Document:

LOAN FACILITY AGREEMENT

Loan Facility Agreement (the “Agreement”) dated September 20, 2016 among The Alkaline Water Company Inc. (the “Corporation”) and Turnstone Capital Inc. (the “Lender”).

                     ARTICLE 1 

 INTERPRETATION

	
Section 1.1

	
Defined Terms.

Capitalized terms used in this Agreement and not otherwise defined have the meanings given to them in Schedule 1.1, unless there is something in the subject matter or context inconsistent therewith.

	
Section 1.2

	
Headings, etc.

The division of this Agreement into Articles and Sections and the insertion of headings are for convenient reference only and do not affect its interpretation.

	
Section 1.3

	
Gender and Number.

Any reference in this Agreement to gender includes all genders. Words importing the singular number also include the plural and vice versa.

	
Section 1.4

	
Currency.

All references in this Agreement to dollars or to “$” are expressed in United States currency unless otherwise specifically indicated.

	
Section 1.5

	
Numerical Expressions.

Numerical expressions in this Agreement follow the international convention whereby a comma (,) separates the thousands and a full stop (.) separates the decimals.

	
Section 1.6

	
Certain Phrases.

In this Agreement, the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”. The expressions “Article”, “Section” and other subdivision followed by a number mean and refer to the specified Article, Section or other subdivision of the Agreement.  In the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.

	
Section 1.7

	
Statutory References.

Except as otherwise provided in this Agreement, any reference in this Agreement to a statute refers to such statute and all rules and regulations made under it as they may have been or may from time to time be amended, re-enacted or superseded.

	
Section 1.8

	
Schedules.

The schedules attached to this Agreement form an integral part of it for all purposes of it.

                      

 

                       ARTICLE 2 

PRINCIPAL SUM

	
Section 2.1

	
Principal Sum.

Subject to the terms and conditions of this Agreement, the Lender agrees to make available to the Corporation a loan in the aggregate principal amount of $1,000,000 (the “Loan Amount”).

	
Section 2.2

	
Loan Accommodation.

	
(1)

	
The Lender agrees, subject to the terms and conditions of this Agreement, to make one or more advances of the Loan Amount to the Corporation as requested from time to time by the Corporation in an amount to be agreed upon by the Corporation and the Lender (each, an “Advance”), provided that the Lender shall have the option to provide an additional Advances of up to $500,000 for the purchase of equipment by the Corporation.

	
(2)

	
The Corporation shall provide not less than two (2) Business Days’ prior written notice to the Lender of the amount of any Advance and the Lender shall deliver the Advance to the Corporation within five (5) Business Days of such notice.  The principal amount of all Advances owing from time to time and all other amounts now or hereafter payable hereunder, and at any time outstanding hereunder, are referred to herein as the “Principal Amount”.

	
Section 2.3

	
Maturity and Payments.

	
(1)

	
The Loan Amount shall mature on the date which is two (2) years after the date of the first Advance (the “Maturity Date”) or such earlier date as the Principal Amount may become due and payable in accordance with the terms and conditions hereof (including upon any conversion pursuant to Article 5).

	
(2)

	
The Corporation shall commence repayment of the Principal Amount, on a monthly basis, beginning on the date that is 12 months after the date of the first Advance with the amount to be repaid each month being equal to the Principal Amount outstanding on the date of such monthly payment divided by the number of months remaining before the Maturity Date.

	
Section 2.4

	
Interest.

	
(1)

	
The Principal Amount will bear simple interest (“Interest”) at a rate of 10.0% per annum, both before and after the Maturity Date and any default and/or judgement, from and including the date of the first Advance to the earlier of: (i) the date of repayment in full of the Principal Amount, and (ii) the date of conversion in full of the Principal Amount.

	
(2)

	
Interest will be calculated daily and paid monthly for the previous 30 days commencing on the date which is 35 days after the first Advance.

	
Section 2.5

	
Prepayments.

Subject to Article 5, the Corporation may prepay all or any portion of the Principal Amount and any accrued but unpaid Interest thereon on not less than ten (10) days’ prior written notice upon payment in cash, at the expiry of the notice period, of the Principal Amount being repaid, together with any accrued but unpaid Interest thereon.

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Section 2.6

	
Date, Time and Place of Closing.

Subject to satisfaction or waiver by the relevant Party of the conditions of Closing, the Closing shall take place at the offices of Clark Wilson LLP, Suite 900 - 885 West Georgia Street, Vancouver, British Columbia, Canada V6C 3H1 at 11:00 a.m. (Vancouver time) on the Closing Date or at such other place, on such other date and at such other time as may be agreed upon in writing between the Corporation and the Lender.  Notwithstanding the foregoing, each party agrees that the Closing may be completed by the exchange of undertakings between the respective legal counsel for the Parties, provided such undertakings are satisfactory to each party's respective legal counsel.

                        ARTICLE 3 

COVENANTS

	
Section 3.1

	
Actions to Satisfy Closing Conditions.

	
(1)

	
Subject to the terms and conditions of this Agreement, the Corporation shall take all such actions as are within its power to control and use its commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Schedule 3.2(1) prior to the Closing Date.

	
(2)

	
Subject to the terms and conditions of this Agreement, the Lender shall take all such actions as are within its power to control and to use its commercially reasonable efforts to cause other actions to be taken which are not within its power to control, so as to ensure compliance with all of the conditions set forth in Schedule 3.2(2) prior to the Closing Date.

	
Section 3.2

	
Filings and Authorizations.

Each of the Corporation and the Lender, as promptly as practicable after the execution of this Agreement will (i) make, or cause to be made, all filings and submissions under all Laws applicable to it, that are required for it to consummate the transactions contemplated herein in accordance with the terms of this Agreement, including all filings and submissions required by the Securities Regulatory Authorities; (ii) use its best efforts to obtain, or cause to be obtained, all Authorizations necessary or advisable to be obtained by it in order to consummate the transactions contemplated herein in accordance with the terms of this Agreement; and (iii) use its commercially reasonable efforts to take, or cause to be taken, all other actions necessary, proper or advisable in order for it to fulfil its obligations under this Agreement.  The Corporation and the Lender will coordinate and cooperate in exchanging information and supplying assistance that is reasonably requested in connection with this Section 3.2.

	
Section 3.3

	
Affirmative Covenants.

	
(1)

	
So long as any Principal Amount remains outstanding or for so long as Advances may be made hereunder, the Corporation shall:

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(a)

	
obtain any necessary approvals for the conversion and issuance of Common Shares pursuant hereto;

	
(b)

	
preserve and maintain its corporate existence and all its rights, licences, powers, privileges, franchises and goodwill;

	
(c)

	
carry on and conduct its business in a proper and efficient manner;

	
(d)

	
keep proper books of record and account, in which full and correct entries of all transactions in relation to the Business are made;

	
(e)

	
comply in all material respects with the requirements of all applicable Laws;

	
(f)

	
advise the Lender immediately upon becoming aware of any Event of Default (as hereinafter defined) and deliver to the Lender upon request a certificate in form and substance satisfactory to the Lender signed by a senior officer certifying that to the best of his knowledge no Event of Default has occurred or, if such is not the case, specifying all Events of Default and their nature and status; and

	
(g)

	
promptly cure or cause to be cured any defects in the execution and delivery of this Agreement or any defects in the validity or enforceability of this Agreement.

	
(2)

	
Unless otherwise agreed by the Lender, so long as any Principal Amount remains outstanding, if the Corporation completes any debt or equity financing of more than $250,000 (other than in connection with an Exempt Issuance), then the Corporation will use the proceeds of such financing to repay any Principal Amount remaining outstanding at the time of the completion of such financing.

	
(3)

	
So long as any Principal Amount remains outstanding or for so long as Advances may be made hereunder, the Corporation shall provide the Lender with the right of first refusal to provide any debt or equity financing (each, a “Subsequent Financing”) to be undertaken by the Corporation (including any Affiliate) that is for capital raising purposes on the same terms as may be bona fide offered by any lender or investor.  If the Corporation is considering a Subsequent Financing, then the Corporation shall deliver to the Lender a written notice of its intention to effect a Subsequent Financing (a “Subsequent Financing Notice”). The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of the Subsequent Financing, the amount of proceeds intended to be raised thereunder and shall include a term sheet or similar document relating thereto as an attachment. If the Lender desires to undertake or participate in such Subsequent Financing, the Lender must provide written notice to the Corporation by not later than 5:00 p.m. (Arizona time) on the third (3rd) Business Day after the Lender has received the Subsequent Financing Notice stating that the Lender is willing to participate in the Subsequent Financing, the amount of the Lender’s participation, and representing and warranting that the Lender has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Corporation receives no such notice from the Lender as of such third (3rd) Business Day, the Lender shall be deemed to have notified the Corporation that it does not elect to participate in the Subsequent Financing.   Notwithstanding the foregoing, this Section 3.3(3) shall not apply in respect of an Exempt Issuance or any commercial loans in the aggregate amounts of up to $1,500,000 from lenders which are regularly engaged in the making of commercial loans.

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Section 3.4

	
Negative Covenants.

So long as any Principal Amount remains outstanding or for so long as Advances may be made hereunder, the Corporation shall not, without consent of the Lender:

	
(a)

	
purchase, establish or acquire in any manner any new business undertaking or make any change in the nature of the Business that would result in a Material Adverse Effect;

	
(b)

	
except in the Ordinary Course, sell, lease, abandon or otherwise dispose of, either directly or indirectly, any of the assets of the Corporation;

	
(c)

	
except in the Ordinary Course, (i) declare, make, pay or commit to any form of distribution or reduction of the profits of the Corporation or of its capital, including any dividend (including stock dividends) or other distribution on any present or future shares; (ii) purchase, redeem or retire or acquire any of its shares, or any option, warrant or other right to acquire any such shares, or apply or set apart any of its assets therefor; or (iii) pay any bonus to shareholders; and

	
(d)

	
other than an Exempt Issuance, issue any Common Shares at a price less than $1.10 per Common Share or issue any securities convertible or exerciseable into Common Shares with a conversion or exercise price less than $1.10 per Common Share.

	
Section 3.5

	
Board Observer.

Effective immediately following the Closing and (i) so long as any Principal Amount remains outstanding or (ii) for so long as Advances may be made hereunder,

	
(a)

	
the Lender shall be entitled to designate one (1) individual (the “Board Observer”) who shall have the right to attend, in a non-voting observer capacity, all meetings (whether in person, by conference telephone, or otherwise) of the Board (including any committees thereof) and to participate in discussions of matters brought to the members of the Board or committee, as applicable, for vote or discussion. The Board Observer shall receive advance notice in substantially the same form and by substantially the same means as the members of the Board or committee, as applicable, of any such meetings. In this respect, the Corporation shall give the Board Observer copies of all notices (in substantially the same form and by substantially the same means as such notices are provided to the members of the Board or committee, as applicable) as well as other materials that it provides to the members of the Board or committee, as applicable, for meetings.  The Board Observer shall have no voting rights with respect to actions taken or elected not to be taken by the Board;

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(b)

	
the Board Observer shall be provided with any written information prepared by the management of the Corporation or a member of the Board and distributed to the members of the Board (including any committees thereof), including a proposed written consent for actions to be taken without a meeting of the Board (including any committees thereof);

	
(c)

	
The Lender shall, and the Lender shall cause the Board Observer to, execute prior to (i) the Board Observer’s attendance at the first of the meetings as contemplated in Section 3.5(a) or (ii) the Board Observer’s first receipt of the written information as contemplated in Section 3.5(b), whichever is earlier, a standard non-disclosure and market stand-off agreement with the Corporation; and

	
(d)

	
Notwithstanding this Section 3.5, the Corporation may exclude the Board Observer from access to any material or meeting or portion thereof if the Corporation believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege or to prevent a conflict of interest, or if the Corporation believes that such exclusion is reasonably necessary to protect highly confidential proprietary information or for other similar reasons.

