Exhibit
10.3
Execution
Copy
REVENUE
LOAN AND SECURITY AGREEMENT
THIS
REVENUE LOAN AND SECURITY AGREEMENT (as amended from time to time, this “Agreement”) is made as of September 28, 2022
(the “Effective Date”), by and among:
CHRISTOPHER
J. BOEVER
(the
“Key Person”),
STRYVE
FOODS, LLC., a Texas limited liability company
5801
Tennyson Parkway
Suite
275
Plano,
TX 75024
(“Company”),
the
parties listed under the heading “Guarantors” on the signature pages attached hereto (each, a “Guarantor,”
collectively, the “Guarantors;” each of Company and each Guarantor are referred to herein as a “Company Entity,”
and together as the “Company Entities”),
and
DECATHLON
ALPHA V, L.P., a Delaware limited partnership,
1441
West Ute Boulevard, Suite 240
Park
City, UT 84098
(“Lender”).
BACKGROUND
Company
wishes to borrow from Lender and Lender wishes to lend to Company an amount up to the Revenue Loan Amount (as defined below) on the terms
and conditions of this Agreement. In connection with and as a material inducement to Lender to
lend the Revenue Loan Amount to Company, Company desires to make certain representations and warranties to Lender.
AGREEMENT
The
parties hereby agree as follows:
ARTICLE
1
DEFINITIONS AND ACCOUNTING PRINCIPLES
1.1
Definitions. Capitalized words and phrases used in this Agreement but not otherwise defined herein have the definitions given in
Article 11.
1.2
Accounting Principles. The character or amount of any asset, liability, capital account or reserve and of any item of income or expense
required to be determined pursuant to this Agreement, and any consolidation or other accounting computation required to be made pursuant
to this Agreement, and the construction of any definition in this Agreement containing a financial term, will be determined or made,
as the case may be, in accordance with United States generally accepted accounting principles (“GAAP”), to the extent
applicable, unless such principles are inconsistent with the express requirements of this Agreement.
ARTICLE
2
ADVANCE, INTEREST AND PAYMENTS
2.1
Revenue Loan Advance. Upon the terms and subject to the conditions of this Agreement:
(a)
Initial Advance. Lender will make the Initial Advance to Company on the date of Closing.
(b)
Subsequent Advance. Any time beginning 15 days prior to an Advance Period through the end of such Advance Period as set forth on
Schedule 2.1(b), Company may by delivering to Lender a written Advance Request in the form provided by Lender to Company (“Advance
Request”) request one or more Subsequent Advances in accordance with the Schedule 2.1(b) up to a maximum principal amount
for all Advances equal to the Revenue Loan Amount. If all of the conditions set forth on Schedule 2.1(b) are satisfied on the
date of the Advance Request, Lender will advance to Company the requested amount within 15 business days of receipt of such Advance Request.
(c)
Not a Revolving Facility. Company acknowledges and agrees that the credit facility granted hereunder is a multiple advance facility,
but is not a revolving facility, and Company may not borrow, repay and re-borrow Advances.
2.2
Interest. Interest on the Amount Advanced shall accrue from and after the date of Closing at such rate as is necessary to generate
an amount equal to the Interest, provided, however, in no case shall such rate exceed the maximum rate allowable under
applicable law.
2.3
Promise to Pay. Company promises to pay to the order of Lender, or its assigns in lawful money of the United States of America, for
application against the Amount Advanced, together with the Interest as follows (with all payments
to be applied first to fees and expenses incurred by Lender, then to accrued interest, and finally to principal, which Lender
shall enter in its records of payments made by Company, and such records will be deemed conclusive evidence of the subject matter thereof
absent manifest error):
(a)
Maturity. The aggregate outstanding and unpaid Amount Advanced and Interest will be immediately due on the Maturity Date.
(b)
Monthly Payments. Commencing on the Payment Commencement Date and continuing thereafter until the earlier of (i) the Maturity Date,
and (ii) prepayment in full of the Obligations, Company shall pay to Lender, on the 15th day of each month (or the next business day
if such date is not a business day) (each a “Payment Date”), by wire transfer or Automated Clearing House (ACH) transfer
to the Lender Account described on Schedule 2.3(b)(1) an amount equal to the product of (i) all Revenue for the month preceding
the immediately preceding month (by way of example only, the December 15 payments would be based upon the October Revenue) multiplied
by (ii) the Applicable Revenue Percentage. Notwithstanding anything to the contrary in the preceding sentence, payments made by ACH transfer
must be initiated and received no later than the applicable Payment Date. Lender, in its sole discretion, may apply any monthly payment
first to offset any outstanding invoices for legal or other fees that are 60 or more days overdue and then toward satisfaction of the
monthly payment due on such Payment Date. Lender shall notify Company of any such offsets within five (5) business days. If any monthly
payment due pursuant to this Agreement is not paid when due, then Company will be assessed on the third business day following the applicable
Payment Date, if such monthly payment has not been paid and received by Lender, automatically and without notice from Lender, a service
fee of $500 payable to Lender (or other loan servicing agent). All service fees for missed payments are due on the day they arise. Successive
service fees will be assessed and due on the third business day following the 15th day of each month until Company has paid such past
due amounts. All service fees will bear interest at the rate set forth in Section 12.7 from the date they arise. A pro-forma payment
schedule that is based on Company’s financial projections is attached as Schedule 2.3(b)(2).
(c)
Annual Payment Cap. Notwithstanding Section 2.3(b), for each calendar year during the term of this Agreement, Company will
not be required to make aggregate monthly payments under Section 2.3(b) in excess of the amount calculated as (i) 1.2, multiplied
by (ii) an amount equal to the sum of the product of (A) the aggregate projected Revenue for all months during such calendar year (as
set forth on Schedule 2.3(b)(2)) multiplied by (B) the Applicable Revenue Percentage, for each month during such calendar year
(the “Annual Payment Cap”). Once the monthly payments received by Lender for a calendar year equal the Annual Payment Cap,
Company will not be obligated to make additional monthly payments pursuant to Section 2.3(b) for the remainder of such calendar
year and the next monthly payment due under Section 2.3(b) would be payable on January 15th of the following year.
(d)
Prepayment. Company may at its option prepay the Amount Advanced balance and unpaid Interest on any Payment Date without penalty
or premium.
(e)
Termination of Payment Obligation. The payment obligation shall terminate upon Lender receiving payments from Company equal to the
Amount Advanced plus the Interest and all other amounts (other than pursuant to Section 9.1) due pursuant to this Agreement (the
“Payoff Date”).
2.4
Security Interest. Company hereby assigns and grants to Lender, a continuing security interest in all of its right, title and interest
in and to the Collateral. Upon indefeasible payment in full of the Obligations and termination of Lender’s obligation to make Advances
hereunder, Lender shall promptly release such security interest. Company hereby authorizes Lender to take all such actions as are reasonably
necessary to, in Lender’s sole discretion, perfect its security interest in the Collateral, including the filing of such financing
statements and amendments and continuations thereof as may be useful in order to perfect such security interest and, if any Collateral
is covered by a certificate of title, Company will from time to time upon request of Lender execute such documents as may be required
to have such security interest properly noted on a certificate of title. In addition, Company authorizes Lender to file, from time to
time, (and reaffirms its authorization of the filing of any financing statements filed prior to the date of this Agreement) such financing
statements against the Collateral described as “all assets” or the like as Lender reasonably deems necessary or useful to
perfect such security interest. The security interest granted to Lender is subordinate to any security interest granted to secure the
Senior Indebtedness.
2.5
Guaranty and Security Interest. Each Guarantor, jointly and severally with each other Guarantor, hereby irrevocably, unconditionally
and absolutely guarantees the punctual payment in full when due and the performance of the Obligations, in accordance with the terms
of this Agreement (with respect to each Guarantor, the “Guaranty”). Subject to the foregoing, each Guarantor hereby
further agrees that if Company fails to pay in full when due (whether at stated maturity, by acceleration or otherwise) all or any part
of the Obligations, each Guarantor will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any Obligations, it will promptly pay the same in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of that extension or renewal. Each Guaranty is a continuing guaranty and shall apply to each
Guarantor and all Obligations whenever arising and regardless of any intermediate payment or discharge in part thereof. As security for
the performance of each Guarantor’s Guaranty obligations, each Guarantor hereby assigns and grants to Lender a continuing security
interest in all of its right, title and interest in and to the Collateral of such Guarantor (in each case, substituting the name of the
applicable Guarantor for the “Company” on Schedule 11.2) subject to the same rights and obligations as set forth in
Section 2.4.
2.6
Revival and Reinstatement of Indebtedness. If
the payment of all or any part of the Obligations by Company or the transfer to Lender of any Collateral or other property should for
any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights (a “Voidable
Transfer”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do
so upon the advice of its counsel, then the amount of such Voidable Transfer or the amount of such Voidable Transfer that Lender is required
or elects to repay or restore, including all reasonable out-of-pocket costs, expenses and attorneys’ fees incurred by Lender in
connection therewith, and the Obligations shall automatically be revived, reinstated and restored by such amount and shall exist as though
such Voidable Transfer had never been made.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and Warranties of the Company Entities. As a material inducement to Lender to enter into this Agreement and to make
one or more Advances to Company, each Company Entity, jointly and severally, represents and warrants to Lender as follows:
(a)
Organization, Good Standing and Qualification. Each Company Entity is duly organized, validly existing and in good standing under
the laws of the state of its organization. Each Company Entity is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a Material Adverse Effect. Each Company Entity has all required power and
authority necessary to own and operate its properties, to carry on its business as now conducted and presently proposed to be conducted
and to carry out the transactions contemplated by this Agreement.
(b)
Subsidiaries. Schedule 3.1(b) sets forth the parent, the parent of the parent and each subsidiary of the Company. Except as set forth
on Schedule 3.1(b) (including any Company Entity that is a subsidiary of another Company Entity), no Company Entity presently
owns or controls, directly or indirectly, or holds any rights to acquire, any interest in any other entity. No Company Entity is a participant
in any joint venture, partnership or similar arrangement.
(c)
Authorization. All action necessary on the part of each Company Entity, its officers, directors, managers and members, for the authorization,
execution and delivery of the Transaction Documents, the performance of all Obligations of such Company Entity hereunder and thereunder
has been taken or will be taken prior to the Closing. The Transaction Documents and all other agreements contemplated thereby to which
a Company Entity is a party constitute valid and legally binding obligations of such Company Entity, enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) to the extent the indemnification provisions may be limited by applicable laws.
