Form 8-K - Current report

Share Name	Share Symbol	Market	Type
BranchOut Food Inc	NASDAQ:BOF	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	1.80	1.68	1.79				0	00:00:00

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2024

BRANCHOUT FOOD INC.

(Exact name of registrant as specified in its charter)

Nevada	001-41723	87-3980472
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification Number)

205 SE Davis Avenue, Bend Oregon		97702
(Address of principal executive offices)		(Zip Code)

(844) 263-6637

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		BOF		Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

Convertible Note Financing

As previously reported, on July 15, 2024, BranchOut Food Inc. (the “Company”), entered into a Securities Purchase Agreement (as amended, the “SPA”) with Daniel L. Kaufman, pursuant to which Mr. Kaufman agreed to purchase from the Company, in a private placement (i) a 12% Senior Secured Convertible Promissory Note in the principal amount of up to $3,400,000 (the “Convertible Note”), convertible into shares of the Company’s common stock, par value $.0001 per share (“Common Stock”) at a fixed price of $0.7582 per share of Common Stock, a (ii) a warrant to purchase 1,000,000 shares of Common Stock at an exercise price of $1.00 per share (the “$1.00 Warrant”), and (iii) a warrant to purchase 500,000 shares of Common Stock at an exercise price of $1.50 per share (the “$1.50 Warrant” and, together with the $1.00 Warrant, the “Warrants” and together with the Convertible Note, the “Purchased Securities”), in consideration of an initial loan in the principal amount of $2,000,000 (the “Initial Loan”) to be made to the Company under the Convertible Note on the “Initial Closing Date” (as defined in the SPA), subject to the terms and conditions thereof. On July 19, 2024, the Company, Mr. Kaufman and Kaufman Kapital LLC entered into an amendment to the SPA (the “SPA Amendment”), which among other things, replaced Mr. Kaufman with Kaufman Kapital LLC as the “Investor” under the SPA.

On July 24, 2024, the Company issued the Purchased Securities to the Investor in consideration of the Investor making the Initial Loan to the Company.

The Convertible Note

The Convertible Note matures on the earlier of (i) December 31, 2025, (ii) the sale by the Company of $5,000,000 of equity or debt securities in a single transaction or series of related transactions (excluding certain specified transactions), or (iii) the closing of a change of control transaction as provided in the Convertible Note. Loans outstanding under the Convertible Note bear interest at an initial rate of 12% per annum, and together with accrued principal are convertible into Common Stock, provided that the holder may not convert amounts outstanding under the Convertible Note into Common Stock until the Company has obtained the approval of its shareholders for such conversion in accordance with Listing Rule 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc., as applicable, to the extent that, at such time, such approval is required under such Listing Rules for such conversion.

The Company’s obligations under the Convertible Note are secured by a lien granted to the Investor on substantially all of the Company’s assets pursuant to a Security Agreement entered between the Company and the Investor (the “Security Agreement”). In addition, the Convertible Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions of this nature.

The Warrants

The Warrants are exercisable until December 31, 2025, provided that the Warrants may not be exercised until the Company has obtained the approval of its shareholders to the exercise of the Warrants in accordance with Listing Rules 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc.

The information set forth above is qualified in its entirety by reference to the actual terms of the SPA, the SPA Amendment, the Security Agreement, the Convertible Note and the Warrants, which have been filed as Exhibits 10.1, 10.2, 10.3, 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K, and which are incorporated herein by reference.

Amendment of Senior Notes and Warrants

In connection with the sale of the Purchased Securities to the Investor under the SPA, the Company entered into an Omnibus Amendment to Note Documents with substantially all of the holders (the “Holders”) of the Company’s Senior Secured Notes (the “Senior Notes”) and warrants issued under that certain Subscription Agreement dated as of January 10, 2024, as amended, pursuant to which, among other things, (i) the exercise price of the warrants issued to the Holders was reduced from $2.00 to $1.00, (ii) the outside maturity date of the Senior Notes held by the Holders was extended from December 31, 2024 to December 31, 2025 (subject to further extension in the event the maturity date of the Convertible Note is extended), (iii) the Company’s obligation to make payments of principal under the Senior Notes held by the Holders beginning July 1, 2024 has been eliminated, and instead all obligations of the Company under such Senior Notes will be due in one lump sum on the maturity date of the Senior Notes, and (iv) the Company’s obligations under the Convertible Note and liens granted to the holder thereof, will be pari passu with the Company’s obligations under the Senior Notes held by the Holders and liens granted to the holders thereof.

The information set forth above is qualified in its entirety by reference to the actual terms of the Omnibus Amendment to Note Documents, which has been filed as Exhibit 10.4 to this Current Report on Form 8-K, and which are incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

Sale of Purchased Securities

The information set forth under Item 1.01 is incorporated herein by reference. The sale of the Purchased Securities was effected pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

Unit Offering of Common Stock and Warrants

As previously reported, on July 15, 2024, the Company entered into Subscription Agreements (the “Subscription Agreements”) with three investors, consisting of Eric Healy, the Company’s Chief Executive Officer; an affiliate of John Dalfonsi, the Company’s Chief Financial Officer; and the Company’s President, pursuant to which such investors agreed to purchase $525,000 of “Units” from the Company, each Unit consisting of (i) 100 shares of Common Stock, and (ii) a warrant to purchase 125 shares of Common Stock over the following ten years at an exercise price of $1.00 per share, at a purchase price per Unit equal to $75.82. The Company completed the sale of the Units to Eric Healy and the Company’s President on July 23, 2024, resulting in the issuance of an aggregate of 560,538 shares of Common Stock and warrants to purchase 700,672 shares of Common Stock. The sale of the Units was effected pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 24, 2024, in connection with the closing of the sale of the Purchased Securities under the SPA, Deven Jain was appointed to serve as a director of the Company. Mr. Jain is employed by Kaufman Kapital LLC as a private analyst. There are currently no agreements between the Company and Mr. Jain relating to his appointment as a director of the Company.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 4.1	12% Senior Secured Convertible Promissory Note of the Company in the principal amount of up to $3,400,000, dated July 23, 2024, issued to Kaufman Kapital LLC

Exhibit 4.2	$1.00 Warrant dated July 23, 2024, issued to Kaufman Kapital LLC

Exhibit 4.3	$1.50 Warrant dated July 23, 2024, issued to Kaufman Kapital LLC

Exhibit 4.4	Form of Warrant issued under Subscription Agreement dated July 15, 2024 (incorporated by reference to Exhibit 4.4 of the Form 8-K filed by the Company with Securities and Exchange Commission on July 19, 2024)

Exhibit 10.1	Securities Purchase Agreement, dated July 15, 2024, between the Company and Daniel L. Kaufman (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by the Company with Securities and Exchange Commission on July 19, 2024)

Exhibit 10.2	Amendment to Securities Purchase Agreement, dated July 19, 2024, by and among the Company, Daniel L. Kaufman and Kaufman Kapital LLC (incorporated by reference to Exhibit 10.2 of the Form 8-K filed by the Company with Securities and Exchange Commission on July 19, 2024)

Exhibit 10.3	Security Agreement between the Company and Kaufman Kapital LLC, dated July 23, 2024

Exhibit 10.4	Omnibus Amendment to Note Documents, dated July 23, 2024, between the Company and holders of the Company’s Senior Notes

Exhibit 10.5	Unit Subscription Agreement of the Company, dated July 15, 2024 (incorporated by reference to Exhibit 10.3 of the Form 8-K filed by the Company with Securities and Exchange Commission on July 19, 2024)

Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BranchOut Food Inc.

Date: July 29, 2024	By:	/s/ Eric Healy
		Eric Healy, Chief Executive Officer

Exhibit 4.1

THIS NOTE AND THE UNDERLYING SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.

BRANCHOUT FOOD INC.

12% Senior Secured Convertible Promissory Note

$3,400,000

July 23, 2024 (the “Issue Date”)

FOR VALUE RECEIVED, BRANCHOUT FOOD, INC., a Nevada corporation (the “Company”) with its principal executive office at 205 SE Davis Ave., Suite C, Bend, Oregon 97702, promises to pay to the order of Kaufman Kapital LLC, a Delaware limited liability company, or its registered assigns (the “Holder” or “Payee”), the principal amount of Three Million Four Hundred Thousand Dollars ($3,400,000), or such lesser amount as shall equal the aggregate unpaid principal amount of the loans made by Payee to the Company hereunder (the “Principal Amount”), together with interest on such Principal Amount, on the earlier of (i) December 31, 2025, (ii) the closing by the Company of the next sale (or series of related sales), of equity or debt securities in which the Company receives aggregate gross proceeds of at least Five Million Dollars ($5,000,000.00) (which shall exclude the financing under the Securities Purchase Agreement, and pursuant to the $525,000 offering of common stock and warrants consummated on or after July 15, 2024 and on or prior to the date hereof and any refinancing of existing indebtedness), or (iii) (x) the sale of more than 50% of the total outstanding equity of the Company in a non-public sale, (y) any merger, share exchange, consolidation or other reorganization or business combination of the Company if immediately after such transaction either (I) persons who were directors of the Company immediately prior to such transaction do not constitute at least a majority of the directors or other comparable control group of the surviving entity immediately after such transaction, or (II) persons who hold a majority of the voting equity of the surviving entity immediately after such transaction are not persons who directly or indirectly held a majority of the voting equity of the Company immediately prior to such transaction, or (z) the sale or exclusive license of substantially all of the assets of the Company (the earliest of such dates being the “Maturity Date”). Interest on this Senior Secured Convertible Promissory Note (this “Note”) shall accrue on the Principal Amount outstanding from time to time at a rate per annum computed in accordance with Section 2 hereof. This Note evidences an initial loan made by the Payee to the Company in the amount of $2,000,000 on the Issue Date pursuant to the Securities Purchase Agreement (as defined below), and may evidence up to an additional $1,400,000 in loans to be made by the Holder following the date hereof pursuant to the Securities Purchase Agreement.

This Note has been issued pursuant to a Securities Purchase Agreement (as amended, supplemented, restated or otherwise modified from time to time, the “Securities Purchase Agreement”) entered into between the Company and the Payee, and is secured by a Security Agreement (as amended, supplemented, restated or otherwise modified from time to time the “Security Agreement”) covering certain collateral (the “Collateral”), and the intercreditor agreement executed in connection therewith, all as more particularly described and provided therein, and is entitled to the benefits thereof. The Security Agreement and any and all other documents executed and delivered by the Company under which Payee is granted liens, or liens are perfected, on assets of the Company in connection with the transactions contemplated by the Securities Purchase Agreement are collectively referred to as the “Security Documents.” Unless otherwise defined in this Note, capitalized terms used herein shall have the meanings set forth in the Securities Purchase Agreement.

1. Principal Repayment

A. Optional Prepayment. Subject to Section 1B, at any time from and after the date on which Shareholder Approval has been obtained by the Company, the Company may prepay this Note, without premium or penalty, in whole or in part, with accrued interest to the date of such prepayment on the amount prepaid.

B. Notice of Prepayment. Before the Company shall be permitted to prepay this Note pursuant to 1A hereof, the Company shall provide ten (10) Business Days prior notice to the Payee of its intent to make such prepayment, which notice shall state the date and amount of such prepayment (the “Prepayment Date”). The Payee shall have the option at any time prior to the Prepayment Date to elect to convert this Note pursuant to Section 5 below.

2. Computation and Payment of Interest.

A. Base Interest Rate. Subject to Sections 2B and 2C below, the outstanding Principal Amount shall bear interest at the rate of twelve (12%) percent per annum (the “Initial Interest Rate”); provided that, subject to Sections 2B and 2C below, outstanding Principal Amount shall bear interest at a rate equal to the sum of the Initial Interest Rate plus six percent (6.0%) per annum, commencing on January 1, 2025, if Shareholder Approval has not been obtained by the Company on or before December 31, 2024.

B. Default Interest. Upon the occurrence an Event of Default (as defined below), the rate of interest applicable to the unpaid Principal Amount shall be increased to twenty four percent (24%) per annum, until such time as such Event of Default has been cured. It is understood and agreed that such interest rate is payable upon demand and is not a penalty.

