Document:

Exhibit 10.3 

[FORM OF]
KRISPY KREME DOUGHNUTS, INC.
RESTRICTED STOCK UNIT
AGREEMENT 

     THIS
AGREEMENT is made as of [_____], by and between Krispy Kreme Doughnuts, Inc., a North
Carolina corporation having its principal office at 370 Knollwood Street,
Winston-Salem, North Carolina 27103 (the “Corporation”), and [_____] (“Employee”).

W I T N E S S E T H: 

     WHEREAS,
the Board of Directors and shareholders of the Corporation have approved the
Krispy Kreme Doughnuts, Inc. 2000 Stock Incentive Plan (the “Plan”), for the
purposes and subject to the provisions set forth in the Plan; 

     WHEREAS,
the Plan provides for the grant of “restricted stock,” which is defined in
Article 2(ee) of the Plan to include the right to receive shares of Common Stock
in the future; 

     WHEREAS,
under the definition of “restricted stock” in Article 2(ee) and the provisions
of Article 8 of the Plan, the issuance of restricted stock units, which are
rights to receive shares of stock at a specified time in the future and
following the lapse of applicable restrictions, is authorized; 

     WHEREAS,
pursuant to authority granted to it in the Plan, the Compensation Committee of
the Board of Directors of the Corporation (the “Committee”) has, on behalf of
the Corporation, granted to Employee restricted stock units with respect to the
Common Stock of Krispy Kreme Doughnuts, Inc., as set forth below; and

     WHEREAS, this Agreement evidences
the grant of restricted stock units under the Plan. 

     NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises set forth
below and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows: 

1. Award of Restricted Stock
Units 

     This
Agreement sets forth the terms of an award to the Employee of [_____] restricted stock units
(the “Restricted Stock Units”), subject to, and in accordance with, the
restrictions, terms and conditions set forth in the Plan and this Agreement. The
grant date of this award of Restricted Stock Units is [_____] (“Grant Date”). Each Restricted
Stock Unit will entitle the Employee to receive one share of Common Stock at the
time, and subject to the conditions, set forth herein and in the Plan.

2. Restrictions 

     If
Employee remains employed, Employee shall become vested in the Restricted Stock
Units in [_____]
installments beginning on [_____], and continuing on the next [_____] anniversaries of such date (each
such date shall be a “Vesting Date”), all as set forth below: 

	Date
     	Number
      of
Units that
      Vest
on such
      Date  
  
	
	
	[        ]	[        ]
	[        ]	[        ]
	[        ]	[        ]
	[        ]	[        ]

     Any unvested Restricted Stock Units
shall be automatically forfeited upon the Employee’s Termination of Employment
for any reason other than due to Employee’s death, Retirement or Disability. In
the event of a Termination of Employment of the Employee due to his or her
death, Retirement or Disability, the Restricted Stock Units will become
immediately vested in full. For purposes of this Agreement, employment with a
Subsidiary of the Corporation shall be considered employment with the
Corporation. Unless otherwise provided by the Committee, all amounts receivable
in connection with any adjustments to the Common Stock under Section 4.4 of the
Plan shall be subject to the vesting schedule in this Section 2.

3. Distribution of
Common Stock 

     The
Corporation shall, subject to Sections 8 and 25 below, distribute to Employee
(or his or her heirs in the event of Employee’s death) at the time of vesting of
the Restricted Stock Units (as provided in Sections 2 or 7 hereof), a number of
shares of Common Stock equal to the number of Restricted Stock Units then held
by Employee that became vested at such time. 

4. Rights and
Restrictions 

     The
Restricted Stock Units shall not be transferable, other than pursuant to will or
the laws of descent and distribution. Prior to vesting of the Restricted Stock
Units and delivery of the shares of Common Stock to Employee, Employee shall not
have any rights or privileges of a shareholder as to the shares of Common Stock
subject to the Restricted Stock Units. Specifically, Employee shall not have the
right to receive dividends or the right to vote such shares of Common Stock
prior to vesting of the Restricted Stock Units and delivery of the shares of
Common Stock. 

5. Certificates 

     Upon the
vesting of the Restricted Stock Units pursuant to the terms hereof and the
satisfaction of any withholding tax liability pursuant to Section 8 hereof,
certificates evidencing the shares of Common Stock required to be delivered
pursuant to the terms hereof shall be delivered to Employee or other evidence of
ownership of such shares of Common Stock shall be provided to Employee, such as
tracking through book entry. 

6. Transfer of
Common Stock

     The
Common Stock delivered hereunder may be sold, assigned, pledged, hypothecated,
encumbered, or transferred or disposed of in any other manner, in whole or in
part, only in compliance with the terms, conditions and restrictions as set
forth in the governing instruments of the Corporation, applicable federal and
state securities laws or any other applicable laws or regulations and the terms
and conditions hereof. 

