Document:

ex4-4_march2008.htm

    EXHIBIT 4.4

    
       

       

      

       

      THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGIS­TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  EXCEPT
AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF
FEBRUARY 22, 2008, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRA­TION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM,
SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

       

      Right to
Purchase 9,340,000 Shares of Common Stock, par value $.01 per share

       

      STOCK
PURCHASE WARRANT

       

      THIS CERTIFIES THAT, for value
received, AJW Master Fund, Ltd. or its registered assigns, is entitled to
purchase from Avitar
Inc., a Delaware corporation (the “Company”), at any time or from time to
time during the period specified in Paragraph 2 hereof, 9,340,000 fully
paid and nonassessable shares of the Company’s Common Stock, par value $.01 per
share (the “Common Stock”), at an exercise price per share equal to $.001 (the
“Exercise Price”).  The term “Warrant Shares,” as used herein, refers
to the shares of Common Stock purchasable hereunder.  The Warrant
Shares and the Exercise Price are subject to adjustment as provided in Paragraph
4 hereof.  The term “Warrants” means this Warrant and the other
warrants issued pursuant to that certain Securities Purchase Agreement, dated
February 22, 2008, by and among the Company and the Buyers listed on the
execution page thereof (the “Securities Purchase Agreement”).

       

      This
Warrant is subject to the following terms, provisions, and
conditions:

       

      1. Manner of Exercise; Issuance
of Certificates; Payment for Shares.

       

      
        	
                          Subject to the
      provisions hereof, this Warrant may be exercised by the holder hereof, in
      whole or in part, by the surrender of this Warrant, together with a
      completed exercise agreement in the form attached hereto (the “Exercise
      Agreement”), to the Company during normal business hours on any business
      day at the Company’s principal executive offices (or such other office or
      agency of the Company as it may designate by notice to the holder hereof),
      and upon (i) payment to the Company in cash, by certified or offi­cial
      bank check or by wire transfer for the account of the Company of the
      Exercise Price for the Warrant Shares specified in the Exercise Agreement
      or (ii) if the resale of the Warrant Shares by the holder is not then
      registered pursuant to an effective registration statement under the
      Securities Act of 1933, as amended (the “Securities Act”), delivery to the
      Company of a written notice of an election to effect a “Cashless Exercise”
      (as defined in Section 11(c) below) for the Warrant Shares specified in
      the Exercise Agreement.  The Warrant Shares so purchased shall
      be deemed to be issued to the holder hereof or such holder’s designee, as
      the record owner of such shares, as of the close of business on the date
      on which this Warrant shall have been surrendered, the completed Exercise
      Agreement shall have been deliv­ered, and payment shall have been made
      for such shares as set forth above.  Certifi­cates for the
      Warrant Shares so purchased, representing the aggregate number of shares
      specified in the Exercise Agreement, shall be delivered to the holder
      hereof within a reasonable time, not exceeding five (5) business days,
      after this Warrant shall have been so exercised.  The
      certificates so delivered shall be in such denominations as may be
      requested by the holder hereof and shall be registered in the name of such
      holder or such other name as shall be designated by such
      holder.  If this Warrant shall have been exercised only in part,
      then, unless this Warrant has expired, the Company shall, at its expense,
      at the time of delivery of such certificates, deliver to the holder a new
      Warrant representing the number of shares with respect to which this
      Warrant shall not then have been exercised.  In addition to all
      other available remedies at law or in equity, if the Company fails to
      deliver certificates for the Warrant Shares within five (5) business days
      after this Warrant is exercised, then the Company shall pay to the holder
      in cash a penalty (the “Penalty”) equal to 2% of the number of Warrant
      Shares that the holder is entitled to multiplied by the Market Price (as
      hereinafter defined) for each day that the Company fails to deliver
      certificates for the Warrant Shares.  For example, if the holder
      is entitled to 100,000 Warrant Shares and the Market Price is $2.00, then
      the Company shall pay to the holder $4,000 for each day that the Company
      fails to deliver certificates for the Warrant Shares.  The
      Penalty shall be paid to the holder by the fifth day of the month
      following the month in which it has
accrued.

              

      

       

      Notwithstanding
anything in this Warrant to the contrary, in no event shall the holder of this
Warrant be entitled to exercise a number of Warrants (or portions thereof) in
excess of the number of Warrants (or portions thereof) upon exercise of which
the sum of (i) the number of shares of Common Stock beneficially owned by the
holder and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised Warrants and the
unexercised or unconverted portion of any other securities of the Company
(including the Notes (as defined in the Securities Purchase Agreement)) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 4.9% of the outstanding shares of Common
Stock.  For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13D-G thereunder, except as
otherwise provided in clause (i) of the preceding
sentence.  Notwithstanding anything to the contrary contained herein,
the limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

       

      2. Period of
Exercise.

       

      
        	
                  This Warrant
      is exercisable at any time or from time to time on or after the date on
      which this Warrant is issued and delivered pursuant to the terms of the
      Securities Purchase Agreement and before 6:00 p.m., New York, New York
      time on the seventh (7th)
      anniversary of the date of issuance (the “Exercise
    Period”).