C. Maximum Rate. In the event that it is determined that, under the laws relating to usury applicable to the Company or the indebtedness evidenced by this Note (“Applicable Usury Laws”), the interest charges and fees payable by the Company in connection herewith or in connection with any other document or instrument executed and delivered in connection herewith cause the effective interest rate applicable to the indebtedness evidenced by this Note to exceed the maximum rate allowed by law (the “Maximum Rate”), then such interest shall be recalculated for the period in question and any excess over the Maximum Rate paid with respect to such period shall be credited, without further agreement or notice, to the Principal Amount outstanding hereunder to reduce said balance by such amount with the same force and effect as though the Company had specifically designated such extra sums to be so applied to principal and the Payee had agreed to accept such extra payment(s) as a premium-free prepayment. All such deemed prepayments shall be applied to the principal balance payable at maturity. In no event shall any agreed-to or actual exaction as consideration for this Note exceed the limits imposed or provided by Applicable Usury Laws in the jurisdiction in which the Company is resident applicable to the use or detention of money or to forbearance in seeking its collection in the jurisdiction in which the Company is resident.

D. Payment of Interest. Interest shall accrue and be paid in lump-sum payment on the Maturity Date (or any earlier date of payment).

3. Covenants of Company.

A. Affirmative Covenants. The Company covenants and agrees that, so long as this Note shall be outstanding, unless it has otherwise obtained the prior written consent of the Holder, it will perform the obligations set forth in this Section 3A:

(i) Taxes and Levies. The Company will promptly pay and discharge all taxes, assessments, and governmental charges or levies imposed upon the Company or upon its income and profits, or upon any of its property, before the same shall become delinquent, as well as all claims for labor, materials and supplies which, if unpaid, might become a lien or charge upon such properties or any part thereof; provided, however, that the Company shall not be required to pay and discharge any such tax, assessment, charge, levy or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings and the Company shall set aside on its books adequate reserves in accordance with generally accepted accounting principles with respect to any such tax, assessment, charge, levy or claim so contested, so long as no liens arise in connection with any non-payment;

(ii) Maintenance of Existence. The Company will do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate existence, all necessary rights and franchises and comply in all material respects with all laws applicable to the Company;

(iii) Notice of Certain Events. The Company will give prompt written notice (with a description in reasonable detail) to the Payee of the occurrence of any Event of Default or any event which, with the giving of notice or the lapse of time, would constitute an Event of Default;

(iv) The Company will promptly provide to the Holder all information pertaining to the Company, and its properties, operations and business, or related to this Note and the documents, instruments and agreements in connection therewith, reasonably requested by Holder from time to time;

(v) The Company shall provide a copy of all materials sent to the Board of Directors, and to the holders of indebtedness. At the request of the Holder, the Company shall allow the Holder to be or appoint a board observer to attend and observe all board meetings;

(vi) The Company will duly and punctually pay and/or perform its obligations under this Note;

(vii) The Company will preserve and maintain its existence and all of its leases, privileges, franchises, qualifications and rights that are necessary or useful in the ordinary conduct of its business, and conduct its business as presently conducted in an orderly and efficient manner in accordance with good business practices;

(viii) Holder shall be entitled to receive, as soon as available, and in any event within 45 days after the end of each fiscal quarter, reviewed consolidated balance sheets of the Company and its subsidiaries, unaudited consolidated statements of income, cash flows, and stockholders’ equity for each such quarterly period and for the current fiscal year to date, all in reasonable detail and all prepared in accordance with GAAP, consistently applied (subject to normal year-end audit adjustments and the absence of notes thereto); provided that the Company shall have satisfied this obligation by timely filing with the SEC its Quarterly Reports on Form 10-Q;

(ix) Holder shall be entitled to receive, as soon as available, and in any event within ninety (90) days of the end of each fiscal year, reviewed consolidated balance sheets of the Company and its subsidiaries as at the end of each such fiscal year and reviewed consolidated statements of income, cash flows, and stockholders’ equity for such fiscal year, in each case setting forth in comparative form the figures for the previous fiscal year, of certified public certifying to the effect that, except as set forth therein, such financial statements have been prepared in accordance with GAAP, applied on a basis consistent with prior years, and fairly present in all material respects the financial condition of the Company and its subsidiaries as of the dates thereof and the results of their operations and changes in their cash flows and stockholders’ equity for the periods covered thereby; provided that the Company shall have satisfied this obligation by timely filing with the SEC its Annual Reports on Form 10-K;

(x) Upon reasonable notice from Holder, the Company at Company’s expense shall, and shall cause its directors, officers, and employees to, afford Holder and its representatives reasonable access during normal business hours to (i) the properties, offices, plants, and other facilities of the Company and its subsidiaries, (ji) the corporate, financial and similar records, reports, and documents of the Company and its subsidiaries, and (iii) the officers, senior employees, and public accountants of the Company and its subsidiaries, and to afford Holder and its representatives the opportunity to discuss and advise on the affairs, finances, and accounts of the Company and its subsidiaries with their officers, senior employees, and public accountants (and the Company hereby authorizes said accountants to discuss with Holder and its representatives such affairs, finances, and accounts);

(xi) Upon Holder’s request, not later than thirty (30) days prior to the commencement of each fiscal year, the Company shall prepare and provide to Holder an annual operating budget for the Company and its subsidiaries in detail for the upcoming fiscal year, including capital and operating expense budgets, cash flow projections, and projected income and profit and loss projections, all itemized in reasonable detail; and

(xii) The Company will at all times reserve and keep available, solely for the issuance and delivery upon the exercise of a Warrant shares of Common Stock, as from time to time shall be issuable upon the exercise of such Warrant. The Company covenants and agrees that all such shares of Common Stock that may be issued upon the exercise of the rights represented by such Warrant will, upon issuance, be duly authorized, validly issued, fully paid (assuming payment of the exercise price by Holder) and nonassessable and free from all preemptive rights and free of all taxes, liens and charges with respect to the issue thereof. The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the securities of the Company may be listed.

B. Negative Covenants. The Company covenants and agrees that, so long as this Note shall be outstanding, unless it has otherwise obtained the prior written consent of the Holder, it will perform the obligations set forth in this Section 3B:

(i) Liquidation, Dissolution. The Company will not liquidate or dissolve, consolidate with, or merge into or with, any other corporation or other entity without the prior written consent of Payee;

(ii) Sales of Assets. The Company will not, other than in the ordinary course of business, sell, transfer, lease or otherwise dispose of, or grant options, warrants or other rights with respect to, its properties or assets material to the Company’s business to any person or entity;

(iii) Indebtedness. The Company will hereafter not create, incur, assume or suffer to exist, contingently or otherwise, any indebtedness, provided, that this covenant shall not apply to (w) the Senior Secured Notes of the Company outstanding on the date hereof (it being expressly agreed that the issuance of any additional Senior Secured Notes shall require the Holder’s consent), (x) the Company’s indebtedness to the United States Small Business Administration (“SBA”) pursuant to a $34,500 Promissory Note issued to the SBA, (y) capitalized leases approved in advance by Holder, or (z) purchase money indebtedness approved in advance by Holder (secured solely by Liens on the equipment or assets leased or purchased);

(v) Negative Pledge. The Company will not hereafter create, incur, assume or suffer to exist any mortgage, pledge, hypothecation, assignment, security interest, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any financing lease) (each, a “Lien”) upon any of its property, revenues or assets, whether now owned or hereafter acquired, except any of the following (collectively, “Permitted Liens”):

(a) Liens existing on the date hereof in favor of holders of the Company’s Senior Secured Promissory Notes, which are pari passu with or junior to the Lien of the Holder securing the Company’s obligations under this Note;

(b) Liens granted to secure indebtedness incurred (i) that is permitted under Section 3B(iii) above, (ii) to finance the acquisition (whether by purchase or capitalized lease) of tangible assets or (iii) under equipment leases or purchase money indebtedness, but in each case, only on the assets acquired with the proceeds of such indebtedness;

(c) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(d) Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue ; and

(e) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;

(vi) Dividends. The Company will not declare or pay any dividends or distributions on its outstanding capital stock;

(vii) Affiliate Transactions. The Company will not enter into or suffer to exist any transaction with any employee, officer, director, shareholder of the Company or any affiliate of the Company except transactions in the ordinary course of business on arms’ length terms; and

(viii) Claims. The Company will not waive any material term of a material contract, instrument or agreement or enter into or modify any material contract, instrument or agreement, or bring or settle any material claim or litigation, without the prior consent of the Holder.

4. Events of Default.

If any of the following events shall occur for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation by law or otherwise) (each, an “Event of Default”):

(i) Non-Payment of Obligations. The Company shall default in the payment of the principal of this Note as and when the same shall become due and payable (whether by acceleration or otherwise) or shall fail to pay accrued interest on this Note within five (5) business days of when the same shall become due and payable (whether by acceleration or otherwise);

(ii) Non-Performance of Affirmative Covenants. The Company shall default in the due observance or performance of any covenant set forth in Section 3A;

(iii) Non-Performance of Negative Covenants. The Company shall default in the due observance or performance of any covenant set forth in Section 3B;

(iv) Bankruptcy, Insolvency, Etc. The Company (or any of its subsidiaries) shall:

(a) admit in writing its inability to pay its debts as they become due;

(b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its property, or make a general assignment for the benefit of creditors;

(c) in the absence of such application, consent or acquiesce in, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for any part of its property;

(d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company, and, if such case or proceeding is not commenced by the Company or converted to a voluntary case, such case or proceeding shall be consented to or acquiesced in by the Company or shall result in the entry of an order for relief; or

(e) take any corporate or other action authorizing, or in furtherance of, any of the foregoing;

(v) Cross-Default. The Company shall default in the payment when due, or otherwise default in the performance, after the expiration of any applicable grace period, of any amount payable under the Existing Notes Documents, or any other obligation of the Company for money borrowed (including capital leases and purchase money financing) in excess of $100,000, or there occurs any “event of default” or similar circumstance or event entitling the holder thereof to accelerate the obligations thereunder or to exercise rights and remedies, or the Existing Notes Documents become due and payable prior to the payment in full of the obligations hereunder;

(vi) Other Breaches, Defaults. The Company shall default or be in breach of any term or provision of this Note, any other Transaction Document (as defined in the Securities Purchase Agreement), or any representation or warranty made by the Company to the Payee in any Transaction Document shall be materially false or misleading;

(vii) Security Documents. The Security Documents shall fail to create a valid and perfected Lien in and to any Collateral or if the Company or any grantor breaches the terms thereof; or

(viii) Intercreditor Agreement. The Company shall make any payment with respect to the obligations under the Existing Notes Documents, or shall have permitted any of its Subsidiaries to make any such payment, except in compliance with the terms of the Intercreditor Agreement, or shall have amended any provision of any document evidencing such Existing Notes Documents, except in compliance with the terms of the Intercreditor Agreement, or amend any provision affecting the Holder’s rights contained in any documentation relating to the Existing Notes Documents, or if any party breaches or contests the validity of or of any material provision of the Intercreditor Agreement.

then, and in any such event, the Holder may take or cause to be taken any or all of the following actions, without prejudice to the rights of Payee to enforce its claims against the Company: (1) declare the principal of and any accrued interest and all other amounts payable under this Note to be due and payable, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company, (2) proceed to enforce or cause to be enforced any remedies provided under the Security Agreement, and (3) exercise any other remedies available at law or in equity, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Note; provided, that upon the occurrence of any Event of Default referred to in Section 4(iv) then (without prejudice to the rights and remedies specified in clause (3) above) automatically, without notice, demand or any other act by any Holder, the principal of and any accrued interest and all other amounts payable under this Note shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company, anything contained in this Note to the contrary notwithstanding. No remedy conferred in this Note upon any Holder is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereinafter existing at law or in equity or by statute or otherwise.