ARTICLE 4

 REPRESENTATIONS AND WARRANTIES

	
Section 4.1

	
Representations and Warranties of the Corporation.

The Corporation represents and warrants as to those matters set forth in Schedule 4.1 and acknowledges and confirms that the Lender is relying upon such representations and warranties in connection with the Advances of the Loan Amount.

	
Section 4.2

	
Representations and Warranties of the Lender.

The Lender represents and warrants as to those matters set forth in Schedule 4.2 and acknowledges and confirms that the Corporation is relying on such representations and warranties in connection with the Advances of the Loan Amount.

       ARTICLE 5 

CONVERSION OF PRINCIPAL AMOUNT

	
Section 5.1

	
Conversion of Principal Amount into Common Shares.

	
(1)

	
Upon and subject to the provisions and conditions of this Article 5, any Principal Amount, and any accrued but unpaid Interest thereon, shall be convertible into Common Shares (each, a “Conversion”) by the Lender, at its option, at any time.

	
(2)

	
The Conversion shall occur at a conversion price of $1.00 (the “Conversion Price”), subject to adjustment as provided in Section 5.4 hereof.

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Section 5.2

	
Manner of Exercise of Right to Convert to Common Shares.

The Lender may exercise its rights to convert by sending to the Corporation at its principal address a notice exercising its right to convert in accordance with the provisions of this Article 5 such notice setting forth the Principal Amount to be converted and the conversion date (which shall be no less than ten (10) Business Days from the date of the notice unless otherwise agreed to by the Parties).  Upon receipt of the notice, the Lender shall be entered in the books of the Corporation as at the conversion date as the holder of the number of Common Shares into which the Principal Amount is convertible and, as soon as practicable, the Corporation shall deliver to the Lender a certificate or certificates for such Common Shares.

	
Section 5.3

	
Common Shares

The Common Shares issued upon such conversion shall rank only in respect of dividends declared in favour of Shareholders of record on and after the conversion date.  As of and from the conversion date, the Common Shares so issued shall, for all purposes, be and be deemed to be issued and outstanding as fully paid and non-assessable Common Shares.

	
Section 5.4

	
Adjustment of Conversion Price.

	
(1)

	
The Conversion Price in effect at any date shall be subject to adjustment from time to time as provided in this Section 5.4.

	
(2)

	
If the Corporation at any time after the date hereof subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding Common Shares into a greater number of Common Shares, any Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.  If the Corporation at any time after the date hereof consolidates (by combination, reverse stock split or otherwise) its outstanding Common Shares into a smaller number of Common Shares, any Conversion Price in effect immediately prior to such consolidation will be proportionately increased.  Any adjustment under this Section 5.4(2) shall become effective at the close of business on the date the subdivision or consolidation becomes effective.

	
(3)

	
If at any time after the date hereof there occurs:

	
(a)

	
a reclassification or redesignation of the Common Shares, any change of the Common Shares into other shares or securities or any other capital reorganization involving the Common Shares other than transactions covered by Section 5.4(2);

	
(b)

	
a consolidation, amalgamation or merger of the Corporation with or into any other body corporate, or plan of arrangement involving the Corporation, which results in a reclassification or redesignation of the Common Shares or a change or exchange of the Common Shares into other shares or securities; or

	
(c)

	
the transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another corporation or entity;

(any of such events being herein called a “Capital Reorganization”), after the effective date of the Capital Reorganization:

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(d)

	
the Lender will be entitled to receive upon Conversion, in lieu of the number of Common Shares to which the Lender was theretofore entitled upon the Conversion, the kind and aggregate number of shares and other securities or property resulting from the Capital Reorganization which the Lender would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Lender had been the registered holder of the number of Common Shares to which the Lender was theretofore entitled to receive upon the Conversion;  and

	
(e)

	
the Conversion Price shall, on the effective date of the Capital Reorganization, be adjusted by multiplying the Conversion Price in effect immediately prior to such Capital Reorganization by the number of Common Shares purchasable pursuant to the Conversion immediately prior to the Capital Reorganization, and dividing the product thereof by the number of successor securities determined in Section 5.4(3)(d) above.

If necessary, as a result of any Capital Reorganization, appropriate adjustments will be made in the application of the provisions of the Agreement with respect to the rights and interest thereafter of the Lender to the end that the provisions of the Agreement will thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the Conversion.

	
(4)

	
If any question arises with respect to the adjustments provided in this Section 5.4, such question shall be conclusively determined by a firm of chartered accountants (who may be the Corporation's auditors) appointed by the Corporation and acceptable to the Lender.  Such chartered accountants shall be given access to all necessary records of the Corporation and their determination shall be binding upon the Corporation and the Lender.

	
Section 5.5

	
No Requirement to Issue Fractional Shares.

The Corporation shall not be required to issue fractional Common Shares upon any Conversion.  Where the aggregate number of Common Shares to be issued would result in a fraction of a Common Share being issuable, the number of Common Shares to be issued to the Lender shall be rounded down to the next whole number, and no cash or other consideration shall be paid or payable in lieu of such fraction of a Common Share.

	
Section 5.6

	
Certificate as to Adjustment.

The Corporation shall, from time to time immediately after the occurrence of any event which requires an adjustment or re-adjustment as provided in Section 5.4, deliver a certificate of the Corporation to the Lender specifying the nature of the event requiring the same and the amount of the necessary adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

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Section 5.7

	
Notice of Special Matters.

The Corporation shall give notice to the Lender, in the manner provided in Section 7.2, of its intention to fix a record date for any event mentioned in Section 5.4 which may give rise to an adjustment in the Conversion Price, and, in each case, the notice shall specify the particulars of the event and the record date and the effective date for the event; provided that the Corporation shall only be required to specify in the notice such particulars of the event as shall have been fixed and determined on the date on which such notice is given.  Such notice shall be given not less than 14 days prior to the applicable record date.

	
Section 5.8

	
Corporation to Reserve Shares.

The Corporation shall at all times reserve and keep available out of its authorized Common Shares and solely for the purpose of Conversion as in this Article 5 provided, and conditionally allot to the Lender, such number of Common Shares as may be issuable upon any Conversion.  The Corporation covenants with the Lender that all Common Shares which shall be issuable pursuant to this Agreement shall be duly and validly issued as fully-paid and non-assessable.

                 ARTICLE 6 

TERMINATION AND EVENTS OF DEFAULT

	
Section 6.1

	
Termination

This Agreement may, by notice in writing given prior to the Closing, be terminated:

	
(a)

	
by mutual consent of the Parties;

	
(b)

	
by the Lender, upon the occurrence of an Event of Default (subject to the provisions of Section 6.3); or

	
(c)

	
by either Party if there has been a material breach of any provision of this Agreement by the other Party and such breach has not been waived by the non-breaching Party.

	
Section 6.2

	
Events of Default.

The occurrence of any of the following events shall constitute an “Event of Default” under this Agreement:

	
(a)

	
if the Corporation fails to pay any principal or other amounts payable under this Agreement or otherwise payable by the Corporation, its successors or assigns, to the Lender, its successors or assigns when such amounts become due and payable and such failure remains unremedied for 10 Business Days;

	
(b)

	
the Corporation fails to perform, observe or comply with any of the covenants contained in Article 3 and, if the circumstances giving rise to such failure are capable of modification or rectification (such that, thereafter the covenant would be observed or performed), the failure remains uncorrected for a period of 10 Business Days following the earlier of (x) the date on which the Lender provides notice to the Corporation of such failure; and (y) the date on which the Corporation becomes aware of any such failure;

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(c)

	
if the Corporation fails to perform, observe or comply with any other term, covenant or agreement contained in this Agreement and, if the circumstances giving rise to such failure are capable of modification or rectification (such that, thereafter the covenant would be observed or performed), the failure remains uncorrected for a period of 30 Business Days following the earlier of (x) the date on which the Lender provides notice to the Corporation of such failure; and (y) the date on which the Corporation becomes aware of any such failure;

	
(d)

	
if any judgment or order for the payment of money in excess of $250,000 is rendered against the Corporation or its subsidiary and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order, or (ii) there shall be any period of 10 consecutive Business Days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

	
(e)

	
if the Corporation or its subsidiary (i) admits in writing its inability to pay its debts generally or makes a general assignment for the benefit of creditors, (ii) institutes or has instituted against it any proceeding seeking (x) to adjudicate it a bankrupt or insolvent, (y) liquidation, winding‐up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors including any plan of compromise or arrangement or other corporate proceeding involving or affecting its creditors, or (z) the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its properties and assets, and in the case of any such proceeding instituted against it (but not instituted by it), either the proceeding remains undismissed or unstayed for a period of 30 Business Days, or any of the actions sought in such proceeding (including the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its properties and assets) occurs, or (iii) takes any corporate action to authorize any of the above actions.

	
Section 6.3

	
Consequences of an Event of Default.

Upon the occurrence or existence of any Event of Default and following the expiry of any applicable grace periods and at any time thereafter during the continuance of such Event of Default, the Lender may, by written notice to the Corporation, declare all outstanding amounts payable by the Corporation hereunder (which amount shall be determined as if the Loan Amount and any Interest payable thereon was being repaid on the date of such notice) to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  Upon the occurrence or existence of any Event of Default described in Section 6.2(e) hereof, immediately and without notice, all outstanding amounts payable by the Corporation hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.  In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Lender may exercise any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

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                      ARTICLE 7 

 MISCELLANEOUS

	
Section 7.1

	
Indemnification.

The Corporation agrees to indemnify the Lender from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (except by reason of the negligence or wilful misconduct of the Lender) which may be imposed on, incurred by, or asserted against the Lender and arising by reason of any action (including any action referred to herein) or inaction or omission to do any act legally required of the Corporation.

	
Section 7.2

	
Notice.

Any notice, direction or other communication (each a “Notice”) given regarding the matters contemplated by this Agreement must be in writing, sent by personal delivery, courier or facsimile (but not by electronic mail) and addressed:

	
To the Lender at:

	
Turnstone Capital Inc

No. 25 Mason Complex

Stoney Ground

PO Box 193

 The Valley, British Anguilla

	
Attention:

	
Yenny Martinez

	
Telephone:

	
+41 44 214 6673

	
Facsimile:

	 _______________
	
To the Corporation at:

	
The Alkaline Water Company Inc.