(d)
Litigation. Except as set forth on Schedule 3.1(d), there is no action, suit, proceeding or investigation pending or, to Company’s
Knowledge, threatened against any Company Entity. The foregoing includes, without limitation, actions, suits, proceedings or investigations
pending or, to Company’s Knowledge, threatened involving the prior employment of any Company Entity’s employees or their
obligations under any agreements with prior employers. No Company Entity is subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by a Company
Entity currently pending or that a Company Entity intends to initiate.
(e)
Compliance with Other Instruments. No Company Entity is: (i) in violation of or default under any provision of its organizational
documents, as amended, (ii) to its Knowledge in violation of or default under, in any material respect, any instrument, judgment, order,
writ, decree or contract to which it is a party or by which it is bound, or (iii) to its Knowledge in violation of or default under,
in any material respect, any provision of any federal or state statute, rule or regulation applicable to such Company Entity. The execution,
delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby will not result in
any such violation, or be in material conflict with or constitute, with or without the passage of time and giving of notice, either a
material default under any such provision, instrument, judgment, order, writ, decree or contract or an event that results in the creation
of any Lien, charge or encumbrance upon any assets of a Company Entity or the suspension, revocation, impairment, forfeiture or non-renewal
of any permit, license, authorization or approval applicable to a Company Entity, its business or operations or any of its assets or
properties, other than the security interests arising under the Transaction Documents.
(f)
Affiliate Transactions. No employee, member, manager, officer or director of a Company Entity or member of his or her immediate family
is indebted to a Company Entity, nor is a Company Entity indebted (or committed to make loans or extend or guarantee credit) to any of
them. To each Company Entity’s Knowledge, except as set forth in Schedule 3.1(f), none of such persons has any direct or
indirect ownership interest in any firm or corporation with which a Company Entity is affiliated or with which a Company Entity has a
material business relationship (other than a Company Entity), or any firm or corporation that competes with any Company Entity, except
that employees, shareholders, officers or directors of a Company Entity and members of their immediate families may own up to 2% of the
outstanding stock of publicly traded companies or diversified private funds owning multiple companies that may compete with a Company
Entity.
(g)
Financial Statements. The consolidated financial statements for Company’s most recently completed fiscal year and year-to-date
for the current year as of the most recently ended month are attached hereto as Schedule 3.1(g), are correct in all material respects,
and fairly present Company’s operating results and financial conditions as of dates and for the periods indicated therein. As of
the dates of such financial statements, no Company Entity had any material obligation, contingent liability, liability for Taxes or long-term
lease obligation that is not reflected in such financial statements or the notes thereto. Since the date of such financial statements:
(i) each Company Entity has operated its businesses only in the ordinary course; (ii) there has not been individually or in the aggregate
any change that may result in a Material Adverse Effect; (iii) no Company Entity has guaranteed any Indebtedness of any other Person;
(iv) no Company Entity has any Indebtedness for borrowed money other than pursuant to, or as permitted by, this Agreement; and (v) no
event has occurred that could have a Material Adverse Effect. Each Company Entity is solvent.
(h)
Tax Returns; Taxes. (i) Each Company Entity has timely filed all material returns, declarations, reports, estimates, information
returns, and statements, including any schedules and amendments to such documents (“Returns”), required to be filed
or sent by it in respect of any Taxes or required to be filed or sent by it by any Taxing authority known to the Company as having jurisdiction;
(ii) all such Returns are complete and accurate in all material respects; (iii) each Company Entity has timely and properly paid all
Taxes required to be paid by it; and (iv) each Company Entity has complied, in all material respects, with all applicable laws, rules,
and regulations relating to the collection or withholding of Taxes from third parties and the payment thereof; (v) there are no Liens
for Taxes upon any assets of any Company Entity, except such as are being contested in good faith; (vi) no deficiency for any Taxes has
been asserted, assessed or proposed in writing against any Company Entity that has not been resolved and paid in full or is not being
contested in good faith; (vii) no waiver, extension or comparable consent given by any Company Entity regarding the application of the
statute of limitations with respect to any Taxes or Returns is outstanding, nor is any request for any such waiver or consent pending;
and (viii) except as set forth on Schedule 3.1(h), there has been no Tax audit or other administrative proceeding or court proceeding
with regard to any Taxes or Returns, nor is any such Tax audit or other proceeding pending, nor has there been any notice to any Company
Entity by any Taxing authority regarding any such Tax audit or other proceeding.
(i)
Permits. Each Company Entity has all franchises, permits, licenses and any similar authority necessary for the conduct of its business
the lack of which would have a Material Adverse Effect, and each Company Entity believes it can obtain, without undue burden or expense,
any similar authority for the conduct of its business as planned to be conducted. No Company Entity is in default in any material respect
under any of such franchises, permits, licenses or other similar authority.
(j)
Compliance with Laws. Each Company Entity, the operation of its business and all premises controlled by such Company Entity is in
material compliance with all applicable laws and orders or directives of any governmental authorities having jurisdiction over such Company
Entity, its properties or operations, except where the failure to comply could not reasonably be expected to have a Material Adverse
Effect. No Company Entity has received any citation, directive, letter or other communication (whether oral or written) or any notice
of any proceeding, claim, lawsuit or investigation, from any Person arising out of such Company Entity’s ownership or occupation
of its premises or the conduct of its operations.
(k)
Disclosure. To its Knowledge, each Company Entity has provided Lender with all the information available to it that Lender has requested.
To the best of each Company Entity’s Knowledge, neither this Agreement (including all the exhibits attached hereto) nor any certificates
delivered in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading in light of the circumstances under which they were made.
(l)
Title to Property and Assets. The property and assets owned by a Company Entity are owned solely by such Company Entity free and
clear of all mortgages, liens, loans and encumbrances, other than Permitted Liens. With respect to a Company Entity’s leased property
and assets, such Company Entity is in compliance with the applicable leases in all material respects and, to such Company Entity’s
Knowledge, it holds valid leasehold rights in and to such leased property and assets. There are no financing statements reflecting the
perfection of any security interest in favor of any creditor other than Lender covering all or any part of any Company Entity’s
assets in existence or on file in any public office other than those representing the Permitted Liens.
(m)
Name and Location of Company. Each Company Entity has provided to Lender in writing its legal name, state of organization, entity
type, and chief executive office address. Company maintains all of its books and records regarding its assets at its chief executive
office. Each Company Entity has such business and financial experience as is necessary to enable it to protect its interests in connection
with the transactions contemplated by this Agreement.
(n)
Collateral. Each Company Entity has full power
and authority to grant a first-priority security interest on the Collateral pursuant to this Agreement and no disability or contractual
obligation exists that would prohibit any Company Entity from pledging the Collateral pursuant to this Agreement. There are no subscriptions,
warrants, rights of first refusal, or other restrictions on transfer relative to, or options exercisable with respect to, the Collateral.
The Collateral is not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and no
Company Entity knows of any reasonable grounds for the institution of any such proceedings. The Collateral consisting of equipment and
inventory is in good operating condition and repair, subject to ordinary wear and tear, and the Company Entity owning such Collateral
has made all economically reasonable and necessary repairs thereto. The Collateral consisting of inventory is of good and marketable
quality, free from defects, except for inventory for which adequate reserves have been made in accordance with GAAP.
(o)
Intellectual Property. Each Company Entity owns
or is a licensee of all intellectual property rights used in or necessary for the conduct of its business and operations, as currently
conducted and as proposed to be conducted, or that are material to the condition (financial or otherwise), business, or operations of
such Company Entity.
(p)
Customers and Suppliers. Except as set forth on
Schedule 3.1(p), (i) none of the material customers or material suppliers of a Company Entity have indicated to any Company
Entity that they intend to terminate, discontinue, or materially reduce their business relationship with such Company Entity, and (ii)
there have been no developments with any customers or suppliers of any Company Entity that may serve as the basis for such customer or
supplier to materially change its relationship with a Company Entity. Except as set forth on Schedule 3.1(p), no Company Entity
has any overdue payables to any supplier for services, materials, equipment or other products previously provided to any Company Entity.
(q)
Ordinary Course of Business. Each Company
Entity intends to run its business in the ordinary course of business and will continue to use commercially reasonable efforts to preserve
substantially intact the business organization and assets of the Company Entities and preserve the current relationships of the Company
Entities with customers, suppliers and other persons with which any Company Entity has significant business relations.
(r)
No Operations; Holding Company. Neither Stryve Foods, Inc. nor Andina Holdings, LLC (i) hold any assets, interests, or investments,
other than with respect to their direct or indirect ownership interest in the Company, (ii) does not have any employees, (iii) does not
conduct any business, other than business incidental to their direct or indirect ownership in the Company, and (iv) has no liabilities
or obligations whatsoever other than related to their direct or indirect ownership in the Company.
3.2
[Reserved]
ARTICLE
4
CLOSING
4.1
Closings. The closing of the Initial Advance pursuant to this Agreement (the “Closing”) shall take place at the
offices of Fredrikson & Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402-1425, by an electronic exchange of
executed counterpart copies of this Agreement and the other Transaction Documents between counsel for Company and Lender. At the Closing,
the Company Entities and Lender shall exchange signature pages to this Agreement by facsimile, portable document format (.pdf), DocuSign
or other electronic transmission, and Lender will thereafter make the Initial Advance. Distributions of proceeds of the Initial Advance
pursuant to this Section 4.1 shall be made in accordance with Schedule 4.1 to the parties set forth thereon by wire transfer
and, in Lender’s sole discretion, are subject to off-set of the Company’s Share of Transaction Costs.
4.2
Lender’s Conditions to Closing. Lender’s Advances pursuant to this Agreement are subject to the condition that on or
before the Closing, Lender has received evidence of the following actions and or executed original copies of the following documents,
in form and substance satisfactory to Lender:
(a)
a Deposit Account Control Agreement for each Deposit Account maintained by Company;
(b)
a copy of resolutions duly adopted by the governing body (e.g., board of directors, board of governors, managing members,
general partner or the like) (the “Governing Body”) of each Company Entity authorizing this Agreement and the transactions
contemplated hereby;
(c)
a Certificate of Perfection from Company with respect to each Company Entity in the form provided by Lender to Company; and
(d)
a copy of Company’s current operating budget including, without limitation, projected revenues, expenses, wages, and uses of
loan proceeds, and if applicable, approved by Company’s Governing Body.
4.3
Subsequent Closings. The closing of each Subsequent
Advance pursuant to this Agreement, if any (each, a “Subsequent Closing”) shall take place at the offices of Fredrikson
& Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402-1425 by exchange of an Advance Request, including a
Subsequent Closing certificate executed by the Key Person in form and substance satisfactory to Lender certifying that the conditions
to the Subsequent Advance set forth on Schedule 2.1(b) have been satisfied.
