Document:

Exhibit 4.1

 

NEITHER
THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS.

 

 

WORKHORSE GROUP INC.

 

 

CONVERTIBLE NOTE

 

	Issuance Date: July 13, 2015	Original Principal Amount:  $250,000
	Note No.  WKHS-1	Consideration Paid at Close: $100,000

 

FOR VALUE
RECEIVED, WORKHORSE GROUP INC., a Nevada corporation (the "Company"), hereby promises to pay to the order of Cardinal
Capital Group, Inc. or registered assigns (the "Holder") the amount set out above as the Original Principal Amount
(as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the "Principal") when due,
whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the
terms hereof) and to pay interest ("Interest") on any outstanding Principal at the applicable Interest Rate from the
date set out above as the Issuance Date (the "Issuance Date") until the same becomes due and payable, upon the Maturity
Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof).

 

The Original
Principal Amount is $250,000 (two hundred fifty thousand) plus accrued and unpaid interest and any other fees. The Consideration
is $225,000 (two hundred twenty five thousand) payable by wire transfer (there exists a $25,000 original issue discount (the “OID”)).
The Holder shall pay $100,000 of Consideration upon closing of this Note. The Holder may pay additional Consideration to the Company
in such amounts and at such dates as Holder may choose in its sole discretion. For purposes hereof, the term “Outstanding
Balance” means the Original Principal Amount, as reduced or increased, as the case may be, pursuant to the terms hereof
for conversion, breach hereof or otherwise, plus any accrued but unpaid interest, collection and enforcements costs, and any other
fees or charges incurred under this Note. The Original Principal Amount due to Holder shall be prorated based on the Consideration
paid by Holder (plus an approximate 10% Original Issue Discount that is prorated based on the Consideration paid by the Holder
as well as any other interest or fees) such that the Company is only required to repay the amount funded and the Company is not
required to repay any unfunded portion of this Note.

 

		(1)	GENERAL TERMS

 

(a)                
Payment of Principal. The "Maturity Date" shall be two years from the date of each payment of Consideration, as may
be extended at the option of the Holder in the event that, and for so long as, an Event of Default (as defined below) shall not
have occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall not have
occurred and be continuing on the Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time
and the failure to cure would result in an Event of Default.

    	1

    	 

    

 

(b)
                 Interest. A one-time interest
charge of twelve percent (12%) (“Interest Rate”) shall be applied on the Issuance Date to the Original Principal Amount.
Interest hereunder shall be paid on the Maturity Date (or sooner as provided herein) to the Holder or its assignee in whose name
this Note is registered on the records of the Company regarding registration and transfers of Notes in cash or converted into
Common Stock at the Conversion Price provided the Equity Conditions are satisfied.

(c)                   Security.
 This Note shall not be secured by any collateral or any assets pledged to the Holder. 

		(2)	EVENTS OF DEFAULT.

 

(a)                
An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether
it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body):

 

(i)                 
The Company's failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this Note
(including, without limitation, the Company's failure to pay any redemption payments or amounts hereunder) or any other Transaction
Document;

 

(ii)                  A
Conversion Failure as defined in section 3(b)(ii)

 

(iii)             
The Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary
of the Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the
Company or any subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect
relating to the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company
any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 61 days; or the Company or any subsidiary
of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding
is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed
receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of sixty
one (61) days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the
Company or any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary of the Company
shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or
any corporate or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting any of the
foregoing;

 

(iv)              
The Company or any subsidiary of the Company shall default in any of its obligations under any other Note or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or
by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount exceeding $100,000, whether such indebtedness now exists
or shall hereafter be created; and

 

    	2

    	 

    

 

(v)                
The Common Stock is suspended or delisted for trading on the Over the Counter Bulletin Board market (the “Primary Market”).

 

(vi)                 The
Company loses its ability to deliver shares via “ DWAC/FAST” electronic transfer.

 

(vii)                The
Company loses its status as “DTC Eligible.”

 

(viii)              
The Company shall become late or delinquent in its filing requirements as a fully-reporting issuer registered with the Securities
& Exchange Commission.

 

(b)                
Upon the occurrence of any Event of Default, the Outstanding Balance shall immediately increase to 120% of the Outstanding Balance
immediately prior to the occurrence of the Event of Default (the “Default Effect”). The Default Effect shall automatically
apply upon the occurrence of an Event of Default without the need for any party to give any notice or take any other action.

 

(3)                
CONVERSION OF NOTE.This Note shall be convertible into shares of the Company's Common Stock, on the terms and conditions set
forth in this Section 3.

