Document:

ex10-6.htm

Exhibit 10.6

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	  Right to Purchase up to 25,000,000 shares of Common Stock of Innovative Food Holdings, Inc. (subject to adjustment as provided herein)

 

CLASS H COMMON STOCK PURCHASE WARRANT

 

No. 2012-H-001                                                                                                Issue Date: May 11, 2012

 

Initial Exercise Date: September 11, 2014

 

INNOVATIVE FOOD HOLDINGS, INC., a corporation organized under the laws of the State of Florida (the “Company”), hereby certifies that, for value received, ALPHA CAPITAL ANSTALT (the “Holder”), address at Pradafant 7, 9490 Furstentums, Vaduz, Lichtenstein, Fax: 011-42-32323196, or its assigns, is entitled, subject to the terms set forth below, to purchase from the Company at any time after the Initial Exercise Date until 5:00 p.m., E.S.T. on eight years after the Initial Exercise Date (the “Expiration Date”), up to the amount of fully paid and non-assessable shares of Common Stock set forth below at a per share purchase price of $0.0002. The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the “Purchase Price.”

 

(a)           Contemporaneously with the issuance of this Warrant to the Holder, the Company issued and delivered to the Holder a Secured Convertible Note (the “Note”) in the principal amount of $1,200,000.00 (“Principal Amount”).  The Holder may exercise this Warrant in whole or in part for the lesser of (i) 20.833 Warrant Shares for each One Dollar ($1.00) of the initial Principal Amount of the Note for a total of 25,000,000 Warrant Shares, or (ii) one hundred (100) Warrant Shares for each One Dollar ($1.00) of the Principal Amount outstanding on the day immediately preceding the Initial Exercise Date.

 

(b)           The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein.  The amount of Warrant Shares which may be purchased upon exercises of this Warrant may be different than the amount of Warrant Shares stated above due to adjustments and partial exercises.  The Company may reduce the Purchase Price for some or all of the Warrants, temporarily or permanently, provided such reduction is made as to all outstanding Warrants for all Holders of such Warrants.

 

(c)           Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement (the “Subscription Agreement”), dated as of May 11, 2012, entered into by the Company, the Holder and the other signatories thereto in connection with the issuance of the Note and Warrants.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

 

1

 

 

(i)           The term “Company” shall mean Innovative Food Holdings, Inc., a Florida corporation, and any corporation which shall succeed or assume the obligations of Innovative Food Holdings, Inc. hereunder.

 

(ii)           The term “Common Stock” includes (i) the Company's Common Stock, $0.0001 par value per share, as authorized on the date of the Subscription Agreement, and (ii) any other securities into which or for which any of the securities described in (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

(iii)           The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

 

(iv)           The term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this Warrant.

 

1.           Exercise of Warrant.

 

1.1.           Number of Shares Issuable upon Exercise.  From and after the Initial Exercise Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of Section 1.2 or upon exercise of this Warrant in part in accordance with Section 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4 below and Section 12 of the Subscription Agreement.

 

1.2.           Full Exercise.  This Warrant may be exercised in full by the Holder hereof by delivery to the Company of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and delivery within two days thereafter of payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect.  The original Warrant is not required to be surrendered to the Company until it has been fully exercised.

 

1.3.           Partial Exercise.  This Warrant may be exercised in part (but not for a fractional share) by delivery of a Subscription Form in the manner and at the place provided in Section 1.2, except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect.  On any such partial exercise, provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.

 

1.4.           Fair Market Value.  For purposes of this Warrant, the Fair Market Value of a share of Common Stock as of a particular date (the "Determination Date") shall mean:

 

 

2

 

 

(a)           If the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange or the American Stock Exchange, LLC, then the average of the closing sale prices of the Common Stock for the five (5) Trading Days immediately prior to (but not including) the Determination Date;

 

(b)           If the Company's Common Stock is not traded on an exchange or on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange or the NYSE AMEX Equities, but is traded on the OTC Bulletin Board or in the over-the-counter market or Pink Sheets, then the average of the closing bid and ask prices reported for the five (5) Trading Days immediately prior to (but not including) the Determination Date;

 

(c)           Except as provided in clause (d) below and Section 3.1, if the Company's Common Stock is not publicly traded, then as the Holder and the Company agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided; or

 

(d)           If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.