ARTICLE
5
AFFIRMATIVE COVENANTS
Unless
otherwise agreed in writing by Lender, each Company Entity shall, so long as any of the Obligations remain unsatisfied, comply with the
covenants in this Article 5.
5.1
Financial Information; Reporting.
(a)
Standard Reporting. Company must deliver the following reports (the “Standard Reports”) to Lender within the time
periods specified below:
(i)
As directed by Lender, Company must either (A) complete and submit Lender’s online financial data questionnaire (each, a “Monthly
Questionnaire”) within 15 days after the end of each month, which fully and accurately reports such information about the most
recently completed month, which information shall be subject to audit review and adjustment, or (B) provide automated online access (read
only) to its QuickBooks or other accounting software system through a third-party service provider acceptable to Lender (such as Codat.io)
enabling Lender to view Company’s accounts receivable, accounts payable, profit and loss, balance sheet, and other financial information;
(ii)
Company’s annual audited consolidated financial statements (balance sheet, cash flow statement and income statement), which will
be audited by Company’s accounting firm (the “Audited Financial Statements”) and prepared in all material respects,
in accordance with GAAP, within 10 days of Company receiving the Audited Financial Statements;
(iii)
Company’s annual internally prepared consolidated financial statements (balance sheet, cash flow statement, and income statement),
detailed on a monthly basis and prepared in accordance with GAAP due within 90 days after the end of each fiscal year (the “Financial
Statements”);
(iv)
Copies of Company’s consolidated quarterly Financial Statements prepared by Company’s
accounting firm, in all material respects, in accordance with GAAP, except for the omission of footnotes and subject to normal adjustments
due within 60 days after the end of each fiscal quarter;
(v)
Company’s Tax returns within 10 days of filing with
the applicable Taxing authority;
(vi)
Lender’s annual compliance survey within 30 days after Company receives the survey from Lender;
and
(vii)
All of Company’s required SEC filings.
(b)
Nonstandard Reporting (upon request only). From time to time, and only if requested by Lender, Company will promptly deliver the
following reports to Lender:
(i)
Copies of any reports that Company sends to any of its equity holders (as an equity holder);
(ii)
Company’s consolidated annual operating and capital expenditure budgets and cash flow forecast
for the year presented on a monthly basis;
(iii)
Copies of any material notices to or from any other borrowed money lender to Company;
(iv)
Such other information and financial reports with respect to the Collateral and/or the financial condition and operations of Company
as Lender may reasonably request, including Company’s books and records; and
(v)
Copies of Company’s monthly consolidated Financial Statements as of the end of such month
prepared by Company, in all material respects, in accordance with GAAP, except for the omission of footnotes and subject to normal year-end
adjustments.
(c)
Service Charges for Late Periodic Reports. Each time Company fails to submit a Standard Report on or before its due date, Company
will, automatically and without notice, be assessed a $500 service charge. Successive service charges will be assessed and due on the
15th day of each month until Company has submitted all past due Standard Reports. All service charges will bear interest at the rate
set forth in Section 12.7 from the date they arise.
5.2
Maintenance of Corporate Existence and Properties.
(a)
Each Company Entity will at all times do or cause to be done all things necessary to maintain, preserve and renew its charter and
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;
(b)
Each Company Entity will provide or cause to be provided for itself insurance against loss or damage of the kinds customarily insured
against by businesses similarly situated and located, with reputable insurers, in such amounts, with such deductibles and by such methods
as are adequate in the judgment of such Company Entity’s Governing Body, and in any event in amounts not less than amounts generally
maintained by other companies of similar size engaged in similar businesses;
(c)
Each Company Entity will keep true books of records and accounts in which full and correct entries will be made of its business transactions,
and will reflect in its financial statements adequate accruals and reserves, all in accordance with GAAP; and
(d)
Each Company Entity will comply in all material respects with all applicable laws, statutes, rules, regulations, orders and restrictions
in respect of the conduct of its business and the ownership of its properties, except such as are being contested in good faith.
5.3
Payment of Indebtedness, Taxes and Claims. Each Company Entity will pay (i) its Indebtedness, the Obligations, and all other obligations
promptly and in accordance with their respective terms; (ii) file all Tax returns and reports which are required by law to be filed by
it; (iii) pay before they become delinquent, all Taxes (including payroll Taxes), assessments and governmental charges and levies imposed
upon it or its property, unless being contested in good faith; and (iv) pay all claims or demands of any kind (including but not limited
to those of suppliers, mechanics, carriers, warehousemen, landlords and other like persons) which, if unpaid, might result in the creation
of a lien upon its property other than a Permitted Lien.
5.4
Nature of Relationship. Lender is entering into this Agreement and making one or more advances to Company based on its confidence
in the Key Person and the Key Person’s integrity and ability to manage the Company Entities. Given the Key Person’s experience
and expertise operating the Company Entities and his greater access to information, Lender is entrusting the Key Person with broad discretion
in the control and management of the Company Entities; provided that Key Person is not a Guarantor and is not otherwise personally liable
for the Obligations. In the event that Key Person ceases to be employed by any Company Entity, for any reason, Company will use their
commercially reasonable efforts to identify an acceptable replacement Key Person. Company will not, without Lender’s prior written
consent, hire or compensate a replacement Key Person on terms substantially different from those applicable to similarly situated executives
in the market applicable to Company.
5.5
Litigation and Other Notices. Company shall furnish to Lender written notice of the following promptly after any officer of any Company
Entity becomes aware of the same:
(a)
any Event of Default or the occurrence of any event or condition that would likely result in an Event of Default, specifying the
nature and extent thereof and the corrective action (if any) proposed to be taken with respect thereto; provided, however,
that Company shall provide written notice to Lender not later than 48 hours prior to the occurrence of an Event of Default described
in Section 7.3 of this Agreement;
(b)
the filing or commencement of, or receipt of notice of intention of any Person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any governmental authority, against any Company Entity which has had or would likely have
a Material Adverse Effect;
(c)
any development, event or condition affecting or relating to any Company Entity that has had, or would likely have, a Material Adverse
Effect; provided, however, notice for events which occur on a frequent basis may be aggregated into one monthly or quarterly
notice as agreed upon in writing by Lender; and
(d)
the issuance by any governmental authority of any injunction, order or decision, or the entry by any Company Entity into an agreement
with any governmental agency, materially restricting the business of any Company Entity or concerning any material business practice
of any Company Entity; provided, however, notices regarding regulatory changes will be provided only quarterly.
5.6
Inspection. Each Company Entity shall permit Lender, at Lender’s expense, to visit and inspect such Company Entity’s
properties; examine its books of account and records; and discuss such Company Entity’s affairs, finances, and accounts with its
officers during normal business hours of such Company Entity as may be reasonably requested by Lender; provided, however,
that such Company Entity shall not be obligated pursuant to this Section 5.6 to provide access to any information that it reasonably
and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement,
in form acceptable to Company) or the disclosure of which would or could reasonably be expected to adversely affect the attorney-client
privilege between Company and its counsel, and provided, further, that, to the extent that no Event of Default has occurred and is continuing,
Lender shall not conduct more than two (2) such inspections in any 12-month period.
5.7
Audit Right.
(a)
Upon reasonable advance notice from Lender, Company shall, not more than once every 12 months, make the financial books and records
of each Company Entity available to Lender and its designated representatives for review and audit so that Lender may verify (i) the
amount of payments made by Company to Lender and (ii) the aggregate Revenues. Lender shall provide the full written results of such review
and audit to Company within 10 days after the completion of such review and audit. Subject in each case to Section 5.7(b), in
the event that a review and audit by Lender or its designated representatives results in a determination that the amounts that were paid
to Lender (A) were underpaid by less than 10%, Company shall pay to Lender the amount unpaid plus interest at the rate of 1% per month
on the amount unpaid, but Lender shall bear all of the costs, fees and expenses incurred by Lender as a result of the review and audit
or (B) were underpaid by 10% or more, Company shall pay to Lender, in addition to the amount unpaid plus interest at the rate of 1% per
month on the amount unpaid, all of the costs, fees and expenses actually incurred by Lender as a result of the review and audit.
(b)
Notwithstanding the foregoing, if Company disputes or disagrees with any of the results of Lender’s review and audit, Company
may deliver to Lender, within 15 days of its receipt of the written results of Lender’s review and audit, a written dispute notice
of its specific objections to Lender’s review and audit (a “Dispute Notice”). Upon the delivery by Company of
a Dispute Notice, Company and Lender shall in good faith, and in consultation with their respective accountants, work together to resolve
all disputed issues set forth in such Dispute Notice. To the extent that the disputed items set forth in the Dispute Notice remain unresolved
after 20 business days following the receipt of the Dispute Notice, Company and Lender shall submit such unresolved items to an accounting
firm of national or regional reputation that is mutually agreed upon by Company and Lender (the “Accountants”). If
the issues in dispute are submitted to the Accountants for resolution: (i) Company and Lender shall each furnish to the Accountants such
documents and information relating to the disputed issues as the Accountants may reasonably request and are available to that party and
shall be afforded the opportunity to present to the Accountants any material relating to the review and audit in question and to discuss
such review and audit with the Accountants; (ii) the determination by the Accountants of the actual amounts that should have been paid
to Lender during the period subject to review and audit (the “Settled Audit Amount”), as set forth in a notice delivered
to both parties by the Accountants within 30 days of the Accountants’ engagement, will be binding and conclusive on the parties;
and (iii) Company and Lender shall bear the costs, fees and expenses of the Accountants for such determination in the same manner they
would bear the costs, fees and expenses of Lender for the review and audit in accordance with Section 5.7(a). Within 10 business
days following the determination of the Settled Audit Amount, the appropriate payments shall be made by Company, if any, in accordance
with Section 5.7(a), based solely on the Settled Audit Amount.
5.8
Subsidiaries. Company shall cause all of the Company Entities to comply with the provisions of Article 5 and Article 6.
5.9
Further Assurances.
(a)
Each Company Entity will at any time or times promptly execute, such instruments and perform such acts as Lender may reasonably request
to establish and maintain an attached and perfected security interest in the Collateral and will pay all costs of filing and recording.
(b)
Company will reimburse Lender for all reasonable costs, fees and expenses (including attorneys’ fees) for the perfection and
the continuation of the perfection of Lender’s security interest in the Collateral and the cost of any terminations, extensions,
renewals, amendments and releases thereof, and shall promptly pay all reasonable costs, fees and expenses of any record searches for
financing statements Lender may reasonably require.
5.10
Records Regarding Collateral. Each Company Entity shall (a) maintain all records, instruments or other documentation evidencing or
otherwise relating to the Collateral either electronically or at Company’s chief executive office and (b) will not change such
Company Entity’s name, state of organization, or location of its chief executive office, without the prior written consent of Lender
(which consent shall not be unreasonably withheld or delayed).