 7730 E Greenway Road, Ste 203

Scottsdale, Arizona 85260

	
Attention:

	
Ricky Wright

	
Telephone:

	
(480) 272-7290

	
Facsimile:

	
(480) 998-6901

	
With a copy, which shall not constitute notice, to:

	
Clark Wilson LLP

 Barristers and Solicitors

	
900-885 West Georgia Street

 Vancouver, BC  V6C 3H1

	
Attention:

	
Virgil Z. Hlus

	
Telephone:

	
(604) 891-7707

	
Facsimile:

	
(604) 687-6314

 

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A Notice is deemed to be delivered and received (i) if sent by personal delivery, on the date of delivery if it is a Business Day and the delivery was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day; (ii) if sent by same-day service courier, on the date of delivery if sent on a Business Day and delivery was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day; (iii) if sent by overnight courier, on the next Business Day; or (iv) if sent by facsimile, on the Business Day following the date of confirmation of transmission by the originating facsimile. A Party may change its address for service from time to time by providing a Notice in accordance with the foregoing. Any subsequent Notice must be sent to the Party at its changed address. Any element of a Party’s address that is not specifically changed in a Notice will be assumed not to be changed.

	
Section 7.3

	
Time of the Essence.

Time shall be of the essence of this Agreement.

	
Section 7.4

	
Announcements.

The Parties shall consult with each other before issuing any press release, news release or otherwise making any filings or public statements with respect to this Agreement and the transactions contemplated herein and shall not issue such press release without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, in each case, subject to applicable Laws and the exercise of such fiduciary duties, as may be appropriate.

	
Section 7.5

	
Third Party Beneficiaries.

The Parties intend that this Agreement will not benefit or create any right or cause of action in favour of any Person, other than the Parties or, if applicable, their respective Affiliates.  No Person, other than the Parties and such Affiliates, is entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum. The Parties reserve their right to vary or rescind the rights at any time and in any way whatsoever, if any, granted by or under this Agreement to any Person who is not a Party or an Affiliate of any Party, without notice to or consent of that Person.

	
Section 7.6

	
No Agency or Partnership.

Nothing contained in this Agreement makes or constitutes any Party, or any of its directors, officers or employees, the representative, agent, principal, partner, joint venture, employer, employee of any other Party. It is understood that no Party has the capacity to make commitments of any kind or incur obligations or liabilities binding upon any other Party.

	
Section 7.7

	
Expenses.

Except as otherwise expressly provided in this Agreement, each Party will pay for its own costs and expenses incurred in connection with this Agreement and the transactions contemplated by it.  The fees and expenses referred to in this Section are those which are incurred in connection with the negotiation, preparation, execution and performance of this Agreement, and the transactions contemplated by this Agreement, including the fees and expenses of legal counsel, investment advisers and accountants.

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Section 7.8

	
Amendments.

This Agreement may only be amended, supplemented or otherwise modified by written agreement signed by all of the Parties.

	
Section 7.9

	
Waiver.

	(1)	No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar).  No waiver will be binding unless executed in writing by the Party to be bound by the waiver.  A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

	(2)	If a Party waives compliance with any of the conditions, obligations or covenants contained in this Agreement, the waiver will be without prejudice to any of its rights of termination in the event of non-fulfilment, non-observance or non-performance of any other condition, obligation or covenant in whole or in part.

	
Section 7.10

	
Entire Agreement.

This Agreement constitutes the entire agreement between the Parties with respect to the transactions contemplated by this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement. The Parties have not relied and are not relying on any other information, discussion or understanding in entering into and completing the transactions contemplated by this Agreement, except as set out herein.

	
Section 7.11

	
Successors and Assigns.

	(1)	This Agreement becomes effective only when executed by all of the Parties. After that time, it is binding on and enures to the benefit of the Parties and their respective heirs, administrators, executors, legal personal representatives, successors and permitted assigns.

	(2)	Except as otherwise provided in this Agreement, neither this Agreement nor any of the rights or obligations under this Agreement are assignable or transferable by the Corporation without the prior written consent of the Lender, nor by the Lender without the prior written consent of the Corporation, provided that the Lender may, without such consent, assign all or part of its rights and obligations under this Agreement, without reducing its own obligations hereunder, to any of its Affiliates.

	
Section 7.12

	
Further Assurances.

The Parties agree to execute and deliver such further and other papers, cause such meetings to be held and resolutions passed enacted, exercise their vote and influence, and do and perform and cause to be done and performed, such further and other acts and things that may be necessary or desirable in order to give full effect to this Agreement and every part thereof.

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Section 7.13

	
Severability.

If any provision of this Agreement is determined to be illegal, invalid or unenforceable, by an arbitrator or any court of competent jurisdiction from which no appeal exists or is taken, that provision will be severed from this Agreement and the remaining provisions will remain in full force and effect.

	
Section 7.14

	
Governing Law.

This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of Nevada and the federal laws of the United States applicable therein.

	
Section 7.15

	
Counterparts.

This Agreement may be executed in any number of counterparts (including counterparts by facsimile or other electronic transmission) and all such counterparts taken together will be deemed to constitute one and the same instrument. The Party sending the facsimile or other electronic transmission will also deliver the original signed counterpart to the other Party, however, failure to deliver the original signed counterpart shall not invalidate this Agreement.

	
Section 7.16

	
Non-Merger.

Except as otherwise expressly provided in this Agreement, the covenants, representations and warranties shall not merge on and shall survive the Closing. Notwithstanding the Closing or any investigation made by or on behalf of any Party, the covenants, representations and warranties shall continue in full force and effect. Closing shall not prejudice any right of one Party against any other Party in respect of anything done or omitted under this Agreement or in respect of any right to damages or other remedies.

The remainder of this page has been intentionally left blank.

14

 

IN WITNESS WHEREOF the parties have executed this Loan Facility Agreement.

	 	 	
THE ALKALINE WATER COMPANY INC.

	
By:

	
/s/ Richard A. Wright

	 	
Authorized Signing Officer

	 	 	
TURNSTONE CAPITAL INC.

	
By:

	
/s/ Yenny L. Martinez

	 	
Authorized Signing Officer

15

  

SCHEDULE 1.1

 DEFINED TERMS

“Advance” has the meaning specified in Section 2.2(1).

“Agreement” means this loan facility agreement and all schedules attached to it and the expressions “Article” and “Section”, followed by a number mean and refer to the specified Article or Section of this Agreement.

“Applicable Securities Laws” means the Securities Act and all other applicable securities Laws.

“Authorization” means, with respect to any Person, any order, permit, approval, consent, waiver, clearance, licence or similar authorization of any Governmental Entity having jurisdiction over the Person.

“Board” means the board of directors of the Corporation.

“Business” means the production and sale of alkaline water as currently conducted by the Corporation and its subsidiaries, and, if applicable.

“Business Day” means any day of the year, other than a Saturday, a Sunday or any day on which banks are required or authorized to close in Phoenix, Arizona.

“Capital Reorganization” has the meaning specified in Section 5.4(3).

“Closing” means the completion of the first Advance and related transactions as contemplated in this Agreement.

“Closing Date” means September _____, 2016, or such later date as the Parties may agree in writing.

“Common Shares” means the shares of common stock in the capital of the Corporation, and shall, where the context permits, include (i) any securities into which such Common Shares may be converted, reclassified, redesignated, subdivided, consolidated or otherwise changed; (ii) any securities of the Corporation or of any other Person received by the holders of such Common Shares as a result of any merger, amalgamation, reorganization, arrangement or other similar transaction involving the Corporation; and (iii) any securities of the Corporation which are received by any one or more Persons as a stock dividend or distribution on or in respect of such Common Shares.

“Contract” means any agreement, contract, licence, undertaking, engagement or commitment of any nature, written or oral.

“Conversion Price” has the meaning specified in Section 5.1(2).

“Event of Default” has the meaning specified in Section 6.2.

16

“Exempt Issuance” means the issuance of (a) Common Shares or options to employees, officers or directors of the Corporation pursuant to any equity incentive or stock option plan duly adopted for such purpose, (b) securities exercisable or exchangeable for or convertible into Common Shares issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the directors of the Corporation, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating corporation or an owner of an asset in a business synergistic with the business of the Corporation and shall provide to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

“Governmental Entity” means (i) any international, multinational, national, federal, provincial, state, municipal, local or other governmental or public department, central bank, court, commission, board, bureau, agency or instrumentality, domestic or foreign; (ii) any subdivision or authority of any of the above; (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, and includes any Securities Regulatory Authority.

“Laws” means applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, statutory rules, principles of common and civil law and equity,  terms and conditions of any grant of approval, permission, orders, decrees, rules, regulations and municipal by-laws, whether domestic, foreign or international; (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, rulings, authority, licence, decrees and awards of any Governmental Entity (including the Securities Regulatory Authorities); and (iii) policies, practices and guidelines of any Governmental Entity (including the Securities Regulatory Authorities), which, although not actually having the force of law, are considered by such Governmental Entity as requiring compliance as if having the force of law, in each case binding on or affecting the Person, or the assets of the Person, referred to in the context in which such word is used, and the term “applicable” with respect to such Laws and in the context that refers to one or more Persons, means that such Laws apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a Governmental Authority (including the Securities Regulatory Authorities) having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities, in each case as such Laws may be amended from time to time.

“Lien” means any mortgage, charge, pledge, hypothecation, security interest, assignment, encumbrance, lien (statutory or otherwise), charge, title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition that in substance secures payment or performance of an obligation.

“Loan Amount” has the meaning specified in Section 2.1.

17

“Material Adverse Effect” means any effect that when considered either individually or in the aggregate (i) is materially adverse or is reasonably likely to be materially adverse to the properties, assets, liabilities, obligations (whether absolute, accrued, conditional or otherwise), businesses, affairs, condition (financial or otherwise), operations, results of operations or prospects of the Corporation or its subsidiaries, taken as a whole; or (ii)  will, or would reasonably be expected to, prevent or materially impair the ability of the parties to consummate the transactions contemplated hereby.

“Maturity Date” has the meaning specified in Section 2.3.

“Notice” has the meaning specified in Section 7.2.

“Ordinary Course” means, with respect to an action taken by a Person, that such action is consistent with the past practices of the Person and is taken in the ordinary course of the normal day-to-day operations of the Person.

“Party” means a party to this Agreement and any other Person who may become a party to this Agreement.

“Person” means a natural person, partnership, limited partnership, limited liability partnership, limited liability company, unlimited liability company, corporation, joint stock company, trust, unincorporated association, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning.

“Principal Amount” has the meaning specified in Section 2.2(2).

“Securities Act” means the United States Securities Act of 1933, as amended.

“Securities Regulatory Authorities” means collectively, the Securities and Exchange Commission and any applicable state securities regulatory authority.

18

SCHEDULE 3.2(1)

CONDITIONS FOR THE BENEFIT OF THE LENDER

	
(1)

	
Truth of Representations and Warranties. The representations and warranties of the Corporation contained in this Agreement shall have been true and correct as of the date of this Agreement and shall be true and correct as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date.

	
(2)

	
Performance of Covenants.  The Corporation shall have fulfilled or complied with all covenants contained in this Agreement to be fulfilled or complied with by it at or prior to the Closing.