 

(a)                
Conversion Right. Subject to the provisions of Section 3(c), at any time or times on or after the Issuance Date, the Holder shall
be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable
shares of Common Stock in accordance with Section 3(b), at the Conversion Price (as defined below). The number of shares of Common
Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be equal to the quotient of dividing
the Conversion Amount by the Conversion Price. The Company shall not issue any fraction of a share of Common Stock upon any conversion.
If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of
a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer agent fees, legal fees, costs
and any other fees or costs that may be incurred or charged in connection with the issuance of shares of the Company’s Common
Stock to the Holder arising out of or relating to the conversion of this Note.

 

(i)                 
"Conversion Amount" means the portion of the Original Principal Amount and Interest to be converted, plus any penalties,
redeemed or otherwise with respect to which this determination is being made.

 

(ii)               
"Conversion Price" shall equal the lesser of (a) $0.20 or (b) 60% of the lowest trade occurring during the twenty five
(25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or
part of this Note, subject to adjustment as provided in this Note.

    	3

    	 

    

 

		(b)	Mechanics of Conversion.

 

(i)                 
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a "Conversion Date"),
the Holder shall (A) transmit by email, facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York, NY
Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the "Conversion
Notice") to the Company. On or before the third Business Day following the date of receipt of a Conversion Notice (the "Share
Delivery Date"), the Company shall (A) if legends are not required to be placed on certificates of Common Stock pursuant
to the then existing provisions of Rule 144 of the Securities Act of 1933 (“Rule 144”) and provided that the Transfer
Agent is participating in the Depository Trust Company's ("DTC") Fast Automated Securities Transfer Program, credit
such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder's or its designee's balance
account with DTC through its Deposit Withdrawal Agent Commission system or (B) if the Transfer Agent is not participating in the
DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled
which certificates shall not bear any restrictive legends unless required pursuant the Rule 144. If this Note is physically surrendered
for conversion and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being
converted, then the Company shall, upon request of the Holder, as soon as practicable and in no event later than three (3) Business
Days after receipt of this Note and at its own expense, issue and deliver to the holder a new Note representing the outstanding
Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this
Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock upon the transmission of
a Conversion Notice.

 

(ii)               
Company's Failure to Timely Convert. If within two (2) Trading Days after the Company's receipt of the facsimile or email copy
of a Conversion Notice the Company shall fail to issue and deliver to Holder via “DWAC/FAST” electronic transfer the
number of shares of Common Stock to which the Holder is entitled upon such holder's conversion of any Conversion Amount (a "Conversion
Failure"), the Original Principal Amount of the Note shall increase by $2,000 per day until the Company issues and delivers
a certificate to the Holder or credit the Holder's balance account with DTC for the number of shares of Common Stock to which
the Holder is entitled upon such holder's conversion of any Conversion Amount (under Holder’s and Company’s expectation
that any damages will tack back to the Issuance Date). Company will not be subject to any penalties once its transfer agent processes
the shares to the DWAC system. If the Company fails to deliver shares in accordance with the timeframe stated in this Section,
resulting in a Conversion Failure, the Holder, at any time prior to selling all of those shares, may rescind any portion, in whole
or in part, of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned
to the Outstanding Balance with the rescinded conversion shares returned to the Company (under Holder’s and Company’s
expectations that any returned conversion amounts will tack back to the original date of the Note).

 

(iii)             
DWAC/FAST Eligibility.If the Company fails for any reason to deliver to the Holder the Shares by DWAC/FAST electronic transfer
(such as by delivering a physical stock certificate), or if there is a Conversion Failure as defined in Section 3(b)(ii), and
if the Holder incurs a Market Price Loss, then at any time subsequent to incurring the loss the Holder may provide the Company
written notice indicating the amounts payable to the Holder in respect of the Market Price Loss and the Company must make the
Holder whole by either of the following options at Holder’s election:

 

Market
Price Loss = [(High trade price for the period between the day of conversion and the day the shares clear in the Holder’s
brokerage account) x (Number of shares receivable from the conversion)] – [(Net Sales price realized by Holder) x (Number
of shares receivable from the conversion)].

 

Option
A – Pay Market Price Loss in Cash. The Company must pay the Market Price Loss by cash payment, and any such cash payment
must be made by the third business day from the time of the Holder’s written notice to the Company.

Option
B – Add Market Price Loss to Outstanding Balance. The Company must pay the Market Price Loss by adding the Market Price
Loss to the Outstanding Balance (under Holder’s and the Company’s expectation that any Market Price Loss amounts will
tack back to the Issuance Date).