5.11
Company Bank Account. Company shall use its best efforts to: (a) maintain a banking relationship with Company Bank or other commercial
bank; (b) ensure that all Revenue shall be deposited into an account described in Schedule 5.11, or successor account thereto;
(c) ensure that such account has a balance in excess of the amount due to Lender on each date that a payment pursuant to this Agreement
is due; and (d) ensure that the Applicable Revenue Percentage is transferred to Lender Account in accordance with this Agreement. Company
shall within five business days notify Lender in writing of any change in its banking relationship (whether such change is with Company
Bank or to another bank) and shall provide Lender with new contact information and account details for all new bank accounts.
5.12
Background Check. It is agreed that prior to any person assuming any office, position, or responsibilities
currently held by the Key Person, Company will use commercially reasonable efforts to ensure that such person provides Lender with written
authorization to conduct a background check within 30 days after such person’s appointment; provided that such background
check shall only be for informational purposes and shall not give Lender any rights to veto such replacement Key Person. Failure by such
person to provide written consent within such 30 day period will be considered an Event of Default under Section 7.2 of this Agreement.
5.13
Compliance. Each Company Entity shall comply with the requirements of all applicable state and federal laws, and of all rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be subject, including, without limitation, Section 326 of the
USA Patriot Act of 2001, 31 U.S.C. Section 5318.
5.14
[Reserved]
5.15
[Reserved]
5.16
Registration of Intellectual Property Rights.
Each Company Entity will register with the United States Patent and Trademark Office or the United States Copyright Office its intellectual
property rights including revisions or additions thereto with any product before the sale or licensing of the product to any third party,
in each case to the extent registrable and the Governing Body of such Company Entity in good faith deems appropriate for the development
of such Company Entity’s business and in the best interest of the Company Entity and
its equity holders. To the extent that the Governing Body of a Company Entity in good faith determines appropriate for the development
of such Company Entity’s business and in the best interests of Company and its equity holders, each such Company Entity will: (i)
protect, defend, and maintain the validity and enforceability of the intellectual property rights and promptly advise Lender in writing
of any known or claimed infringements thereof, and (ii) not allow any intellectual property rights to be abandoned, forfeited or dedicated
to the public without Lender’s prior written consent.
5.17
Senior Indebtedness Cap. In no case shall the
aggregate amount of all Senior Indebtedness exceed an amount equal $10,000,000 (the “Senior Indebtedness Cap”). Notwithstanding
the foregoing, the Senior Indebtedness Cap shall be adjusted as follows based upon the financial performance of the Company.
(a)
If the Company achieves a monthly net loss of less than or equal to ($200,000) for three consecutive
months and for the same three months achieves a gross margin of at least 35%, the Senior Indebtedness Cap shall increase to $12,000,000.
(b)
If the Company achieves a positively monthly EBITDA of at least $1 for three consecutive months
and for the same three months achieves a gross margin of at least 40%, the Senior Indebtedness Cap shall increase to $15,000,000.
For
the avoidance of doubt, if the Company achieves either of the Senior Indebtedness Cap increases noted above, the new Senior Indebtedness
Cap shall be applicable until all Obligations are satisfied.
5.18
No Operations; Holding Company.
Neither Stryve Foods, Inc. nor Andina Holdings, LLC shall (i) hold any assets, interests, or investments, other than with respect to
their direct or indirect ownership interest in the Company, (ii) does not have any employees, (iii) does not conduct any business, other
than business incidental to their direct or indirect ownership in the Company, and (iv) has no liabilities or obligations whatsoever
other than related to their direct or indirect ownership in the Company.
5.19
No distributions. No Company Entity shall make any cash distributions to Stryve Foods, Inc. or Andina Holdings, LLC; provided, however,
with respect to each calendar year that Stryve Foods, Inc. or Andina Holdings, LLC is treated as a partnership for federal income tax
purposes, a Company Entity may make cash distributions to Stryve Foods, Inc. and Andina Holdings, LLC to enable the holders of membership
or other ownership interests of Stryve Foods, Inc. or Andina Holdings, LLC to pay the aggregate federal, state and local income taxes
which are payable by such holders for such calendar year, based upon the highest marginal federal, state and local income tax rate in
effect at such time., on the taxable income derived from Stryve Foods, Inc. and Andina Holdings, LLC.
ARTICLE
6
NEGATIVE COVENANTS
Unless
otherwise agreed in writing by Lender, each Company Entity shall, so long as any of the Obligations remain unsatisfied, comply with the
covenants in this Article 6.
6.1
Indebtedness.
(a)
No Company Entity will (i) create, incur, assume, guarantee, or otherwise become liable for any incremental Indebtedness after the
date of this Agreement other than Permitted Indebtedness, (ii) create any Lien on any of its assets other than Permitted Liens, or (iii)
waive, forgive, release, amend, terminate or fail to enforce any material amount owed to a Company Entity or other right held by a Company
Entity.
(b)
Without the prior written approval of Lender, Company will not (i) increase the advance rate or interest rate in respect of any Indebtedness,
(ii) increase the maximum principal amount of any Indebtedness, or (iii) shorten the dates upon which payments of principal or interest
of any Indebtedness are due.
6.2
Restricted Payments.
(a)
The Company will not, at any time, make or become obligated to make, directly or indirectly, any: (i) payment or distribution in
respect of any capital stock, units or other equity interests in any Company; (ii) payment or distribution on account of the purchase,
repurchase, redemption or other retirement of any capital stock, units or other interests in any Company; (iii) loans or advances to
any affiliate, stockholder, or member, including, without limitation, any officer or member of the Governing Body of any Company Entity;
and/or (iv) investment in third parties other than in money market funds for purposes of cash management and will not permit any Company
Entity to make any such investment.
(b)
Notwithstanding Section 6.2(a), Company may pay reasonable compensation (including reasonable salary, bonus and equity compensation
for a company of similar size, financial condition, location and industry), reimburse expenses incurred on behalf of a Company Entity,
other than amounts contemplated in the projections and pro forma financials provided by Company to Lender on August 26, 2022, and, if
Company is, for Tax purposes, a partnership (including a limited liability company Taxed as a partnership) or Subchapter S corporation,
distributions in such amounts as reasonably determined to be necessary to allow equity holders to pay federal, state and local income
Taxes with respect to the income allocated to such equity holder from Company with respect to the applicable Tax year.
6.3
Ownership; Maintenance of Collateral. No Company Entity shall (a) transfer or otherwise dispose of all or any portion of the Collateral,
other than (i) in the ordinary course of business, (ii) to the extent that (A) such Collateral is exchanged for credit against the purchase
price of similar replacement property or (B) the proceeds of such disposition are reasonably promptly applied to the purchase price of
such replacement property (b) enter into any lease or license for the use of the Collateral without fair and reasonable consideration,
or (c) waive, forgive, release, amend, terminate or fail to enforce any material contract to which Company is a party or other right
held by Company. Each Company Entity shall keep the Collateral free and clear of all Liens of every kind or character (except for Permitted
Liens). Each Company Entity shall promptly pay when due all license fees, registration fees, Taxes, assessments and other charges which
may be levied upon or assessed against the ownership, possession or uses of the Collateral or any portion thereof, except as otherwise
permitted in this Agreement. Each Company Entity shall keep accurate and complete records of the Collateral and shall, upon Lender’s
reasonable request, promptly affix on any Collateral constituting chattel paper, a notice, in form satisfactory to Lender, of Lender’s
security interest created hereunder. Each Company Entity shall use commercially reasonable efforts to maintain all Collateral in good
working order, subject to ordinary wear and tear, and, with respect to intellectual property, make such filings, prosecute such applications,
pay necessary fees (including maintenance fees), and take such other actions as necessary to properly maintain and protect such Company
Entity’s intellectual property rights. For the avoidance of doubt, no Company Entity shall, without Lender’s prior written
consent, sell or otherwise transfer or cease operations of any business unit, operating division, or other material portion of such Company
Entity’s business operations, unless Company shall determine, in its reasonable business judgment, that such operations are not
material to the conduct of such Company Entity’s business.
6.4
New Subsidiaries. No Company Entity will create or permit to exist any new subsidiary or joint venture without the prior written
consent of Lender. If Lender consents to the formation of any subsidiary or joint venture after the date of this Agreement (each, an
“Approved Subsidiary”), then such Approved Subsidiary (a) shall execute and deliver such joinder and other documents
as Lender shall reasonably request, and (b) will be considered a Guarantor and Company Entity for all purposes under this Agreement.
By executing and delivering the joinder required under clause (a) above, such Approved Subsidiary will be deemed to have granted a security
interest as contemplated under Section 2.4 of this Agreement in all of such Approved Subsidiary’s assets and Lender will
be permitted to take such actions and make such filings as are contemplated in Section 2.4 of this Agreement with respect to such
Approved Subsidiary.
6.5
Affiliate Transactions. No Company Entity will enter into any transaction of any kind with any Affiliate of a Company Entity, whether
or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to such Company Entity
as would be obtainable by such Company Entity at the time in a comparable arm’s-length transaction with a Person other than an
Affiliate; provided that the foregoing restriction shall not apply to (a) transactions between or among the Company Entities,
and (b) payments permitted by Section 6.2.
ARTICLE
7
EVENTS OF DEFAULT
The
term “Event of Default” means the occurrence of any one or more of the following events:
7.1
Payment of Obligations. The failure or refusal of Company to pay any portion of the Obligations
on the due date in accordance with the terms of the Transaction Documents (each, a “Payment Event of Default”); provided
that, subject to Section 8.2 and Section 12.7 hereof, Company will have 15 days following the due date thereof to cure
any such Payment Event of Default.
7.2
Other Covenants. The failure or refusal of any Company Entity to punctually and properly perform, observe and comply with any material
affirmative covenant, agreement or condition contained in any of the Transaction Documents and such failure continues for a period of
30 days after the earliest of: (a) the date Company gives notice of such failure to Lender;
(b) the date Company should have given notice of such failure to Lender pursuant to this Agreement; and (c) the date Lender gives notice
of such failure to Company; provided there will be no cure period for (i) any breach of any
negative covenant contained in any of the Transaction Documents, and (ii) the Events of Default provided in Section 7.3.
7.3
Bankruptcy; Insolvency.