	
(3)

	
Other Approvals. The Corporation shall have obtained all such other orders, permits, approvals, waivers, consents, licenses or similar authorizations of Securities Regulatory Authorities necessary to complete the Closing.

	
(4)

	
No Legal Action.  No legal or regulatory acts nor proceedings shall be pending or threatened by any Person which would enjoin, restrict or prohibit the Corporation from entering into this Agreement or performing any of its obligations hereunder.

19

SCHEDULE 3.2(2)

CONDITIONS FOR THE BENEFIT OF THE CORPORATION

	
(1)

	
Truth of Representations and Warranties.  The representations and warranties of the Lender contained in this Agreement shall be true and correct as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date.

	
(2)

	
Performance of Covenants.  The Lender shall have fulfilled or complied with all covenants contained in this Agreement to be fulfilled or complied with by it at or prior to the Closing.

	
(3)

	
Approvals.  The Corporation shall have obtained all orders, permits, approvals, waivers, consents, licenses or similar authorizations of Securities Regulatory Authorities necessary to complete the Closing.

	
(4)

	
No Legal Action.  No legal or regulatory acts nor proceedings shall be pending or threatened by any Person which would enjoin, restrict or prohibit the Lender from entering into this Agreement or performing any of its obligations hereunder.

	
(5)

	
Other.  The Corporation shall have received such additional information and documents as it may reasonably require in connection with the foregoing.

20

SCHEDULE 4.1

 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

Corporate Matters

 

 

	
1.

	
The Corporation and its subsidiary are corporations duly incorporated, organized and validly existing under the Laws of their jurisdictions of incorporation and each has the requisite corporate power and authority to own and operate its property, carry on its business and enter into and perform their obligations under this Agreement, and none of them is in violation of their constating documents.

	
2.

	
The execution and delivery of, and performance by the Corporation of this Agreement has been duly authorized by all necessary corporate action on the part of the Corporation.

	
3.

	
The execution and delivery of and performance by the Corporation of this Agreement does not and will not result in the violation of any Law.

	
4.

	
This Agreement has been duly executed and delivered by the Corporation and constitutes a legal, valid and binding agreement of the Corporation, enforceable against it in accordance with its terms, subject to any limitation under applicable Laws relating to (i) bankruptcy, winding-up, insolvency, arrangement, fraudulent preference and conveyance, assignment and preference and other laws of general application affecting the enforcement of creditors' rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

	
5.

	
Except for the filing of a Form D and any state reports, no filing with, notice to, or Authorization of, any Governmental Entity is required on the part of the Corporation as a condition to the lawful completion of the transactions contemplated by this Agreement.

	
6.

	
The Common Shares issuable on Conversion, if and when issued in accordance with the terms of the Agreement, shall be duly authorized, fully paid and non-assessable and the Lender will have good and valid title to such Common Shares, free and clear of all Liens.

Securities Law Matters

	
7.

	
The Corporation warrants that it will comply with Applicable Securities Laws with respect to the performance of its obligations under this Agreement, including the Conversion and the issuance of Common Shares pursuant thereto.

21

  

SCHEDULE 4.2

 REPRESENTATIONS AND WARRANTIES OF THE LENDER

Corporate Matters

	
1.

	
The Lender is a corporation duly incorporated, organized and validly existing under the Laws of its incorporation and has the requisite corporate power and authority to carry on its business and enter into and perform its obligations under this Agreement and is not in violation of its constating documents.

	
2.

	
The execution and delivery of, and performance by the Lender of, this Agreement has been duly authorized by all necessary corporate action on the part of the Lender.

	
3.

	
The execution and delivery of, and performance by the Lender of, this Agreement do not and will not result in the violation of any Law.

	
4.

	
This Agreement has been duly executed and delivered by the Lender and constitutes a legal, valid and binding agreement of the Lender, enforceable against it in accordance with its terms, subject only to any limitation under applicable Laws relating to (i) bankruptcy, winding-up insolvency, arrangement, fraudulent preference and conveyance, assignment and preference and other similar laws of general application affecting creditors' rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

Securities Law Matters

	
5.

	
None of the Loan nor the Common Shares (collectively, the “Securities”) have been or will be registered under the Securities Act, or under any securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to any U.S. Person (as defined below), except in accordance with the provisions of Regulation S under the Securities Act (“Regulation S”), pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in each case only in accordance with applicable state, provincial and foreign securities laws.

	
6.

	
The Corporation has not undertaken, and will have no obligation, to register any of the Securities under the Securities Act or any other applicable securities laws.

	
7.

	
The Corporation will refuse to register the transfer of any of the Securities to a U.S. Person not made pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act and in each case in accordance with applicable laws.

	
8.

	
The decision to execute this Agreement and to acquire the Securities has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Corporation and such decision is based entirely upon a review of any public information which has been filed by the Corporation with the United States Securities and Exchange Commission (the “SEC”).

22

	
9.

	
The Corporation and others will rely upon the truth and accuracy of the acknowledgements, representations, warranties, covenants and agreements of the Lender contained in this Schedule and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached, the Lender will promptly notify the Corporation.

	
10.

	
The Lender and the Lender’s advisor(s) have had a reasonable opportunity to ask questions of, and receive answers from, the Corporation in connection with the distribution of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Corporation.

	
11.

	
The books and records of the Corporation were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Lender during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Securities hereunder have been made available for inspection by the Lender, its legal counsel and/or its advisor(s).

	
12.

	
Any resale of the Securities by the Lender will be subject to resale restrictions contained in the securities laws applicable to the Corporation, the Lender and any proposed transferee, including resale restrictions imposed under United States securities laws.

	
13.

	
The Lender has been advised to consult the Lender’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions, and it is solely responsible (and the Corporation is not in any way responsible) for compliance with:

	
(a)

	
any applicable laws of the jurisdiction in which the Lender is resident in connection with the distribution of the Securities hereunder, and

	
(b)

	
applicable resale restrictions.

	
14.

	
No documents in connection with the issuance of the Securities have been reviewed by the SEC or any other securities regulators.

	
15.

	
Neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of any of the Securities.

	
16.

	
There is no government or other insurance covering any of the Securities.

23

	
17.

	
Offers and sales of any of the Securities prior to the expiration of the period specified in Regulation S (such period hereinafter referred to as the “Distribution Compliance Period”) will only be made in compliance with the safe harbor provisions set forth in Regulation S or pursuant to the registration provisions of the Securities Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period will be made only in compliance with the registration provisions of the Securities Act or an exemption therefrom, and in each case only in accordance with applicable securities laws.

	
18.

	
Hedging transactions involving the Securities may not be conducted unless such transactions are in compliance with the provisions of the Securities Act and in each case only in accordance with applicable securities laws.

	
19.

	
The Lender is knowledgeable of, or has been independently advised as to, the applicable securities laws having application in the jurisdiction in which the Lender is resident (the “International Jurisdiction”) which would apply to the offer and sale of the Securities.

	
20.

	
The Lender is purchasing the Securities pursuant to exemptions from prospectus or equivalent requirements under applicable laws or, if such is not applicable, the Lender is permitted to purchase the Securities under applicable securities laws of the International Jurisdiction without the need to rely on any exemptions.

	
21.

	
The applicable securities laws of the International Jurisdiction do not require the Corporation to make any filings or seek any approvals of any kind from any securities regulator of any kind in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Securities.

	
22.

	
The purchase of the Securities by the Lender does not trigger:

	
(a)

	
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction, or

	
(b)

	
any continuous disclosure reporting obligation of the Corporation in the International Jurisdiction.

	
23.

	
The Lender will, if requested by the Corporation, deliver to the Corporation a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in Sections 21, 22 and 23 above to the satisfaction of the Corporation, acting reasonably.

	
24.

	
The Lender is aware that an investment in the Corporation is speculative and involves certain risks and the possible loss of the entire Loan Amount.

	
25.

	
The Lender has made an independent examination and investigation of an investment in the Securities and the Corporation and agrees that the Corporation will not be responsible in any way for the Lender’s decision to invest in the Securities and the Corporation.

24

	
26.

	
The Lender is not an underwriter of, or dealer in, any of the Securities, nor is the Lender participating, pursuant to a contractual agreement or otherwise, in the distribution of the Securities.

	
27.

	
The Lender is purchasing the Securities for its own account for investment purposes only and not for the account of any other person and not for distribution, assignment or resale to others, and no other person has a direct or indirect beneficial interest in such Securities, and the Lender has not subdivided its interest in any of the Securities with any other person.

	
28.

	
The Lender is not aware of any advertisement of any of the Securities and is not acquiring the Securities as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

	
29.

	
The Lender has not acquired the Securities as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S) in the United States in respect of any of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities, provided, however, that the Lender may sell or otherwise dispose of any of the Securities pursuant to registration of any of the Securities pursuant to the Securities Act and any applicable securities laws or under an exemption from such registration requirements.

	
30.

	
No person has made to the Lender any written or oral representations:

	
(a)

	
that any person will resell or repurchase any of the Securities,

	
(b)

	
that any person will refund the purchase price of any of the Securities, or

	
(c)

	
as to the future price or value of any of the Securities.

	
31.

	
In this Schedule, the term “U.S. Person” will have the meaning ascribed thereto in Regulation S, and for the purpose of this Schedule includes, but is not limited to: (a) any person in the United States; (b) any natural person resident in the United States; (c) any partnership or corporation organized or incorporated under the laws of the United States; (d) any partnership or corporation organized outside the United States by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts; or (e) any estate or trust of which any executor or administrator or trustee is a U.S. Person.

25Exhibit 4.1

 

PITNEY BOWES INC.

