Document:

Settlement Agreement dated October 30, 2006

 Exhibit 10.16 
 IN THE TWENTIETH JUDICIAL CIRCUIT IN AND FOR 
 COLLIER COUNTY, FLORIDA 
 CIVIL DIVISION 
 ALAN B. FIELDS, 
 Plaintiff, 
  

			
	vs.	  	                Case No.: 05-419-CA-CAE

 CERTIFIED DIABETIC SERVICES, 
 INC., a Delaware corporation, CDS 
 INVESTORS, LLC, a Florida Limited 
 Liability Company, and BRENT 
 PETERSON, 
 Defendants. 
                                        
                     / 
 SETTLEMENT AGREEMENT 
 During a mediation conference on Monday, October 30, 2006 at 1:00 p.m., the
parties reached the following agreement: 
  

	 	1.	See attached Ex “A”. shall pay to                     
the sum of $         within                      days of this date. Each party shall bear its own fees and
costs. 

  

	 	2.	The parties shall exchange general releases and any other documents which are appropriate to implement this settlement. 

  

	 	3.	The case and all claims asserted herein will be dismissed with prejudice promptly upon receipt of $75K payment by 11/30/06. 

  

	 	4.	Neither party has relied upon any representation or statement of the other party, opposing counsel, or the mediator with respect to the underlying facts, the rights and obligations
of the parties, or the advisability of agreeing to this settlement. 

	 	5.	This agreement shall be enforceable by the Court upon motion of either party. 

  

	 	6.	See Exhibit “A”. 

	
	  

	  

	  

	  

	  

	  

	  

	  

	  

	  

									
	Dated:	 	  
	 		 	Dated:	 	  

			
	ALAN B. FIELDS	 		 	CERTIFIED DIABETIC SERVICES, INC.
					
	By:	 	 /s/    Alan B. Fields
	 		 	By:	 	 /s/    Lowell M. Fisher, Jr.

		 		 		 	Its:	 	 Chairman and CEO

			
	 /s/    A. Anderson B. Dogali
	 		 	 /s/    David C. Banker

	A. Anderson B. Dogali	 		 	David C. Banker
	Forizs & Dagali, P.L.	 		 	Bush Ross, P.A.
	4301 Anchor Plaza Parkway, Suite 300	 		 	220 S. Franklin Street
	Tampa, Florida 33634	 		 	Tampa, Florida 33602
	Attorney for Plaintiff	 		 	Attorney for Defendant, Certified Diabetic Services, Inc.
					
		 		 		 	Dated:	 	 Oct. 30, 2006

				
		 		 		 	CDS INVESTORS, LLC
					
		 		 		 	By:	 	 /s/    Brent Peterson

		 		 		 	Its:	 	 Managing Member

				
		 		 		 	 /s/    Antonio Faga

		 		 		 	Antonio Faga
		 		 		 	7955 Airport Road North, Suite 101
		 		 		 	Naples, Florida 334109
		 		 		 	Attorney for Defendant CDS Investors, LLC
			
	LOWELL FISHER	 		 	BRENT PETERSON
					
	By:	 	 /s/    Lowell M. Fisher, Jr.
	 		 	By:	 	 /s/    Brent Peterson

					
	Dated:	 	 10/30/2006
	 		 	Dated:	 	 10/30/2006

 (Per ¶ 7 of Ex “A”) 

 Exhibit “A” 
 1. Certified Diabetic Services, Inc. (the “Company”) will pay Alan Fields (“Fields”) cash of $75,000 on or before November 30, 2006. 
 2. The Company will pay Fields $120,000, in 24 equal monthly installments of $5,000, beginning on December 31, 2006 and continuing monthly thereafter until paid in
full. 
 3. The Company will issue Fields 1,500,000 shares of its common stock. 
 4. The Company will file a registration statement on Form SB-2 with the U.S. Securities and Exchange Commission and will include in that registration statement the 1,500,000 shares being issued to Fields in this
settlement agreement. 
 5. The Company will cause the restrictive legend on the shares currently owned by Fields to be removed, provided that the Company
receives an opinion of Field’s counsel that the restrictive legend can be removed. 
 6. Fields agrees that he will not vote 1,500,000 shares of common
stock that he presently owns during the 24 month period following the date of this Agreement, provided however, if Fields sells any such shares in bona fide third party transactions to persons that are not affiliated with him, then the Company will
permit these shares to be voting shares. Fields will surrender to the Company stock certificate(s) so that the Company can place a legend on such certificates indicating this restriction. The Company will return the share certificates to Fields with
such legend. Upon the Company’s receipt of a letter from a licensed broker dealer that it is in receipt of Field’s shares for sale in the “open market” together with a representation from Fields that he intends to sell such
shares in the “open market’, the Company will issue a certificate without the legend referenced in this paragraph, provided however, Fields will not be entitled to vote any such shares which are not sold pending the expiration of the
period referenced in this paragraph. 
 7. The Company, CDS Investors, LLC, the Company’s subsidiaries, affiliates, directors (present and former),
officers (present or former) and employees (present or former), including but not limited to Lowell Fisher and Brent Peterson on the one hand, and Fields and his affiliates on the other hand, will execute broad mutual general releases of any and all
causes of action arising out of events occurring on or before the date of this settlement agreement. 
 8. The parties will dismiss the lawsuit, including
all claims and counterclaims, with prejudice. 
 9. The Company will release Fields from the sanctions awarded against him. 
 10. Each party will bear its own legal fees and costs. 
 11. Fields will
execute a UCC-3, releasing all claims against the Company’s assets, which UCC-3 will be held in escrow pending the $75,000 payment referenced in paragraph 1 above. 
 12. Fields shall be permitted to characterize the tax treatment of the settlement payment in any manner he desires. 
 13. If
the Company defaults in the payments due under paragraph 2, and such default continues for 10 days after its due date, then Fields shall be entitled to accelerate all payments due and shall be entitled to entry of a judgment for the balance due to
him. 
 14. Fields transfers all of his rights to the membership units in the LLC to the Company for no additional consideration. 

 15. Fields acknowledges that he has no right to exercise any stock option that he may hold in the Company. 
 16. If a legal action is initiated by any party to this agreement against another, arising out of or relating to the alleged performance or non-performance of any right
or obligation established hereunder, or any dispute concerning the same, any and all fees, costs and expenses reasonably incurred by each successful party or his or its legal counsel in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect of, such action shall be the joint and several obligation of and shall be paid or reimbursed by the unsuccessful party.Common Stock Purchase Warrant

 Exhibit 10.17 
 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
 COMMON STOCK PURCHASE WARRANT

 To Purchase 2,920,000 Shares of Common Stock of 
 Certified Diabetic Services, Inc. 
 THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”) certifies that, for value received, ABS SOS-Plus Partners Ltd. (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the fifth anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe
for and purchase from Certified Diabetic Services, Inc., a Delaware corporation (the “Company”), 2,920,000 shares, subject to adjustment pursuant to Section 2 (the “Warrant Shares”) of Common Stock, par value
$0.01 per share, of the Company (the “Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 1(b). 
 Section 1. Exercise. 
 a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination
Date by delivery to the Company of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such
Holder appearing on the books of the Company); provided, however, within 5 trading days of the date the Notice of Exercise Form is delivered to the Company, the Holder shall have surrendered this Warrant to the Company and, unless the
Holder wishes to effect a cashless exercise, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank. 
  

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 b) Exercise Price. The exercise price of the Common Stock under this Warrant shall
be $0.05 per share, subject to adjustment hereunder (the “Exercise Price”). 
 c) Cashless Exercise.
If, at any time or times on or after one year from the Initial Exercise Date there is not an effective registration statement under the Securities Act and applicable state securities or blue sky laws for the sales of the Warrant Shares, this Warrant
may also be exercised in whole or in part at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where: 
  

					
	(A)	  	=	  	the FMV on the business day immediately preceding the date of such election;
			
	(B)	  	=	  	the Exercise Price of this Warrant, as adjusted; and
			
	(X)	  	=	  	the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.
			
	FMV	  	=	  	the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a trading market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the trading market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern
Time); (b) if the Common Stock is not then listed or quoted on a trading market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the average of the closing price per share of the Common Stock so reported for the last ten (10) days in which shares of the Common Stock traded; or (c) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

 Notwithstanding anything herein to the contrary, if on the Termination Date
(1) there is not an effective registration statement under the Securities Act and applicable state securities or blue sky laws for the sales of the Warrant Shares and (2) the FMV is greater than the Exercise Price, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 1(c). 
 d) Mechanics of Exercise.

 i. Authorization of Warrant Shares. The Company covenants that all Warrant Shares which may be issued upon the
exercise of the 

  

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purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly 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 with such issue). 
 ii. Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Company or its
transfer agent, if applicable, to the Holder by crediting the account of the Holder’s custodian with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant
in such system, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within three (3) trading days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant and
payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company, or in the event of a cashless
exercise, the date that the Notice of Exercise is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 1(d)(vii) prior to the issuance of such
shares, have been paid. 
 iii. Delivery of New Warrants Upon Exercise. If this Warrant is exercised in part, the
Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant. 
 iv. Rescission Rights. If the Company fails to,
or fails to cause its transfer agent to, transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to Section 1(d)(iii) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such
exercise. 
 v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any
other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and
if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the 

  

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Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased to satisfy a sale exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that
the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof. 
 vi. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise Price. 
 vii. Charges, Taxes and Expenses.
Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto. 
  

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 viii. Closing of Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
 e) Exercise
Limitations. 
 i. Holder’s Restrictions. A Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 1(c) or otherwise, to the extent that after giving effect to such issuance after exercise, such Holder (together with such Holder’s affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such issuance. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such
Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its affiliates. Except as
set forth in the preceding sentence, for purposes of this Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by a Holder that the Company is not representing
to such Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in
this Section 1(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which a portion of this Warrant is exercisable shall be in the sole discretion of a Holder, and
the submission of a Notice of Exercise shall be deemed to be each Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this Section 1(e), in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public announcement 

  

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by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company shall within two trading days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by such Holder or its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 1(e) may be waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior notice to the Company, and the provisions of this Section 1(e) shall
continue to apply until such 61st day (or such later date, as determined by such Holder, as may be specified in such notice of waiver). 

Section 2. Certain Adjustments. 
 a) Stock Dividends and Splits; Certain Grants. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, (iv) issues by reclassification of shares of
the Common Stock any shares of capital stock of the Company or (v) grants shares of Common Stock or options to consultants or independent contractors for services with an issuance price at or above FMV (“Consultant Shares”) in
an amount equal to or less than 1% of the issued and outstanding capital stock of the Company in any 12 month period, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of Warrant Shares issuable
upon exercise of this Warrant shall be proportionately adjusted. Any adjustment made pursuant to this Section 2(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. 
 b) Subsequent Equity Sales. At any time after the date hereof, if the Company at any time while this Warrant is outstanding, shall offer, sell, grant any option to purchase or offer, sell or grant any right to
reprice its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or options to acquire common stock or securities convertible into Common Stock (each,
“Common Stock Equivalents”) entitling any Person to acquire shares of Common Stock, at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances

  

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collectively, a “Dilutive Issuance”), as adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), then the
Exercise Price shall be reduced to the Base Share Price. In addition, the number of Warrant Shares issuable hereunder (“Dilutive Warrant Shares”) shall be increased such that the result of multiplying the number of Dilutive Warrant
Shares by the Base Share Price equals the result of multiplying the Warrant Shares by the Exercise Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments
shall be made, paid or issued under this Section 2(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the trading day following the issuance of any Common Stock or Common Stock Equivalents subject
to this section, indicating therein the applicable issuance price, or of applicable reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares
based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. As used in this Section “Exempt Issuance” means the issuance of (i) shares of Common Stock or
options to employees officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the board of directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, (ii) Consultant Shares (for avoidance of doubt, such shares at an exercise price at or above FMV) in an amount equal to or less than 1% of the issued and outstanding capital stock of the
Company in any 12 month period, (iii) securities upon the exercise of or conversion of any securities issued hereunder, convertible securities, options or warrants issued and outstanding on the date of this Warrant, provided that such
securities have not been amended since the date of this Warrant to increase the number of such securities, (iv) securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (v) securities issued to a lender in connection with debt financing; provided (1) such
issuance of securities is not the primary purpose of the debt financing, (2) the FMV of such securities is not in excess of 10% of the amount of the debt financing, and (3) such issuance of securities does not exceed 2% of the issued and
outstanding capital stock of the Company. 
  

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 c) Pro Rata Distributions. If the Company, at any time prior to the Termination
Date, shall distribute to all holders of Common Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the
Common Stock (which shall be subject to Section 2(b)), then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled
to receive such distribution by a fraction of which the denominator shall be the FMV determined as of the record date mentioned above, and of which the numerator shall be such FMV on such record date less the then per share fair market value at such
record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in
a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately after the record date mentioned above. 
 d) 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 Person, (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 Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or
property, or (D) 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 an all cash transaction, cash equal to the value of this Warrant as determined in accordance with the Black-Scholes option pricing
formula. For purposes of any such exercise, the determination of the Exercise 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 Exercise 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 

  

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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 2(d) and insuring
that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
 e) Calculations. All calculations under this Section 2 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 2, the number of shares of
Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding. 
 f) Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. 
 g) Notice
to Holders. 
 i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to this
Section 2, the Company shall promptly mail to each Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 
 ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize
the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be 

  

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taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such
notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the 20-day period commencing on the date of
such notice to the effective date of the event triggering such notice. 
 Section 3. Transfer of Warrant. 
 a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Sections 4(a) and
3(d) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. 
 b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 3(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. 
 c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 
  

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 d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, or eligible for free
transferability pursuant to Rule 144 under the Securities Act, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of
counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act. The foregoing provisions do not in any way limit the
Company’s obligations under the Registration Rights Agreement executed on even date herewith between the Company and the Warrant Holder (the “Registration Rights Agreement”). 
 Section 4. Miscellaneous. 
 a) Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws and Section 3 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part,
at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. The transferee shall sign an investment letter in form
and substance reasonably satisfactory to the Company. 
 b) No Rights as Shareholder Until Exercise. This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of a cashless exercise), the
Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment. 
 c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate. 
 d) Saturdays, Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not
a Saturday, Sunday or legal holiday. 
  

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 e) Authorized Shares. 
 The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants 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 the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the trading market upon which the Common Stock may be listed. 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. 
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in
the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 
 f) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the laws of the State of Florida without regard to its conflict of laws rules. 
  

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 g) Restrictions. The Holder warrants that it is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of 1933, as amended. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws. 
 h) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate at 11:59 p.m. Eastern Standard Time on the
Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder. 
 i) Notices. Any notice, request or other document required or permitted to be given or delivered to the
Holder by the Company shall be delivered in accordance with the notice provisions of the Registration Rights Agreement. 
 j)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
 k) Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law would be adequate. 
 l) Successors and
Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The
provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares. 
 m) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder. 
 n) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provisions or the remaining provisions of this Warrant. 
  

 - 13 - 

 o) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant. 
 ******************** 
  

 - 14 - 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized. 
 Effective as of: November 30, 2006 
 Executed: March     , 2008 
  

			
	Certified Diabetic Services, Inc.
		
	By:	 	  

		 	Lowell M. Fisher, Chairman & CEO

  

 - 15 - 

 NOTICE OF EXERCISE 
  

	TO:	CERTIFIED DIABETIC SERVICES, INC. 

 (1) The
undersigned hereby elects to purchase                      Warrant Shares of the Company pursuant to the terms of the attached Warrant, and
tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. 
 (2) Payment shall take the
form of (check applicable box): 
  ̈  in lawful money of the United States; or 
  ̈  the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set
forth in Subsection 1(c) of the attached Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in Subsection 1(c). 
 (3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified
below: 
 _________________________________________ 
 The Warrant Shares shall be delivered to the following: 
 _________________________________________ 
 _________________________________________ 
 _________________________________________ 
 (4) Accredited Investor. The undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of 1933, as amended. 
 [SIGNATURE OF HOLDER] 
 Name of Investing Entity:
                                        
                                         
                                         
                                         
          
 Signature of Authorized Signatory of Investing Entity:
                                         
                                         
                                         
     
 Name of Authorized Signatory:
                                         
                                         
                                         
                                        

Title of Authorized Signatory:
                                         
                                         
                                         
                                         

 Date:
                                         
                                         
                                         
                                         
                                        

 

 - 16 - 

 ASSIGNMENT FORM 
 (To assign the foregoing warrant, execute 
 this form and supply required information. 
 Do not use this form to exercise the warrant.) 
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to 
                                        
                                         
                                         
                            whose address is 
 ___________________________________________________________________________________. 
 ___________________________________________________________________________________ 
 Dated:
            ,              
  

			
	Holder’s Signature:	 	  

		
	Holder’s Address:	 	  

		
		 	  

  

			
	Signature Guaranteed:	  	  

 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the
Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant. 
  

 - 17 -

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