ex10-1.htm


    Exhibit
10.1

     

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

    


    THE
HOLDER, AND ANY ASSIGNMENEE BY ACCEPTANCE OF THIS NOTE, ACKNOWLEDGE AND AGREE
THAT, BY REASON OF THE PROVISIONS OF THIS NOTE, FOLLOWING CONVERSION OF A
PORTION OF THIS NOTE, THE UNPAID AND UNCONVERTED PRINCIPAL AMOUNT OF THIS NOTE
MAY BE LESS THAN THE AMOUNT STATED ON THE FACE HEREOF.

    


    


    Principal Amount:
$200,000.00                                                                                                           Issue
Date: December 31, 2008

    


    


    SECURED CONVERTIBLE
PROMISSORY NOTE

    


    FOR VALUE
RECEIVED, INNOVATIVE FOOD HOLDINGS, INC., a Florida corporation (hereinafter
called “Borrower”), hereby promises to pay to ALPHA CAPITAL ANSTALT, Pradfant 7,
9490 Furstentums, Vaduz, Lichtenstein, Fax: 011-42-32323196 (the “Holder”) or
its registered assigns or successors in interest or order, without demand, the
sum of Two Hundred Thousand Dollars ($200,000.00) (“Principal Amount”), on July
31, 2011 (the “Maturity Date”), if not sooner paid and less any amounts
previously paid pursuant to the terms hereof.

    


    This Note
has been entered into pursuant to the terms of a subscription agreement between
the Borrower and the Holder dated at or about the date hereof (the
“Subscription Agreement”), and shall be governed by the terms of such
Subscription Agreement.  Unless otherwise separately defined herein,
all capitalized terms used in this Note shall have the same meaning as is set
forth in the Subscription Agreement.  The following terms shall apply
to this Note:

    


    ARTICLE
I

    


    INTEREST; AMORTIZATION

    


               1.1.           Interest
Rate.   Subject to Section 5.7 hereof, interest payable on
this Note shall accrue on the outstanding Principal Amount at a rate per annum
(the "Interest Rate") of eight percent (8%).  Interest on the
outstanding Principal Amount shall accrue from the date of this Note and shall
be payable in arrears together with, at the same time and in the same manner as
payment of Principal Amount and on the Maturity Date, whether by acceleration or
otherwise.

    


    1.2.           Minimum Monthly Principal
Payments.   Amortizing payments of the outstanding
Principal Amount of this Note and accrued interest shall commence on the six
month anniversary of the Issue Date and on the same day of each month (each a
“Repayment Date”) until all of the Principal Amount has been repaid, by the
payment of cash pursuant to the terms hereof.  Subject to Article II
below, on each Repayment Date, the Borrower shall make payments to the Holder in
an amount equal to $8,000 (the “Monthly Amount”).

    


    1.3.           Maturity Date
Extension.   Any Principal Amount, interest and any other
sum arising under this Note and the Subscription Agreement that remains
outstanding on the Maturity Date shall be due and payable on the Maturity
Date.  Unless the Holder elects to extend the Maturity Date of some of
all of such outstanding amounts up to an additional one year, in which case the
Maturity Date with respect to such terms designated by the Holder will be such
date elected by Holder, subject to acceleration as described in this
Note.

    


    1.4.           Default Interest
Rate.  Following the occurrence and during the continuance of
an Event of Default (as defined in Article IV), the annual interest rate on this
Note shall (subject to Section 5.7) be fifteen percent (15%).  Such
interest shall be due and payable together with regular scheduled Monthly
Amounts.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

    


    CONVERSION
RIGHTS

    


               2.1.           Holder’s Conversion
Rights.   Subject to Section 2.2, the Holder shall have
the right, but not the obligation, to convert all or any portion of the then
aggregate outstanding Principal Amount of this Note, together with interest and
fees due hereon, and any sum arising under the Subscription Agreement, and the
Transaction Documents, including but not limited to Liquidated Damages, into
shares of Common Stock, subject to the terms and conditions set forth in this
Article II, at the rate of $.005 per share of Common Stock (“Fixed Conversion
Price”), as the same may be adjusted pursuant to this Note and the Subscription
Agreement.  The Holder may exercise such right by delivery to the
Borrower of a written Notice of Conversion pursuant to Section 2.3.