 

OFFICERS’ CERTIFICATE

 

September 22, 2016

 

The undersigned officers of Pitney Bowes
Inc., a Delaware corporation (the “Company”), each hereby certifies in his or her respective capacity, on behalf of
the Company pursuant to the Indenture, dated as of February 14, 2005, between the Company and Citibank, N.A., as trustee (the
“Base Indenture”), as amended by the First Supplemental Indenture, dated as of October 23, 2007, by and among the
Company, The Bank of New York Mellon, as successor trustee (the “Trustee”), and Citibank, N.A., as resigning trustee
(the “First Supplemental Indenture”, and together with the Base Indenture, the “Indenture”), as follows:

 

(1)        Each of the undersigned
has read and is familiar with the Indenture, including the provisions in Sections 2.01, 2.03 and 2.04, and is familiar with the
resolutions adopted by the Board of Directors, and corporate proceedings taken by the Company, in connection with the issuance
of $600,000,000 aggregate principal amount of the Company’s 3.375% Notes due 2021 (the “Notes”) under the Indenture;

 

(2)        Each of the undersigned
has examined such documents, certificates, orders and proceedings and made such investigations as the undersigned deemed necessary
or appropriate in order to give this Officers’ Certificate;

 

(3)        In the opinion of each
of the undersigned, the examinations and investigations described in the preceding paragraph are sufficient to enable him or her
to express an informed opinion as to whether all conditions precedent provided for in the Indenture with respect to the authentication,
delivery and issuance of the Notes have been complied with;

 

(4)        In the opinion
of each of the undersigned, all conditions precedent provided for in the Indenture with respect to the authentication, delivery
and issuance of the Notes have been complied with; and

 

(5)        The Notes shall
have the terms set forth in the form of Note attached hereto as Exhibit A and in the Company’s Prospectus dated September
15, 2014 as supplemented by the Prospectus Supplement dated September 15, 2016 and filed with the Securities and Exchange Commission
on September 19, 2016 (as so supplemented, the “Prospectus”), which terms shall include the following:

 

(a)        The series of debt securities
of which the Notes are a part hereby shall be designated as “3.375% Notes Due 2021”;

 

(b)        The aggregate principal
amount of Notes that may be authenticated and delivered under the Indenture shall be $600,000,000, except as provided in Section
2.03 of the Indenture;

 

(c)        The Notes will be offered
for sale to the public at 99.724% of the

    	 

    	

    

aggregate principal amount, plus any accrued interest
from September 22, 2016;

 

(d)        The Notes mature on October
1, 2021;

 

(e)        Each Note will bear interest
from September 22, 2016, at a rate equal to 3.375% per annum, subject to adjustments from time to time as set forth in the form
of Note attached hereto as Exhibit A, and will pay such interest on April 1 and October 1, commencing on April 1, 2017
to the person in whose name such Note was registered at the close of business on the date, whether or not a business day, that
is 15 calendar days prior to the applicable interest payment date;

 

(f)        The principal of, Make-Whole
Amount, if any, and interest on the Notes will be payable in accordance with the terms, and at the place or places, set forth
or contemplated in the form of Note attached hereto as Exhibit A;

 

(g)        The Notes will be redeemable
in whole or in part prior to maturity in accordance with the terms set forth or contemplated in the form of Note attached hereto
as Exhibit A;

 

(h)        If certain change of control
triggering events occur, the Notes will require the Company to make an offer to each holder of Notes to repurchase all or any
part of such Holder’s notes for cash, in accordance with the terms set forth or contemplated in the form of Note attached
hereto as Exhibit A;

 

(i)         In addition to the covenants
set forth in the Indenture, the Notes shall be subject to the covenants set forth in Exhibit B attached hereto;

 

(j)         If an Event of Default with
respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and
with the effect provided in the Indenture. Upon payment of (i) the amount of principal so declared due and payable and (ii) interest
on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if
any, on the Notes shall terminate;

 

(k)        The Notes will not be subject
to a sinking fund;

 

(l)         The Notes will be issued
in minimum denominations of $2,000.00 and integral multiples of $1,000.00 in excess thereof;

 

(m)       The Notes will not be convertible
into other securities of the Company;

 

(n)        The provisions of Section
10.01(b) of the Base Indenture relating to covenant defeasance shall apply to the Notes. Pursuant to Section 10.01(b)(iii)(C)
of the Base Indenture, it shall be a condition to such defeasance that the Company’s deposit in connection with such defeasance
shall not result in a breach or violation of, or constitute a default under, the Indenture with respect to the series of debt
securities of which the Notes are a part;

 

(o)        The Notes will be issued
in permanent global form. The Notes will be deposited with The Depository Trust Company and the Notes will be

    	 

    	

    

registered in the name of Cede & Co.;

 

(p)        The Company may, from time
to time, without the consent of the holders of any Notes, reopen the series of debt securities of which the Notes are a part and
issue additional debt securities with the same terms (including maturity and interest payment terms) as the Notes. After such
additional debt securities are issued they shall be fungible with the Notes to the extent specified in the applicable prospectus
or pricing supplement; and

 

(q)        The principal of, Make-Whole
Amount, if any, and interest on the Notes will be payable in U.S. dollars.

 

Capitalized terms used herein
(including the Exhibits hereto) and not otherwise defined shall have the meanings assigned to them in the Indenture.

 

[Signature page follows]

    	 

    	

    

IN WITNESS WHEREOF, the undersigned officers,
on behalf of the Company, have executed this Certificate as of the date first written above.

 

	 	By:	/s/ Michael Monahan	 
	 	Name:	Michael Monahan	 
	 	Title:	Executive Vice President, Chief Operating Officer and Chief Financial Officer	 
	 	 	 	 	 
	 	By:	/s/ Debbie Salce	 
	 	Name:	Debbie Salce	 
	 	Title:	Vice President and Treasurer	 

 

[Officers’
Certificate – Indenture]

    	 

    	

    

Exhibit A

    	 

    	

    

FORM OF GLOBAL
SENIOR NOTE

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY (AS DEFINED IN THE INDENTURE)
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT
IN THE CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, TRANSFER OF,
OR IN EXCHANGE FOR, OR IN LIEU OF, THIS SECURITY WILL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

PITNEY BOWES INC.

 

	No. [  ]	SENIOR NOTE	CUSIP No. 724479AK6
	 	(Fixed Rate)	 

 

	PRINCIPAL AMOUNT: $[    ]	 	STATED MATURITY OF SECURITY: October
    1, 2021
	 	 	 
	DENOMINATIONS: U.S. $2,000.00 and integral multiples
    of U.S. $1,000.00 in excess thereof	 	COMPUTATION PERIOD:  30/360  
	 	 	 
	ISSUE DATE: September 22, 2016	 	REGULAR RECORD DATE(S): 15 calendar days immediately
    preceding an Interest Payment Date
	 	 	 
	INTEREST RATE: 3.375% per annum, subject to adjustment
    as described herein	 	REDEEMABLE: Yes.
	 	 	 
	INTEREST PAYMENT DATES: April 1 and October 1, commencing
    on April 1, 2017	 	SINKING FUND: None. 

    	 

    	

    

Pitney Bowes Inc., a corporation duly organized
and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., as nominee
for The Depository Trust Company, or registered assigns, the principal amount on the Stated Maturity specified above unless redeemed
or repurchased prior to such date in accordance with the provisions referred to on the reverse hereof (the Stated Maturity or
date of earlier redemption or repurchase, as the case may be, is referred to herein as the “Maturity”) and to pay
interest thereon (computed, on the basis of a 360-day year of twelve 30-day months), from and including the Issue Date specified
above (the “Issue Date”) or from and including the most recent Interest Payment Date (as defined below) to which interest
on this Security (or any predecessor Security) has been paid or duly provided for to, but excluding, the Interest Payment Date,
on the Interest Payment Dates specified above in each year (each, an “Interest Payment Date”) and at Maturity, at
the rate per annum equal to the Interest Rate specified above, subject to adjustment from time to time as described on the reverse
herein (the “Interest Rate”), until the principal hereof is paid or duly made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid
to the Person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the
relevant Regular Record Date.

 

Any interest on this Security that is payable
but not punctually paid or duly provided for (“defaulted interest”) on any Interest Payment Date shall forthwith cease
to be payable to the Registered Holder on the relevant Regular Record Date by virtue of such Holder having been a Holder on such
Regular Record Date. Such defaulted interest may be paid by the Company, at its election in each case, as provided in clause (a)
or clause (b) below:

 

(a)        The Company may elect to
make payment of any defaulted interest to the Persons in whose names the Securities (or their respective predecessor Securities)
are registered at the close of business on a special record date for the payment of such defaulted interest, which shall be fixed
in the following manner. The Company shall notify the Trustee (as defined on the reverse hereof) in writing of the amount of defaulted
interest proposed to be paid on each Security and the date of the proposed payment and at the same time the Company shall deposit
with the Trustee funds equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed payment. Such funds when deposited shall be held
in trust for the benefit of the Persons entitled to such defaulted interest as provided in this clause (a). Thereupon the Trustee
promptly shall fix a special record date for the payment of such defaulted interest in respect of the Securities, which shall
be not more than 15 nor less than ten days prior to the date of the proposed payment. The Trustee promptly shall notify the Company
of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of
such defaulted interest and the special record date thereof to be mailed, first class postage prepaid, to each Holder of Securities
at his address as it appears in the Security register, not less than ten days prior to such special record date. Notice of the
proposed payment of such defaulted interest and the special record date therefor having been mailed as aforesaid, such defaulted
interest in respect of the Securities shall be paid to the Persons in whose names the Securities (or their

    	2

    	

    

respective predecessor Securities)
are registered on such special record date and such defaulted interest shall no longer be payable pursuant to the following clause
(b).

 

(b)        The Company may make payment
of any defaulted interest on the Securities in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this clause, such payment shall be deemed practicable by the
Trustee.

 

If any Interest Payment Date or the Maturity
of this Security falls on a day that is not a Business Day with respect to this Security, the related payment of principal, premium,
if any, and/or interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest
shall accrue on the amount so payable for the period from and after such Interest Payment Date or Maturity, as the case may be.
A “Business Day” means a day, other than a Saturday, a Sunday, or any other day on which banking institutions in The
City of New York are authorized or required by law or executive order to remain closed.

 

Reference is hereby made to the further
provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.

 

Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

    	3

    	

    

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed by manual or facsimile signature under its corporate seal.

 

	 	PITNEY BOWES INC.
	 	 	 	 
	 	By:	 	 
	 	 	Name: 	Debbie Salce
	 	 	Title:	Vice President and Treasurer
	 	 	 	 
	 	By:	 	 
	 	 	Name:	Steven Green
	 	 	Title:	Vice President – Finance and Chief Accounting Officer

 

Attest:

 

	 	 

Dated: September 22, 2016

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series
designated herein referred to in the within-mentioned Indenture.

 

	 	THE BANK OF NEW YORK MELLON,
	 	 	as Trustee	 
	 	 	 	 
	 	By:	 	 
	 	 	Authorized Signatory	 

    	 

    	

    

[Reverse of Security]

 

This Security is one of a duly authorized
issue of securities of the Company (the “Securities”) issued and to be issued in one or more series under an Indenture,
dated as of February 14, 2005, between the Company and Citibank, N.A., as trustee (the “Initial Indenture”), as amended
by the First Supplemental Indenture, dated as of October 23, 2007, by and among the Company, The Bank of New York Mellon, as successor
trustee (the “Trustee”; which term includes any successor trustee under the Indenture), and Citibank, N.A., as resigning
trustee (the “First Supplemental Indenture”, and together with the Initial Indenture, the “Indenture”),
to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated
on the face hereof, limited initially to an aggregate principal amount of $600,000,000 which amount may be increased at the option
of the Company if in the future it determines that it may wish to reopen the series of Securities of which this Security is a
part and sell additional Securities having the same terms. Except as may be otherwise stated on the face hereof, the Securities
of this series are issuable only as registered Securities, without coupons, in denominations of $2,000.00 and integral multiples
of $1,000.00 in excess thereof.

 

The Securities are general, direct, unconditional
and senior unsecured obligations of the Company.

 

The Company may redeem the Securities of
the series of which this Security is a part, at any time in whole or from time to time in part on any day fixed for redemption
in accordance with this Security and the Indenture (a “Redemption Date”), at a redemption price equal to (i) in the
case of a Redemption Date on or after September 1, 2021, the sum of 100% of the aggregate principal amount of the Securities being
redeemed and accrued but unpaid interest on those Securities to such Redemption Date; provided, however, that interest shall be
payable on an Interest Payment Date that falls on or before the Redemption Date to Holders of Securities on the Regular Record
Date for such Interest Payment Date or (ii) in the case of a Redemption Date prior to September 1, 2021, the sum of 100% of the
aggregate principal amount of the Securities being redeemed, accrued but unpaid interest on those Securities to such Redemption
Date, and the Make-Whole Amount, if any, as defined below; provided, however, that interest shall be payable on an Interest Payment
Date that falls on or before the Redemption Date to Holders of Securities on the Regular Record Date for such Interest Payment
Date.