5. Conversion of Note.

A. Optional Conversion. The Holder of this Note shall have the option, at any time and from time to time, to convert all or any portion of the outstanding Principal Amount of this Note plus all accrued and unpaid interest thereon (such Principal Amount and accrued and unpaid interest to be so converted the “Conversion Amount”) into shares of common stock, par value $0.001 per share (“Common Stock”), of the Company at an initial conversion price per share equal to $0.7582 per share (the “Conversion Price”), subject to adjustment as provided in subsection 5E below. The shares of Common Stock issuable upon conversion of this Note at the Conversion Price are referred to herein as the “Conversion Shares.”

B. Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert any portion of this Note until the Company has obtained the approval of the shareholders of the Company for such conversion in accordance with Listing Rule 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc., as applicable, to the extent that, at such time, such approval is required under such Listing Rules for such conversion.

C. Mechanics of Conversion.

(i) Before the Holder of this Note shall be entitled to convert this Note into shares of Common Stock pursuant to Section 5A, such holder shall give written notice to the Company in the form attached hereto as Annex A (“Conversion Notice”), at its principal corporate office, by email, or otherwise, of the election to convert the same and shall state therein the Conversion Amount and the name or names in which the certificate or certificates for shares of Common Stock are to be issued. On or before the third (3rd) business day following the date of receipt of a Conversion Notice, the Company shall issue and deliver to the address as specified in the Conversion Notice, a certificate (which may be in electronic form), registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled.

(ii) All Common Stock which may be issued upon conversion of the Note will, upon issuance, be duly issued, fully paid and non-assessable and free from all taxes, liens, and charges with respect to the issuance thereof.

D. Authorized Shares. At all times the Company shall have authorized and shall have reserved a sufficient number of shares of Common Stock to provide for the conversion of the Notes at the then effective Conversion Price. Without limiting the generality of the foregoing, if, at any time, the Conversion Price is decreased, the number of shares of Common Stock authorized and reserved for issuance upon the conversion of this Note shall be proportionately increased.

E. Anti-Dilution Provisions. The Conversion Price in effect at any time and the number and kind of securities issuable upon the conversion of this Note shall be subject to adjustment from time to time upon the happening of certain events as follows:

(i) In case the Company shall hereafter (i) declare a dividend or make a distribution on its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, combination or reclassification shall be adjusted so that it shall equal the price determined by multiplying the Conversion Price by a fraction, the denominator of which shall be the number of shares of Common Stock outstanding after giving effect to such action, and the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such action. Such adjustment shall be made successively whenever any event listed above shall occur.

(ii) Whenever the Conversion Price is adjusted pursuant to Subsection (i) above, the number of Conversion Shares issuable upon conversion of this Note shall simultaneously be adjusted by multiplying the number of Conversion Shares initially issuable upon conversion of this Note by the Conversion Price in effect on the date hereof and dividing the product so obtained by the Conversion Price, as adjusted.

(iii) In case of any reorganization, reclassification or change of the Common Stock (including any such reorganization, reclassification or change in connection with a consolidation or merger in which the Company is the continuing entity), or any consolidation of the Company with, or merger of the Company with or into, any other entity (other than a consolidation or merger in which the Company is the continuing entity), or of any sale of the properties and assets of the Company as, or substantially as, an entirety to any other person or entity, this Note shall thereafter be convertible into the kind and amount of stock or other securities or property receivable upon such reorganization, reclassification, change, consolidation, merger or sale by a Holder of the number of shares of Common Stock into which this Note would have been converted prior to such transaction. The provisions of this subsection (iii) shall similarly apply to successive reorganizations, reclassifications, changes, consolidations, mergers or sales immediately prior to such reorganization, reclassification, change, consolidation, merger or sale.

6. Amendments and Waivers.

The provisions of this Note may from time to time be amended, modified, supplemented, or waived in the manner provided in the Securities Purchase Agreement.

7. Miscellaneous.

A. Parties in Interest. All covenants, agreements and undertakings in this Note binding upon the Company or the Payee shall bind and inure to the benefit of its successors and permitted assigns of the Company and the Payee, respectively, whether so express or not.

B. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to the conflicts of laws principles thereof.

C. Waiver of Jury Trial. THE PAYEE AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PAYEE OR THE COMPANY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE’S PURCHASING THIS NOTE.

D. Fees and Expenses. The Company shall pay to or at the direction of the Payee on demand (i) all reasonable and documented out-of-pocket expenses incurred by the Holder and its affiliates (including the fees, charges and disbursements of any counsel for the Holder and its affiliates) in connection with the preparation, negotiation, execution, delivery, and administration of the Securities Purchase Agreement, this Note and the documents, instruments and agreements in connection herewith, and any amendments, modifications, or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) (provided that the Company’s obligation to reimburse Holder for legal fees for the initial Closing is limited to the lesser of (x) $75,000 and (y) 75% of such legal fees ), (ii) all out-of-pocket expenses incurred by Holder and its affiliates, including the fees, charges and disbursements of any counsel for the such persons, in connection with the enforcement or protection of its rights (A) in connection with the Securities Purchase Agreement, this Note, and the documents, instruments and agreements in connection herewith, or (B) in connection with any advance or credit accommodations made to or for the benefit of the Company, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such advances and accommodations, the common stock issued in conversion of the Notes or exercise of the warrants, and the documents, instruments and agreements in connection herewith and therewith.

[Signature Page Follows]

IN WITNESS WHEREOF, this Note has been executed and delivered on the date specified above by the duly authorized representative of the Company.

	BRANCHOUT FOOD INC.

	By:	/s/ Eric Healy
	Name:	Eric Healy
	Title:	Chief Executive Officer

ANNEX A

CONVERSION NOTICE

The undersigned hereby elects to convert principal and/or interest under the 12% Senior Secured Convertible Promissory Note, issued as of July __, 2024 (the “Note”) of Branchout Food Inc., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof and the Note, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:

Date to Effect Conversion: ___________________________________

Principal Amount of Note to be Converted: _______________________

Amount of Interest of Note to be Converted: ____________________

Number of shares of Common Stock to be issued:_________________

________________________________________________________

Signature: _______________________________________________

Name: __________________________________________________

Address for Delivery of Common Stock Certificates: _______________

________________________________________________________

Exhibit 4.2

THIS WARRANT and the Securities that may be purchased upon the exercise of this warrant have been acquired for INVESTMENT AND NOT FOR DISTRIBUTION, AND have NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the “Act”). Such securities may not be offered for sale, sold, pledged or hypothecated, or otherwise transferred unless and until registration under the act or an exemption from the registration requirements of the act is available for such offer, sale, pledge, hypothecation, or transfer in the opinion of legal counsel reasonably satisfactory to the company.

BRANCHOUT FOOD INC.

WARRANT

Warrant No. 1

Date of Issuance: July 23, 2024

BRANCHOUT FOOD INC., a Nevada corporation (the “Company”), for valid consideration received, hereby certifies that Kaufman Kapital LLC or its registered assigns (the “Holder”), is entitled pursuant to the terms of this warrant (this “Warrant”), subject to the terms set forth below, commencing on the Shareholder Approval Date (as defined below) to purchase, prior to termination as provided in Section 5 hereof, up to 1,000,000 shares of duly authorized, validly issued, fully-paid and non-assessable shares of the Company’s Common Stock (the “Common Stock”), at an exercise price of $1.00 per share (the “Exercise Price”), subject to adjustment as set forth herein. The Common Stock purchasable upon exercise of this Warrant, as adjusted from time to time pursuant to the terms of this Warrant, are hereinafter referred to as the “Warrant Stock.” This Warrant is issued pursuant to that certain Securities Purchase Agreement of even date herewith, by and between the Company and the Holder .

1. Exercise.

(a) Shareholder Approval Date. This Warrant may not be exercised until the Company has obtained the approval of the shareholders of the Company to the exercise of this Warrant in accordance with Listing Rule 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc (such approval, “Warrant Shareholder Approval”, and the date of such approval, the “Warrant Shareholder Approval Date”), to the extent that at such time, such approval is required under such Listing Rules for such exercise.

(b) General. This Warrant may be exercised by Holder in whole or in part, during the period beginning on the Warrant Shareholder Approval Date and ending on the date of termination as provided in Section 5 hereof, by surrendering this Warrant, with the purchase form appended hereto as Exhibit A completed in accordance with the instructions thereto and duly executed by such Holder or by such Holder’s duly authorized attorney, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full by cash, check or wire transfer of all or such portion of the aggregate Exercise Price as is payable in respect of the number of shares of Warrant Stock purchased upon such exercise.

(c) Timing. The exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 1(b) above. If Holder exercises this Warrant in connection with a merger or sale of the Company other than in connection with the conversion of the Company into a corporation through conversion, merger, or similar transaction in which the relative equity ownership percentages of the owners of the Company do not change (“Change of Control Transaction”), Holder may designate that the exercise date be deemed the closing date of such Change of Control Transaction, and conditional upon the occurrence of such event.

(d) Conversion Right.

(i) Right to Convert Warrant; Net Issuance. In addition to and without limiting the rights of the Holder under the terms of this Warrant, but only to the extent this Warrant has not otherwise been exercised, the Holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into Warrant Stock as provided in this Section 1(d) at any time or from time to time during the term of this Warrant. Upon exercise of the Conversion Right with respect to a particular number of shares of Warrant Stock set forth on the purchase form appended hereto as Exhibit A (the “Converted Warrant Stock”), the Company shall deliver to the Holder (without payment by the Holder of any exercise price or any cash or other consideration) that number of shares of Warrant Stock equal to the quotient obtained by dividing (X) the value of this Warrant (or the specified portion hereof) on the Conversion Date (as defined in subsection (ii) hereof), which value shall be determined by subtracting (A) the aggregate Exercise Price of the shares of Converted Warrant Stock immediately prior to the exercise of the Conversion Right from (B) the aggregate Fair Market Value of the Converted Warrant Stock issuable upon exercise of this Warrant (or the specified portion hereof) on the Conversion Date (as hereinafter defined) by (Y) the Fair Market Value of one share of Converted Warrant Stock on the Conversion Date (as hereinafter defined).

Expressed as a formula, such conversion shall be computed as follows:

	X =	B - A
		Y

Where:	X =	the number of shares of Warrant Stock that may be issued to Holder upon exercise of the Conversion Right

	Y =	the Fair Market Value of one share of Warrant Stock

	A =	the aggregate Exercise Price (the per share Exercise Price multiplied by the number of shares of Converted Warrant Stock)

	B =	the aggregate Fair Market Value (i.e., Fair Market Value multiplied by the number of shares of Converted Warrant Stock)

No fractional shares of Warrant Stock shall be issuable upon exercise of the Conversion Right, and, if the number of shares of Warrant Stock to be issued determined in accordance with the foregoing formula is other than a whole number, the Company shall pay to the Holder an amount in cash equal to the Fair Market Value of the resulting fractional share of Warrant Stock on the Conversion Date.

(ii) Method of Exercise. The Conversion Right may be exercised by the Holder by the surrender of this Warrant at the principal office of the Company together with a written statement specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of shares of Warrant Stock which are being surrendered (referred to in subsection (i) hereof as the Converted Warrant Stock) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement (the “Conversion Date”). If the shares of Warrant Stock are certificated, then certificates for the Converted Warrant Stock issuable upon exercise of the Conversion Right shall be issued as of the Conversion Date and shall be delivered to the Holder within thirty (30) days following the Conversion Date.

(iii) Determination of Fair Market Value. For purposes of this Agreement, “Fair Market Value” shall mean, as of any particular date: (a) the lowest of the five most recent closing prices of the Warrant Stock if trading on any public exchange; (b) if there have been no sales of the Warrant Stock on any such exchange on any such day, the average of the highest bid and lowest asked prices for the Warrant Stock on all such exchanges at the end of such day; (c) if on any such day the Warrant Stock is not listed on a domestic securities exchange, the closing sales price of the Warrant Stock as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Warrant Stock on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Warrant Stock quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Warrant Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Warrant Stock is not listed on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association, the “Fair Market Value” of the Warrant Stock shall be the fair market value per share of Warrant Stock as determined jointly by the Company and the Holder; provided, that if the Company and the Holder are unable to agree on the Fair Market Value per share of the Warrant Stock within a reasonable period of time (not to exceed ten (10) days from the Company’s receipt of the purchase form), such Fair Market Value shall be determined by a nationally recognized investment banking, accounting or valuation firm jointly selected by the Company and the Holder. The determination of such firm shall be final and conclusive, and the fees and expenses of such valuation firm shall be borne by the Company.

