IVFH Innovative Food Holdings Inc (QB)

A.

Seller is engaged in the business of wholesaling bulk organic ingredients and other related food products (the “Business”);

B.

Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, substantially all of the properties, business, and assets of Seller used and/or useful in the operation of the Business, constituting substantially all of Seller’s assets, and Buyer desires to assume from Seller, and Seller desires to assign to Buyer, certain liabilities and obligations of Seller with respect to the operation of the Business, in each case for consideration and in accordance with the terms and conditions of this Agreement;

C.

Owner owns all of the issued and outstanding shares of Seller’s capital stock and will derive a direct and substantial benefit as the result of consummation of the transactions contemplated by this Agreement;

D.

Buyer, Seller, and Owner desire to enter into this Agreement for the purpose of setting forth their mutual understandings and agreements with respect to the foregoing; and

E.

Capitalized terms used but not defined in the context of the Section in which such terms first appear shall have the meanings set forth in Section 6.8.

(a)

All of Seller’s rights in, to, and under the Leased Property;

(b)

All tangible personal property (whether as owner, lessor, lessee or otherwise), including, without limitation, all machinery, equipment, instruments and vehicles (including the Ryder truck acquired in April 2024), as set forth on Section 1.1(b) of the Disclosure Schedule;

(c)

All Intellectual Property, associated goodwill, related licenses and sublicenses (in each case, whether granted or obtained), and other rights, remedies against infringements of, and rights to protection of interests in Intellectual Property under the Laws of all jurisdictions;

(d)

The contracts listed on Section 1.1(d) of the Disclosure Schedule and all associated rights of Seller (the “Assumed Contracts”);

(e)

All notes receivable, trade receivables, accounts receivable, commissions, and other receivables and rights to payment of Seller, including any rebates or credits;

(f)

All Permits obtained by, on behalf of, or for the benefit of Seller from any Governmental Authority, to the extent assignable;

(g)

All books, records and other printed or written materials used and/or useful in, or otherwise reflecting or derived from, the operation of the Business, including without limitation all forecasts, financial information, vendor and customer lists, supplier lists, employee training and personnel manuals and files, computer records, data related to point-of-sale scanning which includes historical purchase and sales data;

(h)

All causes of action (except for those causes of action that are related exclusively to any of the Excluded Assets), claims, and demands of Seller (whether known or unknown, matured or unmatured, accrued or contingent), including rights to returned or repossessed goods and rights as an unpaid vendor; rights of recovery, rights of warranty and indemnity, rights to product liability insurance proceeds, rights of set-off and rights of recoupment; all marketing and advertising materials, all supplies and miscellaneous assets; the Uniform Product Code Symbols of Seller; and the use of any telephone numbers that are used in the operation of the Business;

(i)

all inventories of Seller, wherever located, including all finished goods, work in process, raw materials, spare parts and all other materials and supplies to be used or consumed by Seller in the production of finished goods, including Food and Food Inventory (“Inventories”), provided that “Inventories” shall not include beverages or foodstuffs or other items intended for human or animal consumption that is not salable in the ordinary course of business, including any such Inventories (i) beyond their Expiry Date (inclusive of documented extensions from the manufacturer) on the date of Closing, or (ii) that are within thirty (30) days or less of their Expiry Date (inclusive of documented extensions from the manufacturer);

(j)

All claims of Seller against third parties relating to the Acquired Assets, whether choate or inchoate, known or unknown, contingent or noncontingent;

(k)

All insurance benefits, including rights and proceeds, arising from or relating to the Acquired Assets or the Assumed Liabilities prior to the Closing, unless expended in accordance with this Agreement; 

(l)

All licenses, certificates, and certifications issued, made, or given by any Person (including but not limited to Governmental Authorities, but without duplication of Permits), including any right or license to designate or identify Inventory or goods as being Kosher or organic, or as meeting any other quality, purity, sourcing, ethical, or comparable standard, to the extent assignable.

(a)

all cash, cash equivalents, short-term investments and marketable securities of Seller; and Seller’s security deposit with ProLogis and any prepaid expenses; and

(b)

the assets, properties, and rights specifically listed and described on Section 1.2(b) of the Disclosure Schedule.

(a)

Subject to adjustment pursuant to Section 1.6, the purchase price for the Acquired Assets and the Assumed Liabilities (the “Purchase Price”) shall be equal to $1,750,000.00.

(b)

Buyer shall pay the Purchase Price on the Closing Date as follows: (i) a promissory note in substantially the form of Exhibit A in the principal amount of $350,000.00 (the “Seller Financing Note”); and (ii) the remainder of the Purchase Price, $1,400,000.00, shall be paid to Seller at Closing by wire transfer or delivery of other certified funds. The promissory note shall be executed by Buyer in favor of Seller with interest at six percent (6%) per annum for a term of sixty (60) months payable in equal monthly installments with the first payment due one month after Closing. The promissory note shall contain default, notice and acceleration provisions. The default interest shall be twelve percent (12%). Said note shall provide for a five (5) day grace period, a five percent (5%) late fee, no prepayment penalty and a right of set-off.

(a)

Inventory Adjustment. Not more than 5 Business Days prior to the Closing Date, Buyer and Seller shall conduct an inventory of the Seller’s Inventories, and mutually prepare and agree to a statement setting forth the Parties’ good faith determination of the book value of the Inventories as of the Closing Date (the “Closing Inventory"). For the avoidance of doubt, Closing Inventory shall not include inventory that is (i) not salable in the ordinary course of business, including any such Inventories (ii) beyond their Expiry Date (inclusive of documented extensions from the manufacturer) on the date of Closing, or (iii) that are within thirty (30) days or less of their Expiry Date (inclusive of documented extensions from the manufacturer) as of the Closing Date. If the Closing Inventory, as determined in accordance with this Section 1.6(a), is less than the Estimated Closing Inventory, then the portion of the Purchase Price payable to Seller pursuant to Section 1.5(b)(ii) shall be reduced at Closing in the amount of the deficiency. If the Closing Inventory, as determined in accordance with this Section 1.6(a), exceeds the Estimated Closing Inventory, then then the portion of the Purchase Price payable to Seller pursuant to Section 1.5(b)(ii) shall be increased at Closing in the amount of such excess.

(b)

Net Accounts Receivable Adjustment.

(1)

Not less than 5 Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer a statement setting forth its good faith estimate of the book value of the accounts receivable of the Business (the “Estimated Accounts Receivable”) and accounts payable of the Business (the “Estimated Accounts Payable”), each as of the Closing Date, together with a report setting forth detailed supporting calculations.