7. Change in
Control 

     In the
event of a “Change in Control,” the Restricted Stock Units shall become vested
in full, provided that Employee has not incurred a Termination of Employment
prior to the date thereof. For purposes hereof, “Change in Control” shall have
the meaning set forth in the Plan, except in the case of a transaction described
in clauses (1) or (3) of paragraph (b) of such definition, the consummation of
such a transaction, rather than the approval by shareholders of the Corporation
of such transaction or an agreement to effect such a transaction, shall
constitute a Change in Control. 

8. Taxes and
Withholding 

     (a) Employee shall be responsible for all federal, state and local income
taxes payable with respect to this award of Restricted Stock Units. Employee
acknowledges that he or she may incur substantial tax liability arising out of
the grant of Restricted Stock Units to him or her. 

     (b) The Corporation shall have the right to retain and withhold from any
distribution of Common Stock in respect of Restricted Stock Units the minimum
amount of taxes required by any government to be withheld or otherwise deducted
and paid with respect to such Restricted Stock Units. At its discretion, the
Corporation may require Employee to immediately reimburse the Corporation for
any such taxes required to be withheld and may withhold any distribution in
whole or in part until the Corporation is so reimbursed. In lieu thereof, the
Corporation shall have the right to withhold from any other cash amounts due to
Employee an amount equal to such taxes required to be withheld or withhold and
cancel (in whole or in part) a number of shares of Common Stock having a market
value equal to the amount of such taxes. In addition, Employee may elect to
satisfy the withholding requirement, in whole or in part, by having the
Corporation withhold shares of Common Stock with a Fair Market Value equal to
the minimum statutory tax required to be withheld. The right to withhold shares
of Common Stock with a Fair Market Value equal to the minimum statutory tax
required to be withheld to satisfy the withholding requirement may be withdrawn
by the approval of the Committee. 

9. Modification of
Agreement 

     This
Agreement may be modified, amended, suspended or terminated, and any terms or
conditions may be waived, but only by a written instrument executed by the
parties hereto. 

10. Severability 

     The
provisions of the Agreement are severable and if any one or more provisions are
determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provision to the extent
enforceable in any jurisdiction, shall nevertheless be binding and enforceable.

11. Notices 

     Any and
all notices under this Agreement shall be in writing, and sent by hand delivery
or by certified or registered mail (return receipt requested and first-class
postage prepaid), in the case of the Corporation, to its principal executive
offices to the attention of the Chief Financial Officer, and, in the case of
Employee, to Employee’s address as shown on the Corporation’s records.

12. Binding
Effect 

     (a) This Agreement shall be binding upon and inure to the benefit of any
assignee or successor in interest to the Corporation, whether by merger,
consolidation or the sale of all or substantially all of the Corporation’s
assets.

     (b) This Agreement shall be binding upon and inure to the benefit of Employee
and his or her legal representative and any person to whom the Restricted Stock
Units may be transferred by will, the applicable laws of descent and
distribution, or otherwise in accordance with the terms of the Plan. 

13. Agreement to be
Bound by Plan 

     Employee
hereby acknowledges that Employee fully understands his or her rights under the
Plan, and that Employee agrees to be bound by all the terms and provisions of
the Plan. 

14. Plan
Controls 

     The
Restricted Stock Units and the terms and conditions set forth herein are subject
in all respects to the terms and conditions of the Plan (which are incorporated
herein by reference). Except as otherwise expressly set forth herein, the
capitalized terms used in this Agreement shall have the same definitions as set
forth in the Plan. To the extent that any conflict may exist between any term or
provision of this Agreement and any term or provision of the Plan, such term or
provision of the Plan shall control. 

15. Rights to
Future Grants; Compliance with Law

     Nothing
in this Agreement shall be construed as constituting a commitment, guarantee,
agreement or understanding of any kind or nature that the Corporation, any
Subsidiary or affiliate shall continue to employ Employee, nor shall this
Agreement affect in any way the right of the Corporation, any Subsidiary or
affiliate to terminate the employment or other service of Employee at any time
and for any reason. By Employee’s execution of this Agreement, Employee
reaffirms and acknowledges and agrees that Employee’s employment or other
service to the Corporation, any Subsidiary or affiliate is “at will.” No change
of Employee’s duties with respect to the Corporation, any Subsidiary or
affiliate shall result in, or be deemed to be, a modification of any of the
terms of this Agreement. Employee acknowledges and agrees that the award and
acceptance of Restricted Stock Units pursuant to this Agreement does not entitle
Employee to future grants under the Plan or any other plan. 

16. Covenants and
Representations of Employee

     Employee represents, warrants,
covenants and agrees with the Corporation as follows: 

     (a)
Employee has not relied upon the Corporation with respect to any tax
consequences related to the Restricted Stock Units or shares of Common Stock
subject thereto. Employee assumes full responsibility for all such tax
consequences and the filing of all tax returns Employee may be required to file
in connection therewith.

     (b)
Employee will not distribute or resell any Common Stock (or other securities)
issuable hereunder in violation of law. Employee shall comply with all
provisions of the Corporation’s Securities Trading Policy, as in effect from
time to time. 