 

1.5.           Company Acknowledgment.  The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

 

1.6.           Delivery of Stock Certificates, etc. on Exercise. The Company agrees that, provided the purchase price listed in the Subscription Form is received as specified in Section 2, the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which delivery of a Subscription Form shall have occurred and payment made for such shares as aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter (“Warrant Share Delivery Date”), the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.  The Company understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the Holder.  As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Shares upon exercise of this Warrant the proportionate amount of $100 per business day after the Warrant Share Delivery Date for each $10,000 of Purchase Price of Warrant Shares for which this Warrant is exercised which are not timely delivered.  The Company shall pay any payments incurred under this Section in immediately available funds upon demand.  Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

 

 

3

 

 

1.7.           Buy-In.   In addition to any other rights available to the Holder, if the Company fails to deliver to a Holder the Warrant Shares as required pursuant to this Warrant, and the Holder or a broker on the Holder’s behalf, purchases (in an open market transaction or otherwise) shares of common stock to deliver in satisfaction of a sale by such Holder of the Warrant Shares which the Holder was entitled to receive from the Company (a "Buy-In"), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder's total purchase price (including brokerage commissions, if any) for the shares of common stock so purchased exceeds (B) the aggregate Purchase Price of the Warrant Shares required to have been delivered together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price of Warrant Shares to have been received upon exercise of this Warrant, the Company shall be required to pay the Holder $1,000, plus interest. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

 

2.           Cashless Exercise.

 

(a)           Payment upon exercise may be made at the option of the Holder either in (i) cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants in accordance with Section (b) below or (iii) by a combination of any of the foregoing methods, for the number of Common Stock specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms of this Warrant) and the holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.  Notwithstanding the immediately preceding sentence, payment upon exercise may be made in the manner described in Section 2(b) below, only with respect to Warrant Shares not included for unrestricted public resale in an effective Registration Statement on the date notice of exercise is given by the Holder.

 

(b)           If the Fair Market Value of one share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by delivery of a properly endorsed Subscription Form delivered to the Company by any means described in Section 13, in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula:

 

X=Y (A-B)

          A

 

Where           X=           the number of shares of Common Stock to be issued to the Holder

 

	
  

	
Y=

	
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)

 

	
  

	
A=

	
Fair Market Value

 

	
  

	
B=

	
Purchase Price (as adjusted to the date of such calculation)

 

 

4

 

 

For purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction in the manner described above shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Subscription Agreement.

 

3.           Adjustment for Reorganization, Consolidation, Merger, etc.

 

3.1.           Fundamental Transaction.  If, at any time while this Warrant is outstanding, (A) the Company  effects any merger or  consolidation  of the Company with or into another entity, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,  (C) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, or spin-off) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental  Transaction"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b) if the Company is acquired in (1) a transaction where the consideration paid to the holders of the Common Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a person or entity not traded on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market, cash equal to the Black-Scholes Value.  For purposes of any such exercise, the determination of the Purchase Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Purchase Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder's right to exercise such warrant into Alternate Consideration.  The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3.1 and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.  “Black-Scholes Value” shall be determined in accordance with the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of such request and (iii) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg L.P. determined as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction.

 

3.2.           Continuation of Terms.  Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4.

 

3.3           Share Issuance.  Until the Expiration Date, if the Company shall issue any Common Stock except for the Excepted Issuances (as defined in the Subscription Agreement), prior to the complete exercise of this Warrant for a consideration less than the Purchase Price that would be in effect at the time of such issuance, then, and thereafter successively upon each such issuance, the Purchase Price shall be reduced to such other lower price for then outstanding Warrants.  For purposes of this adjustment, the issuance of any security or debt instrument of the Company carrying the right to convert such security or debt instrument into Common Stock or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Purchase Price upon the issuance of the above-described security, debt instrument, warrant, right, or option if such issuance is at a price lower than the Purchase Price in effect upon such issuance and again at any time upon any actual, permitted, optional, or allowed issuances of shares of Common Stock upon any actual, permitted, optional, or allowed exercise of such conversion or purchase rights if such issuance is at a price lower than the Purchase Price in effect upon any actual, permitted, optional, or allowed such issuance.  Common Stock issued or issuable by the Company for no consideration will be deemed issuable or to have been issued for $0.0001 per share of Common Stock.  The reduction of the Purchase Price described in this Section 3.3 is in addition to the other rights of the Holder described in the Subscription Agreement.  Upon any reduction of the Purchase Price, the number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 3.3) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section 3.3) be in effect, and (b) the denominator is the Purchase Price in effect on the date of such exercise.

 

 

5

 

 

4.           Extraordinary Events Regarding Common Stock.  In the event that the Company shall (a) issue additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect on the date of such exercise.

 

5.           Certificate as to Adjustments.  In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants or the Purchase Price, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 11 hereof).  Holder will be entitled to the benefit of the adjustment regardless of the giving of such notice.  The timely giving of such notice to Holder is a material obligation of the Company.  Holder shall be entitled to the benefit of an actual Purchase Price notwithstanding a Form of Subscription made in reliance on a higher Purchase Price.

 

6.           Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements.  Not later than sixty (60) days of the Closing Date, the Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.  This Warrant entitles the Holder hereof, upon written request, to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company's Common Stock.