(2)

Within (60) days after the Closing Date, Buyer shall prepare and deliver to Seller a statement setting forth (i) any objections it has to Seller’s Estimated Accounts Receivable and/or Estimated Accounts Payable calculations and (ii) Buyer’s calculation of the accounts receivable of the Business (the “Closing Accounts Receivable”) and accounts payable of the Business (the “Closing Accounts Payable”), each as of the Closing Date. Seller shall have 10 days after receipt of Buyer’s Closing Accounts Receivable and/or Closing Accounts Payable calculations to notify Buyer of any disputes regarding the Closing Accounts Receivable and/or Accounts Payable calculation. If Seller notifies Buyer of any disputes in accordance with this subsection (b), then the parties will negotiate in good faith in an effort to resolve those disputes. If the parties are unable to resolve any dispute within 10 days after Buyer receives notice, then either party may submit that dispute for resolution to an accountant with an independent accounting firm of recognized national or regional standing mutually acceptable to Buyer and Seller. The resolution of any dispute by that accounting firm shall be rendered within 30 days after submission of the dispute to the accounting firm and shall be conclusive and binding upon the parties.

(3)

If the Closing Accounts Receivable is less than the Closing Accounts Payable, as determined in accordance with Section 1.6(b)(2) above, then the principal amount of the Seller Financing Note shall be reduced automatically in the amount of the deficiency. If the Closing Accounts Receivable is greater than the Closing Accounts Payable, as determined in accordance with Section 1.6(b)(2) above, then Buyer shall pay to Seller the excess amount.

(a)

At the Closing, Seller shall deliver or cause to be delivered to Buyer, for the transfer, filing or recording thereof (Buyer shall pay all Transfer Taxes):

(1)

a bill of sale for all of the Acquired Assets that are tangible personal property in substantially the form of Exhibit C (the “Bill of Sale”), duly executed by Seller;

(2)

an assignment of all of the Acquired Assets that are intangible personal in a form satisfactory to Buyer, which assignment shall also contain Buyer’s undertaking and assumption of the Assumed Liabilities (the “Assignment and Assumption Agreement”) in substantially the form of Exhibit D, duly executed by Seller;

(3)

assignments of all Intellectual Property Assets and separate assignments of all registered Marks, Patents and Copyrights each in a form satisfactory to Buyer, duly executed by Seller;

(4)

a certificate of the Secretary of Seller certifying, as complete and accurate as of the Closing, attached copies of the charter and bylaws or other applicable governing documents of Seller, certifying and attaching all requisite resolutions or actions of Seller’s board of directors and stockholders approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and certifying to the incumbency and signatures of the officers of Seller executing this Agreement and any other document relating to the transactions contemplated hereby.

(b)

At the Closing, Buyer shall deliver, or cause to be delivered, to Seller:

(1)

the Purchase Price by wire transfer of immediately available funds to the account specified by the Seller in Exhibit E;

(2)

the Seller Financing Note, duly executed by Buyer; and

(3)

the Assignment and Assumption Agreement, duly executed by Buyer;

(a)

Injunction. There shall be no effective injunction, writ or preliminary restraining order or any order of any nature issued or Law passed by a governmental authority of competent jurisdiction to the effect that the transactions contemplated hereby may not be consummated as provided herein, no proceeding or lawsuit shall have been commenced by any governmental authority for the purpose of obtaining any such injunction, writ or preliminary restraining order and no written notice shall have been received from any governmental authority indicating an intent to restrain, prevent, materially delay or restructure the transactions contemplated hereby, in each case where the Closing would (or would be reasonably likely to) result in a material fine or penalty payable by the Buyer or a material restriction on the Buyer’s operation of its business as a result of such matter.

(b)

Consents. All Required Consents shall have been obtained or made on terms and conditions reasonably satisfactory to the Buyer.

(c)

Representations and Warranties. Each of the representations and warranties of the Seller and the Owner set forth in ARTICLE II shall have been true and correct in all material respects, except that those representations and warranties that by their terms are qualified by materiality shall be true and correct in all respects.

(d)

Performance of Obligations of the Seller Parties. The Seller Parties shall have performed in all respects all covenants and agreements required to be performed by them hereunder at or prior to the Closing.

(e)

 No Material Adverse Effect. There shall not have occurred (nor shall the Buyer have become aware of) any material adverse effect or any development reasonably likely to result in a material adverse effect. “Material Adverse Effect” means any change, event, occurrence, circumstance, development or effect that, individually or in the aggregate, has had or would reasonably be expected to have or give rise to, a material adverse effect on (a) the business, financial condition or results of operations of the Seller or (b) the ability of Seller or the Owner to consummate the transactions contemplated by this Agreement on a timely basis; provided that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or would reasonably be expected to have, a Material Adverse Effect: any adverse change, event, occurrence, circumstance or development to the extent attributable to (i) the announcement, or pendency of this Agreement or the transactions

contemplated by this Agreement if and to the extent proximately attributable to any Buyer or its affiliates; (ii) operating, business, regulatory or other conditions in the staffing, recruiting, and workforce solutions industry; (iii) general economic conditions, including changes in the credit, debt or financial or capital markets (including changes in interest or exchange rates), in each case, in the United States or anywhere else in the world; (iv) taking any action at the written request of any Buyer, including the impact thereof on relationships, contractual or otherwise, with, or actual or potential loss or impairment of, clients, customers, suppliers, distributors, partners, financing sources, managing directors or other employees and/or consultants and/or on revenue, profitability and cash flows; (v) changes in GAAP or other accounting requirements or principles or any changes in applicable Laws or the interpretation thereof after the date hereof; (vi) the failure of the Seller to meet or achieve the results set forth in any projection or forecast; (vii) global, national or regional political conditions, including hostilities, acts of war (whether declared or undeclared), sabotage or terrorism or military actions or any escalation, worsening or diminution of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (viii) hurricanes, earthquakes, floods, epidemic, pandemic, disease outbreak or other health crisis or public health event, or other natural disasters or acts of god; (ix) any actual or potential sequester, stoppage, shutdown, default or similar event or occurrence by or involving any governmental entity; or (x) any actual or potential break-up of any existing political or economic union of or within any country or countries or any actual or potential exit by any country or countries from, or suspension or termination of its or their membership in, any such political or economic union; provided that, in the case of the foregoing clauses (ii), (iii), (v), (vii), (viii), (ix) or (x), if such change, event, occurrence, circumstance, development or effect affects the Seller in a disproportionate manner in comparison to a majority of the other participants in the staffing, recruiting, and workforce solutions industry, then the disproportionate aspect of such change, event, occurrence, circumstance, development or effect (and only such disproportionate aspect) shall be taken into account in determining whether a Material Adverse Effect has occurred or will occur.