     (c) The agreements, representations, warranties and covenants made by
Employee herein with respect to the Restricted Stock Units shall also extend to
and apply to all of the shares of Common Stock
issued to Employee from time to time pursuant to the Restricted Stock Units.
Acceptance by Employee of any certificate representing shares of Common Stock
shall constitute a confirmation by Employee that all such agreements,
representations, warranties and covenants made herein continue to be true and
correct at that time. 

     (d) As
a condition to receiving this award, Employee agrees to abide by the
Corporation’s Equity Retention Policy, Compensation Recovery Policy and Stock
Ownership Guidelines, each as in effect from time to time and to the extent
applicable to Employee from time to time. 

17. Governing
Law 

     This
Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of North Carolina, without giving effect to the conflict of
laws provisions thereof.

18. Waiver 

     The
waiver by the Corporation of a breach of any provision of this Agreement by
Employee shall not operate or be construed as a waiver of any subsequent breach
by Employee. 

19. Limitation of
Liability 

     The
liability of the Corporation under this Agreement and in the award of the
Restricted Stock Units hereunder is limited to the obligations set forth herein
with respect to such award, and nothing herein contained shall be interpreted as
imposing any liability in favor of Employee or any others with respect to any
loss, cost or expense which Employee or others may incur in connection with or
arising out of any transaction involving the Restricted Stock Units. 

20. Entire
Agreement 

     The
parties hereto agree that this Agreement sets forth all of the promises,
agreements, conditions, understandings, warranties, and representations between
the parties with respect to the award of Restricted Stock Units and that there
are no promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied between the parties with
respect to the award of Restricted Stock Units other than as set forth in this
Agreement and in the Plan. Any modifications or any waiver of any provision
contained in this Agreement shall not be valid unless made in writing and signed
by the person or persons sought to be bound by such waiver or modifications.

21. Authority of
Committee 

     All
determinations made by the Committee with respect to the interpretation,
construction and application of any provision of this Agreement shall be final,
conclusive and binding on the parties. 

22. Definitions 

     (a)
“Retirement” shall mean Employee’s Termination of Employment at a time when the sum
of Employee’s age and years of employment with the Corporation, its Subsidiaries
and affiliates equals or exceeds 65. 

     (b)
“Termination of
Employment” means the discontinuance of
Employee’s service relationship with the Corporation and its Subsidiaries,
including but not limited to service as an employee of the Corporation and its
Subsidiaries, as a non-employee member of the board of directors of the
Corporation, or as a consultant or advisor to the
Corporation and its Subsidiaries. Except to the extent provided otherwise in an
agreement or determined otherwise by the Committee, a Termination of Employment
shall not be deemed to have occurred if the capacity in which Employee provides
service to the Corporation changes (for example, a change from consultant status
to Employee status, or vice versa) or if Employee transfers among the various
entities constituting the Corporation and its Subsidiaries, so long as there is
no interruption in the provision of service by Employee to the Corporation and
its Subsidiaries. Employee shall not be deemed to have incurred a Termination of
Employment if Employee is on military leave, sick leave, or other bona fide
leave of absence approved by the Corporation of 180 days or fewer (or any longer
period during which Employee is guaranteed reemployment by statute or contract.)
In the event an Employee’s leave of absence exceeds this period, he or she will
be deemed to have incurred a Termination of Employment on the day following the
expiration date of such period.

23. [Forfeiture in
the Event of Competition and/or Solicitation or other Detrimental
Acts]1

     In return
for granting the Restricted Stock Units to Employee, Employee agrees to the
following restrictions.

     (a) Employee expressly agrees and covenants that during the Restricted Period
(as defined below), Employee shall not, without the prior written consent of the
Corporation, directly or indirectly:

     (i) own,
manage, control, participate in, consult with, become employed by or otherwise
render services to any Competitive Business (as defined below) in the Territory
(as defined below), except that it shall not be considered a violation of this
clause for Employee to be a passive owner of not more than two percent of the
outstanding stock of any class of any corporation which is publicly traded, so
long as Employee has no active participation in the business of such
corporation; 

     (ii) induce or attempt to induce any customer, supplier, client or other
business relation of the Corporation or its affiliates to cease doing business
with the Corporation or its affiliates if such cessation could reasonably be
expected to result in material harm to the Corporation; 

     (iii) induce or attempt to induce any employee of the Corporation or its
affiliates to leave the employ of the Corporation or its affiliates, or in any
way interfere with the relationship between the Corporation or its affiliates
and any person employed by them; or

     (iv)
violate the Corporation’s Securities Trading
Policy. 

     (b) Employee expressly agrees and covenants that Employee will not, without
the prior written consent of the Corporation, directly or indirectly, disclose
or use at any time before or after Employee’s Termination of Employment any
Confidential Information (as defined below) of which Employee is or becomes
aware, whether or not such information is developed by Employee, except to the
extent such disclosure or use is directly related to and appropriate in
connection with Employee’s performance of duties assigned to Employee by the
Corporation or its affiliates. Under all circumstances and at all times,
Employee will take all appropriate steps to safeguard Confidential Information
in his or her possession and to protect it against disclosure, misuse,
espionage, loss and theft.