 

7.           Assignment; Exchange of Warrant.  Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a "Transferor"). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form") and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

 

 

6

 

 

8.           Replacement of Warrant.  On 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 of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

9.           Maximum Exercise.  The Holder shall not be entitled to exercise this Warrant on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock on such date.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Rule 13d-3 thereunder.  Subject to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the issuance of more than 4.99%.  The restriction described in this paragraph may be waived, in whole or in part, upon sixty-one (61) days prior notice from the Holder to the Company to increase such percentage to up to 9.99%, but not in excess of 9.99%.  The Holder may decide whether to convert a Convertible Note or exercise this Warrant to achieve an actual 4.99% or up to 9.99% ownership position as described above, but not in excess of 9.99%.

 

10.           Warrant Agent.  The Company may, by written notice to the Holder of the Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such Warrant Agent.

 

11.           Transfer on the Company's Books.  Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

12.           Registration Rights.  The Holder of this Warrant has been granted certain registration rights by the Company.  These registration rights are set forth in the Subscription Agreement.  The terms of the Subscription Agreement and such registration rights are incorporated herein by this reference.

 

13.           Notices.   All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:  if to the Company, to: Innovative Food Holdings, Inc., 3845 Beck Boulevard, Suite 805, Naples, FL 34114, Attn: Sam Klepfish, CEO, facsimile: (516) 858-0503, with a copy by facsimile only to: Howard Rhine, Esq., Feder Kaszovitz  LLP, 750 Lexington Avenue, New York, NY 10022-1200, facsimile: (212) 888-7776,  and (ii) if to the Holder, to the address and facsimile number listed on the first paragraph of this Warrant, with a copy by fax (which shall not constitute notice) only to: Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

14.           Law Governing This Warrant.  This Warrant shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York.  The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The Company and Holder waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.   Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

[-Signature Page Follows-]

 

 

7

 

 

 

IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

 

	  	
INNOVATIVE FOOD HOLDINGS, INC.

 

 

 

By:                                                                           

       Name:

       Title:

 

 

 

 

	  	  	  

 

 

8

 

 

Exhibit A

 

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO:  INNOVATIVE FOOD HOLDINGS, INC.

The undersigned, pursuant to the provisions set forth in Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

 

___           ________ shares of the Common Stock covered by such Warrant; or

	
___

	
shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2 of the Warrant.

 

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________.  Such payment takes the form of (check applicable box or boxes):

 

___           $__________ in lawful money of the United States; and/or

	
___

	
the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or

 

	
___

	
the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2 of the Warrant, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

 

After application of the cashless exercise feature as described above, _____________ shares of Common Stock are required to be delivered pursuant to the instructions below.

 

The undersigned requests that the certificates for such shares be issued in the name of, and delivered to __________________________________________ whose address is ___________________________ __________________            __________________.

 

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an exemption from registration under the Securities Act.

 

	
Dated:___________________

	
 

(Signature must conform to name of holder as specified on the face of the Warrant)

 

 

 

(Address)

 

 

9

 

 

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of INNOVATIVE FOOD HOLDINGS, INC. to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of INNOVATIVE FOOD HOLDINGS, INC. with full power of substitution in the premises.

 

 

	
Transferees

	
Percentage Transferred

	
Number Transferred

	  	  	  
	  	  	  
	  	  	  

 

 

	
Dated:  __________________, _______

 

 

 

Signed in the presence of:

 

 

(Name)

 

 

ACCEPTED AND AGREED:

[TRANSFEREE]

 

 

 

(Name)

 

	
 

(Signature must conform to name of holder as specified on the face of the warrant)

 

 

 

 

 

(address)

 

 

 

(address)

 

 

10Kangaroo Holdings, Inc. 2007 Equity Incentive Plan

 Exhibit 10.1 
 KANGAROO HOLDINGS INC. 
 2007 EQUITY INCENTIVE PLAN 

1. DEFINED TERMS 

Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related to
those terms. 
 2. PURPOSE 
 The Plan has been established to advance the interests of the Company by providing for the grant to Participants of Stock-based Awards. 
 3. ADMINISTRATION 
 The Administrator has discretionary authority, subject
only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all things
necessary to carry out the purposes of the Plan. Determinations of the Administrator made under the Plan will be conclusive and will bind all parties. 
 4. LIMITS ON AWARDS UNDER THE PLAN 
 (a)
Number of Shares. A maximum of 4,000,000 shares of Stock may be delivered in satisfaction of Awards under the Plan. The number of shares of Stock delivered in satisfaction of Awards shall, for purposes of the preceding sentence, be
determined net of shares of Stock withheld by the Company in payment of the exercise price of the Award or in satisfaction of tax withholding requirements with respect to the Award. To the extent that any Award granted under the Plan terminates,
expires or is canceled without having been exercised, the Stock covered by such Award shall again be available for Awards under the Plan. The limit set forth in this Section 4(a) shall be construed to comply with Section 422. To the extent
consistent with the requirements of Section 422, Stock issued under awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition shall not reduce the number of shares available for Awards under the
Plan. 
 (b) Type of Shares. Stock delivered by the Company under the Plan may be authorized but unissued
Stock or previously issued Stock acquired by the Company. 
 5. ELIGIBILITY AND PARTICIPATION 

The Administrator will select Participants from among those key Employees and directors of, and consultants and advisors to, the Company
or its Affiliates who, in the opinion of the Administrator, are in a position to make a significant contribution to the success of the Company and its Affiliates. Eligibility for ISOs is limited to employees of the Company or of a “parent
corporation” or “subsidiary corporation” of the Company, as those terms are defined in Section 424 of the Code. 