    


               2.2.           Conversion
Limitation.   Neither Holder nor the Borrower may convert
on any date that amount of the Note Principal or interest in connection with
that number of shares of Common Stock which would be in excess of the sum of (i)
the number of shares of Common Stock beneficially owned by the Holder and its
affiliates on a Conversion Date, Repayment Date, the date Notice of Redemption
is given, or the date Notice of Mandatory Conversion is given, as the case may
be, (ii) any Common Stock issuable in connection with the unconverted portion of
the Note, and (iii) the number of shares of Common Stock issuable upon the
conversion or repayment of the Note with respect to which the determination of
this provision is being made, which would result in beneficial ownership by the
Holder and its affiliates of more than 4.99% of the outstanding shares of Common
Stock of the Borrower on such Conversion Date.  For the purposes of
the provision to the immediately preceding sentence, beneficial ownership shall
be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13d-3 thereunder.  Subject to the
foregoing, the Holder shall not be limited to aggregate conversions of only
4.99% and aggregate conversion by the Holder may exceed 4.99%.  The
Holder shall have the authority and obligation to determine whether the
restriction contained in this Section 2.2 will limit any conversion hereunder
and to the extent that the Holder determines that the limitation contained in
this Section applies, the determination of which portion of the Note is
convertible shall be the responsibility and obligation of the
Holder.  The Holder may waive the conversion limitation described in
this Section 2.2, in whole or in part, upon and effective after 61 days prior
written notice to the Borrower to increase such percentage to up to
9.99%.

    


               2.3.           Holder’s Conversion
Procedure.

    


                          (a)           In
the event that the Holder elects to convert any amounts outstanding under this
Note into Common Stock, the Holder shall give notice of such election by
delivering an executed and completed notice of conversion (a “Notice of
Conversion”) to the Borrower, which Notice of Conversion shall provide a
breakdown in reasonable detail of the Principal Amount, accrued interest and
amounts being converted.  The original Note is not required to be
surrendered to the Borrower until all sums due under the Note have been
paid.  On each Conversion Date (as hereinafter defined) and in
accordance with its Notice of Conversion, the Holder shall make the appropriate
reduction to the Principal Amount, accrued interest and fees as entered in its
records.  Each date on which a Notice of Conversion is delivered or
telecopied to the Borrower in accordance with the provisions hereof shall be
deemed a “Conversion Date.”  A form of Notice of Conversion to be
employed by the Holder is annexed hereto as Exhibit A.

    


                          (b)           Pursuant
to the terms of a Notice of Conversion, the Borrower will issue instructions to
the transfer agent accompanied by an opinion of counsel (if so required by the
Borrower’s transfer agent), and, except as otherwise provided below, shall cause
the transfer agent to transmit the certificates representing the Conversion
Shares to the Holder by crediting the account of the Holder’s designated broker
with the Depository Trust Corporation (“DTC”) through its Deposit Withdrawal
Agent Commission (“DWAC”) system within three (3) business days after receipt by
the Borrower of the Notice of Conversion (the “Delivery Date”). In the case of
the exercise of the conversion rights set forth herein, the conversion privilege
shall be deemed to have been exercised and the Conversion Shares issuable upon
such conversion shall be deemed to have been issued upon the date of receipt by
the Borrower of the Notice of Conversion. The Holder shall be treated for all
purposes as the beneficial holder of such shares of Common Stock, or, in the
case that Borrower delivers physical certificates as set forth below, the record
holder of such shares of Common Stock, unless the Holder provides the Borrower
written instructions to the contrary.  Notwithstanding the foregoing to the contrary, the
Borrower or its transfer agent shall only be obligated to issue and deliver the
shares to the DTC on the Holder’s behalf via DWAC (or certificates free
of restrictive legends) if the registration statement providing for the resale
of the shares of Common Stock issuable upon the conversion of this Note is
effective or the shares may otherwise be delivered without restrictive
legend.  In the event that Conversion Shares cannot be delivered to
the Holder via DWAC, the Borrower shall deliver physical certificates
representing the Conversion Shares by the Delivery Date to an address designated by Holder in the U.S.  In any event, subject to compliance with the
provisions of Rule 144, all shares of Common Stock deliverable pursuant to
Sections 2.1 and 2.4 must be delivered without restrictive or other
legends.

    


               2.4.           Conversion Mechanics and
Adjustments.

    


                       
(a)           The number
of shares of Common Stock to be issued upon each conversion of this Note
pursuant to this Article II shall be determined by dividing that portion of the
Principal Amount and interest and fees to be converted, if any, by the then
applicable Fixed Conversion Price or the conversion price described in Section
2.1, as applicable.