(a)
any Company Entity commences a voluntary case under Title 11 of the United States Code as now or hereafter in effect, or any successor
thereto;
(b)
an involuntary case under Title 11 of the United States Code is commenced, or any other voluntary reorganization, receivership, or
insolvency proceeding is commenced against any Company Entity and such petition or proceeding, as applicable, is not dismissed within
30 days after commencement of the case or proceeding;
(c)
a custodian is appointed for, or takes charge of, all or any substantial part of the property of any Company Entity;
(d)
any Company Entity commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any Company Entity;
(e)
any Company Entity shall fail to pay, or shall state that it is unable to pay, or is unable to pay, its debts generally as they become
due; or
(f)
the Company Entities (taken as a whole) shall cease or substantially change or reduce their operations.
7.4
Judgments. A judgment for the payment of money in excess of $250,000 is rendered against a Company Entity, and such judgment remains
unpaid or undischarged for more than 30 days from the date of entry thereof or such longer period during which execution of such judgment
is stayed during an appeal from such judgment.
7.5
False Statement. Any representation or warranty made by or on behalf of a Company Entity in this Agreement or any other Transaction
Documents or in any certificate, statement, report or document herewith or hereafter furnished to Lender pursuant to this Agreement or
any other Transaction Documents shall prove to have been (a) false or misleading in any material respect on the date as of which the
facts set forth are stated or certified and (b) a Material Adverse Effect on one or more Company Entities.
7.6
Key Person Events. Key Person violates the non-compete provisions of his/her employment agreement with any Company Entity.
7.7
Cross Default. (a) The maturity of any Indebtedness of any Company Entity (other than Indebtedness under this Agreement) owed to
Lender that is not paid when due, after giving effect to any grace or cure period, or (b) the maturity of any Indebtedness of any Company
Entity in an aggregate amount equal to or greater than $250,000 owed to others is accelerated, or (c) any Company Entity fails to pay
any such Indebtedness when due or, in the case of such Indebtedness payable on demand when demanded, after giving effect to any grace
or cure period.
7.8
Material Adverse Effect. Any other event that Lender deems to have had a Material Adverse Effect, which is continuing, on a Company
Entity.
ARTICLE
8
RIGHTS AND REMEDIES
8.1
General Remedies. If any Event of Default specified in Section 7.3 shall occur, any
commitment to make Advances hereunder shall automatically terminate and all Obligations of the Company Entities to Lender hereunder and
under the other Transaction Documents shall automatically become immediately due and payable without notice. Upon the occurrence
of any Event of Default, Lender may, without notice of any kind (including, without limitation, notice of acceleration or of intention
to accelerate, presentment and demand or protest, all of which are hereby expressly waived by Company) do any one or more of the following:
(a)
declare the entire Amount Advanced, Interest and all other Obligations, or any part thereof, immediately due and payable, provided
that the Interest will be the maximum Interest determined in accordance with Schedule 11.3, which will include all actual adjustments
to the Interest in accordance with the terms of this Agreement, but will exclude speculative adjustments);
(b)
terminate any commitment to make Advances hereunder;
(c)
exercise any and all other legal or equitable rights afforded by the Transaction Documents and the laws of the Applicable Jurisdiction;
and
(d)
take any action permitted by this Agreement or by applicable law, including the Uniform Commercial
Code then in effect in the Applicable Jurisdiction, to satisfy the Obligations, including, but not limited to:
(i)
to the fullest extent permitted by applicable law, without notice, hearing or process except as specified below, take possession and
maintain control over the Collateral. Within two days following demand by Lender for possession
and control of the Collateral following an Event of Default, each Company Entity shall, at its sole cost and expense, assemble and turn
over to Lender all Collateral of such Company Entity then held by such Company Entity.
(ii)
Lender may in its sole discretion sell the Collateral or any part thereof in one or more parcels at public or private sale, for cash,
on credit or for future delivery, and upon such other terms as Lender may deem commercially reasonable, and Lender may purchase all or
any part of the Collateral at public or, if permitted by law, private sale, and in lieu of actual payment of such purchase price, may
set off the amount of such purchase price against the Obligations. Lender may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, with notice, be made at the time and place to which it was so adjourned.
Lender may abandon any such proposed sale. Each Company Entity acknowledges that any private sales of Collateral effected by Lender may
result in terms less favorable to a seller than public sales but each Company Entity agrees that such private sales shall nevertheless
be deemed commercially reasonable. The Company Entities shall pay all costs, fees and expenses incurred by Lender, including reasonable
attorney’s fees and court costs, in connection with any such sale.
(iii)
Subject to the rights of any third party, Lender may enter upon and into and take possession of all or such part or parts of the properties
owned or occupied by any Company Entity, including lands, buildings, equipment and other property as may be necessary or appropriate
in the judgment of Lender to permit or enable Lender to complete the processing or collection of all or any part of the Collateral as
Lender may elect, and use and operate such properties for such purposes and for such length of time as Lender may deem reasonably necessary
or appropriate for such purposes without the payment of any compensation to any Company Entity therefor.
8.2
Expenses Related to Non-Compliance with Covenants. If after five days’ notice from Lender, any Company Entity fails to comply
with any one or more of the covenants provided for in this Agreement, Lender may, but has no obligation to, take such reasonable actions
as Lender, in its sole discretion, deems appropriate to ensure such Company Entity remains in or returns to compliance with this Agreement
and to protect Lender’s interest under this Agreement, including without limitation, paying
premiums, taxes, unpermitted Indebtedness and/or judgments. Company shall thereafter promptly reimburse Lender for all reasonable
costs, fees and expenses incurred by Lender in connection therewith together with interest at the
rate set forth in Section 12.7 from the date of disbursement.
8.3
Penalty. The Lender may assess the Company on the following day, automatically and without notice to Company, a service fee of $500
payable to Lender (or other loan servicing agent). All service fees in respect of uncured Payment Event of Default are due on the day
so assessed. Successive service fees will be assessed and due on the 15th day of each month until Company has cured such Payment Event
of Default. All service fees will bear interest at the rate set forth in Section 12.7 from the date they arise. A pro-forma payment
schedule that is based on Company’s financial projections is attached as Schedule 2.3(b)(2).
8.4
Notice of Sale. If any notification of intended disposition of any of the Collateral is required by law, such notification will be
deemed reasonably and properly given if provided in accordance with Section 12.6 at least 10 business days before such disposition.
Such disposition shall be established by affidavit of a representative of Lender, receipts or other reasonable method.
8.5
Remedies Cumulative; No Waiver. The rights and remedies of Lender hereunder are cumulative and nonexclusive and the exercise of any
one or more of the remedies provided for herein or under applicable law shall not be construed as a waiver of any of the other remedies
of Lender so long as any part of the Obligations remain unsatisfied. No failure on the part of Lender to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power
or remedy by Lender preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
8.6
Application of Proceeds. Any payments or proceeds received by Lender from the Collateral shall be applied to the payment of out-of-pocket
costs, fees and expenses incurred by Lender in connection with performing, managing, maintaining or selling the Collateral, including
reasonable attorneys’ fees and expenses, and the balance, if any, shall be applied by Lender to payment of the Obligations.
8.7
Notice to Account Debtors. Upon the occurrence and during the continuance of (a) any Event of Default under Section 7.3, or
(b) upon any other Event of Default, provided Lender has declared all Obligations immediately due and payable, if such Obligations have
not been paid in full, so long as no Senior Indebtedness is outstanding, Lender may notify any or all account debtors of the existence
of Lender’s security interest in the Collateral and require such account debtors to pay or remit all sums due or to become due
directly to Lender or its nominee.
8.8
Deposit Account Control Agreement. Upon the occurrence and during the continuance of an Event of Default, so long as no Senior Indebtedness
is outstanding, Lender may exercise any and all rights as a secured creditor in respect of the Deposit Accounts of Company, including
without limitation providing instructions to the bank regarding the withdrawal or disposition of any funds credited to the Deposit Accounts
and as to any other matters relating to the Deposit Accounts in accordance with the terms of the Deposit Account Control Agreement.
8.9
Performance by Lender. If any Company Entity does not perform any covenant, duty or agreement in accordance with the terms of the
Transaction Documents, Lender may, at its option, perform or attempt to perform, such covenant, duty or agreement on behalf of such Company
Entity. In such event, any amount expended by Lender in such performance or attempted performance will be payable by Company to Lender
on demand, will become part of the Obligations and will bear interest at the rate set forth in Section 12.7 from the date of such
expenditure by Lender until paid. Notwithstanding the foregoing, it is expressly understood that Lender does not assume and will never
have, except by express written consent of Lender, any liability or responsibility for the performance of any covenant, duty or agreement
of any Company Entity. Lender will have (and is hereby granted in such event) a royalty-free license
to use intellectual property rights of each Company Entity to complete production of, advertisement for, and disposition of any Collateral
and Lender will have a license to enter into, occupy, and use each Company Entity’s premises and the Collateral without charge
to exercise any of Lender’s rights or remedies under this Agreement or under any other Transaction Document.
8.10
Delegation of Duties and Rights. Lender may perform any of its duties or exercise any of its rights under the Transaction Documents
by or through its officers, members of its Governing Body, employees, attorneys, agents or other representatives.
8.11
Expenditures by Lender. Each Company Entity shall indemnify Lender for all court costs, attorneys’ fees, other costs of collection
and other sums spent by Lender pursuant to the exercise of any right (including, without limitation, any effort to collect amounts due
or otherwise enforce this Agreement) provided herein. All such amounts will be payable to Lender on demand and will bear interest at
the rate set forth in Section 12.7 from the date spent until the date repaid.
8.12
Lender’s Authority. Lender has the authority, but is not obligated to:
(a)
place on any chattel paper received as proceeds a notation or legend showing Lender’s security interest;
(b)
demand, collect, receive and receipt for, compound, compromise, settle and give acquittance for, and prosecute and discontinue any
suits or proceedings in respect of any or all of the Collateral in the name of the Company Entities;
(c)
upon prior written notice to Company, take any action which Lender may deem necessary or desirable in order to realize on the Collateral,
including, without limitation, performance of any contract and endorsement in the name of any Company Entity of any checks, drafts, notes
or other instruments or documents received in payment of or on account of the Collateral; and
(d)
place upon each Company Entity’s books and records relating to the Collateral covered by the security interest granted hereby
a notation or legend stating that such are subject to a security interest held by Lender.
8.13
Power of Attorney.
(a)
Each Company Entity hereby irrevocably appoints Lender as its lawful attorney-in-fact, exercisable upon the occurrence and during
the continuance of an Event of Default, to: (i) endorse such Company Entity’s name on any checks or other forms of payment or security;
(ii) sign such Company Entity’s name on any invoice or bill of lading for any account or drafts against account debtors; (iii)
settle and adjust disputes and claims about the accounts directly with account debtors, for amounts and on terms Lender determines reasonable;
(iv) make, settle, and adjust all claims under such Company Entity’s insurance policies; (v) pay, contest or settle any Lien or
adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same;
and (vi) transfer the Collateral into the name of Lender or a third party as the UCC permits.