 6. RULES APPLICABLE TO AWARDS 

(a) All Awards 
 (1) Award Provisions. The Administrator will determine the terms of all Awards, subject to the limitations provided herein. By accepting an Award, the Participant agrees to the terms
of the Award and the Plan. Notwithstanding any provision of this Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent
with the terms and conditions specified herein, as determined by the Administrator. 
 (2) Term of Plan. No
Awards may be made after June 30, 2017, but previously granted Awards may continue beyond that date in accordance with their terms. 
 (3) Transferability. Awards may not be transferred other than by will or by the laws of descent and distribution, and, during a Participant’s lifetime, Awards requiring exercise
may be exercised only by the Participant. 
 (4) Vesting, Etc. The Administrator may determine the time or
times at which an Award will vest or become exercisable, and the terms on which an Award requiring exercise will remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an
Award, regardless of any adverse or potentially adverse tax consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise, however, the following rules will apply: immediately upon the cessation of the
Participant’s Employment, each Award requiring exercise that is then held by the Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate, and all other Awards that are then held by
the Participant or by the Participant’s permitted transferees, if any, to the extent not already vested will be forfeited, except that: 
 (A) subject to (B) and (C) below, all Stock Options held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s
Employment, to the extent then vested and exercisable, and any Stock Options that become vested and exercisable as a result of the cessation of the Participant’s Employment, will remain exercisable for the lesser of (i) a period of 90
days, or (ii) the period ending on the latest date on which such Stock Option could have been exercised without regard to this Section 6(a)(4), and will thereupon terminate; 

(B) all Stock Options held by a Participant or the Participant’s permitted transferees, if any, immediately prior to
the Participant’s death or Disability, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period ending with the first anniversary of the Participant’s death or Disability, or (ii) the
period ending on the latest date on which such Stock Option could have been exercised without regard to this Section 6(a)(4), and will thereupon terminate; and 

(C) all Stock Options held by a Participant or the Participant’s permitted transferees, if any, immediately prior to
the cessation of the Participant’s Employment will immediately terminate upon such cessation if the Administrator determines that such cessation of Employment is the result of Cause. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-2-	 	

 (5) Taxes. The Administrator will make such provision for the
withholding of taxes as it deems necessary. The Administrator may, but need not unless otherwise specified in an Award, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax
withholding requirements (but not in excess of the minimum withholding required by law). 
 (6) Dividend
Equivalents, Etc. Except as otherwise provided in an Award, the Administrator may provide for the payment of amounts in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award. Any entitlement to dividend
equivalents or similar entitlements shall be established and administered consistent either with exemption from, or compliance with, the requirements of Section 409A. 
 (7) Rights Limited. Nothing in the Plan will be construed as giving any person the right to continued employment or service with the Company or its Affiliates, or any rights as a
stockholder except as to shares of Stock actually issued under the Plan. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination
is in violation of an obligation of the Company or any Affiliate to the Participant. 
 (8) Coordination with Other
Plans. Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Affiliates. For example, but
without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company or its Affiliates may be settled in Stock (including, without limitation, Unrestricted Stock) if the Administrator so determines, in
which case the shares delivered shall be treated as awarded under the Plan (but shall not reduce the number of shares available under the Plan as set forth in Section 4 above). 

(9) Section 409A. Each Award shall contain such terms as the Administrator determines, and shall be construed
and administered, such that the Award either (i) qualifies for an exemption from the requirements of Section 409A to the extent applicable, or (ii) satisfies such requirements. 

(10) Certain Requirements of Corporate Law. Awards shall be granted and administered consistent with the
requirements of applicable Delaware law relating to the issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Stock is listed or entered for
trading, in each case as determined by the Administrator. 
 (11) Other Restrictions. For the avoidance of
doubt, Awards and Stock issued upon exercise of Awards may be subject to restrictions under other agreements to which Participants are, or may become, party. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-3-	 	

 (b) Awards Requiring Exercise 

(1) Time And Manner Of Exercise. Unless the Administrator expressly provides otherwise in an Award, an Award
requiring exercise by the holder will not be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the Administrator) signed by the appropriate person and accompanied by any payment (in cash or
Stock, as applicable) required under the Award, if any. If the Award is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that the person exercising the Award has the right to do so. 