              

      

       

      3. Certain Agreements of the
Company.

       

      
        	
                  The
      Company hereby covenants and agrees as
follows:

              

      

       

      (a) Shares to
be Fully Paid.  All Warrant
Shares will, upon issuance in accordance with the terms of this Warrant, be
validly issued, fully paid, and nonassessable and free from all taxes, liens,
and charges with respect to the issue thereof.

       

      (b) Reservation
of Shares.  During the
Exercise Period, the Company shall at all times have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a suf­ficient
number of shares of Common Stock to provide for the exercise of this
Warrant.

       

      (c) Listing.  The Company shall
promptly secure the listing of the shares of Common Stock issuable upon exercise
of the Warrant upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance upon exercise of this Warrant) and shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of
all shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be listed
on such national securities exchange or automated quotation system.

       

      (d) Certain
Actions Prohibited.  The Company will
not, by amendment of its charter or through any re­organi­zation,
transfer of assets, consolidation, mer­ger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed by it hereunder,
but will at all times in good faith assist in the carrying out of all the
provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the holder of this Warrant in order to protect the
exercise privilege of the holder of this Warrant against dilu­tion or other
impairment, consistent with the tenor and purpose of this
Warrant.  Without limiting the general­ity of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this
Warrant.

       

      (e) Successors
and Assigns.  This Warrant will
be binding upon any entity succeeding to the Company by merger, consolidation,
or acquisition of all or sub­stantially all the Company’s
assets.

       

      4. Antidilution
Provisions.

       

      During
the Exercise Period, the Exercise Price and the number of Warrant Shares shall
be subject to adjustment from time to time as provided in this Paragraph
4.

       

      In the
event that any adjustment of the Exercise Price as required herein results in a
fraction of a cent, such Exercise Price shall be rounded up to the nearest
cent.

       

      (a) Adjustment
of Exercise Price and Number of Shares upon Issuance of Common Stock.  Except as
otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever on or
after the date of issuance of this Warrant, the Company issues or sells, or in
accordance with Paragraph 4(b) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Market Price on
the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
Issuance, the Exercise Price will be reduced to a price determined by
multiplying the Exercise Price in effect immediately prior to the Dilutive
Issuance by a fraction, (i) the numerator of which is an amount equal to the sum
of (x) the number of shares of Common Stock actually outstanding immediately
prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
consideration, calculated as set forth in Paragraph 4(b) hereof, received by the
Company upon such Dilutive Issuance divided by the Market Price in effect
immediately prior to the Dilutive Issuance, and (ii) the denominator of which is
the total number of shares of Common Stock Deemed Outstanding (as defined below)
immediately after the Dilutive Issuance.

       

      (b) Effect on
Exercise Price of Certain Events.  For purposes of
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

       

      (i) Issuance
of Rights or Options.  If the Company in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock (“Convertible
Securities”) (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as “Options”) and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share.  For purposes of the preceding
sentence, the “price per share for which Common Stock is issuable upon the
exercise of such Options” is determined by dividing (i) the total amount, if
any, received or receivable by the Company as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if
applicable).  No further adjustment to the Exercise Price will be made
upon the actual issuance of such Common Stock upon the exercise of such Options
or upon the conversion or exchange of Convertible Securities issuable upon
exercise of such Options.

       

      (ii) Issuance
of Convertible Securities.  If the Company in
any manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Market Price on the date of
issuance, then the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities will, as of the
date of the issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the Company for such price per
share.  For the purposes of the preceding sentence, the “price per
share for which Common Stock is issuable upon such conversion or exchange” is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii)
the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities.  No further adjustment
to the Exercise Price will be made upon the actual issuance of such Common Stock
upon conversion or exchange of such Convertible Securities.

       

      (iii) Change in
Option Price or Conversion Rate.  If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion or exchange of
any Convertible Securities; or (iii) the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock (other than
under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold.

       

      (iv) Treatment
of Expired Options and Unexercised Convertible Securities.  If, in any case,
the total number of shares of Common Stock issuable upon exercise of any Option
or upon conversion or exchange of any Convertible Securities is not, in fact,
issued and the rights to exercise such Option or to convert or exchange such
Convertible Securities shall have expired or terminated, the Exercise Price then
in effect will be readjusted to the Exercise Price which would have been in
effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been
issued.