(b)
Each Company Entity hereby appoints Lender as its lawful attorney-in-fact to sign such Company Entity’s name on any documents
necessary to perfect or continue the perfection of Lender’s security interest in the Collateral regardless of whether an Event
of Default has occurred until all Obligations have been satisfied in full and Lender is under no further obligation to make Advances
hereunder.
(c)
Lender’s foregoing appointment as attorney in fact of each Company Entity, and all of Lender’s rights and powers, coupled
with an interest, are irrevocable until all Obligations have been fully repaid and performed and Lender’s obligation to provide
Advances terminates.
8.14
Notification to Company. Lender may, but is under no obligation, to use reasonable efforts to notify Company of any of the foregoing
actions by Lender in this Article 8; provided, however, the parties hereto expressly agree that the failure of Lender to
provide notice shall not in any way affect or impair any action taken by Lender, it being understood that any absolute obligation of
notice is hereby waived by Company and each other Company Entity.
ARTICLE
9
SUCCESS FEE
9.1
Success Fee. In consideration for the Amount Advanced, Company hereby agrees to pay to Lender, upon request and notice by Lender
to Company, a success fee (the “Success Fee”). Lender shall have the right to request the Success Fee upon five (5)
business days’ prior written notice (the “Success Fee Date”) anytime between the Payoff Date and 365 days following
the Payoff Date calculated as set forth below. The Success Fee will be based upon Company’s average market cap calculated using
the average closing price of the Company’s Class A Common Stock (ticker: SNAX) as reflected on the NASDAQ Stock Market for the
five trading days’ preceding the Success Fee Date (the “Success Fee Market Cap”).
(a)
If the Success Fee Market Cap is less than $100,000,000, the Success Fee shall be $0.
(b)
If the Success Fee Market Cap is greater than or equal to $100,000,000 but less than or equal to $100,500,000, the Success Fee shall
be equal to the Success Fee Market Cap minus $100,000,000. For example, if the Success Fee Market Cap was $100,100,000, the Success
Fee would be $100,000.
(c)
If the Success Fee Market Cap is greater than $100,500,000, the Success Fee shall be equal to 0.50% of the Success Fee Market Cap.
For example, if the Success Fee Market Cap is $150,000,000, the Success Fee would be $750,000.
ARTICLE
10
INDEMNIFICATION
10.1
Indemnification. Company agrees to indemnify and hold harmless Lender and its successors and assigns, together with any of its officers,
members of its Governing Body, shareholders, partners, members, and/or managers (such persons, the “Indemnified Parties”),
from and against all losses, damages, liabilities, obligations, costs or expenses (any one such item being herein called a “Loss”
and all such items being herein collectively called “Losses”) which are caused by or arise out of, or (in the case
of claims asserted against any Indemnified Parties by a third party) alleged to result from, arise out of or have been incurred with
respect to, (a) any breach or default in the performance by any Company Entity of any covenant or agreement of any Company Entity contained
in this Agreement, (b) any breach of warranty or inaccurate or erroneous representation made by any Company Entity herein or in any certificate
or other instrument delivered by or on behalf of any Company Entity pursuant hereto, and (c) any and all actions, suits, proceedings,
claims, demands, judgments, costs and expenses (including costs and attorneys’ fees) arising out of the foregoing except when such
actions, suits, proceedings, claims, demands, judgments, costs and expenses arise as a result of the grossly negligent or intentional
actions or omissions of Lender.
10.2
Survival. The indemnification provided in this Article 10 shall only apply, without limitation, to any act, omission, event
or circumstance existing or occurring on or prior to the date of payment in full of the Obligations.
ARTICLE
11
DEFINITIONS
“Accountants”
has the meaning given in Section 5.7(b).
“Advance(s)”
means the Initial Advance, each Subsequent Advance or any one or more of them, if any.
“Advance
Period” means each period listed on Schedule 2.1(b) during which Company may receive a Subsequent Advance.
“Affiliate”
means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person specified.
“Amount
Advanced” means, as of any date of determination, the aggregate amount of all Advances actually advanced by Lender to Company.
“Applicable
Revenue Percentage” means that percentage with respect to any given time as provided for on Schedule 11.1.
“Applicable
Jurisdiction” means the State of Utah.
“Certificate
of Perfection” means a Certificate of Perfection in the form provided by Lender to Company.
“Change
of Control” means either (a) a merger or consolidation of Company with or into another entity, or other transaction, following
which the stockholders of Company immediately prior to such transaction hold securities representing less than a majority of the voting
power of the surviving entity or parent of the surviving entity immediately following such transaction, or (b) the sale, lease, license
or other disposition of all or substantially all of Company’s assets. Notwithstanding the prior sentence, (i) the sale of Company’s
equity securities in a bona fide equity financing transaction, or (ii) any corporate entity changes or structural transitions by Company,
so long as Company retains the same beneficial owners and stockholders as before such changes or transitions, shall not be deemed a “Change
of Control”.
“Closing”
has the meaning given in Section 4.1.
“Collateral”
means those assets listed on Schedule 11.2 of each Company Entity.
“Company
Bank” means Origin Bank.
“Company’s
Share of Transaction Costs” means up to $60,000, which may include all or a portion of the legal fees, filing fees, due diligence
expenses, and/or other costs or expenses incurred by Lender in connection with the transactions contemplated by this Agreement.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings analogous thereto.
“Deposit
Account” means a deposit, demand, savings, passbook, or similar account with a bank or other financial institution.
“Deposit
Account Control Agreement” means a deposit account control agreement among Company, Lender, and the bank at which Company maintains
one or more Deposit Accounts.
“Dispute
Notice” has the meaning given in Section 5.7(b).
“Event
of Default” has the meaning given in Article 7.
“Financial
Statements” has the meaning given in Section 5.1(a).
“Governing
Body” means, with respect to any Person, the governing body (e.g., board of directors, board of governors, managing
members, general partner or the like) for such Person.
“Indebtedness”
means (i) indebtedness for borrowed money or the deferred price of property or services, and other obligations to pay, (ii) obligations
evidenced by notes, bonds, debentures or similar instruments and (iii) capital lease obligations. For
the avoidance of doubt, “Indebtedness” includes, without limiting the foregoing, merchant cash advances, factoring obligations,
pre-sale of future accounts receivable and/or purchase orders, credit card advances, and any off-balance sheet arrangements.
“Initial
Advance” means $4,000,000 and will be the only Advance unless there are Subsequent Advances.
“Interest”
those amounts set forth in Schedule 11.3.
“Key
Person” means each of Christopher J. Boever and any successor Key Person.
“Knowledge”
means the knowledge of the Key Person or Robert Alex Hawkins.
“Lender
Account” means the account with Silicon Valley Bank held in Lender’s name with the account details as set forth in Schedule
2.3(b)(1).
“Lien”
means a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily
incurred or arising by operation of law or otherwise against any property.
“Material
Adverse Effect” means a material adverse effect on (x) the properties, business, prospects, operations, earnings, assets, liabilities
and/or the condition (financial or otherwise) of the Company Entities taken as a whole, whether or not in the ordinary course of business.
“Maturity
Date” means the earliest of: (i) June 13, 2027, (ii) immediately prior to a Change of Control, and (iii) acceleration of the
Obligations as provided in Article 8.
“Obligations”
means the principal amount of all Advances and Interest and all other amounts due under this Agreement, together with all other costs,
fees, expenses, indemnities and reimbursements, as well as all other obligations of any Company Entity now or hereafter existing under
this Agreement or any other Transaction Document.
“Payment
Commencement Date” means October 15, 2022.
“Payoff
Date” has the meaning given in Section 2.3(e).
“Permitted
Indebtedness” means those liabilities and Indebtedness listed on Schedule 11.4 attached hereto.
“Permitted
Liens” means Liens listed on Schedule 11.5 attached hereto.
“Person”
means any individual, entity or association.
“Projected
Revenue” means the Company Entities’ Projected Revenue for the applicable period set forth on Schedule 2.3(b)(2).
“promptly”
means within 10 calendar days following the applicable event.
“Reported
Revenue” means the amount of Revenue reported as being generated by the Company Entities during the applicable period as stated
in the Monthly Questionnaire(s) delivered by Company to Lender pursuant to Section 5.1(a)(i).
“Revenue”
means all non-financing related, net revenues net of promotions, discounts, customer credits, and returns received by any Company Entity
and reported on the Company’s Financial Statements during the applicable period; provided that intercompany revenue shall
not be considered “Revenue.”
“Revenue
Loan Amount” means $6,000,000.
“Revenue
Test Period” means each calendar year during the term of this Agreement, including any partial calendar years (e.g., (i) for
the year in which this Agreement is executed, the Revenue Test Period will be the period from the Effective Date through December 31
of the year of the Effective Date and (ii) for the year in which all outstanding Obligations are paid in full, the Revenue Test Period
will be the period from January 1 of the year through the date on which all outstanding Obligations are paid in full).
“Senior
Indebtedness” means any Indebtedness (including Indebtedness secured by Collateral) having payment and/or Lien priority over
the Obligations owed to a lender reasonably acceptable to the Lender. Lender hereby approves of Alterna Capital Solutions or any of its
affiliates.
“Settled
Audit Amount” has the meaning given in Section 5.7(b).
“Subsequent
Advances” mean all Advances made by Lender to Company following the Initial Advance.
“Tax”
or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, property or windfall profits Taxes, environmental Taxes, customs duties, capital stock, franchise,
employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability, workers’ compensation,
employment-related insurance, real property, personal property, sales, use, transfer, value added, alternative or add-on minimum or other
governmental Tax, fee, assessment or charge of any kind whatsoever including any interest, penalties or additions to any Tax or additional
amounts in respect of the foregoing.
“Term
Sheet Date” means August 10, 2022.
“Transaction
Documents” means this Agreement and all exhibits and schedules to this Agreement, as well as all other agreements executed
or delivered by any Company Entity, any guarantor or party granting security interests or providing credit enhancements in connection
with this Agreement, one or more of the Advances or any Collateral for the Obligations.
ARTICLE
12
MISCELLANEOUS
12.1
Survival and Confirmation of Representations and Warranties. The warranties, representations and covenants of each Company Entity
and Lender and the indemnification obligations of each party contained in or made pursuant to this Agreement shall survive the execution
and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made
by or on behalf of Lender or any Company Entity. All of the representations and warranties set forth herein will be deemed to be repeated
and reaffirmed on the day of each Advance.