(e) Certificates. If the shares of Warrant Stock are certificated, then as soon as practicable after the exercise of this Warrant, the Company shall cause to be issued in the name of, and delivered to, Holder, or as such Holder may direct, a certificate or certificates for the number of shares of Warrant Stock to which such Holder shall be entitled. Issuance of certificates pursuant to this Section 1(e) shall be made without charge to Holder for any issue or transfer tax or other incidental expenses, all of which taxes and expenses shall be paid by the Company.

(f) Legends. Each certificate or other records representing the Common Stock or for any other security issued or issuable upon exercise of this Warrant shall bear the following legend:

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). SUCH SECURITIES MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, PLEDGE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT UNLESS SOLD PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT.”

(g) Status of Common Stock. The Company covenants that the Common Stock, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

2. Adjustments.

(a) Adjustment Upon Reorganization, Reclassification or Change of Control Transaction. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the Capital Stock (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a distribution, dividend or subdivision, split-up or combination of Capital Stock), (iii) Change of Control Transaction, or (iv) other similar transaction (other than any such transaction covered by Section 2(b)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, this Warrant shall, immediately after such reorganization, reclassification, Change of Control Transaction or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of shares of Warrant Stock then exercisable under this Warrant, be exercisable for the kind and number of shares of equity or securities or assets of the Company or of the successor Person (as defined below) resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, Change of Control Transaction or similar transaction and acquired the applicable number of shares of Warrant Stock then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of this Section 2 shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any membership units, interests, shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any Change of Control Transaction or similar transaction in which the successor or purchaser is other than the Company, an immediate adjustment to the number of shares of Warrant Stock then acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise). The provisions of this Section 2(a) shall similarly apply to successive reorganizations, reclassifications, Change of Control Transactions or similar transactions. The Company shall not effect any such reorganization, reclassification, Change of Control Transaction or similar transaction unless, prior to the consummation thereof, the successor (if other than the Company) resulting from such reorganization, reclassification, Change of Control Transaction or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such membership units, interests, shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 2(a), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights set forth in Section 1 instead of giving effect to the provisions of this Section 2(a) with respect to this Warrant

(b) Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Units. If the Company shall, at any time or from time to time after the issuance of this Warrant, (i) pay a dividend or make any other distribution upon the shares of Common Stock or any other Capital Stock of the Company payable in Common Stock, or (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding Common Stock into a greater number of units, the Purchase Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced and the number of shares of Warrant Stock issuable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split or otherwise) its outstanding Common Stock into a smaller number of units, the Purchase Price in effect immediately prior to such combination shall be proportionately increased and the number of shares of Warrant Stock issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

(c) Notice of Adjustments. Whenever the Purchase Price or the number of shares of Warrant Stock purchasable hereunder shall be adjusted pursuant to Section 2 hereof, the Company shall promptly give written notice thereof to Holder in the form of a certificate, signed by the chief executive officer and the executive officer responsible for the creation of such certificate, setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Purchase Price and the number of shares of Warrant Stock purchasable hereunder after giving effect to such adjustment. Such certificate shall be delivered to Holder within thirty (30) days of such adjustment, in accordance with Section 11 hereof.

3. Transfers. The Holder of this Warrant acknowledges that this Warrant and the Warrant Stock have not been registered under the Securities Act of 1933, as amended (the “Act”), and agrees not to offer for sale, sell, pledge, distribute, transfer or otherwise dispose of this Warrant and agrees not to offer for sale, sell, pledge, distribute, transfer or otherwise dispose of any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Act as to this Warrant and the Warrant Stock and registration or qualification of under any applicable Blue Sky or state securities law then in effect, or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required; provided, however, that no opinion need be obtained with respect to a transfer to (A) a partner or member, active or retired, of Holder, (B) the estate of any such partner or member, (C) an “affiliate” of Holder as that term is defined in Rule 405 promulgated by the U.S. Securities and Exchange Commission under the Act, or (D) the spouse, children, grandchildren or spouse of such children or grandchildren of Holder or to trusts for the benefit of Holder or such persons, in each case if the transferee agrees to be subject to the terms hereof. Notwithstanding the foregoing, any transferee receiving Warrant Stock that (X) have been registered under the Act or (Y) are resaleable under Rule 144 promulgated under the Act shall not be required to agree in writing to be subject to the terms of this Section 3.

4. No Impairment. The Company will not, by amendment of its certificate of incorporation or bylaws or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be reasonably necessary or appropriate in order to protect the rights of Holder of this Warrant against impairment.

5. Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate on December 31, 2025 (the “Expiration Date”).

6. Notices of Certain Transactions.

(a) In the event:

(i) that the Company makes any amendment to its certificate of incorporation or bylaws;

(ii) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any Change of Control Transaction, any other consolidation or merger of the Company with or into another entity, or any other transaction or series of related transactions pursuant to which the Company’s equity holders immediately prior thereto will possess a minority of the voting power of the surviving or acquiring entity immediately thereafter, or any transfer of all or substantially all of the assets of the Company; or

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

then, and in each such case, the Company will send to Holder a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, (b) a certified copy of the Company’s current certificate of incorporation or bylaws, or (c) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, Change of Control Transaction, dissolution, liquidation, winding-up, or redemption is to take place, and the time, if any is to be fixed, as of which Holders of record of shares of Common Stock (or such capital stock or securities at the time deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation, winding-up, or redemption) shall be determined. Such notice shall be mailed at least twenty (20) days prior to the record date or effective date for the event specified in such notice.

(b) The Company shall notify the Holder of the Expiration Date of the Warrant, no later than twenty (20) days prior to the Expiration Date.

7. Reservation of Warrant Stock. The Company will at all times reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such shares of Common Stock and other equity securities or property, as from time to time shall be issuable upon the exercise of this Warrant. The Company covenants and agrees that all such shares of Common Stock or other equity securities that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid (assuming payment of the Exercise Price by Holder) and nonassessable and free from all preemptive rights and free of all taxes, liens and charges with respect to the issue thereof. The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock or other equity securities may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the securities of the Company may be listed.

8. Exchange of Warrants. Upon the surrender by Holder of any Warrant, properly endorsed, to the Company at the principal office of the Company, the Company will, subject to the provisions of Section 4 hereof, issue and deliver to or upon the order of such Holder, at Holder’s expense, a new Warrant of like tenor, in the name of such Holder or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock or other equity securities called for on the face or faces of the Warrant so surrendered.

9. Registration of Common Stock. If any shares of Common Stock required to be reserved for purposes of exercise of this Warrant requires registration with or approval of any governmental authority under any applicable law (other than the Act) before such shares of Common Stock may be issued upon exercise, the Company shall, at its expense and as expeditiously as possible, use its best efforts to cause such shares of Common Stock to be duly registered or approved, as the case may be

10. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor at Holder’s expense.

11. Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing and delivered by hand or overnight courier service or sent by facsimile or email as follows:

(a) To his, her, or its address (and email address) provided to the Company.

(b) Notices sent by hand or overnight courier service shall be deemed to have been given when received and notices sent by electronic communications, shall be effective upon confirmation received by the sender, including transmittal coded “advise when received” or words of similar meaning. Any party hereto may by notice so given change its address for future notice hereunder.

12. No Rights as Stockholder. Until the exercise of this Warrant, Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Company unless otherwise acquired. Without limiting the generality of the foregoing, and except as otherwise provided in Section 3 hereof, no dividends shall accrue to the shares of Common Stock or other equity securities underlying this Warrant until the exercise hereof and the purchase of the underlying shares of Common Stock or other equity securities, at which point dividends shall begin to accrue with respect to such shares of Common Stock or other equity securities from and after the date such shares of Common Stock or other equity securities are so purchased. Nothing in this Section 12 shall limit the right of Holder to be provided the notices required to be provided pursuant to the terms of this Warrant.

13. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

14. Governing Law. This Warrant and all actions arising out of or in connection with this Warrant shall be governed by and construed in accordance with the laws of the State of Nevada, without application of conflicts of law principles thereunder.

15. Amendment or Waiver. Any provision of this Warrant may be amended, waived or modified (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely) only by an instrument in writing signed by the Company and Holder. Any amendment, waiver or modification effected in accordance with this Section 15 shall be binding upon Holder, each future holder of the Warrant or the Warrant Stock and the Company.

16. Successor and Assigns. The terms and provisions of this Warrant shall incur to the benefit of, and be binding upon, the Company and each Holder hereof and their respective permitted successors and assigns.

17. Holder Fees. The Company shall pay on demand all out-of-pocket expenses incurred by the Holder, including the fees, charges and disbursements of any counsel for the Holder, in connection with the enforcement or protection of its rights in connection with this Warrant.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the date first written above.

	BRANCHOUT FOOD INC.

	By:	/s/ Eric Healy
	Name:	Eric Healy
	Title:	Chief Executive Officer

	Address:	205 SE Davis Ave., Suite C Bend, Oregon 97702 Attn: Eric Healy Email: eric@branchoutfood.com

[Signature Page –Warrant]

By its counter-signature below, Holder hereby agrees to the foregoing terms and conditions set forth in this Warrant.

	HOLDER:

	KAUFMAN KAPITAL LLC

	By:	/s/ Daniel L. Kaufman
	Name:	Daniel L. Kaufman, Managing Member

[Signature Page –Warrant]

EXHIBIT A

PURCHASE FORM

To:

BRANCHOUT FOOD INC.

Dated: ______________

By checking the box below, the undersigned hereby irrevocably elects:

	☐	to purchase _______ shares of Common Stock, and herewith makes payment of $_________ by cash, check or wire transfer, representing the aggregate Exercise Price therefor pursuant to Section 1(b) of the attached Warrant.

	☐	to exercise the Conversion Right with respect to ___ shares of Common Stock pursuant to Section 1(d) of the attached Warrant.

Please issue a certificate or certificates (if the shares of Warrant Stock are certificated) reflecting the issuance of said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

The undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares of Common Stock except in compliance with applicable securities laws.


	(Entity name, if applicable)

	By:
	Name:
	Title:

Exhibit 4.3

BRANCHOUT FOOD INC.

WARRANT

Warrant No. 2

Date of Issuance: July 23, 2024

BRANCHOUT FOOD INC., a Nevada corporation (the “Company”), for valid consideration received, hereby certifies that Kaufman Kapital LLC or its registered assigns (the “Holder”), is entitled pursuant to the terms of this warrant (this “Warrant”), subject to the terms set forth below, commencing on the Shareholder Approval Date (as defined below) to purchase, prior to termination as provided in Section 5 hereof, up to 500,000 shares of duly authorized, validly issued, fully-paid and non-assessable shares of the Company’s Common Stock (the “Common Stock”), at an exercise price of $1.50 per share (the “Exercise Price”), subject to adjustment as set forth herein. The Common Stock purchasable upon exercise of this Warrant, as adjusted from time to time pursuant to the terms of this Warrant, are hereinafter referred to as the “Warrant Stock.” This Warrant is issued pursuant to that certain Securities Purchase Agreement of even date herewith, by and between the Company and the Holder .

1. Exercise.

(d) Conversion Right.

Expressed as a formula, such conversion shall be computed as follows:

	X =	B - A
		Y

Where:	X =	the number of shares of Warrant Stock that may be issued to Holder upon exercise of the Conversion Right

	Y =	the Fair Market Value of one share of Warrant Stock

	A =	the aggregate Exercise Price (the per share Exercise Price multiplied by the number of shares of Converted Warrant Stock)

	B =	the aggregate Fair Market Value (i.e., Fair Market Value multiplied by the number of shares of Converted Warrant Stock)

(f) Legends. Each certificate or other records representing the Common Stock or for any other security issued or issuable upon exercise of this Warrant shall bear the following legend:

2. Adjustments.

5. Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate on December 31, 2025 (the “Expiration Date”).