(f)

Release of Liens. The Buyer shall have received evidence reasonably satisfactory to it that all Liens affecting any Acquired Asset have been released, or will be released upon repayment of the Seller’s indebtedness at Closing.

(g)

Lease. The Buyer shall have received a duly executed Lease for the Leased Real Property as of the Closing Date from the fee owner of the Leased Real Property in a form acceptable to Buyer in its sole discretion, along with any other estoppel certificates or other related agreements the Buyer may require (the “Lease”).

(h)

Intellectual Property Assignment Agreements. The Seller and the Owner shall have executed any and all intellectual property assignment agreements necessary to transfer the Seller Intellectual Property to the Buyer, in each case in a form reasonably satisfactory to the Buyer.

(i)

Seller Parties Ancillary Agreements. The Seller Parties, shall have delivered, or caused to be delivered, to the Buyer the documents listed in Section 1.9(a) (collectively with the Lease the “Seller Parties Ancillary Agreements”).

(j)

Seller Parties Compliance Certificate. The Seller Parties shall have delivered, or caused to be delivered, to the Buyer a certificate executed by each of the Seller Parties as to compliance with the conditions set forth in Sections 1.10(c) and 1.10(d).

(k)

No Litigation. There shall not be pending or threatened any Action by or before any governmental authorities against the Buyer or any Sellery Party (a) seeking to restrain or prohibit the Buyer’s direct or indirect ownership or operation of all or a significant portion of the Business or Acquired Assets, or to compel the Buyer or any of its affiliates to dispose of

or hold separate any significant portion of the business or assets of the Seller, (b) seeking to restrain or prohibit or make materially more costly the consummation of the transactions contemplated by this Agreement, or seeking to obtain from the Buyer or the Seller any material damages, (c) seeking to impose limitations on the ability of the Buyer to acquire or hold, or exercise full rights of ownership of the Acquired Assets, or (d) which otherwise could reasonably be expected to have a Material Adverse Effect.

(a)

Except as set forth on Section 2.3 of the Disclosure Schedules (each a “Required Consent” and collectively, the “Required Consents”), the execution, delivery and performance by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby do not and will not (with or without notice or lapse of time, or both):

(1)

contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of Seller;

(2)

contravene, conflict with or result in a violation or breach of any provision of any Law or Order;

(3)

require any consent or approval under, violate, conflict with, result in any breach of or any loss of any benefit under, or constitute a change of control or Default under, or result in termination or give to others any right of termination, vesting, amendment, acceleration or cancellation of any Contract to which Seller is a party, or by which its properties or assets may be bound or affected or any Governmental Authority affecting, or relating in any way to the Business; or

(4)

result in the imposition or creation of any Lien on, or with respect to, any of the Acquired Assets.

(b)

The execution, delivery and performance of this Agreement by Seller and the consummation of the transactions contemplated hereby by Seller do not and will not require any Permit of, action by, filing with or notification to, any Governmental Authority, other than any actions or filings the absence of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. For purposes of this Agreement, “Governmental Authority” means any federal, state or local, domestic or foreign or international, government or any judicial, legislative, executive, administrative or regulatory authority, tribunal, agency, body, entity or commission or other governmental, quasi-governmental or regulatory authority or agency, domestic or foreign or international.

(a)

Seller has previously delivered to Buyer true and complete copies of its: (i) internally prepared balance sheets and statements of income, retained earnings and cash flows as of and for its fiscal years ended 2020, 2021, 2022, and 2023, including all applicable footnotes; and (ii) unaudited interim balance sheets and statements of income, retained earnings and cash flows as of and for the eight-month period ended August 2024 (the “Current Financial Statements” and, together with the items described in clause (i) above, the “Financial Statements”). The Financial Statements present fairly in all material respects the financial condition of Seller as at the end of the covered periods and the results of its operations and its cash flows for the covered periods. The Financial Statements were prepared on a consistent basis throughout the covered periods, subject, in the case of the Current Financial Statements, to year-end audit adjustments (which will not, in the aggregate, be material) and the lack of footnotes.

(b)

Except as and to the extent disclosed in the Current Financial Statements or on Section 2.4 of the Disclosure Schedule, Seller has no Liabilities, other than (i) executory obligations under Seller agreements that are not required to be set forth in the Current Financial Statements and (ii) Liabilities incurred in the ordinary course of business since August 2024.

(a)

Section 2.6(a) of the Disclosure Schedule sets forth a complete and accurate list of all material employee benefit plans (the “Employee Plans”) as defined in Section 3 of the Employee Retirement Income Security Act of 1974 (93 P.L. 406), as amended (“ERISA”). Except as required by Law or the terms of an Employee Plan, Seller does not have any plan or commitment to establish any new material Employee Plan or amend in any material respect an existing Employee Plan. With respect to each Employee Plan, to the extent applicable, Seller has made available to Buyer complete and accurate copies of:

(1)

the most recent annual report on Form 5500 required to have been filed with the IRS for each Employee Plan, including all schedules thereto;

(2)

the most recent determination letter, if any, from the IRS for any Employee Plan that is intended to qualify under Section 401(a) of the Code (I.R.C. § 401(a));

(3)

the plan documents and summary plan descriptions, if any, including any amendments or statements of material modifications thereto, or a written description of the terms of any Employee Plan that is not in writing;

(4)

any related trust agreements, insurance contracts, insurance policies or other documents of any funding arrangements;

(5)

any notices during the past three years to or from the IRS or any office or representative of the United States Department of Labor or any similar Governmental Authority relating to any compliance issues in respect of any such Employee Plan;

(6)

all other Material Contracts directly relating to each Employee Plan, including administrative service agreements;

(7)

with respect to each International Employee Plan, to the extent applicable, Seller has made available to Buyer complete and accurate copies of:

(i)

the most recent annual report or similar compliance documents required to be filed with any Governmental Authority with respect to such plan, if any; and

(ii)

any document comparable to the determination letter referenced under clause (ii) above issued by a Governmental Authority, if any.