    


    (b)           The
Fixed Conversion Price and number and kind of shares or other securities to be
issued upon conversion shall be subject to adjustment from time to time upon the
happening of certain events while this conversion right remains outstanding, as
follows:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    A.           Merger, Sale of Assets,
etc.  If (A) the Borrower effects any merger
or  consolidation of the Borrower with or into another entity, (B) the
Borrower 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 Borrower or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower, or (F) the Borrower 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"), this Note, as to the unpaid
principal portion thereof and accrued interest thereon, shall thereafter be
deemed to evidence the right to convert into such number and kind of shares or
other securities and property as would have been issuable or distributable on
account of such Fundamental Transaction, upon or with respect to the securities
subject to the conversion right immediately prior to such Fundamental
Transaction.  The foregoing provision shall similarly apply to
successive Fundamental Transactions of a similar nature by any such successor or
purchaser.  Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such securities of such
successor or purchaser after any such Fundamental Transaction.

    


    B.           Reclassification,
etc.  If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes, this Note, as to the unpaid principal
portion hereof and accrued interest hereon, shall thereafter be deemed to
evidence the right to convert into an adjusted number of such securities and
kind of securities as would have been issuable as the result of such change with
respect to the Common Stock immediately prior to such reclassification or other
change.

    


    C.           Stock Splits, Combinations
and Dividends.  If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the Fixed
Conversion Price shall be proportionately reduced in case of subdivision of
shares or stock dividend or proportionately increased in the case of combination
of shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such
event.

     

    D.           Share
Issuance.   So long as this Note is outstanding, if the
Borrower shall issue any Common Stock except for the Excepted Issuances (as
defined in the Subscription Agreement), prior to the complete conversion or
payment of this Note, for a consideration per share that is less than the Fixed
Conversion Price that would be in effect at the time of such issue, then, and
thereafter successively upon each such issuance, the Fixed Conversion Price
shall be reduced to such other lower issue price.  For purposes of
this adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Fixed Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
upon the issuance of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the then applicable
Fixed Conversion Price.  The reduction of the Fixed Conversion Price
described in this paragraph is in addition to the other rights of the Holder
described in the Subscription Agreement.  Common Stock issued or
issuable by the Borrower for no consideration will be deemed issuable or to have
been issued for $0.0001 per share of Common Stock.  The reduction of
the Fixed Conversion Price described in this paragraph is in addition to the
other rights of the Holder described in the Subscription Agreement.

    


    (c)           Whenever
the Conversion Price is adjusted pursuant to Section 2.4(b) above, the Borrower
shall promptly mail to the Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a statement of the facts requiring such
adjustment.

    


               2.5.           Reservation.   Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable.  Borrower agrees that its issuance of
this Note shall constitute full authority to its officers, agents, and transfer
agents who are charged with the duty of executing and issuing stock certificates
to execute and issue the necessary certificates for shares of Common Stock upon
the conversion of this Note.  Once there are 425,000,000 shares issued
and outstanding, Borrower will promptly take all action necessary to increase
its authorized capital.

    


               2.6           Issuance of Replacement
Note.  Upon any partial conversion of this Note, a replacement
Note containing the same date and provisions of this Note shall, at the written
request of the Holder, be issued by the Borrower to the Holder for the
outstanding Principal Amount of this Note and accrued interest which shall not
have been converted or paid, provided Holder has surrendered an original Note to
the Borrower.

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
III

    


    EVENTS
OF DEFAULT

    


    The
occurrence of any of the following events of default (“Event of Default”) shall,
at the option of the Holder hereof, make all sums of principal and accrued
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment or grace period,
all of which hereby are expressly waived, except as set forth
below:

     

    3.1           Failure to Pay Principal or
Interest.  The Borrower fails to pay any principal, interest or
other sum due under this Note when due.

     

    3.2           Breach of
Covenant.  The Borrower breaches any material covenant or other
material term or condition of the Subscription Agreement or this Note in any
material respect and such breach, if subject to cure, continues for a period of
ten (10) business days after written notice to the Borrower from the
Holder.

     

    3.3           Breach of Representations
and Warranties.  Any material representation or warranty of the
Borrower made herein, in any Transaction Document, or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
herewith or therewith shall be false or misleading in any material respect as of
the date made and as of the Closing Date.