6. Notices of Certain Transactions.

(a) In the event:

(i) that the Company makes any amendment to its certificate of incorporation or bylaws;

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

(b) The Company shall notify the Holder of the Expiration Date of the Warrant, no later than twenty (20) days prior to the Expiration Date.

(a) To his, her, or its address (and email address) provided to the Company.

13. Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the date first written above.

	BRANCHOUT FOOD INC.

	By:	/s/ Eric Healy
	Name:	Eric Healy
	Title:	Chief Executive Officer

	Address:	205 SE Davis Ave., Suite C Bend, Oregon 97702 Attn: Eric Healy Email: eric@branchoutfood.com

[Signature Page –Warrant]

By its counter-signature below, Holder hereby agrees to the foregoing terms and conditions set forth in this Warrant.

	HOLDER:

	KAUFMAN KAPITAL LLC

	By:	/s/ Daniel L. Kaufman
	Name:	Daniel L. Kaufman, Managing Member

[Signature Page –Warrant]

EXHIBIT A

PURCHASE FORM

To:

BRANCHOUT FOOD INC.

Dated: ______________

By checking the box below, the undersigned hereby irrevocably elects:

	☐	to purchase _______ shares of Common Stock, and herewith makes payment of $_________ by cash, check or wire transfer, representing the aggregate Exercise Price therefor pursuant to Section 1(b) of the attached Warrant.

	☐	to exercise the Conversion Right with respect to ___ shares of Common Stock pursuant to Section 1(d) of the attached Warrant.

(Name)

(Address)


	(Entity name, if applicable)

	By:
	Name:
	Title:

Exhibit 10.3

SECurity agreement

THIS SECURITY AGREEMENT, dated as of July 23, 2024 (this “Agreement”), is made by BranchOut Food Inc., a Nevada corporation (the “Company” or “Grantor”), in favor of Kaufman Kapital LLC, a Delaware limited liability company (the “Lender”).

ReCitals

A. The Lender and the Company are parties to that certain Securities Purchase Agreement dated as of July 15, 2024 (as amended, supplemented, restated or otherwise modified from time to time, the “SPA”) pursuant to which the Lender agreed to make a loan to the Company, on the terms and conditions therein, evidenced by that certain 12% Senior Secured Convertible Promissory Note of the Company (the “Loan”).

B. The Loan is presently evidenced by those certain 12% Senior Secured Convertible Promissory Note in the aggregate principal amount of up to $3,400,000 of even date hereof (as amended, supplemented, restated or otherwise modified from time to time the “Initial Note” and together with any other notes issued from time to time under the SPA, the “Notes”).

C. Under the terms of the SPA, Grantor is required to grant to Lender a security interest, subject only to security interests expressly permitted by the Notes, in and to the Collateral hereinafter described.

D. This Agreement is given by Grantor in favor of the Lender to secure the payment and performance of the Notes and all other obligations of Company to Lender or its designees, and all of the other Secured Obligations (defined below).

Accordingly, the parties hereto agree as follows:

ARTICLE 1
definitions

1.1. Terms. The following terms herein used shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

“Collateral” is defined in Section 2.1.

“Contract” means collectively, all sale, service, performance, equipment lease contracts, agreements and grants and all other contracts, agreements or grants (in each case, whether written or oral, or third party or intercompany), between Grantor and any third party, and all assignments, amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof.

“Event of Default” means the failure to pay when due, whether at stated maturity, by acceleration or otherwise, any of the Secured Obligations or any other “Event of Default” as defined in the SPA, any Note or any Transaction Document (as defined in the SPA).

“Lien” means any pledge, assignment, hypothecation, mortgage, security interest, deposit arrangement, option, conditional sale or title retaining contract, sale and leaseback transaction, financing statement filing, lessor’s or lessee’s interest under any lease, subordination of any claim or right, or any other type of lien, charge, encumbrance, preferential arrangement or other claim or right.

“Obligors” Is defined in Section 3 6.

“Permitted Existing Liens” means Liens pursuant to a security agreement dated as of January 10, 2024 securing Senior Secured Promissory Notes issued under that certain Subscription Agreement dated as of January 10, 2024 as amended as of April 16, 2024 and as of the date hereof in the aggregate principal amount of up to $1,675,000 (the “Existing Senior Secured Notes”), which are held by the lenders party thereto.

“Receivables” means all accounts, payment intangibles, chattel paper and instruments.

“Secured Obligations” means any and all obligations of the Company under the Notes and all obligations of the Company under the SPA, and all obligations of Grantor under this Agreement, the Transaction Documents or any other document, instrument or agreement associated with the Notes or the SPA, and any and all other indebtedness and other obligations of the Grantor to the Lender, designees and its affiliates of any kind or nature, howsoever created or evidenced and whether now or hereafter existing, direct or indirect, absolute or contingent, joint and/or several, secured or unsecured, arising by operation of law or otherwise, including through assignment, and whether incurred by Grantor as principal, surety, endorser, guarantor, accommodation party or otherwise, including without limitation all principal and all interest (including any interest accruing subsequent to any petition filed by or against the Grantor or any of them under the U.S. Bankruptcy Code, whether or not an allowed claim), indemnity and reimbursement obligations, charges, expenses, fees, attorneys’ fees and disbursements and any other amounts owing hereunder, thereunder or under applicable law.

“Subsidiary Interests” means all equity interests held by Grantor in its subsidiaries, whether such equity interests constitute investment property or general intangibles under the UCC.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of Nevada; provided, that if, with respect to any UCC financing statement or by reason of any provisions of law, the perfection or the effect of perfection or non-perfection of the security interests granted to Lender is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than Nevada, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of any UCC financing statement relating to such perfection or effect of perfection or non-perfection. Terms used herein without definition shall have the meanings ascribed to such terms in the UCC.

1.2. Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided in the SPA.

1.3. UCC Definitions. Unless otherwise defined herein or in the SPA or the context otherwise requires, and whether or not capitalized, terms for which meanings are provided in Article 8 or Article 9 of the UCC are used in this Agreement, including in preamble and recitals, with such meanings. Without limiting the foregoing, accounts, chattel paper, commercial tort claims, certified security, control, deposit accounts, documents, farm products, fixtures, electronic chattel paper, equipment, general intangibles, goods, instruments, inventory, investment property, letter-of-credit rights, negotiable instruments, payment intangibles, securities and software, whether or not capitalized, shall have the meanings ascribed thereto in the UCC.

ARTICLE 2

GRANT OF SECURITY INTEREST

2.1. Grant of Security Interest. For value received, to secure the prompt payment and complete payment of all Secured Obligations, Grantor hereby grants, assigns and transfers to Lender a security interest in and to all of the Grantor’s assets, including but not limited to the following list of described assets whether now owned or existing or hereafter acquired or arising and wherever located (all of which is herein collectively called the “Collateral”):

(a) all Accounts; all Payment Intangibles; all general intangibles (including, without limitation, all patents, patent applications, trademarks, copyrights and works of authorship, know-how, inventions, all software (including computer programs and supporting information) and all other intellectual property); all securities, equity interests, stock, membership interests held by Grantor; all personal and fixture property of every kind and nature including all goods (including inventory, equipment, and any accessions thereto); all Deposit Accounts and any and all monies credited by or due from any financial institution or any other depository; all additional amounts due to Grantor from any Obligor relating to the Accounts; all Contract rights, rights of payment earned under a Contract right, Instruments (including promissory notes), Chattel Paper (including electronic chattel paper), letters of credit, and money; all leasehold interests; all Supporting Obligations of the foregoing; all real and personal property of third parties in which Grantor has been granted a lien or security interest as security for the payment or enforcement of Accounts;

(b) all investment property (including, without limit, securities, securities entitlements, and financial assets), all securities accounts and all investment property contained therein, including, without limitation, all securities and securities entitlements, financial assets, instruments or other property contained in such securities accounts, and all other investment property, financial assets, instruments or other property at any time held or maintained in such securities accounts, together with all investment property, financial assets, instruments or other property at any time substituted for all or for any part of the foregoing, and all interest, dividends, increases, profits, new investment property, financial assets, instruments or other property and or other increments, distributions or rights of any kind received on account of any of the foregoing, and all other income received in connection therewith;

(d) all proceeds and products of subsection (a) of this Section 2.1 in whatever form, including cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds, negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, and tort claim proceeds; and

(e) all of Grantor’s books and records with respect to any of the foregoing (including, without limit, computer software and the computers and equipment containing said books and records).

Notwithstanding the foregoing, the Collateral shall not include “Excluded Collateral (defined below). “Excluded Collateral” means (i) intent to use trademark applications; and (ii) 4 microwave dehydration machines purchased from Enwave Corporation (“Excluded Equipment”), to the extent that the express terms of an agreement executed on or prior to the date hereof between Grantor and Enwave Technology or Enwave Corporation expressly prohibits the grant to New Lender of a security interest in such Equipment, provided however that such assets or property shall constitute “Excluded Collateral “ only to the extent and for so long as the applicable agreement, or (with respect to intent to use trademarks) applicable law, validly prohibit the creation of a security interest on such property in favor of the Lender, and upon the termination of such prohibition (by written consent or in any other manner), such property shall cease to constitute “Excluded Collateral”.

ARTICLE 3
REPRESENTATIONS AND COVENANTS

Grantor further represents, warrants, covenants and agrees with Lender as follows:

3.1. Ownership of Collateral; Security Interest Priority. At all times, unless Lender shall otherwise consent in writing, Grantor shall be deemed to have represented and warranted that (a) Grantor is the lawful owner of such Collateral, has the right and authority to subject the Collateral to the security interest of Lender, and has the power to transfer the Collateral; and (b) none of the Collateral is subject to any Lien other than the Permitted Existing Liens (solely to the extent such Permitted Existing Liens remain outstanding) and those in favor of Lender, and there is no effective financing statement or other filing covering any of the Collateral on file in any public office, other than Permitted Existing Liens and those in favor of Lender. This Agreement creates in favor of Lender a valid security interest in the Collateral, which security interest, upon filing of financing statements in the appropriate offices in the locations listed on Schedule 3.1, will be perfected and of first priority for security interests that may be perfected by the filing of a financing statement, enforceable against Grantor and all third parties and securing the payment of the Secured Obligations. Grantor authorizes Lender to file financing statements (or any other document requested by Lender based on the applicable laws) describing the Collateral as “all assets” or otherwise as determined by Lender and if requested will execute and deliver to Lender all documents and take such other actions as may from time to time be requested by Lender in order to maintain a perfected first priority security interest in, and if applicable, possession and control of, the Collateral. Grantor will keep the Collateral free at all times from any and all Liens, other than Permitted Existing Liens . Grantor will not, without the prior written consent of Lender, sell, lease, license, transfer, assign or otherwise dispose, or permit or suffer to be sold, leased, licensed, transferred, assigned or otherwise disposed, any of the Collateral, except for any assets permitted to be sold, leased, licensed, transferred, assigned or otherwise disposed under the SPA, subject to the terms of the SPA and the Transaction Documents, and sales of inventory in the ordinary course of business on arms length terms. Lender or its attorneys may after a prior written notice and on regular business hours inspect the Collateral and for such purpose may enter upon any and all premises where the Collateral is or might be kept or located.

3.2. Perfection of Security Interest and Further Assurances.

(a) The Grantor hereby irrevocably authorizes the Lender at any time and from time to time to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction (or any other document necessary or reasonably desirable pursuant to similar applicable laws in such jurisdiction) for the filing of any financing statement or amendment relating to the Collateral, including any financing or continuation statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by the Grantor hereunder, without the signature of the Grantor where permitted by law, including the filing of a financing statement describing the Collateral as all assets now owned or hereafter acquired by the Grantor, or words of similar effect. The Grantor agrees to provide all information required by the Lender pursuant to this Section promptly to the Lender upon request.