       

      (v) Calculation
of Consideration Received.  If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or
sale.  In case any Common Stock, Options or Convertible Securities are
issued or sold for a consideration part or all of which shall be other than
cash, the amount of the consideration other than cash received by the Company
will be the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by
the Company will be the Market Price thereof as of the date of
receipt.  In case any Common Stock, Options or Convertible Securities
are issued in connection with any acquisition, merger or consolidation in which
the Company is the surviving corporation, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and
business of the non-surviving corporation as is attributable to such Common
Stock, Options or Convertible Securities, as the case may be.  The
fair value of any consideration other than cash or securities will be determined
in good faith by the Board of Directors of the Company.

       

      (vi) Exceptions
to Adjustment of Exercise Price.  No adjustment to
the Exercise Price will be made (i) upon the exercise of any warrants, options
or convertible securities granted, issued and outstanding on the date of
issuance of this Warrant; (ii) upon the grant or exercise of any stock or
options which may hereafter be granted or exercised under any employee benefit
plan, stock option plan or restricted stock plan of the Company now existing or
to be implemented in the future, so long as the issuance of such stock or
options is approved by a majority of the independent members of the Board of
Directors of the Company or a majority of the members of a committee of
independent directors established for such purpose; or (iii) upon the exercise
of the Warrants.

       

      (c) Subdivision
or Combination of Common Stock.  If the Company at
any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced.  If the
Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price in effect immediately
prior to such combination will be proportionately increased.

       

      (d) Adjustment
in Number of Shares.  Upon each
adjustment of the Exercise Price pursuant to the provisions of this Paragraph 4,
the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.

       

      (e) Consolidation,
Merger or Sale.  In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon
the exercise of this Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place.  In any such case, the Company will make appropriate provision
to insure that the provisions of this Paragraph 4 hereof will thereafter be
applicable as nearly as may be in relation to any shares of stock or securities
thereafter deliverable upon the exercise of this Warrant.  The Company
will not effect any consolidation, merger or sale or conveyance unless prior to
the consummation thereof, the successor corporation (if other than the Company)
assumes by written instrument the obligations under this Paragraph 4 and the
obligations to deliver to the holder of this Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the holder
may be entitled to acquire.

       

      (f) Distribution
of Assets.  In case the
Company shall declare or make any distribution of its assets (including cash) to
holders of Common Stock as a partial liquidating dividend, by way of return of
capital or otherwise, then, after the date of record for determining
shareholders entitled to such distribution, but prior to the date of
distribution, the holder of this Warrant shall be entitled upon exercise of this
Warrant for the purchase of any or all of the shares of Common Stock subject
hereto, to receive the amount of such assets which would have been payable to
the holder had such holder been the holder of such shares of Common Stock on the
record date for the determination of shareholders entitled to such
distribution.

       

      (g) Notice of
Adjustment.  Upon the
occurrence of any event which requires any adjustment of the Exercise Price,
then, and in each such case, the Company shall give notice thereof to the holder
of this Warrant, which notice shall state the Exercise Price resulting from such
adjustment and the increase or decrease in the number of Warrant Shares
purchasable at such price upon exercise, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based.  Such calculation shall be certified by the Chief Financial
Officer of the Company.

       

      (h) Minimum
Adjustment of Exercise Price.  No adjustment of
the Exercise Price shall be made in an amount of less than 1% of the Exercise
Price in effect at the time such adjustment is otherwise required to be made,
but any such lesser adjustment shall be carried forward and shall be made at the
time and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

       

      (i) No
Fractional Shares.  No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but
the Company shall pay a cash adjustment in respect of any fractional share which
would otherwise be issuable in an amount equal to the same fraction of the
Market Price of a share of Common Stock on the date of such
exercise.

       

      (j) Other
Notices.  In case at any
time:

       

      (i) the
Company shall declare any dividend upon the Common Stock payable in shares of
stock of any class or make any other distribution (including dividends or
distributions payable in cash out of retained earnings) to the holders of the
Common Stock;

       

      (ii) the
Company shall offer for subscription pro rata to the holders of the Common Stock
any additional shares of stock of any class or other rights;

       

      (iii) there
shall be any capital reorganiza­tion of the Company, or reclassification of
the Common Stock, or consolidation or merger of the Company with or into, or
sale of all or substan­tially all its assets to, another corporation or
entity; or

       

      (iv) there
shall be a voluntary or involun­tary dissolution, liquidation or winding up
of the Company;

       

      then, in
each such case, the Company shall give to the holder of this Warrant (a) notice
of the date on which the books of the Company shall close or a record shall be
taken for determining the holders of Common Stock entitled to receive any such
divi­dend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place.  Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common Stock for stock or other securities or property deliverable upon such
reorganization, re­classification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be.  Such notice shall be
given at least 30 days prior to the record date or the date on which the
Company’s books are closed in respect thereto.  Failure to give any
such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.