(b)

Each Employee Plan has been administered and operated in compliance with its terms and with all Law in all material respects, including the applicable provisions of ERISA and the Code, and there is no existing circumstance that is reasonably expected to cause any failure of such compliance. Each Employee Plan that is intended to be “qualified” under Section 401 of the Code (I.R.C. § 401) is the subject of an unrevoked favorable determination letter from the IRS and there is no existing circumstance and nothing has occurred since the date thereof that would reasonably be expected to adversely affect the qualified status of any such Employee Plan. All contributions, premiums and other payments required to be made with respect to any Employee Plan have been timely made, accrued or reserved for, except as would not be expected to result in a material liability.

(c)

There are no material lawsuits, actions, proceedings or claims pending or, to the Knowledge of Seller, threatened on behalf of or against any Employee Plan, the assets of any trust under any Employee Plan, or the plan sponsor, plan administrator or any fiduciary or any Employee Plan, other than routine claims for benefits that have been or are being handled through an administrative claims procedure.

(d)

Seller has not, with respect to any Employee Plan, engaged in or been a party to any non-exempt “prohibited transaction,” as such term is defined in Section 4975 of the Code (I.R.C. § 4975) or Section 406 of ERISA (93 P.L. 406), which could reasonably be expected to result in the imposition of a material penalty assessed pursuant to Section 502(i) of ERISA (93 P.L. 406) or a material tax imposed by Section 4975 of the Code (I.R.C. § 4975).

(e)

Each Employee Plan that provides post-termination or retiree life insurance, health or other welfare benefits to any Person has been operated and administered in accordance with Section 4980B of the Code (I.R.C. § 4980B) and other Law.

(f)

Each Employee Plan that is subject to Section 409A of the Code (I.R.C. § 409A) has been operated and administered in material compliance with Section 409A of the Code (I.R.C. § 

409A). There is no contract, agreement, plan or arrangement to which Seller is a party or by which it is bound to compensate any current or former employee or other disqualified individual for excise taxes which may be required pursuant to Section 4999 of the Code (I.R.C. § 4999) or any Taxes required by Section 409A of the Code (I.R.C. § 409A).

(g)

The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement (either alone or in conjunction with any other event) will not:

(1)

result in any material payment or benefit becoming due or payable, or required to be provided, to any director, employee, consultant or independent contractor of Seller, or cause or create any right to the forgiveness of indebtedness owed by any employee to Seller;

(2)

materially increase the amount of, or accelerate the time of payment of, any benefit or compensation payable under any Employee Plan or other employment arrangement, or result in the payment of any amount that would not be deductible by reason of Section 280G of the Code; or

(3)

result in any violation or breach of or Default under, or limit the ability of Seller to amend, modify or terminate, any Employee Plan or other employee benefit agreement.

(a)

Seller is not a party to, bound by or subject to, or is currently negotiating in connection with entering into, any collective bargaining agreement or understanding with a labor union or organization. None of the employees of Seller is represented by any union with respect to his or her employment by Seller. Except as set forth in Section 2.7(a) of the Disclosure Schedule, there is no claim or grievance pending or, to the Knowledge of Seller, threatened against Seller relating to terms and conditions of employment or unfair labor practices, including charges of unfair labor practices or harassment complaints. To the Knowledge of Seller, there is no activity or proceeding by a labor union or representative thereof to organize any employees of Seller, nor have there been any strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees during the last three years.

(b)

Since December 31, 2023, there has been no “mass layoff” or “plant closing” as defined by the Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”) in respect of Seller and Seller has not been affected by any transactions or engaged in layoffs or employment terminations sufficient in number to trigger application of any state, local, or foreign law or regulation which is similar to the WARN Act.

(c)

There have not been any strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees during the last three years.

(d)

Section 2.7(d) of the Disclosure Schedule contains a complete and accurate list of the following information for each employee, director, independent contractor, consultant and agent of Seller with respect to the Business, including each employee on leave of absence or layoff status: employer; name; job title; date of hiring or engagement; date of commencement of employment or engagement; current compensation paid or payable and any change in compensation since December 31, 2023; sick and vacation leave that is accrued but unused; and service credited for purposes of vesting and eligibility to participate under any Employee Plan, or any other employee or director benefit plan.

(e)

To the Knowledge of Seller, no officer, director, agent, employee, consultant, or contractor of Seller with respect to the Business is bound by any Contract that purports to limit the ability of such officer, director, agent, employee, consultant, or contractor (i) to engage in or continue 

or perform any conduct, activity, duties or practice relating to the Business or (ii) to assign to Seller or to any other Person any rights to any invention, improvement, or discovery. No former or current employee of the Business is a party to, or is otherwise bound by, any Contract that in any way adversely affected, affects, or will affect the ability of Seller or Buyer to conduct the business as carried on by Seller.

(a)

Except as set forth in Section 2.8 of the Disclosure Schedule, there is no complaint, claim, action, suit, litigation, proceeding or governmental or administrative investigation (each an “Action”) pending or, to the Knowledge of Seller, threatened against or affecting a Seller Party, including in respect of the transactions contemplated hereby that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Seller is not subject to any outstanding Order (i) that prohibits Seller from conducting the Business as now conducted or proposed to be conducted or (ii) that would, individually or in the aggregate, have had or would reasonably be expected to have had a Material Adverse Effect.

(b)

To the Knowledge of Seller, except as set forth in Section 2.8 of the Disclosure Schedule, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any Action that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Seller has delivered to Buyer copies of all pleadings, correspondence and other documents relating to each item listed in Section 2.8 of the Disclosure Schedule.

(a)

Seller has timely filed all federal, state, local and foreign Tax returns, estimates, information statements and reports relating to any and all Taxes of Seller or its operations (the “Tax Returns”) required to be filed by Law by Seller as of the date hereof. All such Tax Returns are true, correct, and complete, and Seller has timely paid all Taxes attributable to them that were due and payable as shown on such Tax Returns.

(b)

As of the date of this Agreement, there is no written claim or assessment pending or, to the Knowledge of Seller, threatened for any alleged deficiency in Taxes of Seller, and there is no audit or investigation with respect to any liability of Seller Parties for Taxes. Seller has not waived any statute of limitations with respect to material Taxes or agreed to any extension of time with respect to a material Tax assessment or deficiency.

(c)

There is no tax sharing agreement, tax allocation agreement, tax indemnity obligation or similar written or unwritten agreement, arrangement, understanding or practice with respect to Taxes (including any advance pricing agreement, closing agreement or other arrangement relating to Taxes) that will require any payment by Seller Parties.

(d)

Seller (i) has not been a member of an affiliated group within the meaning of Section 1504(a) of the Code or any similar group defined under a similar provision of state, local or foreign law and (ii) has no liability for Taxes of any Person other than Seller and its Subsidiaries under Treas. Reg. §§ 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor by contract or otherwise.