____________________
 
 1 Section 23 is only included in the Restricted Stock
Unit Agreement for persons holding the title of Senior Vice President or above
of the Corporation or of Krispy Kreme Doughnut Corporation, its wholly-owned
subsidiary. 

     (c) If
the Committee determines that Employee has violated any provisions of this
Section 23 or that Employee’s employment has been terminated for Cause, then
Employee agrees and covenants that: 

     (i) Employee shall automatically forfeit any rights Employee may have with
respect to the Restricted Stock Units as of the date of such determination; and

     (ii) if
Employee has received a distribution of all or any part of the Common Stock
subject to the Restricted Stock Units within the twelve-month period immediately
preceding a violation of this Section 23 or termination of Employee’s employment
for Cause, upon the Corporation’s demand, Employee shall immediately deliver to
the Corporation (A) the shares of Common Stock subject to the Restricted Stock
Units which have been distributed during such period (without the payment by the
Corporation of any consideration for such shares), if the Employee still owns
such shares, or (B) if the Employee no longer owns the Shares, an amount equal
to the Gain realized by the Employee with respect to the shares of Common Stock
subject to the Restricted Stock Units. For the purposes herein, “Gain” shall be
equal to the disposition price per share of any shares of Common Stock received
pursuant to the Restricted Stock Units which shares were sold or disposed of,
multiplied by the number of such shares sold or disposed of, and less any taxes
paid which are not refundable or for which the Employee does not otherwise
receive a tax credit or other form of reimbursement.

     (d) Definitions. For purposes of this Section 23 the following definitions shall apply:

     (i)
“Competitive Business” means any business listed on Exhibit A hereto. 

     (ii) “Confidential Information” means
information that is not generally known to the public and that was
or is used,
developed or obtained by the Corporation or its affiliates in connection with
the business of the Corporation or its affiliates and which constitutes trade
secrets or information which they have attempted to protect, which may include,
but is not limited to, trade “know-how,” customer information, supplier
information, cost and pricing information, marketing and sales techniques,
strategies and programs, computer programs and software and financial
information. It shall not include information (a) required to be disclosed by
court or administrative order; (b) lawfully obtainable from other sources or
which is in the public domain through no fault of Employee; or (c) the
disclosure of which is consented to in writing by the Corporation. 

     (iii) “Restricted Period” means the
period during which Employee is employed by the Corporation or an affiliate and
twelve months following the date that Employee ceases to be employed by the
Corporation or an affiliate for any reason whatsoever.

     (iv)
“Territory” means: 

     (A) The entire United States and any other country where the
Corporation or any of its Subsidiaries, joint venturers, franchisees or
affiliates has operated a retail facility at which the Corporation’s products
have been sold at any time in the one-year period ending on the last day of
Employee’s employment with the Corporation or its affiliates; 

     (B) In the event that the preceding clause shall be determined by
judicial action to define too broad a territory to be enforceable, then
“Territory” shall mean the entire United States;

     (C) In the event that the preceding clauses shall be determined by
judicial action to define too broad a territory to be enforceable, then
“Territory” shall mean the states in the United States where the Corporation or
any of its Subsidiaries, joint venturers, franchisees or affiliates has operated
a retail facility at which the Corporation’s products have been sold at any time
in the one-year period ending on the last day of Employee’s employment with
Corporation or its affiliates; 

     (D) In the event that the preceding clauses shall be determined by
judicial action to define too broad a territory to be enforceable, then
“Territory” shall mean the area that includes all of the areas that are within a
50-mile radius of any retail store location in the United States at which the
Corporation’s products have been sold at any time in the one-year period ending
on the last day of Employee’s employment with the Corporation or its affiliates;
and

     (E) In the event that the preceding clauses shall be determined by
judicial action to define too broad a territory to be enforceable, then
“Territory” shall mean the entire state of North Carolina. 

     (e) The Corporation may require Employee, in connection with the distribution
of Shares under the Restricted Stock Units, to certify in a manner acceptable to
the Corporation that Employee has not violated the terms of this Section 23 and
may decline to distribute such Shares if Employee fails so to certify. If
Employee is required to repay any amount to the Corporation pursuant to this
Section 23, Employee shall pay such amount in such manner and on such terms and
conditions as the Corporation may require, and the Corporation shall be entitled
to withhold or set-off against any other amount owed to Employee by the
Corporation or any of its affiliates (other than any amount owed to Employee
under any retirement plan intended to be qualified under Section 401(a) of the
Code (as defined herein)) up to any amount sufficient to satisfy any unpaid
obligation of Employee under this Section 23.