 

“Make-Whole Amount” means, in
connection with any optional redemption made prior to September 1, 2021, the excess, if any, of (a) the aggregate present value
as of the Redemption Date of each dollar of principal being redeemed and the amount of interest, exclusive of interest accrued
to such Redemption Date, that would have been payable in respect of each such dollar if such redemption had not been made, determined
by discounting, on a semi-annual basis (assuming a 360-day year of twelve 30-day months), such principal and interest at the Reinvestment
Rate, determined on the third Business Day preceding the date notice of such redemption is given, from the respective dates on
which such principal and interest would have

    	5

    	

    

been payable if such redemption had not been
made, to such Redemption Date, over (b) the aggregate principal amount of the Securities being redeemed.

 

“Reinvestment Rate” means 0.350%
plus the arithmetic mean of the yields under the heading “Week Ending” published in the most recent Statistical Release
under the caption “Treasury Constant Maturities” for the maturity, rounded to the nearest month, corresponding to
the remaining life to maturity, as of the Redemption Date of the principal amount of the Securities being redeemed. If no maturity
exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall
be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating
the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount
shall be used. If the format or content of the Statistical Release changes in a manner that precludes determination of the Treasury
yield in the above manner, then the Treasury yield shall be determined in the manner that most closely approximates the above
manner, as reasonably determined by the Company.

 

“Statistical Release” means
the statistical release designated “H.15(519)” or any successor publication which is published weekly by the Federal
Reserve System and which reports yields on actively traded United States government securities adjusted to constant maturities,
or, if such statistical release is not published at the time of any required determination under the Indenture, then such other
reasonably comparable index which shall be designated by the Company.

 

The Company shall give written notice of
any redemption of any Securities to Holders of the Securities to be redeemed at their addresses, as shown in the Security register
for the Securities, at least 30 days and not more than 60 days prior to any Redemption Date. The notice of redemption shall specify,
among other items, the applicable Redemption Date, the redemption price and the aggregate principal amount of the Securities to
be redeemed.

 

If the Company chooses to redeem less than
all of the Securities, it shall notify the Trustee at least 60 days before giving notice of redemption, or such shorter period
as is satisfactory to the Trustee, of the aggregate principal amount of the Securities to be redeemed and the applicable Redemption
Date. The Trustee shall select, in such manner as it shall deem appropriate and fair, the Securities to be redeemed in part.

 

Notice of redemption having been given as
aforesaid, this Security (or the portion of the principal amount hereof so to be redeemed) shall, on the applicable Redemption
Date, become due and payable at the redemption price herein specified above, and from and after such date (unless the Company
shall default in the payment of such redemption price) shall cease to bear interest.

 

If a Change of Control Triggering Event
(as defined below) occurs, unless the Company has exercised its option to redeem the Securities, the Company shall be required
to make an offer (the “Change of Control Offer”) to each Holder of the Securities of the series of which this Security
is a part to repurchase all or any part (equal to $2,000.00 or an integral multiple of

    	6

    	

    

$1,000.00 in excess thereof) of that Holder’s
Securities on the terms set forth herein. In the Change of Control Offer, the Company shall be required to offer payment in cash
equal to 101% of the aggregate principal amount of the Securities to be repurchased, plus accrued and unpaid interest, if any,
on the Securities to be repurchased to the date of repurchase (the “Change of Control Payment”).

 

Within 30 days following any Change of Control
Triggering Event, or, at the Company’s option, prior to any Change of Control (as defined below), but after public announcement
of the transaction that constitutes or may constitute the Change of Control, the Company shall mail a notice to Holders of the
Securities, with a copy to the Trustee, describing the transaction that constitutes or may constitute the Change of Control Triggering
Event and offering to repurchase the Securities on the date specified in the notice, which date shall be no earlier than 30 days
and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”). The notice,
if mailed prior to the date of consummation of the Change of Control, shall state that the offer to purchase is conditioned on
the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. In the event that such offer
to purchase fails to satisfy the condition in the preceding sentence, the Company shall cause another notice meeting the aforementioned
requirements to be mailed to Holders of the Securities.

 

On the Change
of Control Payment Date, the Company shall, to the extent lawful:

 

	 	·	accept for payment all Securities or portions of Securities
    properly tendered pursuant to the Change of Control Offer;
	 	 	 
	 	·	deposit with the paying agent an amount equal to the Change of Control
    Payment in respect of all Securities or portions of Securities properly tendered; and
	 	 	 
	 	·	deliver or cause to be delivered to the Trustee the Securities properly
    accepted together with an officers’ certificate stating the aggregate principal amount of Securities or portions of
    Securities being repurchased.

 

The paying agent will promptly transmit
to each Holder of Securities properly tendered pursuant to the Change of Control Offer the Change of Control Payment for the Securities
being repurchased, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each Holder
a new Security equal in principal amount to any unrepurchased portion, if any, of any Security surrendered; provided, that each
new Security will be in a minimum denomination of $2,000.00 or an integral multiple of $1,000.00 in excess thereof.

 

The Company shall not be required to make
a Change of Control Offer upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in
the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party
repurchases all Securities properly tendered and not withdrawn under its offer. In addition, the Company shall not repurchase
any Securities if there has occurred and is continuing on the Change of Control Payment Date an Event of Default under the Indenture,
other than a default in the payment of the Change of Control Payment upon a Change of Control Triggering Event.

    	7

    	

    

The Company shall comply with the requirements
of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities
laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the
Securities as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws
or regulations conflict with the Change of Control Offer provisions of the Securities, the Company shall comply with those securities
laws and regulations and shall not be deemed to have breached its obligations under the Change of Control Offer provisions of
the Securities by virtue of any such conflict.

 

The Interest Rate payable on the Securities
will be subject to adjustments from time to time if either Moody’s or S&P or, if either of Moody’s or S&P
ceases to rate the Securities or fails to make a rating of the Securities publicly available, in each case for reasons outside
of the control of the Company, a “nationally recognized statistical rating organization” within the meaning of Section
3(a)(62) of the Exchange Act selected pursuant to the definition of “rating agencies” (a “Substitute Rating
Agency”), downgrades (or downgrades and subsequently upgrades) the credit rating assigned to the Securities, in the manner
described below. The Trustee shall not be responsible for monitoring the ratings of the Securities. The Company shall notify the
Trustee in writing of any adjustment to the Interest Rate pursuant hereto due to a ratings change.

 

If the rating assigned by Moody’s
(or any Substitute Rating Agency therefor) of the Securities is decreased to a rating set forth in the immediately following table,
the Interest Rate on the Securities will increase such that it will equal the Interest Rate payable on the Securities on the Issue
Date plus the percentage set forth opposite the rating in the table below (plus, if applicable, the percentage set forth opposite
the rating in the table under “S&P Rating Percentage”):

 

Moody’s
Rating* Percentage

 

	Ba1	 	 	0.25	%
	Ba2	 	 	0.50	%
	Ba3	 	 	0.75	%
	B1 or below	 	 	1.00	%

 

 

	*	Including the equivalent ratings of any Substitute Rating Agency.

 

If the rating assigned by S&P (or any
Substitute Rating Agency therefor) of the Securities is decreased to a rating set forth in the immediately following table, the
Interest Rate on the Securities will increase such that it will equal the Interest Rate payable on the Securities on the Issue
Date plus the percentage set forth opposite the rating in the table below (plus, if applicable, the percentage set forth opposite
the rating in the table under “Moody’s Rating Percentage”):

    	8

    	

    

S&P
Rating* Percentage

 

	BB+	 	 	0.25	%
	BB	 	 	0.50	%
	BB-	 	 	0.75	%
	B+ or below	 	 	1.00	%

 

 

	*	Including the equivalent ratings of any Substitute Rating Agency.

 

If at any time the Interest Rate on the
Securities has been increased and either Moody’s or S&P (or, in either case, a Substitute Rating Agency therefor), as
the case may be, subsequently upgrades its rating of the Securities to any of the threshold ratings set forth above, the Interest
Rate on the Securities will be decreased such that the Interest Rate for the Securities equals the Interest Rate payable on the
Securities on the Issue Date plus the percentages set forth opposite the ratings from the tables above in effect immediately following
the upgrade in rating. If Moody’s (or any Substitute Rating Agency therefor) subsequently upgrades its rating of the Securities
to Baa3 (or its equivalent, in the case of a Substitute Rating Agency) or higher, and S&P (or any Substitute Rating Agency
therefor) upgrades its rating to BBB- (or its equivalent, in the case of a Substitute Rating Agency) or higher, the Interest Rate
on the Securities will be decreased to the Interest Rate payable on the Securities on the Issue Date (and if one such upgrade
occurs and the other does not, the Interest Rate on the Securities will be decreased so that it does not reflect any increase
attributable to the upgrading Rating Agency). In addition, the Interest Rate on the Securities will permanently cease to be subject
to any adjustment described above (notwithstanding any subsequent downgrade in the ratings by either or both Rating Agencies)
if the Securities become rated Baa1 and BBB+ (or, in either case, the equivalent thereof, in the case of a Substitute Rating Agency)
or higher by Moody’s and S&P (or, in either case, a Substitute Rating Agency therefor), respectively (or one of these
ratings if the Securities are only rated by one Rating Agency).

 

Each adjustment required by any downgrade
or upgrade in a rating set forth above, whether occasioned by the action of Moody’s or S&P (or, in either case, a Substitute
Rating Agency therefor), shall be made independent of any and all other adjustments. In no event shall (1) the Interest Rate for
the Securities be reduced to below the Interest Rate payable on the Securities on the Issue Date or (2) the total increase in
the Interest Rate on the Securities exceed 2.00% above the Interest Rate payable on the Securities on the Issue Date.

 

No adjustments in the Interest Rate of the
Securities shall be made solely as a result of a Rating Agency ceasing to provide a rating of the Securities. If at any time Moody’s
or S&P ceases to provide a rating of the Securities, the Company will use its commercially reasonable efforts to obtain a
rating of the Securities from a Substitute Rating Agency, if one exists, in which case, for purposes of determining any increase
or decrease in the Interest Rate on the Securities pursuant to the tables above (a) such Substitute Rating Agency will be substituted
for the last Rating Agency to provide a rating of the Securities but which has since ceased to provide such rating, (b) the relative
rating scale used by such Substitute Rating Agency to assign ratings to senior unsecured debt will be determined in good faith
by an independent investment banking institution of national standing appointed by the Company and, for purposes of determining
the applicable ratings included in the applicable table above with respect to such Substitute Rating Agency, such ratings will
be deemed to be the equivalent ratings used by Moody’s or S&P, as

    	9

    	

    

applicable, in such table and (c) the Interest
Rate on the Securities will increase or decrease, as the case may be, such that the Interest Rate equals the Interest Rate payable
on the Securities on the Issue Date plus the appropriate percentage, if any, set forth opposite the deemed equivalent rating from
such Substitute Rating Agency in the applicable table above (taking into account the provisions of clause (b) above) (plus any
applicable percentage resulting from a decreased rating by the other Rating Agency).