       

      (k) Certain
Events.  If any event
occurs of the type contemplated by the adjustment provisions of this Paragraph 4
but not expressly provided for by such provisions, the Company will give notice
of such event as provided in Paragraph 4(g) hereof, and the Company’s Board of
Directors will make an appropriate adjustment in the Exercise Price and the
number of shares of Common Stock acquirable upon exercise of this Warrant so
that the rights of the holder shall be neither enhanced nor diminished by such
event.

       

      (l) Certain
Definitions.

       

      (i) “Common
Stock Deemed Outstanding” shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable upon
the exercise of Options, as of the date of such issuance or grant of such
Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum
total number of shares of Common Stock issuable upon conversion or exchange of
Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.

       

      (ii) “Market
Price,” as of any
date, (i) means the average of the last reported sale prices for the shares of
Common Stock on the OTCBB for the five (5) Trading Days immediately preceding
such date as reported by Bloomberg, or (ii) if the OTCBB is not the principal
trading market for the shares of Common Stock, the average of the last reported
sale prices on the principal trading market for the Common Stock during the same
period as reported by Bloomberg, or (iii) if market value cannot be calculated
as of such date on any of the foregoing bases, the Market Price shall be the
fair market value as reasonably determined in good faith by (a) the Board of
Directors of the Company or, at the option of a majority-in-interest of the
holders of the outstanding Warrants by (b) an independent investment bank of
nationally recognized standing in the valuation of businesses similar to the
business of the corporation. The manner of determining the Market Price of the
Common Stock set forth in the foregoing definition shall apply with respect to
any other security in respect of which a determination as to market value must
be made hereunder.

       

      (iii) “Common
Stock,” for
purposes of this Paragraph 4, includes the Common Stock, par value $.01 per
share, and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only shares of Common Stock,
par value $.01 per share, in respect of which this Warrant is exercisable, or
shares resulting from any subdivision or combination of such Common Stock, or in
the case of any reorganization, reclassification, consolidation, merger, or sale
of the character referred to in Paragraph 4(e) hereof, the stock or other
securities or property provided for in such Paragraph.

       

      5. Issue
Tax.

       

      
        	
                  The
      issuance of certificates for Warrant Shares upon the exercise of this
      Warrant shall be made without charge to the holder of this Warrant or such
      shares for any issuance tax or other costs in respect thereof, provided
      that the Company shall not be required to pay any tax which may be payable
      in respect of any transfer involved in the issuance and delivery of any
      certificate in a name other than the holder of this
    Warrant.

              

      

       

      6. No Rights or Liabilities as
a Shareholder.

       

      
        	
                  This
      Warrant shall not entitle the holder hereof to any voting rights or other
      rights as a shareholder of the Company.  No provision of this
      Warrant, in the absence of affirmative action by the holder hereof to
      purchase Warrant Shares, and no mere enumeration herein of the rights or
      privileges of the holder hereof, shall give rise to any liability of such
      holder for the Exercise Price or as a shareholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

              

      

       

      7. Transfer, Exchange, and
Replacement of Warrant.

       

      (a) Restriction
on Transfer.  This Warrant and
the rights granted to the holder hereof are transferable, in whole or in part,
upon surrender of this Warrant, together with a properly executed assignment in
the form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, pro­vided, however, that any transfer or
assignment shall be subject to the conditions set forth in Paragraph 7(f) hereof
and to the applicable provisions of the Securities Purchase
Agreement.  Until due presentment for registration of transfer on the
books of the Company, the Company may treat the registered holder hereof as the
owner and holder hereof for all purposes, and the Company shall not be affected
by any notice to the con­trary.  Notwithstanding anything to the
contrary contained herein, the registration rights described in Paragraph 8 are
assignable only in accordance with the provisions of that certain Registration
Rights Agreement, dated February 22, 2008, by and among the Company and the
other signatories thereto (the “Registration Rights Agreement”).

       

      (b) Warrant
Exchangeable for Different Denomina­tions.  This Warrant is
exchange­able, upon the surrender hereof by the holder hereof at the office
or agency of the Company referred to in Paragraph 7(e) below, for new Warrants
of like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

       

      (c) Replacement
of Warrant.  Upon receipt of
evi­dence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of any such loss,
theft, or destruc­tion, upon delivery of an indemnity agreement
reason­ably satisfactory in form and amount to the Company, or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor.

       

      (d) Cancellation;
Payment of Expenses.  Upon the
surrender of this Warrant in connection with any trans­fer, exchange, or
replacement as provided in this Paragraph 7, this Warrant shall be promptly
canceled by the Company.  The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than legal expenses, if
any, incurred by the holder or transferees) and charges payable in connection
with the preparation, execution, and delivery of Warrants pursuant to this
Paragraph 7.