(2) Exercise Price. The exercise price (or the base value from which appreciation is to be measured) of each Award
requiring exercise shall be 100% (in the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422, 110%) of the Fair Market Value of the Stock subject to the Award, determined as of the date of
grant, or such higher amount as the Administrator may determine in connection with the grant. 
 (3) Payment Of
Exercise Price. Where the exercise of an Award is to be accompanied by payment, payment of the exercise price shall be by cash or check reasonably acceptable to the Administrator, or, if so permitted by the Administrator and if legally
permissible, (i) through the delivery of shares of Stock that have been outstanding for at least six months (unless the Administrator approves a shorter period) and that have a Fair Market Value equal to the exercise price, (ii) at such
time, if any, as the Stock is publicly traded, through a broker-assisted exercise program reasonably acceptable to the Administrator, (iii) by other means reasonably acceptable to the Administrator or (iv) by any combination of the
foregoing permissible forms of payment. The delivery of shares of Stock in payment of the exercise price under clause (i) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject
to such rules as the Administrator may reasonably prescribe. 
 (4) Maximum Term. Awards requiring exercise
will have a maximum term not to exceed ten years from the date of grant. 
 7. EFFECT OF CERTAIN TRANSACTIONS 

(a) Mergers, Etc. Except as otherwise provided in an Award: 

(1) Assumption or Substitution. Subject to any required action by the stockholders of the Company, in the event that
the Company shall be the surviving corporation in any merger or consolidation (except a merger or consolidation as a result of which the holders of shares of Stock receive securities of another corporation), the Awards outstanding on the date of
such merger or consolidation shall pertain to and apply to the securities that a holder of the number of shares of Stock subject to any such Award would have received in such merger or consolidation (it being understood that if, in connection with
such transaction, the holders of Stock of the Company retain their shares of Stock and are not entitled to any additional or other consideration, the Awards shall not be affected by such transaction). 

  
  

					
	Kangaroo Equity Incentive Plan	 	-4-	 	

 (2) Cash-Out of Awards. In the event of (i) a dissolution or
liquidation of the Company or any of its Affiliates, (ii) a sale, directly or indirectly, of all or substantially all of the Company’s assets, (iii) a merger or consolidation involving the Company or any of its Affiliates in which the
Company or any of its Affiliates is not the surviving corporation or (iv) a merger or consolidation involving the Company or any of its Affiliates in which the Company or any of its Affiliates is the surviving corporation but the holders of
shares of Stock receive securities of another corporation and/or other property, including cash, the Administrator shall, in its sole discretion (a) have the power to provide for the exchange of each Award outstanding immediately prior to such
event (whether or not then exercisable) for an award on some or all of the property for which the stock underlying such Awards are exchanged, and, incident thereto, make an equitable adjustment, as reasonably determined by the Administrator, in the
exercise price of Awards, or the number or kind of securities or amount of property subject to the Awards and/or, (b) if appropriate, cancel, effective immediately prior to such event, any outstanding Award (whether or not exercisable or
vested) and in full consideration of such cancellation pay to the Participant an amount in cash, with respect to each underlying share of Stock, equal to the excess of (1) the value, as determined by the Administrator in its good faith
discretion, of securities and/or property (including cash) received by such holders of shares of Stock as a result of such event over (2) the exercise price, as the Administrator may in good faith consider appropriate to prevent dilution or
enlargement of rights; provided, that the Administrator shall not exercise discretion under this Section 7(a)(2) with respect to an Award or portion thereof providing for “nonqualified deferred compensation” subject to
Section 409A in a manner that would constitute an extension or acceleration of, or other change in, payment terms if such change would be inconsistent with the applicable requirements of Section 409A. 

(3) Additional Limitations. Any share of Stock and any cash or other property delivered pursuant to
Section 7(a)(2) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was
subject as of such transaction and that did not lapse (and were not satisfied) in connection with such transaction. In the case of Restricted Stock that does not vest in connection with such transaction, the Administrator may require that any
amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with such transaction be placed in escrow, or otherwise be made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the
Plan. 
 (b) Changes in and Distributions With Respect to Stock 

(1) Basic Adjustment Provisions. Subject to any required action by the stockholders of the Company, in the event of
any increase or decrease in the number or change in the kind of issued shares of stock or securities that results from a subdivision or consolidation of shares of Stock, the payment of a stock dividend or from a recapitalization, or any other
increase, decrease or other change in the number of such shares effected without receipt of consideration by the Company, the Administrator shall make such adjustments with respect to the number of shares of Stock or other securities specified in
Section 4(a) above, the number and kind of shares of Stock or other securities subject to the Awards and/or the exercise price per share of Stock or other security, as the Administrator may consider appropriate to prevent the enlargement or
dilution of rights. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-5-	 	