(e)

Seller has withheld (and timely paid to the appropriate Governmental Authority) proper and accurate amounts for all periods through the date hereof in compliance with all Tax withholding provisions of applicable federal, state, local and foreign Laws other than provisions of employee withholding (including, without limitation, withholding of Tax on dividends, interest, and royalties and similar income earned by non-resident aliens and foreign corporations and withholding of Tax on United States real property interests).

(f)

No jurisdiction where Seller does not file a Tax Return has made a claim in writing that Seller is required to file a Tax Return relating to the Business or its assets for such jurisdiction or that any Taxes relating to the Business or its assets are due as a result of doing business in any such jurisdiction.

(a)

Seller has not been in conflict with, in Default or, with notice, lapse of time or both, would be in Default, with respect to or in violation of any (i) statute, law, ordinance, rule, regulation or requirement of a Governmental Authority (each, a “Law”) or (ii) order, judgment, writ, decree or injunction issued by any court, agency or other Governmental Authority (each, an “Order”) applicable to Seller or by which any property or asset of Seller is bound or affected.

(b)

Seller has not received any written notice

(1)

of any Default or violation as described in clause (a) above;

(2)

of any administrative, civil or criminal investigation or audit by any Governmental Authority relating to Seller; or

(3)

from any Governmental Authority alleging that Seller is not in compliance with any Law or Order.

(c)

Seller has all permits, licenses, orders, registrations, certificates, variances, authorizations, consents, approvals, franchises, and similar rights from Governmental Entities required to conduct the Business as currently conducted (“Permits”) and such Permits are valid and in full force and effect. Seller is in compliance with the terms of such Permits and, as of the date of this Agreement, has not received written notice from any Governmental Authority threatening to revoke, or indicating that it is investigating whether to revoke, any such Permit.

(d)

Seller conducts, and since January 1, 2020 has conducted, the Business in compliance in all material respects with all applicable Law related to the storage handling, preparation, labeling, sale and distribution of food to consumers, including the applicable provisions of the Federal Food, Drug, and Cosmetic Act, as amended, and the applicable regulations and requirements adopted by the Food and Drug Administration (the “FDA”) thereunder (collectively, the “Food and Drug Act”), the applicable statutes, regulations and requirements of the United States Department of Agriculture (the “USDA”), and any applicable statutes, regulations and requirements established by any other Governmental Authority responsible for regulating the preparation, labeling, sale and distribution of food products (together with the FDA and USDA, collectively, the “Food Authorities” and the Food and Drug Act together with such other statutes, regulations and requirements collectively, “Food Law”) and terms and conditions imposed in any Permits granted by any Food Authority. To Seller’s Knowledge, each of its suppliers and other third Persons involved in the sourcing, handling, sale, preparation, distribution, or delivery of the Food to or for Seller have complied and are in compliance with applicable Food Law and terms and conditions imposed in any Permits granted by any Food Authority, including any applicable good manufacturing practices and sanitation requirements, labeling and advertising requirements, requirements relating to food or color additives, food standards, product composition requirements, testing requirements or protocols, recordkeeping or reporting requirements, monitoring requirements, packaging (including co-packing and re-packing) requirements, laboratory controls, storage and warehousing procedures, shipping requirements and shelf-life requirements, in each case as required under applicable Food Law or Permits granted by any Food Authority.

(e)

There is currently no pending or, to Seller’s Knowledge, threatened Proceeding relating to or asserting a violation of any Food Law, and there has not been any such Proceeding brought or threatened in writing since January 1, 2020. None of (1) the Seller, the Business, Leased Real Property, or any Food Inventory (current or past) or, (2) to the Knowledge of Seller, the persons that manufacture, process, package, supply ingredients and packaging materials for or distribute Food to Seller, has received or is subject to, or since January 1, 2020, has been subject to, (x) any warning letter, untitled letter, notice of inspectional observation (including FDA Form 483), notice of suspension, notice of intended enforcement or other adverse correspondence or notice from any Food Authority or (y) any import detention, investigation, suspension or withdrawal of inspection or registration, penalty assessment or other compliance or enforcement action by any Food Authority that remains unresolved, and any such resolved matters arising under part (1) of this paragraph are listed on Section 2.10(e) of the Disclosure Schedules.

(f)

All Food Inventory has been substantially properly handled and stored and is properly packaged and labeled and is fit for human consumption and may be shipped in interstate commerce in accordance with applicable Food Law. None of the Food Inventory has been adulterated or misbranded within the meaning of applicable Food Law. All of the current packaging or storage vessels for Food Inventory is adequate for normal shipping and storage. None of the Food Inventory requires any specific approval of the FDA, USDA or any other Food Authority for the purpose of which they are being manufactured, prepared, produced, sold or distributed, which has not been obtained.

(g)

With respect to Food previously sold or any current Food Inventory, none of Seller or, to the Knowledge of Seller, the third persons that manufacture, process, package, supply ingredients or packaging materials for or distribute the Food sold by Seller or consisting of part of the Food Inventory, has since January 1, 2020, voluntarily or involuntarily initiated, conducted or issued, or caused to be initiated, conducted or issued, any recall, field alert, field correction, market withdrawal or replacement, safety alert, or other notice or action relating to an alleged lack of safety or regulatory compliance of any Food (collectively, a “Recall”). To the Knowledge of Seller, since January 1, 2020, no facts have existed that, if known by the applicable Food Authority, would have required or resulted in a Recall. None of the Food Inventory is subject to dietary notification or reporting pursuant to the reportable food registry or similar reporting requirement maintained by the FDA or any foreign Food Authority equivalent having authority over the Business.

(a)

Seller has substantially complied at all times with all applicable Environmental Laws.

(b)

No property currently or formerly owned or operated by Seller has been contaminated with any Hazardous Substance in a manner that could reasonably be expected to require remediation or other action pursuant to any Environmental Law.

(c)

Seller has not received any written notice, demand, letter, claim or request for information alleging that Seller is in violation of or liable under any Environmental Law.

(d)

Seller is not subject to any order, decree or injunction with any Governmental Authority or agreement with any third party concerning liability under any Environmental Law or relating to Hazardous Substances.

(a)

Seller owns or is validly licensed or otherwise has the right to use all patents, inventions, copyrights, software, trademarks, service marks, domain names, trade dress trade secrets and all other intellectual property rights of any kind or nature (“Intellectual Property”) used in the Business as currently conducted.