     

    3.4           Liquidation.   Any
dissolution, liquidation or winding up of Borrower or any substantial portion of
its business.

     

    3.5           Cessation of
Operations.   Any cessation of operations by
Borrower.

     

    3.6           Maintenance of
Assets.   The failure by Borrower to maintain any material
intellectual property rights, personal, real property or other assets which are
necessary to conduct its business (whether now or in the future).

     

    3.7           Receiver or
Trustee.  The Borrower shall make an assignment for the benefit
of creditors, or apply for or consent to the appointment of a receiver or
trustee for it or for a substantial part of its property or business; or such a
receiver or trustee shall otherwise be appointed.

     

    3.8           Judgments.  Any
money judgment, writ or similar final process shall be entered or filed against
Borrower or any subsidiary of Borrower or any of their property or other assets
for more than $100,000.

     

    3.9           Bankruptcy.  Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings or
relief under any bankruptcy law or any law, or the issuance of any notice in
relation to such event, for the relief of debtors shall be instituted by or
against the Borrower.

     

    3.10           Delisting.   Failure
of the Borrower’s Common Stock to be listed for trading or quotation on a
Principal Market for ten (10) or more consecutive days.

     

    3.11           Non-Payment.   A
default by the Borrower under any one or more obligations in an aggregate
monetary amount in excess of $100,000 after the due date and any applicable cure
period.

     

    3.12           Stop
Trade.  An SEC or judicial stop trade order or Principal Market
trading suspension with respect to the Borrower’s Common Stock that lasts for
ten (10) or more consecutive trading days.

     

    3.13           Reservation
Default.   The failure by the Borrower to have reserved
for issuance upon conversion of this Note or upon exercise of the Warrants
issued in connection with the Subscription Agreement, the number of shares of
Common Stock as required in the Subscription Agreement, this Note and the
Warrants.

     

    3.14           Failure to Deliver Common
Stock or Replacement Note.  Borrower’s failure to timely
deliver Common Stock to the Holder pursuant to and in the form required by this
Note or the Subscription Agreement, or if required, a replacement Note.

    


    3.15           Reverse
Splits.   The Borrower effectuates a reverse split of its
Common Stock without twenty days prior written notice to the
Holder.

    


    3.16           Event Described in
Subscription Agreement.  The occurrence of an Event of Default
as described in the Subscription Agreement that, if susceptible to cure, is not
cured during any designated cure period.

    


    3.17           Cross
Default.  A default by the Borrower of a material term,
covenant, warranty or undertaking of any other agreement to which the Borrower
and Holder are parties, or the occurrence of a material event of default under
any such other agreement which is not cured after any required notice and/or
cure period which such default has a Material Adverse Effect, except for late
payments to telecommunication providers.

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
IV

    


    SECURITY
INTEREST

    


    4.           Security Interest/Waiver of
Automatic Stay.   This Note is secured by a security
interest granted to the Holder pursuant to a Security Agreement, as delivered by
Borrower to Holder.  The Borrower acknowledges and agrees that should
a proceeding under any bankruptcy or insolvency law be commenced by or against
the Borrower, or if any of the Collateral (as defined in the Security Agreement)
should become the subject of any bankruptcy or insolvency proceeding, then the
Holder should be entitled to, among other relief to which the Holder may be
entitled under the Transaction Documents and any other agreement to which the
Borrower and Holder are parties (collectively, "Loan Documents") and/or
applicable law, an order from the court granting immediate relief from the
automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder to
exercise all of its rights and remedies pursuant to the Loan Documents and/or
applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY
IMPOSED BY 11 U.S.C. SECTION 362.  FURTHERMORE, THE BORROWER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN
ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.  The Borrower hereby
consents to any motion for relief from stay that may be filed by the Holder in
any bankruptcy or insolvency proceeding initiated by or against the Borrower
and, further, agrees not to file any opposition to any motion for relief from
stay filed by the Holder.  The Borrower represents, acknowledges and
agrees that this provision is a specific and material aspect of the Loan
Documents, and that the Holder would not agree to the terms of the Loan
Documents if this waiver were not a part of this Note. The Borrower further
represents, acknowledges and agrees that this waiver is knowingly, intelligently
and voluntarily made, that neither the Holder nor any person acting on behalf of
the Holder has made any representations to induce this waiver, that the Borrower
has been represented (or has had the opportunity to he represented) in the
signing of this Note and the Loan Documents and in the making of this waiver by
independent legal counsel selected by the Borrower and that the Borrower has
discussed this waiver with counsel.