 (2) Certain Other Adjustments. The Administrator may also make
adjustments of the type described in Section 7(b)(1) above to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(b)(1) above, or any other event, if the Administrator determines that
adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under Section 422 and the requirements of Section 409A, where
applicable. 
 (3) Continuing Application of Plan Terms. References in the Plan to shares of Stock will be
construed to include any stock or securities resulting from an adjustment pursuant to this Section 7. 
 8. LEGAL CONDITIONS ON DELIVERY
OF STOCK 
 The Company will not be obligated to deliver any shares of Stock pursuant to the Plan, or to remove any
restriction from shares of Stock previously delivered under the Plan, until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved, (ii) if a Public
Market for the Stock exists, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance and (iii) all conditions of the Award have been satisfied or waived. If the sale of
Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation
of such Act. The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the
applicable restrictions. 
 9. AMENDMENT AND TERMINATION 
 The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants
of Awards; provided, that, except as otherwise expressly provided in the Plan, the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect materially and adversely the Participant’s
rights under the Plan or an Award, unless the Administrator expressly reserved the right to do so at the time of the Award. Any amendments to the Plan shall be conditioned upon stockholder approval only to the extent, if any, such approval is
required by law (including the Code), as determined by the Administrator. 
 10. OTHER COMPENSATION ARRANGEMENTS 

The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to Award a person bonuses or other
compensation in addition to Awards under the Plan. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-6-	 	

 11. MISCELLANEOUS 
 (a) WAIVER OF JURY TRIAL. BY ACCEPTING AN AWARD
UNDER THE PLAN, EACH PARTICIPANT WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER
THE PLAN AND ANY AWARD, OR UNDER ANY AMENDMENT, WAIVER, CONSENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE
MAY BE DELIVERED IN CONNECTION THEREWITH, AND AGREES THAT ANY SUCH
ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY. BY ACCEPTING AN AWARD UNDER THE PLAN, EACH
PARTICIPANT CERTIFIES THAT NO OFFICER, REPRESENTATIVE OR ATTORNEY OF THE COMPANY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE COMPANY WOULD NOT, IN
THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE
THE FOREGOING WAIVERS. 
 (b) Limitation of Liability.
Notwithstanding anything to the contrary in the Plan, neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of the Company, any Affiliate, or the Administrator, shall be liable to any Participant or to the
estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or
Section 409A or by reason of Section 4999 of the Code; provided, that (i) nothing in this Section 11(b) shall limit the ability of the Administrator or the Company to provide by separate express written agreement with a
Participant for a gross-up payment or other payment in connection with any such tax or additional tax, and (ii) nothing in this Section 11(b) shall limit the liability of the Company to any Participant or to the estate or beneficiary of
such Participant by reason of the failure of an Award to satisfy the requirements of Section 409A to the extent such failure results from the Administrator’s gross negligence in connection with the administration of the Plan. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-7-	 	

 EXHIBIT A 
 Definition of Terms 
 The following terms, when used in the Plan,
will have the meanings and be subject to the provisions set forth below: 
 “Administrator”: The Board, except
that the Board may delegate its authority under the Plan to a committee of the Board, in which case references herein to the Board shall refer to such committee. The Board may delegate (i) to one or more of its members such of its duties,
powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant rights or options to the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (iii) to such
Employees or other persons as it determines such ministerial tasks as it deems appropriate. In the event of any delegation described in the preceding sentence, the term “Administrator” shall include the person or persons so delegated to
the extent of such delegation. 
 “Affiliate”: Any corporation or other entity that stands in a relationship to
the Company that would result in the Company and such corporation or other entity being treated as one employer under Section 414(b) and Section 414(c) of the Code, except that in determining eligibility for the grant of a Stock Option by
reason of service for an Affiliate, Sections 414(b) and 414(c) of the Code shall be applied by substituting “at least 50%” for “at least 80%” under Section 1563(a)(1), (2) and (3) of the Code and Treas. Regs.
§ 1.414(c)-2; provided, that to the extent permitted under Section 409A, “at least 20%” shall be used in lieu of “at least 50%”; and further provided, that the lower ownership threshold described in
this definition (50% or 20% as the case may be) shall apply only if the same definition of affiliation is used consistently with respect to all compensatory stock options or stock awards (whether under the Plan or another plan). 

“Award”: Any or a combination of the following: 

(i) Stock Options. 
 (ii) Restricted Stock 
 “Board”: The Board of Directors of the
Company. 
 “Cause”: The termination of the Participant’s Employment on account of
“Cause” has the meaning ascribed to it in the Participant’s Award, or, if there is no definition of “Cause” in the Participant’s Award, in the Participant’s employment agreement with the Company or its
Affiliates, or, if the Participant does not have an employment agreement or there is no definition of “Cause” in the Participant’s employment agreement, (i) the willful failure by the Participant to substantially perform his
duties with the Company or any Affiliate (other than any such failure resulting from incapacity due to physical or mental illness); (ii) the Participant’s negligence, willful misconduct or illegal conduct in the performance of his duties
for the Company or any 

  
  

					
	Kangaroo Equity Incentive Plan	 	-8-	 	

 
Affiliate which has resulted in, or is reasonably expected to result in, injury to the Company or any Affiliate; (iii) the Participant’s conviction of, or entering a plea of guilty or
nolo contendere to, a misdemeanor involving theft or embezzlement, or a felony; or (iv) the breach by the Participant of any obligations under any written agreement or covenant with the Company or any of its Affiliates, or of any
fiduciary duty or any material act of disloyalty, in any case, which has resulted in or is reasonably expected to result in injury to the Company or any Affiliates. 
 “Change in Control”: shall have the meaning set forth in the Company’s Stockholders Agreement dated as of June 14, 2007. 

“Code”: The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute, as
from time to time in effect. 
 “Company”: Kangaroo Holdings, Inc. 

“Disability”: a permanent disability as defined in the Company’s or an Affiliate’s disability plans, or as
defined from time to time by the Company, in its discretion, or as specified in the Participant’s Award; provided, that in the event the Participant is party to an effective employment agreement or other written agreement with respect to
the termination of a Participant’s Employment, and such agreement contains or operates under a different definition of Disability (or any derivative of such term), the definition of Disability used in such agreement shall be substituted for the
definition set forth above for all purposes hereunder. 
 “Employee”: Any person who is employed by the Company
or an Affiliate. 
 “Employment”: A Participant’s employment or other service relationship (including, for
the avoidance of doubt, service as a director) with the Company or any of its Affiliates. Employment will be deemed to continue so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5
hereto to, the Company or its Affiliates. If a Participant’s employment or other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be deemed to have terminated when the
entity ceases to be an Affiliate, unless the Participant transfers Employment to the Company or any of its remaining Affiliates. 
 “Exchange Act”: The Securities Exchange Act of 1934, as amended. 

“Fair Market Value”: As of any date (i) prior to the existence of a Public Market for the Stock, the value per
share of Stock as reasonably determined in good faith by the Board, taking into account the fair market value of the entire equity of the Company determined on a going concern basis as between a willing buyer and a willing seller, and taking into
account any relevant factors determinative of value, without, however, giving effect to any discount for any lack of liquidity attributable to a lack of a Public Market, any block discount or discount attributable to the size of any person’s
holdings of Stock, any minority interest or any voting rights or lack thereof; or (ii) on which a Public Market for the Stock exists, (a) closing price on such day of a share of Stock as reported on the principal securities exchange on
which shares of 

  
  

					
	Kangaroo Equity Incentive Plan	 	-9-	 	

 
Stock are then listed or admitted to trading, or (b) if not so reported, the average of the closing bid and ask prices on such day as reported on the National Association of Securities
Dealers Automated Quotation System, or (c) if not so reported, as furnished by any member of the National Association of Securities Dealers, Inc. (“NASD”) selected by the Administrator. The Fair Market Value of a share of Stock as of
any such date on which the applicable exchange or inter-dealer quotation system through which trading in the Stock regularly occurs is closed shall be the Fair Market Value determined pursuant to the preceding sentence as of the immediately
preceding date on which the Stock is traded, a bid and ask price is reported or a trading price is reported by any member of NASD selected by the Administrator. In the event that the price of a share of Stock shall not be so reported or furnished,
the Fair Market Value shall be determined by the Administrator in good faith to reflect the fair market value of a share of Stock. 
 “Good Reason”: means any of the following: (i) a reduction by the Company in the Employee’s base salary or benefits as in effect immediately prior to a Change in Control, unless
a similar reduction is made in salary and benefits of all employees, or (ii) the Company requires the Employee to be based at or generally work from any location more than 50 miles from the location at which the Employee was based or generally
worked immediately prior to a Change in Control. Notwithstanding the foregoing, if, as of the date of determination, the Participant is a party to an effective employment agreement or other written agreement with respect to the termination of a
Participant’s Employment or an Award that contains or operates under a different definition of the term “Good Reason” (or any derivation of such term), the definition used by (i) first, such employment agreement or
(ii) second, absent an employment agreement, such other written agreement, shall be substituted for the definition set forth above for all purposes hereunder. 
 “ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422. Each option granted pursuant to the Plan will be treated as providing by
its terms that it is to be a non-incentive stock option unless, as of the date of grant, it is expressly designated as an ISO. 

“Participant”: A person who is granted an Award under the Plan. 

“Plan”: The Kangaroo Holdings, Inc. 2007 Equity Incentive Plan, as from time to time amended and in effect. 

“Public Market”: A Public Market shall be deemed to exist for purposes of the Plan if the Stock is registered under
Section 12(b) or 12(g) of the Exchange Act and trading regularly occurs in such Stock in, on or through the facilities of securities exchanges and/or inter-dealer quotation systems in the United States (within the meaning of Section 902(n)
of the Securities Act) or any designated offshore securities market (within the meaning of Rule 902(a) of the Securities Act). 

“Restricted Stock”: Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if
specified conditions are not satisfied. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-10-	 	

 “Section 409A”: Section 409A of the Code. 

“Section 422”: Section 422 of the Code. 
 “Securities Act”: The Securities Act of 1933, as amended. 

“Stock”: Common Stock of the Company, par value $ 0.01 per share. 