       

      (e) Register.  The Company shall
maintain, at its principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder hereof), a register for
this Warrant, in which the Company shall record the name and address of the
person in whose name this Warrant has been issued, as well as the name and
address of each transferee and each prior owner of this Warrant.

       

      (f) Exercise
or Transfer Without Registration.  If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the “Securities Act”) and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an “accredited investor”
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.  The first holder of this Warrant, by taking and
holding the same, represents to the Company that such holder is acquiring this
Warrant for investment and not with a view to the distribution
thereof.

       

      8. Registration
Rights.

       

      
        	
                The
      initial holder of this Warrant (and certain assignees thereof) is entitled
      to the benefit of such registration rights in respect of the Warrant
      Shares as are set forth in Section 2 of the Registration Rights
      Agreement.

              

      

       

      9. Notices.

       

      
        	
                  All
      notices, requests, and other communications required or permitted to be
      given or delivered hereunder to the holder of this Warrant shall be in
      writing, and shall be personally delivered, or shall be sent by certified
      or registered mail or by recognized overnight mail courier, postage
      prepaid and addressed, to such holder at the address shown for such holder
      on the books of the Company, or at such other address as shall have been
      furnished to the Company by notice from such holder.  All
      notices, requests, and other communications required or permitted to be
      given or delivered hereunder to the Company shall be in writing, and shall
      be personally delivered, or shall be sent by certified or registered mail
      or by recognized overnight mail courier, postage prepaid and addressed, to
      the office of the Company at 65 Dan Road, Canton, MA 02021, Attention:
      Chief Executive Officer, or at such other address as shall have been
      furnished to the holder of this Warrant by notice from the
      Company.  Any such notice, request, or other communication may
      be sent by facsimile, but shall in such case be subsequently confirmed by
      a writing personally delivered or sent by certified or registered mail or
      by recognized overnight mail courier as provided above.  All
      notices, requests, and other communications shall be deemed to have been
      given either at the time of the receipt thereof by the person entitled to
      re­ceive such notice at the address of such person for purposes of
      this Paragraph 9, or, if mailed by registered or certified mail or with a
      recognized overnight mail courier upon deposit with the United States Post
      Office or such overnight mail courier, if postage is prepaid and the
      mailing is properly addressed, as the case may
  be.

              

      

       

      10. Governing
Law.

       

      
        	
                  THIS
      WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
      PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF
      CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE
      EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW
      YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE
      AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS
      CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE
      OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
      PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT
      EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
      PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO
      SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH
      PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
      PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.  THE
      PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT
      SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES,
      INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
      DISPUTE.

              

      

       

      11. Miscellaneous.

       

      (a) Amendments.  This Warrant and
any provision hereof may only be amended by an instrument in writing signed by
the Company and the holder hereof.

       

      (b) Descriptive
Headings.  The descriptive
headings of the several paragraphs of this Warrant are in­serted for
purposes of reference only, and shall not affect the meaning or construction of
any of the provisions hereof.

       

      (c) Cashless
Exercise.  Notwithstanding
anything to the contrary contained in this Warrant, if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act, this Warrant may be exercised
by presentation and surrender of this Warrant to the Company at its principal
executive offices with a written notice of the holder’s intention to effect a
cashless exercise, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
“Cashless Exercise”).  In the event of a Cashless Exercise, in lieu of
paying the Exercise Price in cash, the holder shall surrender this Warrant for
that number of shares of Common Stock determined by multiplying the number of
Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market Price
per share of the Common Stock and the Exercise Price,  and the
denominator of which shall be the then current Market Price per share of Common
Stock.  For example, if the holder is exercising 100,000 Warrants with
a per Warrant exercise price of $0.75 per share through a cashless exercise when
the Common Stock’s current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common
Stock.

       

      (d) Remedies.  The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the holder, by vitiating the intent and purpose of the
transaction contemplated hereby.  Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Warrant, that the holder shall
be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Warrant and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being
required.

       

      

       

      

       

      

       

      

       

      

       

      

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by its duly authorized
officer.

       

      AVITAR
INC.

      

      

      

      By:
_______________________________

       Peter
Phildius

       Chief
Executive Officer

      

       

      Dated as
of February 22, 2008

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      FORM
OF EXERCISE AGREEMENT

       

      

       

      Dated:  ________ __,
200_

       

      

       

      To:           ______________________

       

      

       

      

       

      The
undersigned, pursuant to the provisions set forth in the within Warrant, hereby
agrees to purchase ________ shares of Common Stock covered by such Warrant, and
makes pay­ment herewith in full therefor at the price per share provided by
such Warrant in cash or by certified or official bank check in the amount of,
or, if the resale of such Common Stock by the undersigned is not currently
registered pursuant to an effective registration statement under the Securities
Act of 1933, as amended, by surrender of securities issued by the Company
(including a portion of the Warrant) having a market value (in the case of a
portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________.  Please issue a certificate or
certifi­cates for such shares of Common Stock in the name of and pay any
cash for any fractional share to:

       

      

       

      Name:                      ______________________________

      

      

      Signature:

      Address:____________________________

      _____________________________

      

      

      
        	
                 
      

              	
                Note:

              	
                The
      above signature should correspond exactly with the name on the face of the
      within Warrant, if applicable.