(b)

Section 2.12(b) of the Disclosure Schedules lists all Intellectual Property included in the Purchased Assets

(c)

The Intellectual Property used by Seller does not infringe, misappropriate or otherwise violate the Intellectual Property of any third party.

(d)

Seller has not received any written charge, complaint, claim, demand or notice alleging any such infringement, misappropriation or other violation (including any claim that Seller must license or refrain from using any Intellectual Property of any third party).

(e)

To Seller’s Knowledge no third party has infringed upon, misappropriated or otherwise violated any Intellectual Property of Seller. Seller makes reasonable best efforts to protect and maintain its Intellectual Property.

(a)

Section 2.13(a) of the Disclosure Schedule contains a true and correct list of each parcel of leased real property (the “Leased Real Property”) and a summary description of all plants and structures located on each parcel of Leased Real Property. True and correct copies of all lease agreements for the Leased Real Property (“Leases”) have been provided to Buyer.

(b)

Seller is the lessees under each of the Leases. Each Lease is in full force and effect and there is no existing Default by Seller or, to the Knowledge of any Seller, any other party to such Leases.

(c)

Seller’s interest in the Leased Real Property is free and clear of any Liens, and is not subject to any deeds of trust, assignments, subleases, or rights of any third parties known to or created or permitted by any Seller other than the lessor thereof or any mortgagees of such lessors.

(d)

There is no Default by Seller nor, to Seller’s Knowledge, any other party thereto, under any Leases, and no condition or circumstance exists which, would constitute a Default by Seller nor, to Seller’s Knowledge, any other party thereto, under any such Leases.

(e)

All improvements on the Leased Real Property conform to all applicable state and local Laws or use restrictions, and the property is zoned for the various purposes for which the Leased Real Property and improvements thereon are presently being used.

(f)

Seller has not received any notice of any pending or threatened condemnations, planned public improvements, annexation, special assessments, zoning or subdivision changes, or other adverse claims affecting the Leased Real Property.

(g)

There is no private restrictive covenant or governmental use restriction (including zoning) on all or any portion of the Leased Real Property which prohibits the current use of the Leased Real Property.

(h)

All Permits required for the occupancy and operation of the Leased Real Property (with appurtenant parking uses) as presently being used have been obtained and are in full force and effect and Seller has not received any notices of violations in connection with such items.

(i)

Seller does not have in its possession any studies or reports which indicate any defects in the design or construction of any of the Improvements on the Leased Real Property.

(j)

No Person, other than Buyer, has any right, option, right of first refusal or any other contract, whether oral or written, with respect to the purchase, assignment or transfer of all or any portion of the Leased Real Property.

(a)

Section 2.14(a) of the Disclosure Schedule lists as of the date hereof, and Seller has made available to Buyer true, correct and complete copies of each of the following contracts (each, a “Material Contract”) to which Seller is a party or which bind or affect its properties or assets (excluding leases, subleases or other agreements for Leased Real Property, all of which contracts are disclosed in Section 2.13(a) of the Disclosure Schedule, and excluding Employee Plans):

(1)

contracts containing provisions that limit the ability of Seller (or which, following the consummation of the transactions contemplated hereby, could restrict the ability of Buyer) to compete in any business or with any Person or in any geographic area, or to sell, supply or distribute any of Seller’s services or products (including any non-compete, exclusivity, “most-favored-nation” or similar requirements) or pursuant to which any benefit or right is required to be given or lost, or any penalty or detriment is incurred, as a result of so competing or engaging;

(2)

contracts that provide for or govern the formation, creation, operation, management or control of any strategic partnership, joint venture, joint development, or similar arrangement or partnership;

(3)

contracts that relate to indebtedness;

(4)

the Assumed Contracts;

(5)

any licenses or other agreements for the Seller’s right to the Intellectual Property;

(6)

contracts with any employees of Seller;

(7)

contracts with any customer of the Business;

(8)

contracts with any vendor or supplier of the Business;

(b)

each Material Contract is valid and binding on Seller that is a party thereto and, to the Knowledge of Seller, each other party thereto, and is in full force and effect and enforceable in accordance with its terms, except to the extent enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally, and to general equitable principles, and unless expired or terminated in accordance with its terms; (ii) Seller and, to the Knowledge of Seller, each other party thereto, have performed and complied with all obligations required to be performed or complied with by them under each Material Contract; and (iii) there is no Default under any Material Contract by Seller or, to the Knowledge of Seller, by any other party, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a Default thereunder by Seller or, to the Knowledge of Seller, by any other party thereto.

(a)

The Acquired Assets include, and upon the purchase of the Acquired Assets Buyer will own or have the uncontested right to use, all rights, properties (including Seller’s Intellectual Property), interests in properties, and assets necessary to permit Buyer to carry on the Business as presently conducted by Seller. The Equipment and the Improvements on the Leased Real Property are individually and in the aggregate in good condition and state of repair, reasonable wear and tear and normal depreciation excepted.

(b)

Except as regards Leased Real Property (to which the provisions of Section 2.13. shall apply), Seller owns good, marketable, and transferable title to all of the Acquired Assets, free and clear of any Liens other than Permitted Liens.

(c)

The Acquired Assets constitute all of the assets, tangible and intangible, of any nature whatsoever, necessary to operate the Business in the manner presently operated by Seller.

(a)

Each item of tangible personal property is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for immediate use in the ordinary course of business and is free from patent, and, to the Seller’s Knowledge, latent defects. No item of tangible personal property is in need of repair or replacement other than as part of routine maintenance in the ordinary course of business. Except as disclosed on Section 2.19(a) of the Disclosure Schedule, all tangible personal property used in the Business is in the possession of Seller.

(b)

The Inventory was acquired in the ordinary course of business consistent with the past practice of Seller and the Business. On the Closing Date, (1) the Food Inventory will consist of Food saleable in the ordinary course of the Business, consistent with past practice,; (2) none of the Food Inventory will consistent of any Food subject to a Recall; (3) all Food (and any particular item) comprising the Food Inventory is of a quality and quantity salable in Seller’s ordinary course of business; and (4) the Food Inventory levels have been obtained and maintained at such amounts as are required for the operation of the Business as previously conducted and as currently conducted in the ordinary course of business, in all material respects, and such Food Inventory levels are adequate and reasonable for the Business as

operated by Seller in the ordinary course. All Food Inventory is located at, or is in transit to or from, the Leased Real Property. The Seller has purchased all Food Inventory in compliance with applicable Laws and all Food comprising the Food Inventory complies with Seller’s internal quality assurance guidelines.