 

In the case that conversion shares
are not deliverable by DWAC/FAST electronic transfer an additional 10% discount to the Conversion Price will apply.

 

    	4

    	 

    

 

(iv)              
DTC Eligibility & Sub-Penny. If the Company fails to maintain its status as “DTC Eligible” for any reason, or,
if the Conversion Price is less than $0.01, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000)
(under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date).
In addition, the Conversion Price shall be redefined to equal the lesser of (a) $0.20 or (b) 50% of the lowest trade occurring
during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder
elects to convert all or part of this Note, subject to adjustment as provided in this Note.

 

(v)                
Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion
Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder
and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall
use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this
Note upon conversion.

 

		(c)	Limitations on Conversions
                                         or Trading.

 

(i)                 
Beneficial  Ownership.The Company shall not effect any conversions of this Note and the Holder shall not have the right to
convert any portion of this Note or receive shares of Common Stock as payment of interest hereunder to the extent that after giving
effect to such conversion or receipt of such interest payment, the Holder, together with any affiliate thereof, would beneficially
own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 9.99%
of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt of shares as
payment of interest. Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may
hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock
in excess of 9.99% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially
owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction
contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the
limitation contained in this Section applies, the determination of which portion of the principal amount of this Note is convertible
shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a principal amount
of this Note that, without regard to any other shares that the Holder or its affiliates may beneficially own, would result in
the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum principal amount permitted to be converted on such Conversion Date in accordance with Section 3(a)
and, any principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this
Note. The provisions of this Section may be waived by Holder upon written notification to the Company.

    	5

    	 

    

		(d)	Other Provisions.

 

(i)                 
Share Reservation.The Company shall at all times reserve and keep available out of its authorized Common Stock a number of
shares equal to at least 5 (five) times the full number of shares of Common Stock issuable upon conversion of all outstanding
amounts under this Note; and within 3 (three) Business Days following the receipt by the Company of a Holder's notice that such
minimum number of shares of Common Stock is not so reserved, the Company shall promptly reserve a sufficient number of shares
of Common Stock to comply with such requirement. The Company will at all times reserve at least 7,500,000 shares of Common Stock
for conversion.

 

(ii)               
Prepayment.During the first 120 days this Note is in effect, upon 10 business days’ notice to Holder (“Notice
Period”), the Company may redeem this Note by paying to the Holder an amount as follows (“Redemption Amount”):
(i) if the redemption is within the first 90 days this Note is in effect, then for an amount equal to 120% of the Outstanding
Balance of this Note along with any interest that has accrued during that period, (ii) if the redemption is after the 90th day
this Note is in effect, but before the 120th day this Note is in effect, then for an amount equal to 140% of the Outstanding Balance
of this Note along with any accrued interest. This Note may not be redeemed after 120 days without written consent of the Holder.
The redemption must be closed and paid for within 3 business days following the Notice Period or the redemption will be invalid
and the Company may not redeem this Note. The Holder may convert this Note pursuant to the terms hereof at all times, including
during the Notice Period, until the Redemption Amount has been received in full.

 

(iii)             
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Company or any of its subsidiaries of
any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then the Company shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The
types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited
to, terms addressing conversion discounts, conversion lookback periods, interest rates, original issue discounts, stock sale price,
private placement price per share, and warrant coverage.

 

(iv)              
All calculations under this Section 3 shall be rounded up to the nearest $0.00001 or whole share.

 

(v)                
Nothing herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to Section 2 herein
for the Company's failure to deliver certificates representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.

 

    	6

    	 

    

(4)                
SECTION 3(A)(9) OR 3(A)(10) TRANSACTION.So long as this Note is outstanding, the Company shall not enter into any transaction
or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9)
of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(10) of the Securities Act (a “3(a)(10) Transaction”).
In the event that the Company does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10)
Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note,
but not less than $25,000, will be assessed and will become immediately due and payable to the Holder at its election in the form
of cash payment or addition to the balance of this Note.

 

(5)                
PIGGYBACK REGISTRATION RIGHTS. The Company shall include on the next registration statement the Company files with SEC (or on
the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion of this
Note. Failure to do so will result in liquidated damages of 25% of the outstanding principal balance of this Note, but not less
than $25,000, being immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance
of this Note.

 

(6)                 REISSUANCE
OF THIS NOTE.

 

(a)                
Assignability. The Company may not assign this Note. This Note will be binding upon the Company and its successors and will inure
to the benefit of the Holder and  its successors and assigns and may be assigned by the Holder to anyone of its choosing without
Company’s approval.

 

(b)                
Lost,  Stolen  or  Mutilated  Note.Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note representing the outstanding Principal.

 

(7)                
APPLICABLE LAW AND VENUE. This Note shall be governed by and construed in accordance with the laws of the State of Nevada, without
giving effect to conflicts of laws thereof. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the city and county
of San Diego, in the State of California. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction
of such courts.

 

WAIVER. Any
waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to insist upon strict
adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in writing.

 

 

 

 

 

[Signature Page Follows]

    	7

    	 

    

 

IN WITNESS WHEREOF, the Company has caused this Convertible Note to be duly executed by a
duly authorized officer as of the date set forth above.

	 	
	 	 
	 	Workhorse Group Inc.
	 	 
	 	By:  	

	 	 	Julio C. Rodriguez

Chief Financial Officer

 

 

 

 

 

[Signature Page to Convertible Note No. WKHS-1]

 

 

8Exhibit 4.1

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY (“DTC”) TO A NOMINEE OF DTC, OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

 

	
No.
    	
$
    
	
 
    	
CUSIP No. 713448 CV8
    

 

PEPSICO, INC.

 

FLOATING RATE NOTE DUE 2017

 

PEPSICO, INC., a corporation in existence under the laws of the State of North Carolina (herein called the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of $                        on July 17, 2017, and to pay interest on said principal sum from July 17, 2015 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, quarterly in arrears on January 17, April 17, July 17 and October 17 of each year, commencing October 17, 2015 (each, an “Interest Payment Date”), at the rate determined in accordance with the provisions set forth on the reverse side hereof, until payment of the principal sum has been made or duly provided for. 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 Note (or one or more Predecessor Securities) is registered at the close of business on the Record Date for such Interest Payment Date, which shall be the January 2, April 2, July 2 and October 2 (whether or not a New York Business Day (as defined below)) next preceding such Interest Payment Date. Any such interest that is payable but is not so punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not earlier than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed and upon such notice as may be required by such exchange, if such manner of payment shall be deemed practical by the Trustee, all as more fully provided in the Indenture.

 

Payment of the principal of and interest on this Note will be made at the Place of Payment in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts; provided, however, that payments of interest may be made at the option of the Company by checks mailed to the addresses of the Persons entitled thereto as such addresses shall appear in the Security Register.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

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

 

	
Dated:                             , 2015
    	
PEPSICO, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Hugh F. Johnston
    
	
 
    	
 
    	
Title:
    	
Authorized Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Kenneth   Smith
    
	
 
    	
 
    	
Title:
    	
Authorized   Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
[seal]
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
The   Bank of New York Mellon, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
Dated:
    	
 
    

 

 

REVERSE OF NOTE

 

PEPSICO, INC.

 

FLOATING RATE NOTE DUE 2017

 

This Note is one of a duly authorized issue of debentures, notes or other evidences of indebtedness of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of May 21, 2007 (herein called the “Indenture”), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Trustee, and the Holders of the Securities, the terms upon which the Securities are, and are to be, authenticated and delivered, and the definition of capitalized terms used herein and not otherwise defined herein. The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may be denominated in different currencies, may mature at different times, may bear interest (if any) at different rates (which rates may be fixed or variable), may be subject to different redemption provisions (if any), may be subject to different sinking, purchase, or analogous funds (if any), may be subject to different covenants and Events of Default, and may otherwise vary as provided in the Indenture. This Note is one of a series of Securities of the Company designated as set forth on the face hereof (herein called the “Notes”), initially limited in aggregate principal amount to $600,000,000.

 

Interest on the Securities will be payable quarterly in arrears on each Interest Payment Date (whether or not a New York Business Day (as defined below)). If any Interest Payment Date (other than the maturity date or any earlier repayment date) falls on a day that is not a New York Business Day, the payment of interest that would otherwise be payable on such date will be postponed to the next succeeding New York Business Day, except that if such New York Business Day falls in the next succeeding calendar month, the applicable interest payment date will be the immediately preceding New York Business Day. If the maturity date or any earlier repayment date of this Note falls on a day that is not a New York Business Day, the payment of principal, premium, if any, and interest, if any, otherwise payable on such date will be postponed to the next succeeding New York Business Day, and no interest on such payment will accrue from and after the maturity date or earlier repayment date, as applicable.

 

“New York Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are required or permitted by law, regulation or executive order to be closed in New York City.

 

The interest rate will be reset quarterly on January 17, April 17, July 17 and October 17 of each year (each an “Interest Reset Date”), commencing October 17, 2015. However, if any Interest Reset Date would otherwise be a day that is not a New York Business Day, such Interest Reset Date will be the next succeeding day that is a New

 

 

York Business Day, except that if the next succeeding New York Business Day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding New York Business Day.

 

The initial interest period will be the period from and including July 17, 2015 to but excluding the first Interest Reset Date. The interest rate in effect during the initial interest period will be equal to LIBOR plus 25 basis points, determined two London Business Days (as defined below) prior to July 17, 2015.

 

“London Business Day” means a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

 

After the initial interest period, the interest periods will be the periods from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date (together with the initial interest period, each an “Interest Period”), except that the final Interest Period will be the period from and including the Interest Reset Date immediately preceding the maturity date to but excluding the maturity date. The interest rate per annum for this Note in any Interest Period will be equal to LIBOR plus 25 basis points, as determined by the Calculation Agent (as defined below). The interest rate in effect for the 15 calendar days prior to any repayment date earlier than the maturity date will be the interest rate in effect on the fifteenth day preceding such earlier repayment date.

 

The interest rate on this Note will be limited to the maximum rate permitted by New York law, as the same may be modified by United States law of general application.

 

The Bank of New York Mellon, or its successor appointed by the Company will act as calculation agent (the “Calculation Agent”). The Calculation Agent will determine LIBOR for each Interest Period on the second London Business Day prior to the first day of such Interest Period (an “Interest Determination Date”). Upon the request of any holder of this Note, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date.

 

LIBOR, with respect to any Interest Determination Date, will be the offered rate for deposits of U.S. dollars having a maturity of three months that appears on “Reuters Page LIBOR 01” at approximately 11:00 a.m., London time, on such Interest Determination Date. If on an Interest Determination Date, such rate does not appear on the “Reuters Page LIBOR01” as of 11:00 a.m., London time, or if “Reuters Page LIBOR01” is not available on such date, the Calculation Agent will obtain such rate from Bloomberg L.P. page “BBAM.”

 

If no offered rate appears on “Reuters Page LIBOR01” or Bloomberg L.P. page “BBAM” on an Interest Determination Date, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the Company, for a term of three months commencing on the applicable Interest Reset

 

7

 

Date and in a principal amount equal to an amount that in the judgment of the Calculation Agent is representative for a single transaction in U.S. dollars in such market at such time. The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR for such Interest Period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. in New York City on such Interest Determination Date by three major banks in New York City, selected by the Company, for loans in U.S. dollars to leading European banks, for a term of three months commencing on the applicable Interest Reset Date and in a principal amount equal to an amount that in the judgment of the Calculation Agent is representative for a single transaction in U.S. dollars in such market at such time; provided, however, that if the banks so selected are not quoting as mentioned above, the then-existing LIBOR rate will remain in effect for such Interest Period, or, if none, the interest rate will be the initial interest rate.

 

All percentages resulting from any calculation of any interest rate for the Securities will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 5.876545% (or .05876545) would be rounded to 5.87655% (or .0587655)), and all U.S. dollar amounts will be rounded to the nearest cent, with one-half cent being rounded upward. Each calculation of the interest rate on the Securities by the Calculation Agent will (in the absence of manifest error) be final and binding on the Holders of the Securities and the Company.

 

Accrued interest on the Securities will be calculated by multiplying the principal amount of the Securities by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the Interest Period for which interest is being paid. The interest factor for each day is computed by dividing the interest rate applicable to that day by 360. For these calculations, the interest rate in effect on any Interest Reset Date will be the applicable rate as reset on that date. The interest rate applicable to any other day is the interest rate from the immediately preceding Interest Reset Date or, if none, the initial interest rate.

 

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 under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected by such amendment or modification. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of 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 Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon registration of transfer hereof or

 

8

 

in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

The Indenture contains provisions setting forth certain conditions to the institution of proceedings by Holders of Securities with respect to the Indenture or for any remedy under the Indenture.

 

If an Event of Default with respect to the Notes shall occur and be continuing, the principal amount hereof may be declared due and payable or may be otherwise accelerated in the manner and with the effect provided in the Indenture.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registerable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any Place of Payment duly endorsed, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Notes are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of different authorized denominations as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration or 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 the presentment of this Note 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 Note is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company, the Trustee, nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Note which are defined in the Indenture and are not otherwise defined herein shall have the meanings assigned to them in the Indenture.

 

9

 

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 TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing                                                  attorney to transfer such Note on the books of the Issuer, 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 Note in every particular without alteration or enlargement or any change whatsoever.

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00247-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00247-of-00352.parquet"}]]