(b) The Grantor hereby further authorizes the Lender to file with the United States Patent and Trademark Office and the United States Copyright Office (and any successor office and any similar office in any state of the United States or in any other country) this Agreement, any necessary security agreements and other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by the Grantor hereunder, without the signature of the Grantor where permitted by law.

(c) The Grantor agrees that at any time and from time to time, at the expense of the Grantor, the Grantor will promptly (but in any event no later than the date specified by Lender) execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary or desirable, or that the Lender may reasonably request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Lender to exercise and enforce its rights and remedies hereunder or under any other agreement with respect, any Collateral.

(d) Schedule 3.2(d) attached hereto contains a true, complete, and current listing of all patents, trademarks, tradestyles, copyrights, and other intellectual property rights (including all registrations and applications therefor) owned by Grantor as of the date hereof that are registered with any governmental authority. Grantor shall promptly notify the Lender in writing of any additional intellectual property rights acquired or arising after the date hereof that are or are required to be registered with any governmental authority, and shall on a monthly basis no later than thirty days after month end submit to the Lender a supplement to Schedule 3.2(d) to reflect such additional rights; provided that failure to do so shall not impair the Lender’s security interest therein. Grantor owns or possesses rights to use all franchises, licenses, patents, trademarks, trade names, tradestyles, copyrights, and rights with respect to the foregoing which are required to conduct its business. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and Grantor is not liable to any person for infringement under applicable law with respect to any such rights as a result of its business operations.

(e) All deposit accounts of Grantor on the date hereof are listed and identified (by account number and depository institution) on Schedule 3.2(e) attached hereto and made a part hereof. Grantor shall promptly notify the Lender of any other deposit account opened or maintained by Grantor after the date hereof, and shall submit to the Lender a supplement to Schedule 3.2(e) to reflect such additional accounts; provided that failure to do so shall not impair the Lender’s security interest therein. With respect to any deposit account, as a condition to the establishment and maintenance of any such deposit account except as otherwise agreed to in writing by the Lender, Grantor, the depository institution, and the Lender shall execute and deliver an account control agreement in form and substance satisfactory to the Lender which provides, among other things, for the depository institution’s agreement that it will comply with instructions originated by the Lender directing the disposition of the funds in the deposit account without further consent by Grantor. The Grantor is not required to execute and deliver a control agreement on the date hereof and is not so required after the date hereof unless requested by Lender, and if so requested shall deliver such control agreement within the number of days specified by Lender.

(f) All investment property (including all securities, certificated or uncertificated, securities accounts, and commodity accounts) and Subsidiary Interests of Grantor constituting Collateral on the date hereof, if any, is listed and identified on Schedule 3.2(f) attached hereto and made a part hereof. Grantor shall promptly notify the Lender of any other investment property or Subsidiary Interests constituting Collateral acquired or maintained by Grantor after the date hereof, and shall submit to the Lender a supplement to Schedule 3.2(f) to reflect such additional rights; provided that failure to do so shall not impair the Lender’s security interest therein. Certificates for all certificated securities now or at any time constituting investment property or Subsidiary Interests and part of the Collateral hereunder shall be promptly delivered by Grantor to the Lender duly endorsed in blank for transfer or accompanied by an appropriate assignment or assignments or an appropriate undated stock power or powers, in every case sufficient to transfer title thereto, including, without limitation, all stock received in respect of a stock dividend or resulting from a split up, revision or reclassification of the investment property or Subsidiary Interests constituting Collateral or any part thereof or received in addition to, in substitution of or in exchange for the investment property or Subsidiary Interests constituting Collateral or any part thereof as a result of a merger, consolidation or otherwise. With respect to any uncertificated securities or any investment property or Subsidiary Interests constituting Collateral held by a securities intermediary, commodity intermediary, or other financial intermediary of any kind, at the Lender’s request, Grantor shall execute and deliver, and shall cause any such issuer or intermediary to execute and deliver, an agreement among Grantor, the Lender, and such issuer or intermediary in form and substance reasonably satisfactory to the Lender which provides, among other things, for the issuer’s or intermediary’s agreement that it will comply with such entitlement orders, and apply any value distributed on account of any such investment property or Subsidiary Interests, as directed by the Lender without further consent by Grantor. The Lender may, at any time after the occurrence of an Event of Default, cause to be transferred into its name or the name of its nominee or nominees any and all of the investment property and Subsidiary Interests constituting Collateral hereunder.

(g) Schedule 3.2(g) attached hereto contains a true, complete and current listing of all commercial tort claims held by Grantor as of the date hereof, each described by reference to the specific incident giving rise to the claim. Grantor agrees to execute and deliver to the Lender a supplement to this Agreement, in a form acceptable to the Agent, promptly upon becoming aware of any commercial tort claim held or maintained by Grantor arising after the date hereof; provided, that failure to do so shall not impair the Lender’s security interest therein.

(h) If any Collateral is in the possession or control of any of Grantor’s agents or processors and the Lender so requests, Grantor agrees to notify such agents or processors in writing of the Lender’s security interest therein and instruct them to hold all such Collateral for the Lender’s account and subject to the Lender’s instructions. Grantor shall, upon the request of the Lender, and at the expense of the Grantor, authorize and instruct, and get a valid and binding agreement from, all bailees and other parties, if any, at any time processing, labeling, packaging, holding, storing, shipping, or transferring all or any part of the Collateral to permit the Lender and its representatives to examine and inspect any of the Collateral then in such party’s possession and to verify from such party’s own books and records any information concerning the Collateral or any part thereof which the Lender or its representatives may seek to verify, and to enter into the premises in order to exercise Lender’s rights and remedies. As to any premises not owned by Grantor wherein any of the Collateral is located, Grantor shall, at the Lender’s request, use commercially reasonable efforts to cause each party having any right, title or interest in, or lien on, any of such premises to enter into an agreement (any such agreement to contain a legal description of such premises) whereby such party disclaims any right, title and interest in, and lien on, the Collateral and allows the removal of such Collateral by the Lender or its agents or representatives, and is otherwise in form and substance reasonably acceptable to the Lender.

3.3. Names; Locations. Grantor represents and warrants that Schedule 3.3 set forth the following for each Grantor (a) the jurisdiction in which Grantor is located for purposes of Sections 9-301 and 9-307 of the UCC; (b) the address of Grantor’s chief executive office; (c) each trade name or other name (other than its name set forth on the signature page hereto) used by Grantor; and (d) Grantor’s federal taxpayer identification number (and, during the four months preceding the date hereof, Grantor has not had any other federal taxpayer identification number) and state organizational number. During the past four months preceding the date hereof, Grantor has not been known by any legal name different from the one set forth on the signature page hereto, nor has Grantor been the subject any merger or other corporate reorganization during the past five years. The name set forth on the signature page is the true and correct name of Grantor. Grantor will not change its name or place of incorporation or organization or federal taxpayer identification number except upon 30 days’ prior written notice to Lender.

3.4. Taxes, Etc. Grantor will pay any taxes, assessments and similar imposts and charges, that are now or hereafter may become a Lien upon any of the Collateral, in accordance with the terms and requirements of the SPA and the Transaction Documents.

3.5. Maintenance of Collateral. Grantor shall preserve and maintain all rights of Grantor and Lender in all Collateral, and will not subordinate, supplement or otherwise modify any claim or right of Grantor with respect to any Collateral, or permit, consent or suffer to occur any of the foregoing, If the effect thereof is to impair, or is in any manner adverse to, the rights or interests of Lender without the prior written consent of Lender.

3.6. Special Rights Regarding Receivables. Lender or any of its agents may, at any time and from time to time in its sole discretion upon the existence of any Event of Default, verify, directly with each Person (collectively, the “Obligors”) that owes any Receivables to Grantor, the Receivables in any reasonable manner. Lender or any of its agents may, at any time from time to time after and during the continuance of any Event of Default, notify the Obligors of the security interest of Lender in the Collateral and/or direct such Obligors in such manner and on such terms as Lender or any of its agents shall deem appropriate. Grantor directs and authorizes any and all of its present and future Obligors to comply with requests for information from Lender, Lender’s designees and agents and/or auditors, relating to any and all business transactions between Grantor and the Obligors. Grantor further directs and authorizes all of its Obligors upon receiving a notice or request sent by Lender or Lender’s agents or designees to pay directly to Lender any and all sums of money or proceeds now or hereafter owing by the Obligors to Grantor, and any such payment shall act as a discharge of any debt of such Obligor to Grantor in the same manner as if such payment had been made directly to Grantor. Grantor agrees to take any and all action as Lender may reasonably request to assist Lender in exercising the rights described in this Section.

3.7. Material Agreement Consents; Agreements. Prior to entering into or becoming bound by any material agreement or document (including any material amendment to a material agreement or document) that prohibits or otherwise restricts Grantor from granting a security interest in such agreement or document or for with a default under or termination of could interfere with the Lenders rights and remedies, or that could adversely impact the value of the collateral or the Excluded Equipment, Grantor shall: (i) provide written notice to Lender of the material terms of such agreement with a description of its likely impact on Grantor’s business or financial condition; and (ii) upon Lender’s request, will use commercially reasonable efforts to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (A) Grantor’s interest in such licenses or contract rights to be deemed Collateral and for Lender to have a security interest in such license or contract right, and to have the power to assign such license or contract rights in connection with an enforcement of remedies, that might otherwise be restricted by the terms of the applicable license or agreement, whether now existing or entered into in the future, or otherwise requested by Lender and (B) Lender to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Lender’s rights and remedies under this Agreement and the other Transaction Documents. In addition, at the request of Lender, and at Grantor’s expense, Grantor shall take all actions requested in order to provide that Lender has a perfected lien on the Excluded Equipment subject only to the prior liens of Enwave.

3.8. Subsidiaries. Grantor has no subsidiaries, and Grantor shall not create or maintain or suffer to exist any subsidiaries without the prior written consent of Lender.

3.9. Investment Company Act. Grantor is not, and will not be after giving effect to the transactions contemplated under the SPA, an “investment company” or a company controlled by an investment company, within the meaning of the Investment Company Act of 1940.

ARTICLE 4
REMEDIES

4.1. General Remedies. Upon the occurrence and during the continuum of any Event of Default, Lender shall have and may exercise any one or more of the rights and remedies provided to Lender under this Agreement, the SPA or any of the other Transaction Documents or provided law, including but not limited to all of the rights and remedies of a secured party under the UCC, and Grantor hereby agrees to assemble the Collateral and make it available to Lender at a place to be designated by Lender that is reasonably convenient to both parties, authorizes Lender to take possession of the Collateral with or without demand and in accordance with applicable law and to sell and dispose of the same at public or private sale and to apply the proceeds of such sale to the costs and expenses thereof (including reasonable attorneys’ fees and disbursements, incurred by Lender) and then to the payment and satisfaction of the Secured Obligations. Any requirement of reasonable notice shall be met if Lender sends such notice to Grantor, by registered or certified mail, at least 10 days prior to the date of sale, disposition or other event giving rise to a required notice. Lender may be the purchaser at any such sale. Grantor expressly authorizes such sale of sales of the Collateral in advance of and to the exclusion of any sale or sales of or other realization upon any other collateral securing the Secured Obligations. Lender shall not have any obligation to preserve rights against prior parties, and Lender shall not have any obligation to clean-up or otherwise prepare the Collateral for sale. Grantor hereby waives as to Lender any right of subrogation or marshaling of such Collateral and any other collateral for the Secured Obligations. To this end, Grantor hereby expressly agrees that any such collateral or other security of Grantor or any other party that Lender may hold may be dealt with in all respects and particulars as though this Agreement were not in existence. The parties hereto further agree that public sale of the Collateral by auction conducted in any county in which any Collateral is located or in which Lender or Grantor does business after advertisement of the time and place thereof shall, among other manners of public and private sale, be deemed to be a commercially reasonable disposition of the Collateral. Grantor shall be liable for any deficiency remaining after disposition of the Collateral. Lender may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Lender may specifically disclaim any warranties of title or the like. If Lender sells any of the Collateral upon credit, Grantor will be credited only with payments actually made by the purchaser, received by Lender and applied to the indebtedness of such purchaser. In the event any such purchaser fails to pay for the Collateral, Lender may resell the collateral and Grantor shall be credited with the proceeds of sale.