(a)

During the period commencing with the Closing Date and ending on the fifth anniversary of the Closing Date, neither Seller Party shall, directly or indirectly, engage in, own, be employed by, consult with or otherwise render services to any Person who is engaged in any Competing Business; provided, however, that the ownership of an equity interest of not more than 2% in a publicly traded entity that is engaged in a Competing Business, without more, shall not constitute a violation of this covenant.

(b)

During the period commencing with the Closing Date and ending on the fifth anniversary of the Closing Date, neither Seller Party shall, directly or indirectly: (i) solicit the trade of, or trade with, any customer or supplier of Buyer such that the customer or supplier of Buyer reduces the amount of business that it does (or, but for that solicitation, would do)with Buyer, or (ii) solicit or induce any employee, distributor, sales representative, agent or contractor of Buyer to terminate his, her or its employment or other relationship with Buyer.

(c)

If a Seller Party shall be in breach of any of the provisions of subsection (a) or subsection (b) above, then the time periods set forth in those subsections shall, as they relate to both Seller Parties, be extended by the length of time during which the breach is ongoing.

(d)

As used in this Section 4.1, the following terms have the following meanings:

(1)

“Competing Business” means the manufacturing, marketing or selling of products or services which are competitive with any Products and that are directly or indirectly marketed or sold in the Territory;

(2)

“Product” means (A) any product or service that Buyer is manufacturing, marketing, selling or developing on the date of this Agreement and (B) any other product or service that Buyer has marketed, sold or developed at any time during the three-year period immediately prior to the date of this Agreement; and

(3)

“Territory” means the jurisdiction or jurisdictions, in each case in which Buyer has marketed or sold any Products at any time during the three-year period immediately prior to the date of this Agreement.

(e)

Seller Parties acknowledge and agree that Buyer would be irreparably damaged if any of the provisions of this Section 4.1 are not complied with in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that Buyer shall be entitled to an injunction or injunctions to prevent breaches of this Section 4.1 and shall have the right to specifically enforce Section 4.1 and its terms and provisions against the Seller Parties in addition to any other remedy to which Buyer may be entitled under this Agreement, at law or in equity.

(f)

It is the intent of the parties that each provision of this Section 4.1 be adjudicated valid and enforced to the fullest extent permissible under the laws and public policies of each jurisdiction in which adjudication of the validity or enforcement of Section 4.1 is sought. In furtherance of the foregoing, each provision of Section 4.1 shall be severable from each other provision, and any provision of Section 4.1  that is prohibited or unenforceable in any jurisdiction shall be subject to the following:(i) if the prohibited or unenforceable provision is contrary to or conflicts with any requirement of any statute, rule or regulation in effect in the jurisdiction, then the requirement shall be incorporated into, or substituted for, the prohibited or unenforceable provision to the minimum extent necessary to make the provision valid or enforceable;(ii) the Governmental Entity or arbitrator considering the matter is authorized to (or, if that Governmental Entity or arbitrator is unwilling or fails to do so, then the parties shall) amend the unenforceable provision to the minimum extent necessary to make the provision valid or enforceable, and the parties consent to the entry of an order amending the provision to that extent for that purpose; and (iii) if any unenforceable provision cannot be or is not reformed and made valid or enforceable under this Section 4.1, then the prohibited or unenforceable provision shall be ineffective in that jurisdiction to the minimum extent necessary to make the remainder of Section 4.1 valid or enforceable in that jurisdiction. Any application of the foregoing provisions to any provision of Section 4.1 shall not (x) affect the validity or enforceability of any other provision of Section 4.1 or (y) prevent the prohibited or unenforceable provision from being adjudicated valid or enforced as written in any other jurisdiction.

(a)

[***].

(b)

Neither Seller Party nor their respective Affiliates shall solicit the continued employment of any current employee (unless and until Buyer has informed Seller in writing that the particular current employee will not receive any employment offer from Buyer) or the employment of any Proposed Future Employee after the Closing. Buyer has informed Seller of the identities of those current employees to whom it will not make employment offers.

(c)

[***]

(a)

Seller shall be responsible for (i) the payment of all wages and other remuneration due to current employees with respect to their services as employees of Seller through the close of business on the Closing Date, including pro rata bonus payments and all vacation pay earned prior to the Closing Date; and (ii) the payment of any termination or severance payments and the provision of health plan continuation coverage in accordance with the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) and Sections 601 through 608 of ERISA.

(b)

Seller shall be liable for any claims made or incurred by current employees and their beneficiaries through the Closing Date under the Employee Plans. For purposes of the immediately preceding sentence, a charge will be deemed incurred, in the case of hospital, medical or dental benefits, when the services that are the subject of the charge are performed and, in the case of other benefits (such as disability or life insurance), when an event has occurred or when a condition has been diagnosed that entitles the employee to the benefit.

(a)

ensure that the Seller conducts the Business and operations (i) in the ordinary course and consistent with past practice and (ii) in compliance in all material respects with all applicable Laws and the requirements of all Seller Contracts and Transferred Permits; and

(b)

use commercially reasonable efforts to ensure that the Seller preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and others having business relationships with the Seller.

(a)

the discovery by any Seller Party of any event, condition, fact or circumstance that occurred or existed on or prior to the date hereof and that caused or constitutes an inaccuracy in or breach of any representation or warranty made by any Seller Party in this Agreement;

(b)

the discovery by any Seller Party of any event, condition, fact or circumstance that occurs, arises or exists after the date hereof and that would cause or constitute an inaccuracy in or breach of any representation or warranty made by any Seller Party in this Agreement if (i) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (ii) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date hereof;

(c)

any breach of any covenant or obligation of any Seller Party;

(d)

the discovery by any Seller Party of any event, condition, fact or circumstance that has made or could reasonably be expected to make the timely satisfaction of any condition set forth in in Section 1.10 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect; and

(e)

(i) any notice or other communication from any Person alleging that the consent or approval of such Person is or may be required in connection with the transactions contemplated by this Agreement, and ( ii) any Action or material claim threatened, commenced or asserted against or with respect to the Seller or the transactions contemplated by this Agreement; provided, however, that no notification given to the Buyer pursuant to this Section 4.17 shall limit or otherwise affect any of the representations, warranties, covenants or obligations of any Seller Party, or any of the rights of the Buyer, contained in this Agreement.