 

For so long as only one Rating Agency provides
a rating of the Securities, any subsequent increase or decrease in the Interest Rate of the Securities necessitated by a reduction
or increase in the rating by the Rating Agency providing the rating shall be twice the applicable percentage set forth in the
applicable table above. For so long as none of Moody’s nor S&P (nor, in either case, a Substitute Rating Agency therefor)
provides a rating of the Securities, the Interest Rate on the Securities will increase to, or remain at, as the case may be, 2.00%
above the Interest Rate payable on the Securities on the Issue Date.

 

Any Interest Rate increase or decrease described
above will take effect from the first Interest Payment Date following the date on which a rating change occurs that requires an
adjustment in the Interest Rate. As such, interest will not accrue at such increased or decreased rate until the next Interest
Payment Date following the date on which a rating change occurs. If Moody’s or S&P (or, in either case, a Substitute
Rating Agency therefor) changes its rating of the Securities more than once prior to any particular Interest Payment Date, the
last change by such agency prior to such Interest Payment Date will control for purposes of any Interest Rate increase or decrease
with respect to the Securities described above relating to such Rating Agency’s action. If the Interest Rate payable on
the Securities is increased as described above, the term “interest,” as used with respect to the Securities, will
be deemed to include any such additional interest unless the context otherwise requires.

 

If so indicated on the face hereof, and
in accordance with the terms specified thereon, this Security will be subject to redemption through operation of a sinking fund.

 

The Holders of Securities are entitled to
certain covenants set forth in the Indenture and in an officers’ certificate adopted pursuant to the Indenture.

 

The Indenture contains provisions for defeasance
at any time of the entire indebtedness on this Security, or certain restrictive covenants and Events of Default with respect to
this Security, in each case upon compliance by the Company with certain conditions set forth therein.

 

If an Event of Default with respect to the
Securities of the series of which this Security is a part shall occur and be continuing, the principal of the Securities of the
series of which this Security is a part may be declared due and payable in the manner and with the effect provided in the Indenture.
Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium
and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s
obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of the series of
which this Security is a part shall terminate.

    	10

    	

    

The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of the majority in principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities
of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders
of this Security and of any Security issued in exchange or substitution therefor, irrespective of whether or not notation of such
consent or waiver is made upon this Security.

 

As provided in and subject to the provisions
of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture
or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy thereunder,
unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series and the Holders of not less than 25% in principal amount of the Securities of this series at the time
Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee satisfactory indemnity, and the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed
to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.

 

No reference herein to the Indenture and
no provision of this Security or of the Indenture shall alter or impair the right of any Holder of any Security to receive payment
of the principal of and, subject to Section 2.07 of the Initial Indenture, interest on such Security at the respective rates,
in the respective amount on or after the respective due dates expressed in such Security, or to institute suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

As provided in the Indenture and subject
to certain limitations herein and therein set forth, the transfer of this Security is registrable in the Security register. Upon
surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, if this Security, if so required by the Company or Trustee, is duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder hereof or his attorney duly authorized in writing, thereupon one or more new Securities of the series of which
this Security is a part and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.

 

As provided in the Indenture and subject
to certain limitations herein and therein set forth, the Securities of the series of which this Security is a part are exchangeable
for a like aggregate principal amount of Securities of the series of which this Security is a part and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

    	11

    	

    

No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

Prior to due presentment of this Security
for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose
name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the
Company, the Trustee or any such agent shall be affected by notice to the contrary.

 

This Security shall be deemed to be a contract
under the internal laws of the State of New York (other than principles of law that would apply the law of another jurisdiction),
and for all purposes shall be construed and enforced in accordance with and governed by the laws of said State.

 

For the purposes hereof, the following terms
will be applicable:

 

“Change of Control” means the
occurrence of any of the following: (1) the consummation of any transaction (including, without limitation, any merger or consolidation)
the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than
the Company, any subsidiary or employee benefit plan of the Company or employee benefit plan of any subsidiary of the Company)
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than
50% of the Voting Stock of the Company or other Voting Stock into which the Voting Stock of the Company is reclassified, consolidated,
exchanged or changed, measured by voting power rather than number of shares; (2) the direct or indirect sale, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one or more series of transactions approved by the Board
of Directors of the Company as part of a single plan, of 85% or more of the total consolidated assets of the Company as shown
on the Company’s most recent audited balance sheet, to one or more Persons (other than the Company or one of the subsidiaries
of the Company); or (3) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing
Directors. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Company becomes
a direct or indirect wholly-owned subsidiary of a holding company and (2)(A) the direct or indirect holders of the Voting Stock
of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of
the Company immediately prior to that transaction or (B) immediately following that transaction, no person or group (other than
a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than
50% of the Voting Stock of such holding company.

 

“Change of Control Triggering Event”
means the occurrence of both a Change of Control and a Rating Event.

 

“Continuing Directors” means,
as of any date of determination, any member of the Board of Directors of the Company who (1) was a member of such Board of Directors
of the Company on the date the Securities were initially issued or (2) was nominated for election, elected or appointed to the
Board of Directors of the Company with the approval of a majority of the

    	12

    	

    

Continuing Directors who were members of
the Board of Directors of the Company at the time of such nomination, election or appointment (either by a specific vote or by
approval of the proxy statement of the Company in which such member was named as a nominee for election as a director, without
objection to such nomination).

 

“Investment Grade Rating” means
a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent
investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company.

 

“Moody’s” means Moody’s
Investors Service, Inc., and its successors.

 

“Rating Agencies” means (1)
each of Moody’s and S&P; and (2) if either of Moody’s or S&P ceases to rate the Securities or fails to make
a rating of the Securities publicly available, in each case for reasons outside of the control of the Company, a “nationally
recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company
(as certified by a resolution of the Board of Directors of the Company) as a replacement agency for Moody’s or S&P,
or both of them, as the case may be.

 

“Rating Event” means the rating
on the Securities is lowered by each of the Rating Agencies and the Securities are rated below an Investment Grade Rating by each
of the Rating Agencies on any day within the 60-day period (which 60-day period shall be extended so long as the rating of the
Securities is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier
of (1) the occurrence of a Change of Control and (2) public notice of the occurrence of a Change of Control or the intention of
the Company to effect a Change of Control; provided, however, that a Rating Event otherwise arising by virtue of a particular
reduction in rating will be deemed not to have occurred in respect of a particular Change of Control (and thus will not be deemed
a Rating Event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction
in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing
at the Company’s or its request that the reduction was the result, in whole or in part, of any event or circumstance consisting
of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control
has occurred at the time of the Rating Event).

 

“S&P” means S&P Global
Ratings, a division of S&P Global Inc., and its successors.

 

“Voting Stock” means, with respect
to any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date, the capital
stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

 

Additionally, all terms used in this Security
which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

    	13

    	

    

ABBREVIATION

 

The following abbreviations, when used in
the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable
laws or regulations.

 

	TEN COM	as tenant in common	 	UNIF GIFT MIN ACT	_____ Custodian _____
	TEN ENT	as tenants by the entireties (Cust)	 	 	(Cust)	(Minor)
	JT TEN	as joint tenants with right of survivorship and not
    as tenants in common	 	 	under Uniform Gifts to Minors Act _____

                 (State)

 

Additional abbreviations may also be used though not in the
above list.

    	14

    	

    

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto

____________________________________________________

(please insert social security or other identifying number of
assignee)

____________________________________________________

(please print or typewrite name and address including postal
zip code of assignee)

the within Security and all rights thereunder, hereby irrevocably
constituting and appointing

____________________________________________________

attorney to transfer said Note on the books of the Company,
with full power of substitution in the premises.

 

Dated: _______________________________

 

NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change
whatever.

    	15

    	

    

Exhibit B

 

Limitations on Liens.

 

(a)        The Company will not, and will not permit
any Restricted Subsidiary to, issue, assume, guarantee or become liable for any notes, bonds, debentures or other similar evidences
of Indebtedness for money borrowed (herein referred to for purposes of this “Limitations on Liens” covenant and the
“Limitations on Sales and Lease-Back Transactions” covenant as “Indebtedness”) secured by any Mortgage,
security interest, pledge or lien (herein referred to for purposes of this “Limitations on Liens” covenant as a “Mortgage”)
of or upon (x) any Principal Domestic Manufacturing Plant or (y) shares of capital stock or Indebtedness issued by any Restricted
Subsidiary and owned by the Company or any Restricted Subsidiary, whether owned at the date of this Officers’ Certificate
or thereafter acquired, without making effective provision, and the Company in each case will make or cause to be made effective
provision, whereby the Notes shall be secured by such Mortgage equally and ratably with (or prior to) any and all other Indebtedness
thereby secured, so long as such Indebtedness shall be so secured (for the purpose of providing such equal and ratable security
the principal amount of the Notes shall mean and shall not be less than that principal amount that could be declared to be due
and payable pursuant to Section 5.01 of the Base Indenture on the date of the making of such effective provision and the extent
of such equal and ratable security shall be adjusted quarterly to reflect the change in said principal amount over time pursuant
to Section 5.01 of the Base Indenture and any other provision of the Indenture or this Officers’ Certificate); provided,
however, that the foregoing restriction shall not apply to Indebtedness secured by any of the following:

 

(i)        Mortgages on property of a Corporation
existing at the time such Corporation is acquired (including by way of merger or consolidation) by the Company or a Restricted
Subsidiary or a Restricted Subsidiary is merged into such Corporation or at the time of a sale, lease or other disposition of the
properties of such Corporation (or a division thereof) as an entirety or substantially as an entirety to the Company or a Restricted
Subsidiary, provided that such Mortgages as a result of such merger, consolidation, sale, lease or other disposition is not extended
to property owned by the Company or such Restricted Subsidiary immediately prior thereto;

 

(ii)        Mortgages on property of a
Corporation existing at the time such Corporation first becomes a Restricted Subsidiary;

 

(iii)       Mortgages on any property
existing at the time of acquisition of such property or on the date of first issuance by the Company of Notes;

 

(iv)       Mortgages securing Indebtedness
of a Wholly-Owned Restricted Subsidiary to the Company or to a Wholly-Owned Restricted Subsidiary;

 

(v)        Mortgages on property to secure
all or part of the cost of acquiring, substantially repairing or altering, constructing, developing or substantially improving
all or any part of such property or to secure Indebtedness incurred to provide funds for any such purpose or for reimbursement
of funds previously expended for any such purpose, provided the commitment of the creditor to extend the credit secured by any
such

    	 

    	

    

Mortgage shall have been obtained not later than 180
days after the later of (a) the completion of the acquisition, substantial repair or alteration, construction, development or substantial
improvement of such property or (b) the placing in operation of such property or of such property as so substantially repaired
or altered, constructed, developed or substantially improved;

 

(vi)       mechanics liens, tax liens,
liens in favor of any governmental body to secure progress, advance or other payments or the acquisition of real or personal property
from such governmental body pursuant to any contract or provision of any statute, and other liens, charges and encumbrances incidental
to construction, to the conduct of business or to the ownership of property of the Company or any Restricted Subsidiary which were
not incurred in connection with the borrowing of money or the obtaining of advances or credits or the acquisition of property and
do not in the aggregate materially impair the use of any Principal Domestic Manufacturing Plant for the purposes for which it is
held or which are being contested in good faith by the Company or such Restricted Subsidiary;

 

(vii)      Mortgages arising by reason
of any judgment, decree or order of any court, so long as any appropriate legal proceedings which may have been initiated for the
review of such judgment, decree or order shall not have been finally terminated or so long as the period within which such proceedings
may be initiated shall not have expired; any deposit or pledge with any surety company or clerk of any court, or in escrow, as
collateral in connection with, or in lieu of, any bond on appeal from any judgment or decree against the Company or any Restricted
Subsidiary, or in connection with other proceedings or actions at law or in equity by or against the Company or any Subsidiary;
or

 

(viii)     any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or in part, of any Mortgage referred to in the foregoing
subclauses (i) through (vii), inclusive; provided, however, that the principal amount of Indebtedness secured thereby and not otherwise
authorized by said subclauses (i) through (vii), inclusive, shall not exceed the principal amount of Indebtedness, plus any premium
or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal
or replacement.

 

(b)        Notwithstanding the provisions of clause
(a) above, the Company or any Restricted Subsidiary may issue, assume, guarantee or become liable for Indebtedness secured by Mortgages
which would otherwise be subject to the restrictions of such clause (a), provided that the total of the aggregate amount of Indebtedness
outstanding pursuant to this clause (b), excluding Indebtedness secured by Mortgages permitted under any of the foregoing subclauses
(a)(i) through (vii), together with the aggregate amount of all Attributable Debt, does not exceed 15% of Consolidated Net Tangible
Assets.

 

Limitations on Sale and Lease-Back Transactions.

 

(a)        The Company will not, nor will it permit
any Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction on or after the initial issuance of Notes with respect
to any

    	 

    	

    

Principal Domestic Manufacturing Plant (except for (1) a transaction
providing for a lease for a term, including any renewal thereof, of not more than three years, (2) a transaction between the Company
and a Wholly-Owned Restricted Subsidiary or between Wholly-Owned Restricted Subsidiaries or (3) any lease of property acquired
after the date of the initial issuance of Notes if the rent payable by the Company or such Restricted Subsidiary thereunder is
to be reimbursed under a contract with the government of the United States or any instrumentality or agency thereof), if the commitment
by or on behalf of the purchaser is obtained more than 180 days after the later of (i) the completion of the acquisition, substantial
repair or alteration, construction, development or substantial improvement of such Principal Domestic Manufacturing Plant or (ii)
the placing in operation of such Principal Domestic Manufacturing Plant or of such Principal Domestic Manufacturing Plant as so
substantially repaired or altered, constructed, developed or substantially improved, unless either (x) the Company or such Restricted
Subsidiary would be entitled pursuant to clause (a) of the “Limitations on Liens” covenant to issue, assume, guarantee
or become liable for debt secured by a Mortgage on such Principal Domestic Manufacturing Plant without equally and ratably securing
the Notes or (y) the Company shall apply or cause to be applied, in the case of a sale or transfer for cash, an amount equal to
the net proceeds thereof (but not in excess of the net book value of such sale or transfer) and, in the case of a sale or transfer
otherwise than for cash, an amount equal to the fair market value (as determined by the Board of Directors but not in excess of
the net book value of such Principal Domestic Manufacturing Plant at the date of such sale or transfer) of the Principal Domestic
Manufacturing Plant so leased to the retirement, within 180 days after the effective date of such Sale and Lease-Back Transaction,
of Notes or other unsubordinated Indebtedness (as defined in clause (a) of the “Limitations on Liens” covenant) of
the Company or a Restricted Subsidiary; provided, however, that any such retirement of Notes shall be in accordance with Section
12.01 of the Base Indenture and provided, further, that the amount to be applied to such retirement of Notes or other Indebtedness
shall be reduced by an amount equal to the sum of (A) an amount equal to the principal amount of Notes delivered within 180 days
after the effective date of such Sale and Lease-Back Transaction to the Trustee for retirement and cancellation (for purposes of
making such calculation, the principal amount of Original Issue Discount Securities so retired or cancelled shall mean the portion
thereof that could have been declared due and payable pursuant to Section 5.01 at the time retired and cancelled) and (B) the principal
amount, plus any premium or fee paid in connection with any redemption in accordance with the terms, of other Indebtedness voluntarily
retired by the Company within such 180-day period, excluding retirements pursuant to mandatory prepayment provisions and payments
at maturity.

 

(b)        Notwithstanding the provisions of clause
(a) above, the Company or any Restricted Subsidiary may enter into a Sale and Lease-Back Transaction which would otherwise be subject
to the restrictions of such clause (a) if the aggregate amount of all Attributable Debt plus all Indebtedness secured by Mortgages
on Principal Domestic Manufacturing Plants or upon shares of capital stock or Indebtedness issued by any Restricted Subsidiary,
excluding Indebtedness secured by Mortgages permitted under any of clauses (a)(i) through (vii) of the “Limitations on Liens”
covenant, does not exceed 15% of Consolidated Net Tangible Assets.

 

Company May Consolidate, Etc., Only on Certain Terms.

 

In addition to the requirements set forth
in Section 9.01 of the Base Indenture, the Company shall not consolidate with or merge with or into, or sell, convey or lease all
or

    	 

    	

    

substantially all of its assets to, any other Corporation, if
as a result of any such consolidation or merger or such conveyance, sale or lease, properties or assets of the Company would become
subject to a Mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by the “Limitations
on Liens” covenant, unless the Company or such successor Person, as the case may be, shall take such steps as shall be necessary
effectively to secure the Notes equally and ratably with (or prior to) all Indebtedness secured thereby.

 

Definitions.

 

The following terms (except as otherwise
expressly provided or unless the context otherwise clearly requires) for all purposes of the definitions set forth in this Exhibit
B shall have the meanings specified below. All capitalized terms used in this Exhibit B and not otherwise defined shall
have the meanings assigned to them in the Indenture.

 

“Attributable Debt” in
respect of any Sale and Lease-Back Transaction means, as of the time of the determination, the lesser of (i) the sale price of
the Principal Domestic Manufacturing Plant so leased multiplied by a fraction the numerator of which is the remaining portion of
the base term of the lease included in such transaction and the denominator of which is the base term of such lease, and (ii) the
total obligation (discounted to present value at the implicit interest factor, determined in accordance with generally accepted
financial practice, included in the rental payments, or, if such interest factor cannot readily be determined, at a rate of interest
of 11% per annum, compounded semiannually) under the lease for rental payments (other than amounts required to be paid on account
of property taxes as well as maintenance, repairs, insurance, water rates and other items which do not constitute payments for
property rights (such as those based on real or energy costs or savings) during the remaining portion of the base term of the lease
included in such transaction).

 

“Consolidated Net Tangible Assets”
means as of any particular time the aggregate amount of assets after deducting therefrom (a) all current liabilities (excluding
any such liability that by its terms is extendable or renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed) and (b) all goodwill, excess of cost over assets acquired, patents,
copyrights, trademarks, trade names, unamortized debt discount and expense and other like intangibles, all as shown in the most
recent consolidated financial statements of the Company and its Subsidiaries prepared in accordance with generally accepted accounting
principles.

 

“Consolidated Net Worth”
means the sum of (i) the par value or stated value of the capital stock of the Company, (ii) the capital in excess of par value
and (iii) the retained earnings, all as shown on the most recent consolidated balance sheet of the Company and its Subsidiaries,
prepared in accordance with generally accepted accounting principles.

 

“Corporation” means a
corporation, association, company, joint stock company or business trust.

 

“Funded Debt” means, with
respect to any Person (a) every obligation of such Person for money borrowed and every obligation of such Person secured by any
lien, Mortgage, pledge or other security interest upon any property or asset of such Person (whether or not assumed by

    	 

    	

    

such Person), which by its terms matures at, or is extendible
or renewable at the option of the obligor to, a date more than 12 months after the time of the computation of the amount thereof,
and which would appear as a liability (other than a current liability or a deferred item) on a statement of financial position
of such Person in accordance with generally accepted accounting principles, (b) all obligations in respect of lease rentals which
would be shown on a balance sheet of the obligor as a liability (other than a current liability or a deferred item) in accordance
with generally accepted accounting principles, (c) all guarantees, direct or indirect, of any such Indebtedness or of any such
obligations of others or of dividends, and (d) all outstanding Preferred Stock of any Restricted Subsidiary.

 

“Preferred Stock” as applied
to the capital stock of any Corporation means stock of any class or classes (however designated) which is preferred as to the payment
of dividends, or as to the distribution of assets on any voluntary or involuntary liquidation or dissolution of such Corporation,
over shares of stock of any other class of such Corporation.

 

“Principal Domestic Manufacturing
Plant” means any manufacturing or processing plant or warehouse (other than such manufacturing plant or warehouse which,
in the opinion of the Board of Directors, is not of material importance to the total business conducted by the Company and its
Subsidiaries taken as a whole) together with the land upon which it is erected and fixtures comprising a part thereof, owned by
the Company or any Subsidiary and located in the United States of America, if the gross book value (without deduction of any depreciation
reserves) of all real property and fixed assets included in such plant on the date as of which the determination is being made
exceeds 1% of Consolidated Net Worth.

 

“Restricted Subsidiary”
means any Subsidiary which is organized under the laws of the United States or of any State or of the District of Columbia and
transacts all or a substantial portion of its business in the United States and which owns a Principal Domestic Manufacturing Plant;
provided, however, that the term shall not include any Subsidiary (a) which is solely or primarily engaged in the business of providing
or obtaining financing for the sale or lease of products sold or leased by the Company or any Subsidiary or which is otherwise
primarily engaged in the business of a finance company either on a secured or an unsecured basis or (b) which is solely or primarily
engaged in the business of owning, developing or leasing real property other than a Principal Domestic Manufacturing Plant.

 

“Sale and Lease-Back Transaction”
of a Corporation means any arrangement whereby property has been or is to be sold or transferred by such Corporation to any Person
with the intention on the part of such Corporation of taking back a lease of such property with a term of more than 36 months pursuant
to which the rental payments are calculated to amortize the purchase price of such property substantially over the useful life
of such property, and such property is in fact so leased by such Corporation.

 

“Subsidiary” means with
respect to the Company, a Corporation more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly,
by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of
this definition, “Voting Stock” means stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

    	 

    	

    

“Wholly-Owned Restricted Subsidiary”
means a Restricted Subsidiary all of the outstanding voting stock of which, other than directors’ qualifying shares, and
all the Funded Debt of which shall at the time be owned by the Company or by one or more other Wholly-Owned Restricted Subsidiaries,
or by the Company and one or more other Wholly-Owned Restricted Subsidiaries.

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