12.2
Successors and Assigns. No Company Entity may assign its rights or delegate its Obligations under this Agreement without Lender’s
prior written consent, except in connection with a Change of Control. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the parties’ respective successors and assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this
Agreement.
12.3
Governing Law. This Agreement is governed by and construed under the substantive laws of the Applicable Jurisdiction without regard
to the conflicts of law provisions thereof. The state and federal courts in the Applicable Jurisdiction have exclusive jurisdiction of
any and all actions or suits commenced by Lender or any Company Entity arising under or with respect to this Agreement.
12.4
Jurisdiction and Venue. Each of Lender and each
Company Entity irrevocably consents to the exclusive jurisdiction and venue of any court within the Applicable Jurisdiction, in connection
with any matter based upon or arising out of this Agreement, the Transaction Documents or the matters contemplated herein or therein,
and agrees that process may be served upon them in any manner authorized by the laws of the Applicable Jurisdiction for such persons.
12.5
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.
12.6
Notices. All notices required or permitted hereunder shall be in writing and will be deemed effectively given: (i) upon personal
delivery to the party to be notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of
the recipient, if not, then on the next business day; (iii) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent to the address as set forth on the first page of this
Agreement or at such other address as such party may designate by ten days’ advance written notice to the other parties hereto.
12.7
Fees and Expenses. If the Closing is not completed, Company shall pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement, which amount shall in no event exceed the Company’s Share of Transaction
Costs. If the Closing is completed, Company shall, at the Closing, pay the out-of-pocket fees and expenses of Lender (including reasonable
fees and expenses of counsel for Lender) up to the Company’s Share of Transaction Costs. Lender will submit an invoice to Company
no less frequently than annually for out-of-pocket costs, fees and expenses incurred by Lender in the administration of the transactions
contemplated by this Agreement. Following Closing, Company shall promptly reimburse Lender for all reasonable, documented out-of-pocket
costs, fees and expenses (including accounting, appraisal, consulting, and attorneys’ fees) incurred by Lender in connection with
(i) the administration of the transactions contemplated by this Agreement, (ii) any breach or default by Company under the Transaction
Documents, and (iii) any request by Company to modify or waive the Transaction Documents and otherwise change or affect the rights of
Lender or Obligations of Company pursuant to the Transaction Documents. All fees and expenses assessed or incurred by Lender under this
Agreement will accrue interest at a rate of 10% per annum in the event not paid within thirty (30) days of receipt by Company of an invoice
with respect to such fees and/or expenses.
12.8
Amendments and Waivers. No failure on the part of Lender to exercise and no delay in exercising any power or right hereunder or under
any other Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or right. The remedies herein and in any other instrument, document
or agreement delivered or to be delivered to Lender hereunder or in connection herewith are cumulative and not exclusive of any remedies
provided by law. No notice to or demand on any Company Entity not required hereunder shall in any event entitle any Company Entity to
any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of Lender to any other or
further action in any circumstances without notice or demand. No amendment, modification or waiver of any provision of this Agreement
or any other Transaction Document or consent to any departure by a Company Entity therefrom will be effective unless the same is in writing
and signed by Lender and each Company Entity.
12.9
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision will
be excluded from this Agreement and the balance of the Agreement will be interpreted as if such provision were so excluded and will be
enforceable in accordance with its terms.
12.10
Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and supersede
any prior agreements or understandings (whether written or oral) regarding the subject matter hereof.
12.11
Representation of Lender. Lender is an accredited investor as defined in Rule 501(a) of Regulation D and has such business and financial
experience as necessary to enable it to protect its interests in connection with the transactions contemplated by this Agreement. Lender
has had the opportunity to ask questions and to receive answers and to obtain the information concerning the Company Entities and the
transactions contemplated by this Agreement that it has deemed material and necessary to evaluate the merits and risks of the transactions
contemplated by this Agreement.
12.12
Termination. This Agreement shall terminate upon indefeasible satisfaction of the Obligations; provided, however, Sections
5.1, 5.2, 5.3, 5.5, 5.6, 6.1 and 6.2, shall terminate upon indefeasible payment to Lender
in full of the principal amount of all Advances and Interest thereon.
12.13
Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile,
portable document format (.pdf), DocuSign or other electronic transmission is equally as effective as delivery of a manually executed
counterpart of this Agreement.
12.14
Costs of Enforcement. Company agrees to pay all costs, fees and expenses of enforcement, collection, or preservation of Collateral
(including reasonable attorneys’ fees) that Lender incurs in connection with any default or Event of Default hereunder (whether
before or after any cure). Additionally, Company agrees to pay all out-of-pocket costs, fees and expenses (including reasonable attorneys’
fees) that Lender incurs, before or after any default or Event of Default as a result of any litigation or other action in which Lender
becomes involved as a party, witness or otherwise as a result of making the Advances evidenced by this Agreement.
12.15
Waiver of Jury Trial. Lender and each Company Entity hereby knowingly, voluntarily and intentionally WAIVE THE RIGHT TO TRIAL
BY JURY in respect of any litigation based herein, arising out of, under or in connection with this Agreement or any other Transaction
Document or any course of conduct, course of dealings, statements (whether verbal or written) or acts of any party, or any exercise by
any party of their respective rights under this Agreement or any other Transaction Document. Each Company Entity hereby acknowledges
that this waiver of jury trial is a material inducement to Lender in extending credit to Company, that Lender would not have extended
credit without this waiver of jury trial, and that each Company Entity has had an opportunity to consult with an attorney in connection
with this waiver of jury trial and understands the legal effect of this waiver.
12.16
Waiver of Notices and Hearing. Each Company Entity by entering into this Agreement and negotiating the terms hereof, voluntarily,
intelligently and knowingly waives any rights it may have to demand any notices other than those provided for herein and any right to
a hearing as a condition precedent to Lender’s exercise of its rights to foreclose on any Collateral. All makers, endorsers, sureties,
guarantors and other accommodation parties hereby waive presentment for payment, protest and notice of nonpayment and consent, without
affecting their liability hereunder, to any and all extensions, renewals, substitutions and alterations of any of the terms of this Agreement
and to the release of or failure by Lender to exercise any rights against any party liable for payment thereof and to the release of
Collateral.
12.17
Confidentiality. Except as required by law, no
Company Entity nor any of their respective officers, members of its Governing Body, employees, agents, or equity holders shall disclose
this Agreement, the terms hereof or any related transactions or agreements to any third party other than such Company Entity’s
accountants and attorneys, without the prior written approval of Lender. With Company’s prior approval, not to be unreasonably
withheld, Lender may disclose the existence of this Agreement (but not the terms hereof) for marketing purposes, press releases
or other transactional announcements or updates provided to investor or trade publications, including the placement of “tombstone”
advertisements in financial and other newspapers and journals.
12.18
Credit Reporting. Each Company Entity hereby authorizes Lender (but Lender has no obligation) (a) to provide to credit reporting
agencies a report of the amount of the Obligations owed to Lender, the Revenue Loan Amount, Company’s payment history with respect
to the Obligations, and any other information regarding the Company Entities or the Obligations or otherwise related to this Agreement
that is customarily reported to credit reporting agencies, and (b) to respond to usual and customary credit inquiries from third parties
concerning any Company Entity.
12.19
[Reserved].
12.20
Time. Time is of the essence for the performance
of each and every covenant of each Company Entity under this Agreement.
The
signature page follows.
The
parties have executed this Agreement as of the Effective Date.
| COMPANY: |
|
| |
|
| STRYVE
FOODS, LLC. |
|
| |
|
|
| By:
|
Andina
Holdings, LLC, |
|
| Its:
|
Sole
Member |
|
| |
|
|
| By:
|
Stryve
Foods, Inc. |
|
| Its:
|
Managing
Member |
|
| |
|
|
| By: |
/s/
R. Alex Hawkins |
|
| |
R.
Alex Hawkins, Chief Financial Officer |
|
| |
|
|
| LENDER: |
|
| |
|
| DECATHLON
ALPHA V, L.P. |
|
| |
|
|
| By:
|
Decathlon
Alpha GP V, LLC |
|
| Its:
|
General
Partner |
|
| |
|
|
| By: |
/s/
Wayne Cantwell |
|
| |
Wayne
Cantwell, Managing Director |
|
| |
|
|
| GUARANTORS: |
|
| |
|
| ANDINA
HOLDINGS, LLC |
|
| |
|
|
| By:
|
Stryve
Foods, Inc. |
|
| Its:
|
Managing
Member |
|
| |
|
|
| By: |
/s/
R. Alex Hawkins |
|
| |
R.
Alex Hawkins, Chief Financial Officer |
|
| STRYVE
FOODS, INC. |
|
| |
|
|
| By: |
/s/
R. Alex Hawkins |
|
| |
R.
Alex Hawkins, Chief Financial Officer |
|
| |
|
|
| BRAAITIME,
LLC |
|
| |
|
|
| By:
|
Stryve
Foods, LLC |
|
| Its:
|
sole
member |
|
| |
|
|
| By:
|
Andina
Holdings, LLC, |
|
| Its:
|
Sole
Member |
|
| |
|
|
| By:
|
Stryve
Foods, Inc. |
|
| Its:
|
Managing
Member |
|
| |
|
|
| By: |
/s/
R. Alex Hawkins |
|
| |
Alex
Hawkins, Chief Financial Officer |
|
| |
|
|
| BILTONG
ACQUISITION COMPANY, LLC |
|
| |
|
|
| By:
|
Stryve
Foods, LLC |
|
| Its:
|
sole
member |
|
| |
|
|
| By:
|
Andina
Holdings, LLC, |
|
| Its:
|
Sole
Member |
|
| |
|
|
| By:
|
Stryve
Foods, Inc. |
|
| Its:
|
Managing
Member |
|
| |
|
|
| By: |
/s/
R. Alex Hawkins |
|
| |
Alex
Hawkins, Chief Financial Officer |
|
| |
|
|
| KALAHARI
SNACKS, LLC |
|
| |
|
|
| By:
|
Stryve
Foods, LLC |
|
| Its:
|
sole
member |
|
| |
|
|
| By:
|
Andina
Holdings, LLC, |
|
| Its:
|
Sole
Member |
|
| |
|
|
| By:
|
Stryve
Foods, Inc. |
|
| Its:
|
Managing
Member |
|
| |
|
|
| By: |
/s/
R. Alex Hawkins |
|
| |
Alex
Hawkins, Chief Financial Officer |
|
The
Key Person acknowledges this Agreement as of the Effective Date.
| KEY
PERSON: |
|
| |
|
|
| By: |
/s/
Christopher J. Boever |
|
| |
Christopher
J. Boever |
|
SCHEDULE
2.1(b)
SUBSEQUENT ADVANCE AMOUNT
Company
may request that Lender make Subsequent Advances during each Advance Period stated below, subject to the condition precedent that all
of the following criteria are satisfied as of the date of the corresponding Advance Request (in each case as determined by Lender in
its sole discretion):
| |
1. |
the
principal amount of all Advances previously advanced to Company by Lender plus the principal amount of the new Subsequent Advance
requested does not exceed the Revenue Loan Amount; |
| |
|
|
| |
2. |
with
respect to any Advance Period, the amount of all previous Subsequent Advances made during such Advance Period plus the new Subsequent
Advance requested does not exceed the “Subsequent Advance Amount” for the applicable Advance Period;
|
| |
|
|
| |
3. |
Company
provides Lender with an Advance Request and certifies to Lender that (i) all information contained in the most recent Certificate
of Perfection delivered by Company to Lender is accurate and complete as of the date of the Advance Request; (ii) no Company
Entity is in default and no Event of Default has occurred and (iii) all representations and warranties of the Company Entities
in Article 3 are true as of the date of the Advance Request; |
| |
|
|
| |
4. |
the
requested Subsequent Advance is at least $100,000; |
| |
|
|
| |
5. |
the
sum of the Revenue for each month ended between the Effective Date and the date of the Advance Request exceeds 85.0% of the pro forma
projections set forth on Schedule 2.3(b)(2) for the corresponding period; |
| |
|
|
| |
6. |
for
the three (3) months preceding the date of the Advance Request, the Company must achieve a combined Gross Profit Margin (as defined
pursuant to GAAP) of at least 35%; and |
| |
|
|
| |
7. |
in
each of the three (3) months preceding the date of the Advance Request, the Company’s EBITDA losses shall not exceed (-$200,000). |
| Subsequent
Advance Amount |
|
Advance
Period |
| $1,000,000 |
|
Between
December 1, 2022 and August 31, 2023 |
| $1,000,000 |
|
Between
April 1, 2023 and December 31, 2023 |
SCHEDULE
2.3(b)(1)
LENDER’S ACCOUNT DETAILS
SCHEDULE
2.3(b)(2)
PRO-FORMA PAYMENT SCHEDULE
SCHEDULE
3.1(b)
PARENT AND SUBSIDIARIES
Andina
Holdings, LLC (Parent)
Stryve
Foods, Inc. (Parent of Parent)
Braaitime,
LLC (Subsidiary)
Biltong
Acquisition Company, LLC (Subsidiary)
Kalahari
Snacks, LLC (Subsidiary)
SCHEDULE
3.1(d)
LITIGATION
SCHEDULE
3.1(f)
OWNERSHIP
COMPANY ENTITY OF COMPANY ENTITY AFFILIATES
SCHEDULE
3.1(g)
FINANCIAL STATEMENTS
SCHEDULE
3.1(h)
TAX
AUDITS
SCHEDULE
3.1(p)
CUSTOMERS
& SUPPLIERS
SCHEDULE
4.1
CLOSING USE OF PROCEEDS
SCHEDULE
5.11
COMPANY BANK ACCOUNT
SCHEDULE
11.1
APPLICABLE REVENUE PERCENTAGE
(a)
For
any payment due when the Amount Advanced is $4,000,000 the Applicable Revenue Percentage shall be as follows:
Between
the Effective Date and December 31, 2024 (inclusive) the Applicable Revenue Percentage will be 2.75%.
Between
January 1, 2025 and December 31, 2025 (inclusive) the Applicable Revenue Percentage will be 3.25%.
Between
January 1, 2026 and December 31, 2026 (inclusive) the Applicable Revenue Percentage will be 3.75%.
Between
January 1, 2027 and the Maturity Date (inclusive) the Applicable Revenue Percentage will be 4.00%.
For
each Subsequent Advance of $1,000,000, the Applicable Revenue Percentage shall increase by 0.75%. For example, if the Company requested
and received a $1,000,000 Subsequent Advance on May 15, 2023, the Applicable Revenue Percentage would be 3.50% (2.75% plus 0.75% for
the $1,000,000 Subsequent Advance; if the Company requested and received an additional Subsequent Advance on May 15, 2024, the Applicable
Percentage would be 4.25% (2.75% plus 0.75% for the first $1,000,000 plus 0.75% for the second $1,000,000).
(b)
If
the Revenue or Reported Revenue is not equal to at least 80% of Projected Revenue (the “ARP Threshold”) for any Revenue
Test Period, the Applicable Revenue Percentage for all subsequent monthly payments (beginning with the payment due the following January
15) will, automatically and without notice from Lender, increase by 0.65%.
For
clarity, the terms “Revenue” and “Reported Revenue” have separate meanings (even though it is expected that these
amounts will be the same). The determination of whether the ARP Threshold has been met for the corresponding Revenue Test Period will
be made initially based off of Reported Revenue (as reported in the Monthly Questionnaires delivered by Company to Lender pursuant to
Section 5.1(a)(i)). If the Company Entities fail to meet the ARP Threshold based off of Reported Revenue, then the adjustment
to the Applicable Revenue Percentage made pursuant to clause (b) of this Schedule 11.1 will be effective immediately beginning
with the payment due on January 15 of the year immediately following the applicable Revenue Test Period. If it appears initially that
the Company Entities met the ARP Threshold for the corresponding Revenue Test Period based off of Reported Revenue, but it is later discovered
that the Company Entities failed to meet the ARP Threshold based off of actual Revenue (as reported in the Financial Statements), then
the adjustment to the Applicable Revenue Percentage pursuant to clause (b) of this Schedule 11.1 will be effective retroactively
beginning with the payment due on January 15 of the year immediately following the applicable Revenue Test Period.
If
the Company Entities fail to meet the ARP Threshold for two or more consecutive Revenue Test Periods, the adjustments made pursuant to
clause (b) of this Schedule 11.1 will be cumulative. If, after failing to meet the ARP Threshold for one or more previous Revenue
Test Periods, the Company Entities meet the ARP Threshold for a subsequent Revenue Test Period, any previous adjustments made pursuant
to clause (b) of this Schedule 11.1 will no longer be applied cumulatively and the Applicable Revenue Percentage will revert back
to the standard Applicable Revenue Percentage as determined in accordance with clause (a) of this Schedule 11.1. Except as provided
in the previous paragraph, all adjustments to the Applicable Revenue Percentage made pursuant to this Schedule 11.1 will be applied
prospectively and will not result in a retroactive adjustment to any prior monthly payment.
SCHEDULE
11.2
COLLATERAL
SCHEDULE
11.3
INTEREST
(a)
The
“Interest” means the amount shown below in the column headed Interest opposite the applicable period during which
the Payoff Date occurs:
| Period
During Which the Payoff Date Occurs |
|
Interest
|
| On
or before 12 months after the Effective Date |
|
0.35
times the Amount Advanced |
| After
12 months and on or before 24 months after the Effective Date |
|
0.60
times the Amount Advanced |
| After
24 months and on or before 36 months after the Effective Date |
|
0.85
times the Amount Advanced |
| After
36 months and on or before 48 months after the Effective Date |
|
0.95
times the Amount Advanced |
| After
48 months after the Effective Date |
|
1.00
times the Amount Advanced |
For
the avoidance of doubt, any increases to the Interest made pursuant to clause (b) of the Agreement will be cumulative and will apply
throughout the remainder of the term of the Agreement for each period set forth in the table above.
(b)
If
the Revenue or Reported Revenue is not equal to at least 80% of Projected Revenue (the “Threshold”) for any Revenue
Test Period, then the Interest multiple will increase, automatically and without notice from Lender, by 0.10 throughout the remainder
of the term of the Agreement for each period set forth in the table in part (a) of this Schedule 11.3. For each incremental 10%
that the Projected Revenue is lower than the Threshold for such Revenue Test Period, the Interest multiple will increase, automatically
and without notice from Lender, by an additional 0.05 throughout the remainder of the term of the Agreement for each period set forth
in the table in part (a) of this Schedule 11.3.
If
the Company Entities fail to meet the Threshold for two or more Revenue Test Periods, the adjustments made pursuant to clause (b) of
this Schedule 11.3 will be cumulative. There is no limit to the number of adjustments that may be made pursuant to clause (b)
of this Schedule 11.3.
SCHEDULE
11.4
PERMITTED INDEBTEDNESS
“Permitted
Indebtedness” is:
(a)
Company’s and the Company Entities’ Indebtedness to Lender under this Agreement and the other Transaction Documents;
(b)
Senior Indebtedness;
(c)
unsecured Indebtedness to trade creditors incurred in the ordinary course of business; and
(d)
Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of any Company Entity’s business.
(e)
Guarantees of any Company Entity in respect of Indebtedness otherwise permitted hereunder of another Company Entity;
(f)
Indebtedness in respect of capital leases, and purchase money obligations for fixed or capital assets; provided that the aggregate
amount of all such Indebtedness at any time outstanding shall not exceed $250,000;
(g)
Indebtedness consisting of the financing of insurance premiums payable within one (1) year; and
(h)
unsecured Indebtedness in an aggregate principal amount not to exceed $250,000 at any time outstanding.
SCHEDULE
11.5
PERMITTED LIENS
“Permitted
Liens” are:
(a)
Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Transaction
Documents;
(b)
Liens for Taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and
for which the applicable Company Entity maintains adequate reserves on its books, provided that no notice of any such Lien has been filed
or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;
(c)
Liens securing Senior Indebtedness;
(d)
statutory Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without
action of such parties, provided they have no priority over any of Lender’s Lien and the aggregate amount of such Liens does not
exceed $10,000 at any one time;
(e)
leases or subleases of real property granted in the ordinary course of business, if the leases, subleases, licenses and sublicenses do
not prohibit granting Lender a security interest; and
(f)
banker’s Liens, rights of setoff and Liens in favor of financial institutions incurred made in the ordinary course of business
arising in connection with a Company Entity’s deposit accounts or securities accounts held at such institutions to secure solely
payment of fees and similar costs and expenses;
(g)
Liens securing Indebtedness in respect of capital leases, and purchase money obligations for fixed or capital assets; provided
that the Lien securing such does not exceed the amount of such Indebtedness;
(h)
Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations
incurred in the ordinary course of business (other than Liens imposed by ERISA);
(i)
Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 7.4;
(j)
easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and similar charges or encumbrances affecting
real property not constituting a Material Adverse Effect;
(k)
non-exclusive licenses of intellectual property granted to third parties in the ordinary course of business; and
(l)
non-exclusive licenses of intellectual property granted to third parties in the ordinary course of business in connection with joint
ventures and corporate collaborations.