4.2. Special Remedies Concerning Certain Collateral.

(a) Upon the occurrence and during the continuance of an Event of Default, Grantor shall, if requested to do so in writing, and to the extent so requested, promptly collect and enforce payment of all amounts due Grantor on account of, in payment of, or in connection with, any of the Collateral, hold all payments in the form received by Grantor as trustee for Lender, without commingling with any funds belonging to Grantor, and forthwith deliver all such payments to Lender with endorsement to Lender’s order of any checks or similar instruments.

(b) Upon the occurrence and during the continuance of an Event of Default, Grantor shall, if requested to do so, and to the extent so requested, notify all Obligors and other Persons with obligations to Grantor on account of or in connection with any of the Collateral of the security interest of Lender in the Collateral and direct such account debtors and other Persons that all payments in connection with such obligations and the Collateral be made directly to Lender. Lender itself may, upon the occurrence and during the continuance of an Event of Default, so notify and direct any such account debtor or other Person that such payments are to be made directly to Lender.

(c) Upon the occurrence and during the continuance of an Event of Default, for purposes of assisting Lender in exercising its rights and remedies to Lender under this Agreement, Grantor (i) hereby irrevocably constitutes and appoints Lender as its true and lawful attorney, for and in Grantor’s name, place and stead, to collect, demand, receive, sue for, compromise, and give good and sufficient releases for, any monies due or to become due on account of, in payment of, or in connection with the Collateral, (ii) hereby irrevocably authorizes Lender to endorse the name of Grantor, upon any checks, drafts, or similar items that are received in payment of, or in connection with, any of the Collateral, and to do all things necessary in order to reduce the same to money, (iii) with respect to any Collateral, hereby irrevocably assents to all extensions or postponements of the time of payment thereof or any other indulgence in connection therewith, to each substitution, exchange or release of Collateral, to the addition or release of any party primarily or secondarily liable, to the acceptance of partial payments thereon and the settlement, compromise or adjustment (including adjustment of insurance payments) thereof, all in such manner and at such time or times as Lender shall deem advisable and (iv) hereby irrevocably authorizes Lender to notify the post office authorities to change the address for delivery of Grantor’s mail to an address designated by Lender, and Lender may receive, open and dispose of all mail addressed to Grantor. Notwithstanding any other provisions of this Agreement, it is expressly understood and agreed that Lender shall have no duty, and shall not be obligated in any manner, to make any demand or to make any inquiry as to the nature or sufficiency of any payments received by it or present or file any claim or take any other action to collect or enforce the payment of any amounts due or to become due on account of or in connection with any of the Collateral.

(d) Upon the occurrence and during the continuance of an Event of Default, Grantor hereby irrevocably constitutes and appoints the Lender as its proxy and attorney-in-fact with respect to its investment property and Subsidiary Interests, including the right to vote such investment property and Subsidiary Interests, with full power of substitution to do so. In addition to the right to vote any such investment property and Subsidiary Interests, the appointment of the Lender as proxy and attorney-in-fact shall include the right to exercise all other rights, powers, privileges and remedies to which a holder of such investment property and Subsidiary Interests would be entitled (including giving or withholding written consents of shareholders or other equity holders, calling special meetings of shareholders or other equity holders and voting at such meetings). Such proxy shall be effective, automatically and without the necessity of any action (including any transfer of any such investment property and Subsidiary Interests on the record books of the issuer thereof) by any person (including the issuer of such investment property and Subsidiary Interests or any officer or agent thereof), upon the occurrence of an Event of Default. Grantor hereby ratifies and approves all acts of any such attorney and agrees that neither the Lender nor any such attorney will be liable for any acts or omissions or for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction; provided that, in no event shall they be liable for any punitive, exemplary, indirect or consequential damages. The foregoing powers of attorney and proxy, being coupled with an interest, are irrevocable until the Secured Obligations have been fully paid and satisfied and all commitments of the Lender to extend credit to or for the account of Grantor under the Transaction Documents have expired or otherwise terminated.

4.3. Without in any way limiting the foregoing, Grantor hereby grants to the Lender a royalty free irrevocable license and right to use all of Grantor’s patents, patent applications, patent licenses, trademarks, trademark registrations, trademark licenses, trade names, trade styles, copyrights, copyright applications, copyright licenses, and similar intangibles in connection with any foreclosure or other realization by the Lender on all or any part of the Collateral. The license and right granted to the Lender hereby shall be without any royalty or fee or charge whatsoever.

ARTICLE 5
MISCELLANEOUS

5.1. Remedies Cumulative. No right or remedy conferred upon or reserved to Lender under this Agreement, the SPA or any other Transaction Document is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative in addition to every other right or remedy given hereunder or now or hereafter existing under any applicable law. Every right and remedy of Lender under this Agreement, the SPA or any other Transaction Document or under applicable law may be exercised from time to time and as often as may be deemed expedient by Lender. To the extent that it lawfully may, Grantor agrees that it will not at any time insist upon, plead, or in any manner whatever claim or take any benefit or advantage of any applicable present or future stay, extension or moratorium law, that may affect observance or performance of portions of any provisions of this Agreement, the SPA or any other Transaction Document; nor will it claim, take or insist upon any benefit or advantage of any present or future law providing for the valuation or appraisal of any security for its obligations under this Agreement, the SPA or any other Transaction Document prior to any sale or sales thereof that may be made under or by virtue of any instrument governing the same; nor will Grantor, after any such sale or sales, claim or exercise any right, under any applicable law to redeem any portion of such security so sold.

5.2. Conduct No Waiver. No waiver of default shall be effective unless in writing executed by Lender and waiver of any default or forbearance on the part of Lender under the Notes in enforcing any of its right under this Agreement shall not operate as a waiver of any other default or of the same default on a future occasion or of such right.

5.3. Governing Law; Consent to Jurisdiction. This Agreement is a contract made under, and shall be governed by and construed in accordance with, the law of the State of Nevada applicable to contracts made and to be performed entirely within such State and without giving effect to choice of law principles of such State. Grantor agrees that any legal action or proceeding with respect to this Agreement or the transactions contemplated hereby may be brought in any court of the State of Nevada, or in any court of the United States of America sitting in Nevada, and Grantor hereby submits to and accepts generally and unconditionally the jurisdiction of those courts with respect to its person and property. Nothing in this paragraph shall affect the right of Lender to serve process in any other manner permitted by law or limit the right of Lender to bring any such action or proceeding against Grantor or its property in the courts of any other jurisdiction. Grantor hereby irrevocably waives any objection to the laying of venue of any such suit or proceeding in the above-described courts. The headings of the various subdivisions hereof are for convenience of reference only and shall in no way modify any of the terms or provisions hereof.

5.4. Notices. All notices, demands, requests, consents and other communications hereunder shall be delivered in the manner described in the SPA.

5.5. Rights Not Construed as Duties. Lender neither assumes nor shall it have any duty of performance or other responsibility under any contracts in which Lender has or obtains a security interest hereunder beyond the exercise of reasonable care. If Grantor fails to perform any agreement contained herein, Lender may but is in no way obligated to perform, or cause performance of such agreement, and the reasonable expenses of Lender incurred in connection therewith shall be payable by Grantor under Section 5.8. The powers conferred on Lender hereunder are solely to protect its interests in the Collateral and shall not impose any duty upon Lender to exercise any such powers. Except for the safe custody of any Collateral in Lender’s possession, a duty to exercise reasonable care, and accounting for monies actually received by it hereunder, Lender shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which is reasonable and customary in the industry for Lender.

5.6. Amendments. None of the terms and provisions of this Agreement may be modified or amended in any way except by an instrument in writing executed by Grantor and Lender. Notwithstanding the foregoing, this Agreement may be modified to permit a collateral agent to be appointed for the secured parties hereunder with the consent of the Lender and the collateral agent.

5.7. Severability. If any one or more provisions of this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contented herein shall not in any way be affected, impaired, prejudiced or disturbed thereby, and any provision hereunder found partially unenforceable shall be interpreted to be enforceable to the fullest extent possible.

5.8. Expenses.

(a) Grantor will, upon demand, jointly and severally, pay to Lender an amount of any and all reasonable and documented expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, that Lender may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of Lender hereunder or under the SPA or any other Transaction Document, or (iv) a failure of Grantor to perform or observe any of the provisions hereof.

(b) Grantor agrees to hold harmless and indemnify Lender from and against any and all claims, losses and liabilities actually incurred or suffered growing out of or resulting from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities resulting from Lender’s gross negligence, breach of this Agreement, or willful misconduct.

5.9. Successors and Assigns; Termination. This Agreement shall create a continuing, absolute, unconditional and irrevocable security interest in the Collateral and shall be binding upon Grantor, its successors and assigns, and inure, together with the rights and remedies of Lender hereunder, to the benefit of Lender and its successors, transferees and assigns. Upon the irrevocable payment in full in immediately available funds of all of the Secured Obligations and the termination of all commitments to lend and letters of credit outstanding under this Agreement, the SPA or any other Transaction Document and all other appliable notes and agreements, and the execution and delivery by the Grantor of a written release for the benefit of the Lender, the security interest granted hereunder shall terminate and all rights to the Collateral shall revert to Grantor.

5.10. Evidence of Secured Obligations. Lender’s books and records showing the Secured Obligations shall be admissible in any action or proceeding, shall be binding upon each Grantor for the purpose of establishing the Secured Obligations due from Grantor and shall constitute prima facie proof, absent manifest error, of the Secured Obligations of Grantor to Lender.

5.11. Waiver of Jury Trial. Grantor, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waives any right it may have to a trial by jury in any litigation based upon or arising out of this Agreement, any other Transaction Document or any related instrument or agreement or any of the transactions contemplated by this Agreement, any other Transaction Document or any course of conduct, dealing, statements (whether oral or written) or actions. Grantor shall not seek to consolidate, by counterclaim or otherwise, any such action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either Lender, on the hand, or Grantor, on the other hand, except by a written instrument executed by all of them.

5.12. Limitations on Damages. To the extent not prohibited by applicable law, each party hereto hereby knowingly, voluntarily, intentionally, and irrevocably waives any right such party may have to claim or recover in any dispute or controversy any special, exemplary, punitive, or consequential damages, or damages other than or in addition to actual damages, provided, however, that the limitations set forth in this Section 5.12 shall not apply to the grossly negligent acts or omissions or willful misconduct of either party in performing its obligations under this Agreement.

IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be duly executed as of the day and year first set forth above.

GRANTOR:

BRANCHOUT FOOD INC.

By:	/s/ Eric Healy
Name:	Eric Healy
Title:	Chief Executive Officer

Accepted and Agreed
KAUFMAN KAPITAL LLC

By:	/s/ Daniel L. Kaufman
Name:	Daniel L. Kaufman
Title:	Managing Member

SCHEDULE 3.1 TO SECURITY AGREEMENT

Locations Where Financing Statements Are to Be Filed

SCHEDULE 3.2(D) TO SECURITY AGREEMENT

Intellectual Property

SCHEDULE 3.2(e) TO SECURITY AGREEMENT

Deposit Accounts

SCHEDULE 3.2(F) TO SECURITY AGREEMENT

Investment Property

SCHEDULE 3.2(G) TO SECURITY AGREEMENT

Commercial Tort Claims

SCHEDULE 3.3 TO SECURITY AGREEMENT

List of Names and Locations of Grantor (including Subsidiaries)

Exhibit 10.4

OMNIBUS AMENDMENT TO NOTE DOCUMENTS

THIS OMNIBUS AMENDMENT TO NOTE AGREEMENTS (this “Amendment”), dated as of July 23, 2024, is made by and among BranchOut Food Inc., a Nevada corporation (the “Company”), and the holders of the Company’s Senior Secured Promissory Notes (the “Lenders”) party to this Amendment and Eaglevision Ventures, Inc., a Delaware corporation, as Lender Representative (the “Lender Representative”).