              

      

      

       

      and, if
said number of shares of Common Stock shall not be all the shares purchasable
under the within Warrant, a new Warrant is to be issued in the name of said
undersigned covering the balance of the shares purchasable thereunder less any
frac­tion of a share paid in cash.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      FORM
OF ASSIGNMENT

       

      

       

      

       

      FOR VALUE RECEIVED, the
undersigned hereby sells, assigns, and transfers all the rights of the
undersigned under the within Warrant, with respect to the number of shares of
Common Stock covered thereby set forth hereinbelow, to:

      

       

      Name of
Assignee                                                                Address                                                                No of
Shares

       

      

       

      

       

      

       

      , and
hereby irrevocably constitutes and appoints ___________________________________
as agent and attorney-in-fact to trans­fer said Warrant on the books of the
within-named corporation, with full power of substitution in the
premises.

       

      

       

      Dated:                      ________
__, 200_

       

      

       

      In the
presence
of:                                                                                    ______________________________

       

      Name:______________________________

      

       

      Signature:_________________________

      Title of
Signing Officer or Agent (if any):

      ______________________________

      Address:                      ______________________________

      ______________________________

      

      

      
        	
                 
      

              	
                Note:

              	
                The
      above signature should correspond exactly with the name on the face of the
      within Warrant, if
applicable.EX-4.D.1

 

Exhibit 4(d)(1)

(Form of Security)

			
	 	 	 
	REGISTERED
	 	REGISTERED

PITNEY BOWES INC.

					
	 	 	 	 	 
	No. FXRA-
	 	GLOBAL MEDIUM-TERM NOTE

(Fixed Rate)
	 	CUSIP No. 72447XAD9

ISIN No.                     

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY (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 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.

     If applicable, the “Total Amount of OID”, “Original Yield to Maturity” and “Initial Accrual Period
OID” (computed under the Approximate Method) set forth below have been completed solely for the
purposes of applying Federal Income Tax Original Issue Discount (“OID”) Rules.

	 	 	 
	PRINCIPAL AMOUNT AND CURRENCY
(if other than U.S. dollars): $250,000,000

	 	EXCHANGE RATE AGENT:
	 
	 	 
	DENOMINATIONS

(If other than U.S. dollars or the
U.S. dollar denominations set forth on
the reverse): U.S. $2,000 or an
integral multiple of U.S. $1,000 in
excess thereof

	 	STATED MATURITY OF SECURITY: March
15, 2018
	 
	 	 
	OPTION TO RECEIVE PAYMENT IN SPECIFIED
CURRENCY:

YES: o NO:
þ

	 	COMPUTATION PERIOD (if other than
a 360-day year of 12 30-day
months):
	ISSUE DATE: March 7, 2008

	 	REGULAR RECORD DATE(S) (if other than 15th

 

 

	 	 	 
	 

	 	day preceding the applicable Interest Payment Date): March 1 and September 1
	 
	 	 
	INTEREST RATE: 5.60% per annum

	 	REDEMPTION PERCENTAGE(S):
	 
	 	 
	INTEREST PAYMENT DATE(S): March 15 and
September 15, commencing September 15,
2008

	 	REPAYMENT PERCENTAGE(S)
(option of Holder) (if other than
100% of Principal Amount):
	 
	 	 
	REDEMPTION DATE(S): Any time

	 	ORIGINAL ISSUE DISCOUNT SECURITY:
	 
	 	 
	REPAYMENT DATE(S) (option of Holder):

	 	TOTAL AMOUNT OF OID:
	 
	 	 
	ORIGINAL YIELD TO MATURITY:

	 	INITIAL ACCRUAL PERIOD OID:
	 
	 	 
	 

	 	ISSUE PRICE: 98.883% of the
principal amount plus accrued
interest, if any, from March 7,
2008

OTHER PROVISIONS:

     1. Make Whole Redemption. The Company may redeem the Notes, at any time in whole or from time
to time in part, at a redemption price equal to the sum of 100% of the aggregate principal amount
of the Notes being redeemed, accrued but unpaid interest on those Notes to the redemption date, and
the Make-Whole Amount, if any, as defined below.