(a)

Until the earlier of the Closing or the termination of this Agreement, the Seller Parties shall not, directly or indirectly, and shall not authorize or permit the Seller or any representative of the Seller directly or indirectly to, (i) solicit, initiate, encourage, induce or facilitate the making, submission or announcement of any proposal relating to any transaction or series of transactions involving: (a) any merger, consolidation, share exchange, business combination, issuance of securities, direct or indirect acquisition of securities, recapitalization, tender offer, exchange offer or other similar transaction involving the Seller; (b) any direct or indirect sale, lease, exchange, transfer, license, acquisition or disposition of a material portion of the business or assets of the Seller; or (c) any liquidation or dissolution of the Seller (an “Acquisition Proposal”) or take any action that could reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any information regarding the Seller to any Person in connection with or in response to an Acquisition Proposal or an inquiry or indication of interest that could reasonably be expected to lead to an Acquisition Proposal, (iii) engage in discussions or negotiations with any Person with respect to a potential Acquisition Transaction or an Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition

Proposal, or (v) enter into any letter of intent or similar document or any Contract contemplating or otherwise relating to any Acquisition Transaction. Without limiting the generality of the foregoing, the Seller acknowledges and agrees that any violation of or the taking of any action inconsistent with any of the restrictions set forth in the preceding sentence by any representative of the Seller, whether or not such representative is purporting to act on behalf of the Seller, shall be deemed to constitute a breach of this Section 6.04 by any Seller Party.

(b)

The Owner shall, and shall cause the Seller to, immediately cease and cause to be terminated any existing discussions with any Person (other than the Buyer) that relate to any Acquisition Proposal.

(a)

any misrepresentation or breach of warranty of Seller in this Agreement or any agreement executed and delivered in connection with this Agreement, and schedule or exhibit hereto or thereto;

(b)

any default by a Seller Party in the performance or observance of any of its covenants or agreements under this Agreement;

(c)

any liability set forth on Section 5.1(c) of the Disclosure Schedule;

(d)

any Excluded Asset or any Retained Liabilities; or

(e)

any third-party claim based upon, resulting from or arising out of the Business of Seller conducted on or prior to the Closing Date.

(a)

In no event shall the Buyer be entitled to indemnification pursuant to Section 5.1(a) for any Losses unless the aggregate amount of all such Losses exceeds $20,000 (the “Basket”), in which case the Buyer will be entitled to indemnification for Losses including, and in excess of the Basket, subject to the other limitations contained herein.

(b)

The aggregate amount of all Losses for which the Seller and the Shareholders shall be liable pursuant to Section 5.1(a) shall not exceed $350,000.00.

(c)

Indemnification relating to each of the Fundamental Representations (as defined herein) and all items in Section 5.1(c) shall not be subject to the limitations in Sections 5.2(a) – (b).

(d)

Any Losses arising, directly or indirectly, out of any fraud or intentional misrepresentation or omission with respect to any of the representations made by the Seller or Owner shall not be subject to any of the limitations in Sections 5.2(a) – (b).

(a)

by mutual written consent of the Buyer and the Seller Parties;

(b)

by written notice from the Buyer to the Seller Parties if there has been a breach of any representation, warranty, covenant or agreement by any Seller Party, or any such representation or warranty shall become untrue after the date hereof, and such breach is not curable or, if curable, is not cured within the earlier of (i) fifteen (15) days after written notice thereof.

By:

/s/ Bill Bennett

Name:

Bill Bennett

Title:

Chief Executive Officer

By:

/s/ David Rickard

Name:

David Rickard

Title:

Chief Executive Officer

/s/ David Rickard

David Rickard

(a)

Payment. Payments are to be made to Lender at _________________________, or such other address as is designated by Lender, in lawful money of the United State of America. All payments hereunder shall be applied first to interest and then to principal.

(b)

Late Payment. If any payment is paid more than 10 days after the date on which it was due (a “Late Payment”), Borrower agrees to pay a late fee in the amount of (i) five percent (5%) of the amount of such Late Payment.

(a)

Monetary Obligations. Borrower fails to make any payment required herein within ten (10) days after it is due and payable; or

(b)

Representations. Any statement, representation, or warranty made by Borrower to Lender in the Note or any other agreement or document executed in connection with the subject indebtedness is false, misleading, or erroneous in any material respect; or

(c)

Third Party Matters. Borrower (i) is in default under any agreement with the Lender, (ii) fails to pay any final money judgment, (iii) becomes party to any proceeding, or (iv) fails to comply with any law, which materially and adversely impairs (A) such Borrower’s ability to perform his, her, or its obligations under the Note; or

(d)

Transfers; Liens; Debt. Without Lender’s prior written consent (which the Lender may withhold for any reason or condition upon any event or consideration, as the Lender determines in its sole discretion), a Borrower (i) executes a general assignment for the benefit of its creditors; (ii) becomes the subject, voluntarily or involuntarily, of any bankruptcy, insolvency or reorganization proceeding; (iii) admits in writing its inability to pay its debts generally as they become due or fail to pay its debts as they become due; (iii) applies for or consents to the appointment of a custodian, receiver, trustee, or liquidator of Borrower or of all or a substantial part of any of its assets; or (iv) institutes or voluntarily be or becomes a party to any other judicial proceedings intended to effect a discharge of its or its debts, in whole or in part, or a postponement of the maturity or the collection thereof, or a suspension of any of the rights or powers of Lender; or

(e)

Dissolution; Change in Ownership or Control. Borrower dissolves, liquidates, merges or consolidates; or any interest in Borrower is, voluntarily or involuntarily, assigned, encumbered, or otherwise transferred; or, any time after the Effective Date, the person controlling or owning Borrower changes; or

(f)

Material Adverse Change. A material adverse change occurs in any Borrower’s financial condition, and as a result, the prospect of payment or performance of the Note is impaired; or

(g)

Failure to Discharge. A Borrower fails to discharge within a period of ten (10) days after the commencement thereof any attachment, sequestration, or similar proceedings against any of such Borrower’s assets; or

(h)

Lawsuits. Any suit shall be filed against Borrower which, if adversely determined, would substantially impair the ability of Borrower to perform any of its obligations under and by virtue of the Note.

(a)

Preservation of Legal Existence, Etc. Borrower shall:

(i)

preserve and maintain in full force and effect the legal existence and good standing under the laws of the Borrower’s state or jurisdiction of incorporation or organization;

(ii)

preserve and maintain in full force and effect all Governmental Authorizations necessary or desirable in the normal conduct of the Borrower’s business; and

(iii)

use best efforts, in the ordinary course of business, to preserve the Borrower’s business organization and goodwill.

BORROWER:

Innovative Food Holdings, Inc.

By:                                                                                   

Name:                                                                              

Its: