Document:

DC8041.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
Exhibit 10.3

AMENDED AND RESTATED SECURITY AGREEMENT

     This Amended and Restated Security Agreement (this “Agreement”) is made effective as of December 31, 2009
(“Effective Date”), by and between DayStar Technologies, Inc., a Delaware corporation (“Debtor”),
and Peter Alan Lacey (“Secured Party”), with reference to the essential facts stated in the Recitals below. 

	
RECITALS

     A. The Secured Party previously made two loans to the Debtor in the aggregate principal amount of $300,000 as evidenced by those (i) certain Secured Promissory Notes, dated December 2, 2009 and
December 17, 2009 each in the principal amount of $150,000 issued by the Debtor in favor of the Secured Party (the “Prior Lacey Notes”), (ii) those certain Purchase
Agreements, dated December 2, 2009 and December 16, 2009, by and between the Debtor and the Secured Party (the “Prior Lacey Purchase Agreements,” along with the Prior Lacey
Notes, the “Prior Loan Documents”) and (iii) that certain Security Agreement, dated as of December 2, 2009 and that certain Amended and Restated Security Agreement dated as
of December 17, 2009 by and between Debtor and the Secured Party (the “Prior Lacey Security Agreements”).

     B. Pursuant to the terms of that certain Purchase Agreement of even date herewith (the “Purchase Agreement”) and the Secured
Promissory Note of even date herewith (the “Note”), all between Debtor and Secured Party, Secured Party is loaning to Debtor an additional amount of $125,000 (the
“Loan”). This Agreement, the Purchase Agreement and the Note shall collectively be referred to as the “Loan
Documents”. B. As a condition to receiving the Loan, the terms of the Loan Documents require that Debtor amend and restate the Security Agreement. C. As security for the payment and performance of Debtor’s
obligations to Secured Party under the Loan Documents, and as a condition precedent to Secured Party’s obligation to make the Loan, it is the intent of Debtor to amend and restate the Security Agreement as hereinafter provided. 

	
AGREEMENT

     NOW, THEREFORE, in consideration of the Loan, the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor and Secured Party
hereby agree to amend and restate the Security Agreement as follows: 

     1. Grant of Security Interest. As security for the full and timely payment and performance of the obligations of Debtor to Secured Party
described in Section 2 below (such obligations, collectively and severally, the “Obligations”), subject to the Prior Liens (as defined herein), Debtor hereby pledges and
grants to Secured Party a security interest (“Security Interest”) in and to (a) all of Debtor’s right, title and interest in and to contracts to which Debtor is a
party, and all other contracts relating to Debtor’s assets, business and operations, (b) all of Debtor’s intellectual property and rights therein and thereto, (c) all of Debtor’s other assets, and all assets used and useful in
Debtor’s business and operations, and (d) all other items identified in Exhibit A hereto and incorporated herein by this reference (collectively and severally, the “Collateral”). 

	
Exhibit 10.3

     2. Obligations. The Obligations secured by this Agreement shall consist of (a) the Loan Documents, (b) the Prior Loan Documents, (c) any
additional monies advanced to or borrowed by Debtor from Secured Party, (d) this Agreement, and (e) all amendments or extensions or renewals of such documents, whether now existing or hereafter arising, voluntary or involuntary, whether or not
jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, created or incurred.

	
3.      		
Representations and Warranties. Debtor hereby represents and warrants that:	
	 
	 	
(a) Debtor is the owner of the Collateral and no other person has any right, title, claim	
	 

or interest (by way of security interest or other lien or charge or otherwise) in, against or to the Collateral, except liens for taxes, assessments and other government charges not yet due and payable; except (i) a security
interest held by Banc of America Leasing & Capital, LLC in certain of the Collateral as described in that certain UCC 1 financing statement filed on October 22, 2008 in the Office of the Secretary of State of the State of Delaware under filing
number 83561188 (ii) a security interest held by TD Waterhouse RRSP Account 230832S, in trust for Peter Alan Lacey as beneficiary, (the “Lacey RRSP Account”) as evidenced by
that certain security agreement, effective as of September 21, 2009, by and between Debtor and the Lacey RRSP Account, as secured party, (iii) a security interest held by Secured Party, as evidenced by the Prior Lacey Security Agreements, as amended
and restated herein ((i) and (ii) collectively, the “Prior Liens”); (b) Debtor will not sell or offer to sell or otherwise transfer the Collateral or any interest therein
without the prior written consent of Secured Party, except as may be permitted under the Prior Liens; (c) Debtor will not create or permit to exist any future lien on or security interest in the Collateral in favor of any third party with priority
over Secured Party, without the prior written consent of Secured Party; except in connection with the Prior Liens; (d) Debtor will, upon Secured Party’s request, remove any unauthorized lien or security interest on the Collateral, and defend
any claim affecting the Collateral; (e) Debtor will pay all charges against the Collateral, including, but not limited to, taxes, assessments, encumbrances, and insurance, and upon Debtor’s failure to do so, Secured Party may pay any such
charge as it deems necessary and add the amount paid to the indebtedness of Debtor secured hereunder; (f) Debtor will not use or permit any Collateral to be used unlawfully or in violation of any provision of the Loan Documents, the Prior Loan
Documents, this Agreement, or any applicable statute, regulation or ordinance or any policy of insurance covering the Collateral; and (g) all information heretofore, herein or hereafter supplied to Secured Party by or on behalf of Debtor with
respect to the Collateral is true and correct in all material respects. 

	
4.      		
Covenants of Debtor. Debtor hereby agrees:	
	 
	 	
(a) to do all acts that may be necessary to maintain, preserve and protect the Collateral;	
	 

	
Exhibit 10.3

     (b) to notify Secured Party promptly of any change in Debtor’s name or place of business, or, if Debtor has more than one place of business, its head office, or office in which Debtor’s
records relating to the Collateral are kept; (c) to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings deemed necessary or appropriate by Secured Party to perfect, maintain and
protect its security interest hereunder and the priority thereof; (d) to appear in and defend any action or proceeding which may affect its title to or Secured Party’s interest in the Collateral; (e) to keep separate, accurate and complete
records of the Collateral and to provide Secured Party with copies of such records and such other reports and information relating to the Collateral as Secured Party may reasonably request from time to time; (f) not to cause or permit any waste or
unusual or unreasonable depreciation of the Collateral; and (g) at any reasonable time, upon reasonable request by Secured Party, to exhibit to and allow inspection by Secured Party (or persons designated by Secured Party) of the Collateral.

     5. Events of Default. The occurrence of the following event (“Event of Default”) shall constitute an Event of Default under this Agreement: 

	
(a)      		
Debtor shall default in its performance of any covenant under this Agreement;	
	 
	
(b)      		
Debtor fails to pay when due any sum payable under the terms of the Loan	
	 

Documents, the Prior Loan Documents or this Agreement and Debtor has failed to cure such nonpayment within ninety (90) days after such sum has become due and payable; (c) Debtor files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of
any of the foregoing; or (d) An involuntary petition is filed against Debtor under any bankruptcy statute now or hereafter in effect, unless such petition is dismissed or discharged within sixty (60) days thereafter, or a custodian, receiver,
trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of Debtor. 

     6. Remedies. Upon the occurrence of any Event of Default, Secured Party may, at its option, and without further notice to or demand on Debtor
and in addition to all rights and remedies available to Secured Party under the Loan Documents and the Prior Loan Documents or under law, do any one or more of the following, subject, however, to the respective rights of the secured parties under
the Prior Liens: (a) foreclose or otherwise enforce Secured Party’s security interest in the Collateral in any manner permitted by law, or provided for in this Agreement; and 

	
Exhibit 10.3

     (b) recover from Debtor or Debtor all costs and expenses, including, without limitation, reasonable attorney’s fees, incurred or paid by Secured Party in exercising any right, power or remedy
provided by this Agreement or by law; 

     7. Entire Agreement, Severability. This Agreement, the Prior Loan Documents and the Loan Documents contain the entire agreement between
Secured Party and Debtor with respect to the Collateral which is the subject of this Agreement. If any of the provisions of this Agreement shall be held invalid or unenforceable, this Agreement shall be construed as if not containing those
provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly. 

     8. Choice of Law. This Agreement shall be construed in accordance with and governed by the laws of California as applied to agreements among
California residents, made and to be performed entirely within the State of California. 

     9. Notice. Any written notice, consent or other communication provided for in this Agreement shall be delivered to the addresses and sent in
the manner as set forth in the Loan Documents. Such addresses may be changed by written notice given as provided in the Loan Documents. 