     “Make-Whole Amount” means, in connection with any optional redemption, the excess, if any, of
(a) the aggregate present value as of the date of such redemption of each dollar of principal being
redeemed and the amount of interest, exclusive of interest accrued to the date of redemption, that
would have been payable in respect of each such dollar if such redemption had not been made,
determined by discounting, on a semiannual 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 been payable if such redemption had not been made, to the date of
redemption, over (b) the aggregate principal amount of the Notes being redeemed.

     “Reinvestment Rate” means 0.35% 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 payment date of the principal amount of the Notes 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

2

 

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
dated as of February 14, 2005 (the “Initial Indenture”), between the Company and Citibank, N.A., as
trustee, and the First Supplemental Indenture (the “First Supplemental Indenture”, and together
with the Initial Indenture, the “Indenture”), dated as of October 23, 2007 by and among the
Company, The Bank of New York Mellon Corporation, as successor trustee (the “Trustee”) and
Citibank, N.A., as resigning trustee, then such other reasonably comparable index which shall be
designated by the Company.

     2. Change of Control Offer. If a change of control triggering event occurs, unless the
Company has exercised its option to redeem the Notes as described above under “Make Whole
Redemption”, the Company will be required to make an offer (the “change of control offer”) to each
holder of the Notes to repurchase all or any part (equal to $2,000 or an integral multiple of
$1,000 in excess thereof) of that holder’s notes on the terms set forth in the Notes. In the change
of control offer, the Company will be required to offer payment in cash equal to 101% of the
aggregate principal amount of notes repurchased, plus accrued and unpaid interest, if any, on the
Notes 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, but after public announcement of the transaction that constitutes or may constitute the
change of control, a notice will be mailed to holders of the Notes describing the transaction that
constitutes or may constitute the change of control triggering event and offering to repurchase the
Notes on the date specified in the notice, which date will 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, will 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 will cause another notice meeting the
aforementioned requirements to be mailed to holders of the Notes.

     On the change of control payment date, the Company will, to the extent lawful:

	 	•	 	accept for payment all notes or portions of notes 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 notes or portions of notes properly tendered; and
	 
	 	•	 	deliver or cause to be delivered to the trustee the Notes properly accepted together
with an officers’ certificate stating the aggregate principal amount of notes or
portions of notes being repurchased.

3

 

     The Company will 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 notes properly tendered and not withdrawn under its offer. In addition, the
Company will not repurchase any notes 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.

     The Company will 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
Notes 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
Notes, the Company will comply with those securities laws and regulations and will not be deemed to
have breached its obligations under the change of control offer provisions of the Notes by virtue
of any such conflict.

     For purposes of the change of control offer provisions of the Notes, 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 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” (as that term is defined in
the Indenture) (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 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 (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.

4

 

     “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 on the date the Notes were
issued or (2) was nominated for election, elected or appointed to such Board of Directors with the
approval of a majority of the continuing directors who were members of such Board of Directors 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).

     “Fitch” means Fitch Ratings.

     “Investment grade rating” means a rating equal to or higher than BBB- (or the equivalent) by
Fitch, 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.

     “Rating agencies” means (1) each of Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s
or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for
reasons outside of the control of the Company, a “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the
Company (as certified by a resolution of the Board of Directors) as a replacement agency for Fitch,
Moody’s or S&P, or all of them, as the case may be.

     “Rating event” means the rating on the Notes is lowered by each of the rating agencies and the
Notes 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 will be extended so long as the rating of the Notes 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 comprised 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 Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.

     “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.

5

 

     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 specified on the Schedule
of Increases or Decreases hereto (any currency specified above other than U.S. dollars being
hereinafter referred to as a “Specified Currency”) on the Stated Maturity specified above and to
pay interest thereon (computed, unless a different Computation Period is specified above, 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 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 Date(s) 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, until the principal hereof is paid or duly made available for payment; provided,
however, that, unless the Holder hereof is entitled to make, and has made, a Specified Currency
Payment Election (as hereinafter defined) with respect to one or more such payments, the Company
will make all such payments in respect of this Security in U.S. dollars in amounts determined as
set forth on the reverse hereof. 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 fifteenth day (whether or not a Market Day (as defined on the reverse hereof)) next
preceding such Interest Payment Date, unless a different Regular Record Date is specified above
(the “Regular Record Date”); provided, however, that interest payable at Maturity will be payable
to the Person to whom principal shall be payable; and provided, further, that, if the Issue Date
is after a Regular Record Date and before the next succeeding Interest Payment Date the first
payment of interest shall be payable on the second Interest Payment Date following the Issue Date
to the Person in whose name this Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date immediately preceding such Interest Payment 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 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

6

 

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 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 specified on the face hereof falls on a day that
is not a Market Day with respect to this Security, the related payment of principal, premium, if
any, and/or interest will be made on the next succeeding Market 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.