     (f) Employee acknowledges and agrees that the period, scope and geographic
areas of restriction imposed upon Employee by the provisions of Section 23 are
fair and reasonable and are reasonably required for the protection of the
Corporation. In the event that any part of this Agreement, including, without
limitation, this Section 23, is held to be unenforceable or invalid, the
remaining parts of Section 23 and this Agreement shall nevertheless continue to
be valid and enforceable as though the invalid portions were not a part of this
Agreement. If any one of the provisions in this Section 23 is held to be
excessively broad as to period, scope and geographic areas, any such provision
shall be construed by limiting it to the extent necessary to be enforceable
under applicable law. 

     (g) Employee acknowledges that breach by Employee of this Agreement would
cause irreparable harm to the Corporation and that, in the event of such breach,
the Corporation shall have, in addition to monetary damages and other remedies
at law, the right to an injunction, specific performance and other equitable
relief to prevent violations of Employee’s obligations hereunder. 

24. [Holding Period After
Resignation or Termination]2

     In return
for granting the Restricted Stock Units to Employee, Employee agrees that in the
event of Employee’s Termination of Employment, Employee will delay making any
transactions in the Corporation’s Common Stock until such time as the
Corporation has filed its next succeeding quarterly (10-Q) or annual (10-K)
financial filing, as applicable, with the U. S. Securities and Exchange
Commission.

____________________
 
2 Section 24 is only included in the
Restricted Stock Unit Agreement for persons holding the title of Senior Vice
President or above of the Corporation or of Krispy Kreme Doughnut Corporation,
its wholly-owned subsidiary. 

25. Section
409A 

     It is
intended that this Agreement will comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and any regulations and guidelines
promulgated thereunder (collectively, “Section 409A”), to the extent the
Agreement is subject thereto, and the Agreement shall be interpreted on a basis
consistent with such intent. The Agreement may be amended in any respect deemed
necessary by the Committee in order to preserve compliance with Section 409A of
the Code. Notwithstanding any provision to the contrary in this Agreement, if
Employee is deemed on the date of his or her “separation from service” (within
the meaning of Treas. Reg. Section 1.409A-1(h)) with the Corporation to be a
“specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)),
then with regard to any payment that is considered deferred compensation under
Section 409A payable on account of a “separation from service” that is required
to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into
account any applicable exceptions to such requirement), such payment shall be
made on the date that is the earlier of (i) the expiration of the six (6)-month
period measured from the date of Employee’s “separation from service,” or (ii)
the date of Employee’s death (the “Delay Period”). Upon the expiration of the
Delay Period, all payments delayed pursuant to this Section 25 shall be paid to
Employee in a lump sum. Notwithstanding any provision of this Agreement to the
contrary, for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits upon or following a termination of employment
constituting deferred compensation for purposes of Section 409A, references to
Employee’s “termination of employment” (and corollary terms) with the
Corporation shall be construed to refer to Employee’s “separation from service”
(within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Corporation. No
action or failure to act pursuant to this Section 25 shall subject the
Corporation to any claim, liability, or expense, and the Corporation shall not
have any obligation to indemnify or otherwise protect Employee from the
obligation to pay any taxes, interest or penalties pursuant to Section
409A.

26. [Confidentiality]3

     Employee
agrees to maintain the existence and terms of this Agreement, including the
number of shares of Restricted Stock Units granted hereunder, as confidential,
and neither Employee nor any person acting on his or her behalf shall disclose
the terms of this Agreement to any third party, other than to Employee’s
attorney, accountant, members of Employee’s immediately family or as required by
law. In certain instances, the Corporation may be required by securities
regulations or other laws to disclose information about this award and even the
full content of this Agreement. In the event Employee breaches the terms of this
confidentiality provision, unvested shares of Restricted Stock Units granted
hereunder shall be immediately forfeited. 

____________________
 
3 Section 26 is not included in the Restricted
Stock Unit Agreement for Executive Officers/Section 16 reporting persons of the
Corporation. 

     IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written. 

		KRISPY
      KREME DOUGHNUTS, INC.  
		 
		
		  
		By: 	   
		Title: 	   
		 
		 
		EMPLOYEE  
		 
		 
		    
		Signature:	 
		Printed
      Name:  	 

Exhibit A 

The following businesses, together with
their subsidiaries, are the businesses for purposes of this
Agreement:

Dunkin Brands Inc.
Tim Hortons,
Inc.
George Weston Limited
Interstate Bakeries Corporation
Flowers
Foods, Inc.
McKee Foods
Inc.
Starbucksf8k121109ex10_recoveryengy.htm

     

    Exhibit
10.1

     

     

    
      THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

       

      
        	
                Dated
      December 11, 2009

              	
                Warrant
      to Purchase up to 750,000 Shares of

              
	 
      	
                Common
      Stock (subject to adjustment)

              

      

       

      WARRANT
TO PURCHASE COMMON STOCK

      of

      RECOVERY
ENERGY, INC.

      Void
after November 30, 2014

       

      This
certifies that, for value received, Bel-Car Properties, Inc., or its registered
assigns ("Holder") is entitled,
subject to the terms set forth below, to purchase from RECOVERY ENERGY, INC., a
Nevada corporation (the "Company"), up to
750,000 shares of common stock, par value $0.001 per share, of the Company (the
"Common
Stock"), as constituted on the date hereof (the "Warrant Issue Date"),
upon surrender hereof, at the principal office of the Company referred to below,
with the subscription form attached hereto duly executed, and simultaneous
payment therefor in lawful money of the United States or otherwise as
hereinafter provided, at the Exercise Price as set forth in Section 2 below. The
number and character of such shares of Common Stock and the Exercise Price are
subject to adjustment as provided below. The term "Warrant" as used
herein shall include this Warrant, and any warrants delivered in substitution or
exchange therefor as provided herein.

       

      1. Term of
Warrant.  Subject to the terms and conditions set forth herein,
this Warrant shall be exercisable, in whole or in part, during the term
commencing on the Warrant Issue Date and ending at 5:00 p.m., Mountain Time, on
November 30, 2014, and shall be void thereafter.

       

      2. Exercise
Price.  The exercise price at which this Warrant may be
exercised shall be $3.50 per share (the "Exercise Price"); in
any case, as such Exercise Price may be adjusted from time to time pursuant to
Section 11 hereof.

       

      3. Exercise of
Warrant.

       

      (a) Method of
Exercise.  The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time, or from time to time
during the term hereof as described in Section 1 above, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly completed and executed on
behalf of the Holder, at the principal office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
Holder at the address of the Holder appearing on the books of the Company), upon
payment (A) in cash or by check acceptable to the Company, (B) by authorization
in the Exercise Notice to reduce the number of shares of Common Stock issued to
the Holder upon such exercise by a number equal to the aggregate exercise price
divided by the Market Price on the date of exercise, or (C) by a combination of
(A) and (B), of the purchase price of the shares to be
purchased.  "Market Price" means the price per share of the Common
Stock on any date of determination, which shall be:

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (i)           if
the Common Stock is listed on a U.S. national securities exchange on such date,
the closing sale price or, if no closing sale price is reported, the
last-reported sale price on such date on the U.S. national securities exchange
on which the Common Stock is listed or admitted to trading; or

       

      (ii)           if
the Common Stock is not listed on a U.S. national securities exchange on such
date, or if the closing sale price or last-reported sale price is not obtainable
(even if the Common Stock is listed or admitted to trading on such U.S. national
securities exchange), an average of the last-quoted bid and ask prices in the
over-the-counter market on such date as reported by the OTC Bulletin Board, Pink
Sheets LLC or a similar organization (including any successor thereto);
or

       

      (iii)           if
the Market Price cannot be determined pursuant to either (i) or (ii) above,
determined by the Board of Directors of the Company in its reasonable
judgment.

       

      (b) Issuance of
Shares.  This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event within ten days
thereafter, the Company at its expense shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of shares issuable upon such exercise. In the event that this Warrant is
exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.

       

      4. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. In lieu of any fractional share to
which the Holder would otherwise be entitled (after aggregating all shares that
are being issued upon such exercise), the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction or, at the Company's
option, round the number of shares to be issued up to the next whole
number.

       

      5. 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 loss, theft or
destruction, on delivery of an indemnity agreement reasonably satisfactory in
form and substance to the Company or, in the case of mutilation, on surrender
and cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

       

      6. Rights of Stockholders.
Subject to Sections 9 and 11 of this Warrant, the Holder shall not be
entitled to vote or receive dividends or be deemed the holder of Common Stock or
any other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance, or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until
this Warrant shall have been exercised as provided herein.

       

      7. Transfer
of Warrant.

       

      (a) Warrant Register. The Company
will maintain a register (the "Warrant Register")
containing the names and addresses of the Holder or Holders.  Any
Holder of this Warrant or any portion thereof may change its address as shown on
the Warrant Register by written notice to the Company requesting such
change.  Any notice or written communication required or permitted to
be given to the Holder may be delivered or given by mail to such Holder as shown
on the Warrant Register and at the address shown on the Warrant
Register.  Until this Warrant is transferred on the Warrant Register
of the Company, the Company may treat the Holder as shown on the Warrant
Register as the absolute owner of this Warrant for all purposes, notwithstanding
any notice to the contrary.

       

      (b) Warrant Agent.  The
Company may, by written notice to the Holder, appoint an agent for the purpose
of maintaining the Warrant Register referred to in Section 7(a) above, issuing
the Common Stock or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the
foregoing (the "Warrant
Agent").  Thereafter, any such registration, issuance, exchange
or replacement, as the case may be, shall be made at the office of the Warrant
Agent.

       

      (c) Transferability and Negotiability of
Warrant.  This Warrant may not be transferred or assigned in
whole or in part without compliance with all applicable federal and state
securities laws by the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, if such are requested by the Company).  Subject to the
provisions of this Warrant with respect to compliance with the Securities Act of
1933, as amended (the "Act"), title to this
Warrant may be transferred by endorsement (by the Holder executing the
Assignment Form annexed hereto) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery.

       

      (d) Exchange of Warrant Upon a
Transfer.  On surrender of this Warrant for exchange, properly
endorsed on the Assignment Form and subject to the provisions of this Warrant
with respect to compliance with the Act and with the limitations on assignments
and transfers contained in this Section 7, the Company at its expense shall
issue to or on the order of the Holder a new warrant or warrants of like tenor,
in the name of the Holder or as the Holder (on payment by the Holder of any
applicable transfer taxes) may direct, for the number of shares issuable upon
exercise hereof.

       

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      (e) Compliance
with Securities Laws.

       

      (i) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the shares of Common Stock to be issued upon exercise hereof are being acquired
for investment, and that the Holder will not offer, sell or otherwise dispose of
this Warrant or any shares of Common Stock to be issued upon exercise hereof
except under circumstances that will not result in a violation of the Act or any
state securities laws.

       

      (ii) This
Warrant and all shares of Common Stock issued upon exercise hereof or conversion
thereof shall be stamped or imprinted with a legend in substantially the
following form (in addition to any legend required by state securities
laws):

       

      THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

       

      8. Reservation of
Stock.  The Company covenants that during the term this Warrant
is exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of this Warrant and, from time to time, will take all steps
necessary to amend its Certificate of Incorporation (the "Certificate") to
provide sufficient reserves of shares of Common Stock issuable upon exercise of
this Warrant.  The Company further covenants that all shares of Common
Stock that may be issued upon the exercise of rights represented by this Warrant
and payment of the Exercise Price, all as set forth herein will be duly and
validly authorized and issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously therewith).  The
Company agrees that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.

       

      9. Notices.

       

      (a) Whenever
the Exercise Price or the shares purchasable hereunder shall be adjusted
pursuant to Section 11 hereof, the Company shall issue a certificate signed by
its Chief Financial Officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and the shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such
certificate to be delivered to the Holder of this Warrant by overnight courier
service.

       

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      (b) In
case:

       

      (i) the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

       

      (ii) of any
capital reorganization of the Company, any reclassification of the capital stock
of the Company, any consolidation or merger of the Company with or into another
corporation or entity, or any conveyance of all or substantially all of the
assets of the Company to another corporation or entity, or

       

      (iii) of any
voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

       

      then, and
in each such case, the Company will mail or cause to be sent to the Holder or
Holders a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
con­veyance, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common Stock (or
such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
ten days prior to the record date specified in (A) above or 20 days prior to the
date specified in (B) above, in each case by overnight courier.

       

      10. Amendments and
Waivers.

       

      (a) Except as
provided in Section 1(b) above and Section 10(b) below, this Warrant, or any
provision hereof, may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.

       

      (b) Any term
or condition of this Warrant may be amended or waived with the written consent
of the Company and holders of Warrants representing more than two-thirds of the
shares of Common Stock issuable upon the exercise of all then outstanding
Warrants (the "Majority Holders"),
even without the consent of the Holder.  Any amendment effected in
accordance with this Section 10(b) shall be binding upon each holder of any of
the Warrants, each future holder of any of the Warrants, and the Company;
provided, however, that no special consideration or inducement may be given to
any such holder in connection with such consent that is not given ratably to all
such holders, and that such amendment must apply to all such holders equally and
ratably.  The Company shall promptly give notice to all holders of
Warrants of any amendment effected in accordance with this Section
10(b).

       

      (c) No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

       

       

      11. Adjustments. The Exercise
Price and the shares purchasable hereunder are subject to adjustment from time
to time as follows:

       

      (a) Merger, Reorganization, Sale of
Company, etc.  If at any time while this Warrant is outstanding
and unexpired there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii) a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving entity, or a reverse
merger in which the Company is the surviving entity but the shares of the
Company's capital stock outstanding immediately prior to the merger are
converted or exchanged by virtue of the merger into other property, whether in
the form of securities, cash or otherwise, or (iii) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other corporation or other entity, then, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision shall be made so that
the holder of this Warrant shall thereafter be entitled to receive upon exercise
of this Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares of stock or other securities
or property of the successor corporation or other entity resulting from such
reorganization, merger, consolidation, merger, sale or transfer that a holder of
the shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 11.  The foregoing provision of this Section 11(a)
shall similarly apply to successive reorganizations, consolidations, mergers,
sales and transfers and to the stock or securities of any other corporation or
other entity that are at the time receivable upon the exercise of this
Warrant.  If the per-share consideration payable to the Holder for
shares in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be determined
by the Company's Board of Directors in good faith.  In all events,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon exercise of this Warrant.

       

      (b) Reclassification,
etc.  If the Company, at any time while this Warrant remains
outstanding and unexpired, by reclassification of securities or otherwise, shall
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to acquire such
number and kind of securities as would have been issuable as the result of such
change with respect to the securities that were subject to the purchase rights
under this Warrant immediately prior to such reclassification or other change
and the Exercise Price therefor shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 11.