     10. Interpretation; Rules of Construction. All terms with their initial letters capitalized and not otherwise defined herein shall have the
meaning as set forth in the Loan Documents. The words “include”, “includes” and “including” when used in this Agreement shall be deemed in each case to be followed by the words “without limitation”.  The
headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The parties hereto agree that they have been represented by legal counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement
or document.  This Agreement amends and restates in its entirety the Prior Lacey Security Agreements. Any references to that certain security agreement, dated as of December 2, 2009, or that certain Amended and Restated Security Agreement dated as
of December 17, 2009, by and between the Debtor and the Secured Party in the Prior Loan Documents shall be deemed to be a reference to this Agreement, as amended and restated herein.

	
[SIGNATURE PAGE FOLLOWS]

	
Exhibit 10.3

     IN WITNESS WHEREOF, Debtor and Secured Party have executed this Agreement effective as of the date first above written. 

	
DEBTOR:

	
DayStar Technologies, Inc.,

a Delaware corporation

	
By: 
		
 		
 
	
	
		
		

	
	
Name: 
		
 		
William S. Steckel 
	
	
Title: 
		
 		
Chief Executive Officer 
	

	
SECURED PARTY:

	
Name:

	
Peter Alan Lacey

[SIGNATURE PAGE TO AMENDED AND RESTATED SECURITY AGREEMENT]

	
Exhibit 10.3

	
EXHIBIT A

COLLTERAL LIST

All of Debtor’s right, title and interest, whether now owned or existing or hereafter acquired or arising, and wherever located in the following described property:   Equipment. All Equipment, as that term is defined in the Uniform Commercial Code as in effect in California (the “UCC”). 

	
Investment Property. All Investment Property, as that term is defined in the UCC.
	
Deposit Accounts. All Deposit Accounts, as that term is defined in the UCC.
	
Documents and Instruments. All Documents and Instruments, as those terms are

	 	
defined in the UCC.

  Letter-of-Credit Rights. All Letter-of-Credit Rights, as that term is defined in the UCC. 

	
Inventory Etc. All Inventory, as that term is defined in the UCC.
	
Accounts. All Accounts, as that term is defined in the UCC.
	
General Intangibles. All General Intangibles, as that term is defined in the UCC,

including but not limited to all federal, state, local and foreign, registered or unregistered rights in: (i) all copyrights, rights and interests in copyrights, works protectable by copyrights, copyright registrations and
copyright applications, and all renewals of any of the foregoing, all income, royalties, damages and payments now and hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, all damages and payments
for past, present and future infringement of any of the foregoing and the right to sue for past, present and future infringement of any of the foregoing; (ii) all patents, processes, patent rights and patent applications, including, without
limitation, the inventions and improvements described and claimed therein, all patentable inventions and the reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing and all income, royalties,
damages, and payments now or hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringement of any of the foregoing and the right to sue for
past, present and future infringement of any of the foregoing; (iii) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, mask works, logos and other business
identifiers, prints and labels on which any of the foregoing have appeared or appear; all registrations and recordings thereof, and all applications in connection therewith, and all renewals thereof, and all income, royalties, damages and payments
now or hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and 

	
Exhibit 10.3

future infringement of any of the foregoing and the right to sue for past, present and future infringement of any of the foregoing; (iv) all moral or similar rights; compilations; sui
generis rights; rights under treaties, conventions, directives and the like (including but not limited to rights under the Berne Convention for the Protection Of Literary and Artistic Works, GATT, and all European Union
directives, including but not limited to directives regarding the legal protection of databases); trade secrets; derivative works; tangible or intangible intellectual property being or to be developed; schematics; know-how; technology; rights in
computer software programs or applications (in both source and object code form and in escrow or otherwise); software and firmware listings; fully commented and updated software source code, and complete system build software and instructions
related to all software described herein; designs; sounds; lyrics; soundtracks; music and musical compositions; motion picture synchronization rights; scripts; continuities; testing procedures and results; fabrication and manufacturing methods;
supplier lists; registrations and applications relating to any of the foregoing; employee and independent contractor lists; customer lists; sales prospects; sales, advertising, marketing and promotional information, materials, brochures,
presentations, white papers, case studies, seminar materials, workbooks, brochures, training manuals and materials; website content; documents, records and files relating to design, end user documentation; manufacturing, quality control, sales,
marketing and customer support for all Intellectual Property described herein; business and financial information and strategies; proprietary and other information in or with respect to which Debtor has any interest or rights of any nature; and data
and databases; all exclusive and nonexclusive licenses for any of the foregoing intellectual property as described in this Annex A including any subsection hereof, to the extent such licenses may be assigned as security without the consent of the
licensor (under their terms or, notwithstanding their terms, under existing or future Laws), or to the extent the consent of the licensor is now or hereafter obtained by Secured Party or Debtor; and all other tangible or intangible information and
intellectual property, media (whether now or hereafter existing or invented), copies and languages (including foreign and computer languages) in which any of the foregoing is now or hereafter recorded, copied, translated, encoded or otherwise stored
or utilized in any manner (all of the property described in subsections (i), (ii), (iii) and (iv) is hereafter referred to collectively as “Intellectual Property”);  (v) all (a)
contracts and rights therein, including without limitation rights under software, information and other development contracts; (b) royalties; (c) documents, documents of title, drafts, checks, acceptances, bonds, letters of credit, notes and other
negotiable and non-negotiable instruments, bills of exchange, security deposits, certificates of deposit, insurance policies and any other writings evidencing a monetary obligation or security interest in or lease of personal property; (d) licenses,
leases, rents, contracts or agreements, government entitlements and subsidies and tax refunds; (e) investment property, including, but not limited to, all certificated or uncertificated securities, security entitlements, securities accounts,
commodity contracts and commodity accounts; (f) deposit accounts; (g) guarantees, bonds and other personal property securing the payment or performance of any of the foregoing; (h) chattel 

	
Exhibit 10.3

paper; (i) general intangibles as such term is defined in the Uniform Commercial Code, which shall, in any event, include, without limitation, all right, title and interest in or under any contracts, models, drawings, materials
and records, claims, literary rights, goodwill, rights of performance, warranties, rights under insurance policies and rights of indemnification; and (j) Internet domain names and other identifiers of Debtor and all rights connected therewith; (vi)
all advertising and promotional materials, training manuals, workbooks, case studies and other materials prepared in connection with and/or relating to Debtor’s consulting business, including, but not limited to design, development,
implementation and sale of software, applications, enhancements, frameworks, methodologies, training, marketing, sales and other services that incorporate or utilize any element of the Intellectual Property pursuant to any existing or future license
or other agreement in which Debtor now or hereafter has any interest or right of any nature whatsoever (including, without limitation, rights which do not amount to a property right), whether or not used or to be used by Debtor (including without
limitation any interest of Debtor as seller or buyer, manufacturer, developer, licensee or licensor, or lessee or lessor); and all whether registered, filed or recorded or not; all whether any or all of the foregoing is eligible for intellectual
property protection (including but not limited to whether any of the foregoing is copyrighted or copyrightable). 

  Books and Records. All books, correspondence, credit files, records, invoices, and other documents, including without limitation all tapes, cards, computer runs and
other papers or documents in the possession or control of Debtor; and all balances, credits, deposits, accounts or monies of or in the name of Debtor in the possession or control of, or in transit to the Secured Party, and all records and data
relating to anything described in this Exhibit A, whether in the form of a writing, photograph, microfilm, microfiche, or electronic or other media, together with all of Debtor’s assignable right, title, and interest in and to all computer
software and hardware required to utilize, create, maintain, and process any such records or data on electronic media. 

	
Fixtures. All Fixtures, as that term is defined in the UCC.
	
Products. All products and produce of any of the above.ex10-1.htm

    Exhibit
10.1

     

    EMPLOYMENT
AGREEMENT

     

    AGREEMENT made as of the
1st day
of January 2010, by and between Innovative Food Holdings, Inc., a Florida
corporation with its principal offices at 3845 Beck Blvd., Suite 805, Naples,
Florida 34114 (the “Corporation”), and Sam Klepfish, (the
“Executive”).

    W
I T N E S S E T H:

     

    In
consideration of the mutual covenants contained herein, the parties hereto agree
as follows:

     

    1.   Employment.  The
Corporation hereby employs the Executive as an executive of the Corporation, and
the Executive agrees to serve the Corporation as such, upon the terms and
conditions set forth in this Agreement for the period commencing as of the date
hereof and, unless Executive's employment under the Agreement is otherwise
terminated in accordance with the provisions hereof, ending on December 31,
2012.

     

    2.   Duties.  (a)
Executive shall serve as the Chief Executive Officer, with such duties and
authority as are generally incident to such position, or in such other
management position as the Corporation shall determine. Without limiting the
generality of the foregoing, the Executive shall manage the overall strategic
direction and operations of the corporation.  In performing his duties
hereunder, the Executive shall be subject to the direction of the Corporation's
Board of Directors, but shall not be required to relocate to any location in
order to perform his duties hereunder.

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

     

                          (b)
The Executive agrees that he will devote his business time and attention to the
affairs of the Corporation and that he will use his best efforts to promote the
business and interests of the Corporation. It is understood, however, that the
foregoing will not prohibit the Executive from engaging in investment and other
activities that do not interfere with the performance of his duties
hereunder.

     

    3.   Compensation.  (a)
The Corporation will pay the Executive for all services to be rendered by the
Executive hereunder (including, without limitation, all services to be rendered
by him as an officer of the Corporation and its subsidiaries and affiliates) an
annual base salary (hereinafter referred to as the "Base Salary") at the rate
of:  (i) 151,000 per annum from the date hereof through December 31,
2010 of which $6,500 shall be accrued until June 20, 2010 and then payable in
equal weekly installments until said $6,500 is paid in full by December 31,
2010; (ii) $165,000 per annum from January 1, 2011 through December 31, 2011,
provided, however, that the
increase of $14,000 shall only take effect if the Corporation’s gross annual
sales for 2010 are at least  $7.5 million dollars; and (iii) the
lesser of a 10% increase in salary above the salary in 2011 or $181,000 per
annum from January 1, 2012 through December 31, 2012, provided, however, the increase
in 2012 shall only take effect  if the Corporation’s gross annual
sales for 2011 are at least  $7.5 million dollars.  The Base
Salary for each year shall be payable in equal, weekly installments (accept with
respect to the $6,500 accrued during the initial six months of this Agreement or
as otherwise provided for herein) in accordance with customary payroll practices
for executives of the Corporation.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

     (b) Executive
shall also be entitled to receive an annual bonus based upon the consolidated
aggregate incremental revenues of the Corporation and its subsidiaries (“IVFH”),
over each of the three 12-month periods beginning January 1, 2010 (the
“Bonus”).  The Bonus shall be payable one-half in cash and one-half in
the Corporation’s stock.  The equity component shall be valued based
upon the average closing price of the Corporation’s common stock over the 30
trading days ended on December 31 of the year for which the Bonus is being
calculated, but under no circumstance will be below $0.005 per
share.  The Bonus shall be paid in full as long as an average gross
margin (as calculated historically) of at least 20% is maintained on all sales
revenues of the Corporation’s consolidated sales revenues.  Any
decline in such average gross margin below 20% on all of the Corporation’s
consolidated sales revenues shall reduce the Bonus by 20% for each 1⁄2 percent
decline.  All calculations with respect to the Base Salary and Bonus
shall be based upon the Corporation’s financial statements and shall be
completed no later than January 20 of the following year.  The Bonus
for each year, if earned, shall be payable in full on or before the following
January 27.

     

    The Bonus
shall be payable according to the following schedule:

     

    2010 - additional gross
revenues as compared to 2009

     

      7%
of the then current Base Salary if IVFH achieves $   500,000 of
additional revenues

    14% of
the then current Base Salary if IVFH achieves $1,000,000 of additional
revenues

    21% of
the then current Base Salary if IVFH achieves $1,500,000 of additional
revenues

    28% of
the then current Base Salary if IVFH achieves $2,000,000 of additional
revenues

    35% of
the then current Base Salary if IVFH achieves $2,500,000 of additional
revenues

    50% of
the then current Base Salary if IVFH achieves $3,000,000 of additional
revenues

    

    2011- additional gross
revenues as compared to 2010

    

      7%
of the then current Base Salary if IVFH achieves $   600,000 of
additional revenues

    14% of
the then current Base Salary if IVFH achieves $1,100,000 of additional
revenues

    21% of
the then current Base Salary if IVFH achieves $1,600,000 of additional
revenues

    28% of
the then current Base Salary if IVFH achieves $2,200,000 of additional
revenues

    35% of
the then current Base Salary if IVFH achieves $2,500,000 of additional
revenues

    50% of
the then current Base Salary if IVFH achieves $3,000,000 of additional
revenues

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    2012 – additional gross
revenues as compared to 2011

    

      7%
of the then current Base Salary if IVFH achieves $   700,000 of
additional revenues

    14% of
the then current Base Salary if IVFH achieves $1,100,000 of additional
revenues

    21% of
the then current Base Salary if IVFH achieves $1,600,000 of additional
revenues

    28% of
the then current Base Salary if IVFH achieves $2,200,000 of additional
revenues

    35% of
the then current Base Salary if IVFH achieves $2,700,000 of additional
revenues

    50% of
the then current Base Salary if IVFH achieves $3,300,000 of additional
revenues

    

    For 2011
and 2012, the Corporation shall establish a separate account in which it will
maintain Executive’s increased Base Salary as if it was earned and
payable.  In the event it is determined that Executive is entitled to
such additional Base Salary, the accrued amount of funds in said account shall
be delivered in a lump sum when such determination is made, but no later than
Jan 27th of each such year.  In the event it is determined that
Executive is not entitled to such funds, they shall be returned to the
Corporation’s general working account.

    

    4.   Expenses.  The
Executive shall be entitled to reimbursement by the Corporation, in accordance
with the Corporation's policies then applicable to executives at the Executive's
level, against appropriate vouchers or other receipts for authorized travel,
entertainment and other business expenses reasonably incurred by him in the
performance of his duties hereunder.

     

    5.   Executive
Benefits.  The Executive shall be entitled to participate in,
and receive family health insurance and all benefits either currently offered,
or which are offered during the term of this Agreement, to employees of the
Corporation or the cash equivalent of such health insurance and such other
benefits. The Corporation shall be responsible for paying 75% of the cost of
such health insurance and benefits and shall pay 75% of the cost, at the choice
of the Executive, either through direct payments to the health insurance and/or
benefit providers or through weekly direct cash payments to the Executive (in
the cash amount of 75% of the cost of such Personal or Family Health Insurance
and benefits had the Executive participated in such health insurance plan and/or
benefit plans).

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    6.   Death; Permanent Disability;
Termination.  (a) Upon the death of the Executive during the
term of this Agreement, this Agreement shall terminate.  If during the
term of this Agreement the Executive fails because of illness (physical or
mental) or other incapacity to perform the services required to be performed by
him hereunder for any consecutive period of more than 30 days, or for shorter
periods aggregating more than 45 days in any consecutive twelve-month period
(any such illness or incapacity being hereinafter referred to as “permanent
disability”), then the Corporation, in its discretion, may at any time
thereafter terminate this Agreement upon not less the 10 days’ written notice
thereof to the Executive, and this Agreement shall terminate and come to an end
upon the date set forth in said notice as if said date were the termination date
of this Agreement; provided, however, that no such
termination shall be effective if prior to the date set forth in such notice,
the Executive’s illness or incapacity shall have terminated and he shall be
physically and mentally able to perform the services required hereunder and
shall have taken up and be performing such duties.  If there shall be
any dispute as to whether the Executive has a permanent disability, the dispute
shall be submitted to a panel of three physicians, one of whom shall be selected
by each of the parties, and the third of whom shall be a physician selected by
the first two.  The written decision of such panel shall be
determinative of the issue as to whether the Executive has a permanent
disability, and shall be binding upon both parties.

     

     
(b)  If the Executive’s employment shall be terminated by reason of
his death or permanent disability, the Executive or his estate, as the case may
be, shall be entitled to receive  (i) any earned and unpaid Base
Salary accrued through the date of termination,  (ii) a pro rata
portion of any Bonus which the Executive would otherwise have been entitled to
receive pursuant to any bonus plan or arrangement for senior executives of the
Corporation (such pro rata portion to be payable at the time such Bonus would
otherwise have been payable to the Executive), and  (iii) subject to
the terms thereof, any benefits which may be due to the Executive on the date of
termination under the provisions of any employee benefit plan, program or
policy.

     

     
(c) In the event the Corporation terminates this Agreement without Cause
(as defined in Section 7), Executive shall be paid in a lump sum, on the date of
termination, an amount equal to the Base Salary he would have earned hereunder
for the six (6) months following the date of termination and any Bonuses earned
and/or accrued.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     

     

    7.           Termination for
Cause.  The Corporation may at any time during the term of this
Agreement, by written notice, terminate the employment of the Executive for
cause, the cause to be specified (in reasonable detail) in the
notice.  For purposes of this Agreement, “cause” shall mean any
malfeasance of the Executive in connection with the performance of any of his
duties hereunder, including, without limitation, misappropriation of funds or
property of the Corporation; wrongfully, securing or attempting to secure,
personally any profit in connection with any transaction entered into on behalf
of the Corporation; any intentional act having the effect of injuring the
reputation, business or business relationships of the Corporation; the willful
failure, neglect or refusal by Executive to perform his duties hereunder in any
material respect;  the material breach of any material covenants
contained in this Agreement (provided, however, that the
Executive shall be entitled to thirty days from the date on which the
Corporation gives written notice of termination to cure such conduct or breach);
or conviction (or nolo contendere plea) in
connection with a felony or misdemeanor involving moral
turpitude.  Termination for cause shall be effective upon the giving
of such notice or, where applicable, the expiration of the cure period without
such a cure having been affected by Executive in all material respects; and the
Executive shall be entitled to receive any earned and unpaid Base Salary accrued
through the date of termination.

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    8.           Insurance.  The
Executive agrees that the Corporation may procure insurance on the life of the
Executive, in such amounts as the Corporation may in its discretion determine,
and with the Corporation named as the beneficiary under the policy or
policies.  The Executive agrees that upon request from the Corporation
he will submit to a physical examination and will execute such applications and
other documents as may be required for the procurement of such
insurance.  The Executive shall be granted the right to purchase such
policy at its cash surrender value upon the termination of his employment
hereunder.

     

    9.           Non-Competition;
Solicitation.  (a) The Executive agrees that during his
employment with the Corporation and for a period of two years after Executive
leaves the Corporation’s employ for any reason (other than by termination
without cause), he shall not, without the written consent of the Corporation,
directly or indirectly, either individually or as an employee, agent, partner,
shareholder, consultant, option holder, lender of money, guarantor or in any
other capacity, participate in, engage in or have a financial interest or
management position or other interest in any business, firm, corporation or
other entity if it competes directly with any business operation conducted by
the Corporation or its subsidiaries or affiliates or any successor or assign
thereof at the time the Executive’s employment with the Corporation is
terminated.

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

     

     (b)
The Executive will not at any time during his employment with the Corporation
and for a period of two years after Executive leaves the Corporation’s employ
for any reason, solicit (or assist or encourage the solicitation of) any
employee of the Corporation or any of its subsidiaries or affiliates to work for
Executive or for any business, firm, corporation or other entity in which the
Executive, directly or indirectly, in any capacity described in Section 9(a)
hereof, participates or engages (or expects to participate or engage) or has (or
expects to have) a financial interest or management position.

     

     (c)
If any of the covenants contained in this Section 9 or any part thereof, is held
by a court of competent jurisdiction to be unenforceable because of the duration
of such provision, the activity limited by or the subject of such provision
and/or the area covered thereby, then the court making such determination shall
construe such restriction so as to thereafter be limited or reduced to be
enforceable to the greatest extent permissible by applicable law.

     

     (d)
If the Executive is terminated without cause the provisions of this Section 9
shall be null and void.

     

     (e)
For purposes of this Section 9, (i) the term “Corporation” shall mean IVFH and
any of its subsidiaries; (ii) any act which Executive is prohibited from
engaging in pursuant to this Section 9, he is also prohibited from soliciting,
hiring, encouraging or retaining any other person to engage in any such
activity; and (iii) participation by Executive in the operation of any business
other than in connection with the operation of a business which is in direct
competition with the Corporation or its subsidiaries or affiliates or any
successor or assign thereof shall not be deemed to be a breach of this Section 9
and the foregoing provisions of this Section 9 shall not prohibit the ownership
by the Executive (as the result of open market purchase) of 1% or less of any
class of capital stock of a corporation which is regularly traded on a national
securities exchange, on the NASDAQ System or on an over-the-counter
system.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    10.          Trade Secrets,
Etc.  The Executive agrees that he shall not, during or after
the termination of this Agreement, divulge, furnish or make accessible to any
person, firm, corporation or other business entity, any information, trade
secrets, client lists, vendor lists, pricing information, technical data (with
the exception of duplicatable technical data and code that does not compete with
the Corporation or the Corporation’s business) or know-how relating to the
business, business practices, methods, products, processes, equipment or other
confidential or secret aspect of the business of the Corporation and/or any
subsidiary or affiliate, except as may be required in good faith in the course
of his employment with the Corporation or by law, without the prior written
consent of the Corporation, unless such information shall become public
knowledge (other than by reason of Executive’s breach of the provisions
hereof).