    


    ARTICLE
V

    


    MISCELLANEOUS

    


    5.1           Failure or Indulgence Not
Waiver.  No failure or delay on the part of the Holder hereof
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

     

    5.2           Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be: (i) if to the Borrower to:
Innovative Food Holdings, Inc., 1923 Trade Center Way, Suite #1, Naples, FL
34109, Attn: Sam Klepfish, CEO, facsimile: (239) 596-0204, with a copy by
facsimile only to: Irving Rothstein, Esq., Feder, Kaszovitz, Isaacson, Weber,
Skala, Bass & Rhine LLP, 750 Lexington Avenue, New York, NY 10022-1200,
facsimile: (212) 888-7776, and (ii) if to the Holder, to the name, address and
telecopy number set forth on the front page of this Note, with a copy by
facsimile only to Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New
York, New York 10176, facsimile: (212) 697-3575.

     

    5.3           Amendment
Provision.  The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or
supplemented.

     

    5.4           Assignability.  This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and permitted
assigns.  The Borrower may not assign its obligations under this
Note.

     

    5.5           Cost of
Collection.  If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    5.6           Governing
Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles that would result in the application of the substantive laws of
another jurisdiction.  Any action brought by either party against the
other concerning the transactions contemplated by this Agreement must be brought
only in the civil or state courts of New York or in the federal courts located
in the State and county of New York.  Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts.  The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and
costs.  In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or unenforceability of any other provision of this Note.
Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Borrower in any other
jurisdiction to collect on the Borrower's obligations to Holder, to realize on
any collateral or any other security for such obligations, or to enforce a
judgment or other decision in favor of the Holder.  This Note shall be deemed an
unconditional obligation of Borrower for the payment of money and, without
limitation to any other remedies of Holder, may be enforced against Borrower by
summary proceeding pursuant to New York Civil Procedure Law and Rules Section
3213 or any similar rule or statute in the jurisdiction where enforcement is
sought.  For purposes of such rule or statute, any other document or
agreement to which Holder and Borrower are parties or which Borrower delivered
to Holder, which may be convenient or necessary to determine Holder’s rights
hereunder or Borrower’s obligations to Holder are deemed a part of this Note,
whether or not such other document or agreement was delivered together herewith
or was executed apart from this Note.

     

    5.7           Maximum
Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum rate permitted by applicable law.  In the event
that the rate of interest required to be paid or other charges hereunder exceed
the maximum rate permitted by applicable law, any payments in excess of such
maximum rate shall be credited against amounts owed by the Borrower to the
Holder and thus refunded to the Borrower.

     

    5.8           Non-Business
Days.   Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.

     

    5.9           Redemption.  This
Note may not be redeemed or called without the consent of the Holder except as
described in this Note or the Subscription Agreement.

    


    5.10           Shareholder
Status.  The Holder shall not have rights as a shareholder of
the Borrower with respect to unconverted portions of this
Note.  However, the Holder will have the rights of a shareholder of
the Borrower with respect to the Shares of Common Stock to be received after
delivery by the Holder of a Conversion Notice to the Borrower.

    


    IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by an authorized officer as of the
____ day of December, 2008.

    


    INNOVATIVE
FOOD HOLDINGS, INC.

    


    


    By:________________________________

               Name:

               Title:

    


    WITNESS:

     

    


    ______________________________________

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    NOTICE OF
CONVERSION

    


    (To be
executed by the Registered Holder in order to convert the Note)

     

     

    The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by INNOVATIVE FOOD HOLDINGS, INC. on
December 31, 2008 into Shares of Common Stock of INNOVATIVE FOOD HOLDINGS,
INC. (the “Borrower”) according to the conditions set forth in such Note, as of
the date written below.

    


     

    Date of
Conversion:____________________________________________________________________

    


    


    Conversion
Price:______________________________________________________________________

    


    


    Number of Shares of Common Stock Beneficially Owned on
the Conversion Date: Less than 5% of the
outstanding Common Stock of INNOVATIVE FOOD HOLDINGS, INC.

    


    


    Shares To
Be
Delivered:_________________________________________________________________

    


    


    Signature:____________________________________________________________________________

    


    


    Print
Name:__________________________________________________________________________

    


    


    Address:_____________________________________________________________________________

     

    


     ____________________________________________________________________________