     If (a) this Security is payable in U.S. dollars or (b) this Security is payable in a Specified
Currency and (i) the Holder is not entitled to make, or has not made, a Specified Currency Payment
Election and the Exchange Rate Agent is able to convert the Specified Currency into U.S. dollars or
(ii) the Specified Currency is unavailable to the Company because of the imposition of exchange
controls or other circumstances beyond the control of the Company, then payment of the principal of
(and premium, if any) and interest on this Security will be made at the designated office of the
Trustee at The Bank of New York, 101 Barclay Street, New York, New York 10286 (the “Designated
Office”), or such other office or agency of the Company maintained by it for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or public debts; provided,
however, that payment of the principal of (and premium, if any) and interest due on this Security
at Maturity will be made in immediately available funds at such Designated Office or other office
or agency if this Security is presented to the Trustee in time for the Trustee to make such
payments in accordance with its normal procedures; and provided, further, that, unless this
Security is a Global Security, at the option of the Company payment of interest due on this
Security on an Interest Payment Date other than Maturity may be made by check mailed to the address
of the Holder as such address shall appear in the Security Register; or by wire transfer to an
account maintained by such Holder with a bank located in the United States, provided that such
Holder shall have provided in writing to the Trustee, on or prior to the relevant Regular Record
Date, appropriate payment instructions.

7

 

     Notwithstanding the foregoing, if this Security is a Global Security, all payments due on this
Security will be made in immediately available funds to the Holder.

     If this Security is payable in a Specified Currency and (i) the Holder hereof is entitled to
make, and has made, a Specified Currency Payment Election with respect to such payments and (ii)
either the Specified Currency is available to the Company or is not available to the Company for
any reason other than the imposition of exchange controls or other circumstances beyond the control
of the Company, then (x) the payment of interest due on this Security on any Interest Payment Date
other than Maturity will be made in the Specified Currency (or, if such Specified Currency is not
at the time of such payment legal tender for the payment of public and private debts, in such other
coin or currency of the country which issued such Specified Currency as at the time of such payment
is legal tender for the payment of such debts) by check drawn upon a bank office located outside
the United States and mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register, and (y) payment of principal (and premium, if any) and interest
due at Maturity will be made in such Specified Currency (or, if applicable, such other coin or
currency) by wire transfer of immediately available funds to an account maintained by the Holder
hereof with a bank office located in the country which issued the Specified Currency upon
presentation of this Security to the Trustee in time for such wire transfer to be made by the
Trustee in accordance with its normal procedures. If this Security is payable in a Specified
Currency, the Holder hereof may elect, if specified above, to receive payments of principal of (and
premium, if any) and interest on this Security in such Specified Currency (a “Specified Currency
Payment Election”) by delivery of a written request (including, in the case of an election with
respect to payments at Maturity, appropriate wire transfer instructions) to the Trustee at its
Designated Office referred to above on or prior to the relevant Regular Record Date or the
fifteenth day prior to Maturity, as the case may be. Such request may be in writing (mailed or hand
delivered) or by facsimile transmission. In such circumstance, the Holder may elect to receive
payment in the Specified Currency for all payments of principal (and premium, if any) and interest
and need not file a separate election for each payment. Such election will remain in effect until
revoked by written notice to the Trustee, but written notice of any such revocation must be
received by the Trustee on or prior to the relevant Regular Record Date or the fifteenth day prior
to Maturity, as the case may be. If this Security is a Global Security, the Holder shall be
entitled to make a Specified Currency Payment Election with respect to all or any part of the
principal amount of this Security and in such circumstances, as well as the circumstances referred
to in clause (ii) above, all payments due on this Security will be made in immediately available
funds in the Specified Currency to the Holder. Reference herein to the Specified Currency shall be
deemed to include such other coin or currency as at the time of any payment with respect to this
Security is legal tender for the payment of public and private debts in the country issuing the
Specified Currency at the time this Security was originally issued.

     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.

8

 

     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:  	Michael Monahan 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Helen Shan 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 

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,

   as Trustee

 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

9

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL MEDIUM-TERM NOTE

     The following increases or decreases in this Global Medium-Term Note have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Amount of	 	Amount of this	 	 
	 	 	Amount of Increase	 	Decrease in	 	Global Medium-	 	Signature of
	 	 	in Principal	 	Principal Amount	 	Term Note	 	Authorized Officer
	 	 	Amount of this	 	of this Global	 	Following Such	 	of Trustee or
	 	 	Global Medium-	 	Medium-Term	 	Increase or	 	Securities
	Date	 	Term Note	 	Note	 	Decrease	 	Custodian
	 
	 	 	 	 	 	 	 	 

10

 

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 tenants in common
	TEN ENT

	 	- as tenants by the entireties
	JT TEN

	 	- as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT — 
                
    (Custodian) Custodian       
               (Minor)

Under Uniform Gifts to Minors Act (         
           ) (State)

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

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.

11

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