     

    11.          Acceptance by Executive and
Corporation.  The Executive and the Corporation each accept all
of the terms and provisions of this Agreement, and agree to perform all of the
covenants on their respective parts to be performed hereunder.

     

    12.          Equitable
Remedies.  The Executive acknowledges that he has been employed
for his unique talents and that his leaving the employ of the Corporation during
the Term of this Agreement would seriously hamper the business of the
Corporation and that the Corporation will suffer irreparable damage if any
provisions of Sections 9 or 10 hereof are not performed strictly in accordance
with their terms or are otherwise breached.  The Executive hereby
expressly agrees that the Corporation shall be entitled as a matter of right to
injunctive or other equitable relief, in addition to all other remedies
permitted by law, to prevent a breach or violation by the Executive and to
secure enforcement of the provisions of Sections 9 or 10
hereof.  Resort to such equitable relief, however, shall not
constitute a waiver of any other rights or remedies that the Corporation may
have.

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    13.         Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties hereto and there are no other terms other than those
contained herein.  No waiver, amendment or modification hereof shall
be deemed valid unless in writing and signed by the parties hereto (or their
permitted successors and assigns) and no discharge of the terms hereof shall be
deemed valid unless by full performance of the parties hereto or by a writing
signed by the parties hereto.  No waiver by the Corporation or any
breach by the Executive or the Corporation of any provision or condition of this
Agreement by either of them to be performed shall be deemed a waiver of a breach
of a similar or dissimilar provision or condition at the same time or any prior
or subsequent time.

     

    14.         Severability.  In
case any provision in this Agreement shall be declared invalid, illegal or
unenforceable by any court of competent jurisdiction, the validity and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     

    15.         Notices.  All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be deemed to have been given at the time
when mailed in the United States enclosed in a registered or certified post-paid
envelope, return receipt requested, and addressed to the addresses of the
respective parties stated below or to such changed addresses as such parties may
fix by notice:

     

    
      

      
        	 	
                To
      the Corporation:

              	
                Innovative
      Food Holdings, Inc.

              
	 	 
      	
                3845
      Beck Blvd., Suite 805

              
	 	 
      	
                Naples,
      FL 34114

              
	 	 
      	
                Attn:
      President

              
	 	 	 
	 	
                with
      a copy to:

              	
                Howard
      I. Rhine, Esq.

              
	 	 
      	
                Feder
      Kaszovitz LLP

              
	 	 
      	
                845
      Third Avenue, 11th Floor

              
	 	 
      	
                New
      York, NY 10022

              

         

         

        	 	 	 	 
	 	 	 	 
	 	To
      the Executive:	 	 
	 	 	
              	 
	 	 	
              	 
	 	 	 	 

      

       

    

    provided, however, that any
notice of change of address shall be effective only upon receipt.

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

     

    16.         Successors and
Assigns.  This Agreement is personal in its nature and neither
of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder (except for an
assignment or transfer by the Corporation to its parent or an assignment by the
Executive to a corporation managed by the Executive); provided, however, that the
provisions hereof shall inure to the benefit of, and be binding upon, any
successor of the Corporation, whether by merger, consolidation, transfer of all
or substantially all of the assets of the Corporation, or otherwise, and upon
the Executive, his heirs, executors, administrators and legal
representatives.

     

    17.         Governing
Law.  This Agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of the State
of Florida without giving effect to any principles of conflict of
laws.

     

    18.         Headings.  The
headings in this Agreement are for convenience of reference only and shall not
control or affect the meaning or construction of this Agreement.

     

    19.         Counterparts.  This
Agreement may be executed in two counterparts, each of which shall be deemed an
original of this Agreement and facsimile signatures shall be treated as original
signatures.

    

    

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    

    IN
WITNESS WHEREOF, the parties hereto have hereunder set their hands and seals as
of the day and year first above written.

    

    
       

      
         

        	 	 INNOVATIVE FOOD HOLDINGS,
      INC.

         

        	 	By: 	 
	 	Name: Justin Wiernasz,
      President	 
	 	 	 
	 	 	 
	 	 	 
	 	Joel
      Gold, Director	 
	 	 	 
	 	 	 
	 	 	 
	 	Michael
      Ferrone, Director	 
	 	 	 
	 	 	 
	 	EMPLOYEE:	 
	 	 	 
	 	 	 
	 	 	 
	 	      
                Sam
      Klepfish

              	 

        
 

      

    

    
      
         

      

      
        12

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