RECITALS

WHEREAS, the Company and the Lenders are parties to that certain Subscription Agreement, dated as of January 10, 2024, as amended by a First Amendment thereto dated as of April 16, 2024 (as amended, the “Subscription Agreement”), pursuant to which the Lenders purchased (i) Senior Secured Notes of the Company in the aggregate principal amount of $1,675,000 (the “Notes”), and (ii) warrants to purchase an aggregate of 518,750 shares of the Company’s common stock, at a price of $2.00 per share (the “Warrants”).

WHEREAS, the obligations of the Company to the Lenders under the Notes are secured pursuant to a Security Agreement between the Company and the Lenders, dated as of January 10, 2024 (the “Security Agreement” and together with the Subscription Agreement, the Notes and the Warrants and all documents, instruments and agreements in connection therewith, the “Note Documents”).

WHEREAS, the Company and the Lenders desire amend certain provisions of the Note Documents, in the manner, and on the terms and conditions, provided for herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Amendments.

(a) Warrant Exercise Price. The Exercise Price of the Warrants is hereby reduced from $2.00 to $1.00.

(b) Extension of Maturity Date. The definition of the “Maturity Date” as set forth in the Notes and the Subscription Agreement is hereby amended by replacing “December 31, 2024” with “the later of (x) December 31, 2025, and (y) any later stated maturity date of the Senior Secured Convertible Promissory Note anticipated to be dated on or about July 19, 2024 as amended, supplemented, restated or otherwise modified from time to time, the “New Money Note” issued by Company to Daniel L Kaufman or his designee”.

(c) No Additional Notes. It is agreed that no additional Notes will be issued under the Subscription Agreement and that the Notes may be paid only as permitted under the Intercreditor Agreement to be executed in connection herewith.

(d) Elimination of Amortization Payments. Section 1.1(b) of the Subscription Agreement is hereby deleted.

(e) Qualified Subsequent Financing. The definition of “Qualified Subsequent Financing” as set forth in the Subscription Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“Qualified Subsequent Financing: This term means the next sale (or series of related sales) after July 19, 2024 by the Company, of any security that occurs prior to the Maturity Date in which the Company receives aggregate gross proceeds of Five Million Dollars ($5,000,000.00) or more from any parties that do not currently own, directly or indirectly, independently or through any affiliated entities, any Capital Stock (excluding the financing under the New Money Note, the New Money Subscription Agreement (defined below) and the $525,000 offering of common stock and warrants closing on or after July 15, 2024 and prior to or substantially contemporaneously with the New Money Note, and any refinancing of indebtedness).”

(f) Seniority. Section 7 of the Subscription Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“Notwithstanding any provision in this Subscription Agreement to the contrary, the Indebtedness evidenced by the Senior Secured Notes issued to Purchasers, and each Purchaser’s rights and remedies hereunder and under the Other Investor Agreements, shall be senior in all respects to the liens, terms, covenants and conditions of all debt of the Company existing on January 10, 2024, except for the Permitted Senior Obligations, and, to the extent of any conflict or inconsistency between the other terms of this Subscription Agreement and this Section 7, the provisions of this Section 7 shall control. Each Purchaser acknowledges and agrees that the Indebtedness evidenced by the Senior Secured Note issued to such Purchaser, and such Purchaser’s rights and remedies hereunder and under the Other Investor Agreements, shall be junior with respect to any Collateral (as defined in the Security Agreement) that is subject to the Permitted Senior Obligations (including the Permitted Senior Liens) for so long as such Permitted Senior Obligations remain outstanding. Notwithstanding the foregoing, the Purchasers acknowledge and agree that the indebtedness evidenced by the Senior Secured Notes issued to Purchasers and the Liens securing such indebtedness, shall be (a) pari passu with (i) the indebtedness evidenced by that certain 12% Senior Secured Convertible Promissory Note in the original principal amount of up to $3,400,000, made by the Company in favor of Kaufman Kapital LLC (the “New Money Lender”), pursuant to that certain Subscription Agreement dated as of July 15, 2024, (as amended, supplemented, restated or otherwise modified from time to time, the “New Money Subscription Agreement”), and (ii) the Liens securing such indebtedness, and (b) junior to all other future additional indebtedness issued at the request of the Company under the New Money Subscription Agreement or otherwise in favor of the New Money Lender and its designee(s), successors and assigns, and the Liens securing such indebtedness.”

(g) Sections 10.1 and 10.2 of the Subscription Agreement are hereby amended by adding the following to the end of each such section, prior to the period “, to the extent that a failure to pay or perform would reasonably be expected to result in a Material Adverse Effect;”

(h) Section 11.1 of the Subscription Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“The Company shall not create, incur, issue, assume, guarantee or otherwise become liable for any Indebtedness contractually senior in right of payment to the Senior Secured Notes, except as created under or as permitted by the New Money Subscription Agreement and the notes issued thereunder, and indebtedness secured by Permitted Senior Liens, and all outstanding current and any future obligations of the Company to its officers and/or directors and any additional debt instruments issued by the Company (other than pursuant to or permitted by the New Money Subscription Agreement) shall be subordinated to the Senior Secured Notes in all material respects, in each case, except for the Permitted Senior Liens (solely to the extent such Permitted Senior Liens remain outstanding) or as otherwise permitted under the New Money Subscription Agreement and the notes issued thereunder.”

2. Section 11.2 of the Subscription Agreement is hereby amended by adding the following at the end of the sentence before the period: “and except as permitted under the New Money Subscription Agreement and the notes issued thereunder.

3. Section 11.3 of the Subscription Agreement is hereby amended by deleting clause (d) thereof and replacing it with the following “(d) dispositions permitted under the New Money Subscription Agreement and the notes issued thereunder.”

4. Section 12.9 of the Subscription Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“12.9 WAIVERS, MODIFICATIONS. Any provision of this Agreement and the Notes issued hereunder, and the Security Agreement executed in connection herewith and therewith, may be amended, waived, modified, discharged or terminated with the written consent of the Company and Lenders holding a majority of the aggregate outstanding principal amount of the Notes or the Lender Representative acting for the applicable Lenders. Any such change, modification, waiver or discharge shall not disproportionately and materially adversely affect any Investor or holder of the notes without the consent of the Person affected thereby.”

5. The Subscription Agreement, the Security Agreement and each Note is hereby amended by adding the following provision thereto:

	a.	Appointment and Authorization. Each Lender hereby irrevocably appoints, designates and authorizes Eaglevision Ventures, Inc., a Delaware corporation, acting as authorized representative (the “Lender Representative”) to take such action on its behalf under the provisions of this Agreement, each other Note Document and the Intercreditor Agreement, and to exercise such powers of each Lender hereunder and thereunder. The Lender Representative shall not have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Note Document or otherwise exist against the Lender Representative. Whether or not explicitly set forth therein, the rights, powers, protections, immunities and indemnities granted to the Lender Representative herein shall apply to any document entered into by the Lender Representative in connection with its role as Lender Representative under the Note Documents and the Intercreditor Agreement. Except to the extent expressly provided otherwise herein, the Lenders holding the majority of the outstanding principal amount of Notes (the “Required Holders”) shall have the right to direct the Lender Representative in all matters concerning the Note Documents and the Intercreditor Agreement.

	b.	Delegation of Duties. The Lender Representative may execute any and all of its duties and exercise its rights and powers under this Agreement, any other Note Document or the Intercreditor Agreement by or through agents, sub-agents, employees or attorneys in fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.

	c.	Authorizations. Each Lender agrees that any action taken by the Lender Representative and the Required Holders in accordance with the provisions of this Agreement the Note Documents and the Intercreditor Agreement, and the exercise by the Lender Representative and Required Holders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized by and binding upon, all Lenders. The Lender Representative is hereby authorized (but not obligated) on behalf of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time to take any action with respect to any property, Collateral or Note Documents and the Intercreditor Agreement which may be necessary to create, perfect and maintain perfected Liens upon the Collateral and the properties granted pursuant to the Note Documents. Each Lender hereby irrevocably authorizes the Lender Representative to release any Lien granted to or held by the Lender Representative upon any Collateral in accordance with the Intercreditor Agreement. Upon request by the Lender Representative at any time, the Required Holders will confirm in writing the Lender Representative’s authority, and will direct the Lender Representative to release particular types or items of the Collateral pursuant to this Section and the Lender Representative shall be entitled to conclusively rely, and shall be fully protected in so relying, upon the authorization of the Required Holders.

	d.	Power of Attorney. In furtherance of the authorizations set forth in this Section, each Lender hereby irrevocably appoints the Lender Representative as its attorney-in-fact, with full power of substitution, for and on behalf of and in the name of each such Lender (i) to enter into the Note Documents and amendments thereto and the Intercreditor Agreement, (ii) to act in the capacities and with the powers and authorities set forth therein and in any respect with respect to such agreements, (iii) to take any and all action with respect to the Collateral, the Note Documents, and the Intercreditor Agreement, (iv) to take any and all action and execute all documents, instruments and agreements in connection with the Intercreditor Agreement and the Note Documents on behalf of each Lender, and (v) to execute instruments of release on behalf of each Lender or to take other action necessary to release Liens or to release any guarantor. This power of attorney shall be liberally, not restrictively, construed so as to give the greatest latitude to the Lender Representative. The powers and authorities herein conferred on the Lender Representative may be exercised by the Lender Representative on more than one occasion and through any authorized Person or agent. The power of attorney conferred by this Section to the Lender Representative is granted for valuable consideration and is coupled with an interest and is irrevocable so long as the obligations under the Note Documents, or any part thereof, shall remain unpaid.

	e.	Liability of Lender Representative. The Lender Representative shall not be liable for any action taken or omitted to be taken under or in connection with this Agreement or any other Note Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein as finally determined by a court of competent jurisdiction). The Lender Representative shall not be liable for any action taken or not taken by it with the consent or at the request or direction of the Required Holders. The Lender Representative shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Lender Representative to liability that is contrary to any Note Document or applicable law.

	f.	Reliance by Lender Representative. The Lender Representative shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, facsimile or email, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons.

6. Application to Note Documents; Ratification. The amendments set forth in this Amendment shall apply to the Subscription Agreement and all outstanding Notes and Warrants, and such Notes and Warrants are hereby amended accordingly. Except as expressly modified by this Amendment, the Note Documents are hereby ratified and affirmed and remain in full force and effect. This Agreement constitutes a “Transaction Document” as defined in the Subscription Agreement.

7. Effectiveness. This Amendment with respect to the Company and any Lender will be effective when signed and delivered by the Company and such Lender.

8. Governing Law. The laws of the State of Nevada shall govern all matters arising out of, in connection with or relating to this Amendment, including, without limitation, its validity, interpretation, construction, performance and enforcement.

9. Counterparts. This Amendment may be signed in any number of counterparts, including by email PDF, DocuSign, or other electronic transmission, each of which shall be deemed an original, and all of which, when taken together, shall constitute one and the same document.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first written above.

COMPANY:

BRANCHOUT FOOD INC.

By:	/s/ Eric Healy
Name:	Eric Healy
Title:	Chief Executive Officer

LENDER REPRESENTATIVE:

EAGLEVISION VENTURES, INC.

By:	/s/ John M. Dalfonsi
Name:	John M. Dalfonsi
Title:	Principal

[Signatures of Lenders on Following Pages]

(Signature Page to Omnibus Amendment)

LENDERS:

(Signature Page to Omnibus Amendment)

Cover	Jul. 23, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 23, 2024
Entity File Number	001-41723
Entity Registrant Name	BRANCHOUT FOOD INC.
Entity Central Index Key	0001962481
Entity Tax Identification Number	87-3980472
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	205 SE Davis Avenue
Entity Address, City or Town	Bend
Entity Address, State or Province	OR
Entity Address, Postal Zip Code	97702
City Area Code	(844)
Local Phone Number	263-6637
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	BOF
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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BOF BranchOut Food Inc