       

      (c) Split, Subdivision or Combination of
Shares.  If the Company at any time while this Warrant remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the Exercise Price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination and the number of such
securities shall be proportionately increased in the case of a split or
subdivision or proportionately decreased in the case of a
combination.

       

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      (d) Adjustments for Dividends in Stock
or other Securities or Property.  If while this Warrant remains
outstanding and unexpired, the holders of the securities as to which purchase
rights under this Warrant exist (including without limitation securities into
which such securities may be converted) at the time shall have received, or, on
or after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than cash) of the
Company by way of dividend, then and in each case, this Warrant shall represent
the right to acquire, in addition to the number of shares of the security
receivable upon exercise of this Warrant, and without payment of any additional
consideration therefor, the amount of such other or additional stock or other
securities or property (other than cash) of the Company that such holder would
hold on the date of such exercise had it been the holder of record of the
security receivable upon exercise of this Warrant (or upon such conversion) on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 11.

       

      (e) Other
Adjustments.  In case any event shall occur as to which the
other provisions of this Section 11 are not strictly applicable but as to which
failure to make any adjustment would not fairly protect the exercise rights
represented by this Section 11 in accordance with the essential intent and
principles hereof then, in each such case, the Majority Holders may appoint a
firm of independent public accountants of recognized national standing
reasonably acceptable to the Company, which shall give their opinion as to the
adjustment, if any, on a basis consistent with the essential intent and
principles established herein, necessary to preserve the exercise rights
represented herein.  Upon receipt of such opinion, the Company will
promptly mail a copy thereof to all holders of Common Warrants and shall make
the adjustments described therein.  The fees and expenses of such
independent public accountants shall be borne by the Company.

       

      (f) Calculations.  All
calculations under this Section 11 shall be made to the nearest four decimal
points.

       

      (g) No Impairment.  The
Company shall not, by amendment of its certificate of incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed
hereunder by the Company but will at all times in good faith assist in the
carrying out of all the provisions of this Section 11 and in the taking of all
such action as  may be necessary or appropriate in order to protect
the exercise rights of the Holder against dilution or other
impairment.

       

      (h) Effect on Additional
Shares.  Notwithstanding anything to the contrary herein, the
provisions of this Section 11 shall be applicable to the additional shares of
Common Stock for which this Warrant may become exercisable pursuant to Section
2(b) hereof notwithstanding that the event or circumstance to which this Section
11 applies occurs prior to the applicable increase in shares pursuant to Section
2(b).

       

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

       

      12. Miscellaneous
Provisions.

       

      (a) Saturdays, Sundays and
Holidays.  If the last or appointed day for the taking of any
action or the expiration of any right granted herein shall be a Saturday, Sunday
or legal holiday, then (notwithstanding anything herein to the contrary) such
action may be taken or such right may be exercised on the next succeeding day
that is not a Saturday, Sunday or legal holiday.

       

      (b) Governing
Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Nevada applicable to agreements made
and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.

       

      (c) Binding
Effect.  The terms of this Warrant shall be binding upon and
inure to the benefit of the Company and the Holder and their respective
successors and assigns.

       

      * * * *
*

       

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

       

      IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officers thereunto duly authorized.

       

      
        	 
      	 
      	
                RECOVERY
      ENERGY, INC.

              
	 
      	 
      	
                 

                By:                                                         
                            

                      Jeffrey
      A. Beunier

                      Chief
      Executive Officer

              
	 
      	 
      	 
      

      

       

       

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

       

      NOTICE
OF EXERCISE

       

      (1)           The
undersigned hereby elects to purchase _______ shares of Common Stock of RECOVERY
ENERGY, INC., pursuant to the provisions of Section 3(a) of the attached
Warrant, and tenders herewith payment of the purchase price for such shares in
full.

       

      (2)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

       

       

                                                                     

      (Name)

       

       

                                                                
   

      (Name)

       

       

      (4)           Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified
below:

       

                                                                     

      (Name)

       

                       
   

      (Date)                                                   

                                                      
             

      (Signature)

       

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

       

      ASSIGNMENT

       

      FOR VALUE
RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under the within Warrant, with respect to the number of shares of Common Stock
set forth below:

       

      
        	
                Name
      of Assignee

              	
                Address

              	
                No.
      of Shares

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

      

      and does
hereby irrevocably constitute and appoint ____________________________ Attorney
to make such transfer on the books of RECOVERY ENERGY, INC., maintained for the
purpose, with full power of substitution in the premises.

       

      The
undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the shares of stock to be issued upon
exercise hereof are being acquired for investment, and that the Assignee will
not offer, sell or otherwise dispose of this Warrant or any shares of stock to
be issued upon exercise hereof except under circumstances which will not result
in a violation of the Securities Act of 1933, as amended, or any applicable
state securities laws.

      

      Dated:
_________________________

       

                                                               
         

      Signature
of Holder

      

      

       

      -11-

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