“Stock Option”: An option entitling the holder to acquire shares of Stock upon payment of the exercise price.

 “Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award. 

  
  

					
	Kangaroo Equity Incentive Plan	 	-11-	 	

 FIRST AMENDMENT TO THE KANGAROO HOLDINGS, INC. 

2007 EQUITY INCENTIVE PLAN 
 The
Kangaroo Holdings, Inc. 2007 Equity Incentive Plan is hereby amended as follows: 
 Clause (b) of the definition of Change of Control is hereby
amended in its entirety to read as follows: 
 “(b) any change in the ownership of the Stock if, immediately after giving effect thereto,
the Investors and their Affiliates (each as defined in the Company’s Stockholders Agreement dated as of June 14, 2007) shall own less than 25% of the Equivalent Shares (as defined in the Company’s Stockholders Agreement dated as of June
14, 2007); provided, however, that this clause (b) shall not apply to any change in the ownership of the Stock that occurs while there is a Public Market (as defined in this Plan) for the Stock.” 

This amendment to the definition of Change of Control shall not apply to the existing Stock Option Award Agreements issued to Elizabeth Smith and Joseph
Kadow. 
 Approved and adopted by the Kangaroo Holdings, Inc. Board of Directors on December 2, 2010. 

 Bloomin’ Brands, Inc. 

SECRETARY’S CERTIFICATE 
 The undersigned, being the duly elected and authorized Secretary of Bloomin’ Brands, Inc., a Delaware corporation formerly known as Kangaroo Holdings, Inc. (the “Company”), hereby certifies
that the following resolution amending the Company’s 2007 Equity Incentive Plan (the “Equity Plan”) was duly adopted by the Board of Directors of the Company on October 26, 2007: 

RESOLVED: The Equity Plan is hereby amended by deleting the first sentence of Section 4(a) of the Equity Plan and substituting in its
place the following: “A maximum of 6,272,320 shares of Stock may be delivered in satisfaction of Awards under the Plan.” 
 IN WITNESS
WHEREOF, the undersigned has executed this Certificate as of April 5, 2012. 
 /s/ Joseph J.
Kadow                                        
             
 Joseph J. Kadow 

Secretary 

 Bloomin’ Brands, Inc. 

SECRETARY’S CERTIFICATE 
 The undersigned, being the duly elected and authorized Secretary of Bloomin’ Brands, Inc., a Delaware corporation formerly known as Kangaroo Holdings, Inc. (the “Company”), hereby certifies
that the following resolution amending the Company’s 2007 Equity Incentive Plan (the “Equity Plan”) was duly adopted by the Board of Directors of the Company on July 29, 2011: 

RESOLVED: That the Equity Plan is hereby amended by deleting the first sentence of Section 4(a) of the Equity Plan and substituting in
its place the following: “A maximum of 11,700,000 shares of Stock may be delivered in satisfaction of Awards under the Plan.” 
 IN
WITNESS WHEREOF, the undersigned has executed this Certificate as of April 5, 2012. 
 /s/ Joseph J.
Kadow                                        
             
 Joseph J. Kadow 

Secretary 

 Bloomin’ Brands, Inc. 

SECRETARY’S CERTIFICATE 
 The undersigned, being the duly elected and authorized Secretary of Bloomin’ Brands, Inc., a Delaware corporation formerly known as Kangaroo Holdings, Inc. (the “Company”), hereby certifies
that the following resolution amending the Company’s 2007 Equity Incentive Plan (the “Plan”) was duly adopted by the Board of Directors of the Company on December 9, 2011: 

RESOLVED, that the number of shares of KHI common stock that may be delivered in satisfaction of awards under the Plan is hereby
increased from 11,700,000 to 12,350,000 shares. 
 IN WITNESS WHEREOF, the undersigned has executed this Certificate as of April 5, 2012.

 /s/ Joseph J.
Kadow                                        
             
 Joseph J. Kadow 

Secretary 

 Bloomin’ Brands, Inc. 

SECRETARY’S CERTIFICATE 
 The undersigned, being the duly elected and authorized Secretary of Bloomin’ Brands, Inc., a Delaware corporation formerly known as Kangaroo Holdings, Inc. (the “Company”), hereby certifies
that the following resolution amending the Company’s 2007 Equity Incentive Plan (the “2007 Plan”) was duly adopted by the Board of Directors of the Company on May 10, 2012: 

RESOLVED, that the additional 850,000 shares of Common Stock* authorized for issuance under the 2007 Plan be and hereby are
reserved for issuance under the 2007 Plan and, when such shares are issued in accordance with the 2007 Plan, and the terms of any awards granted thereunder, such shares will be fully paid, validly issued and nonassessable; 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of May 10, 2012. 

 

	
	 /s/ Joseph J. Kadow

	Joseph J. Kadow
	Secretary

  

	*	Defined as shares of Common Stock of Bloomin’ Brands, Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00204-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00204-of-00352.parquet"}]]