Execution Version

 

THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS DEBENTURE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

MAMAMANCINI’S HOLDINGS, INC.

 

CONVERTIBLE, REDEEMABLE DEBENTURE

 

Effective Date: December 19, 2014 Principal Amount: US$2,000,000.00 Maturity
Date: February 19, 2016  

 

This CONVERTIBLE REDEEMABLE DEBENTURE (the “Debenture”) is issued, dated and
effective as of December 19, 2014 (the “Effective Date”), by MAMAMANCINI’S
HOLDINGS, INC., a corporation incorporated under the laws of the State of Nevada
(the “Company”), to MANATUCK HILL SCOUT FUND, LP, a Delaware limited partnership
(together with its permitted successors and assigns, the “Holder”) pursuant to
exemptions from registration under the Securities Act of 1933, as amended. This
Debenture is issued in connection with that certain securities purchase
agreement, dated as of the date hereof, by and between the Company and the
Holder (the “Purchase Agreement”). All capitalized terms used in this Debenture
and not otherwise defined herein shall have the meanings assigned to them in the
Purchase Agreement.

 

ARTICLE I

 

Section 1.01 Principal and Interest. For value received, the Company hereby
promises to pay to the order of the Holder, on February 19, 2016 (the “Maturity
Date”), in immediately available and lawful money of the United States of
America, Two Million United States Dollars (US$2,000,000.00), together with
interest on the outstanding principal amount under this Debenture, at the rate
of fourteen percent (14%) per annum simple interest (the “Interest Rate”) from
the Effective Date, until paid, as more specifically provided below.

 

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Execution Version

 

Section 1.02 Optional Redemption Prior to Maturity. Upon termination of the
Qualified Offering, the Company, at its option, shall have the right to redeem
this Debenture in full and for cash, at any time prior to the Maturity Date,
with ten (10) business days advance written notice (the “Redemption Notice”) to
the Holder. The delivery of a Redemption Notice by the Company shall not limit
the ability of the Holder to exercise its conversion rights pursuant to Section
3.1, below, at any time prior to the effective redemption date. The amount
required to redeem this Debenture in full pursuant to this Section 1.02 shall be
equal to: (i) the aggregate principal amount then outstanding under this
Debenture; plus all accrued and unpaid interest due under this Debenture as of
the redemption date; plus (ii) all other costs, fees and charges due and payable
hereunder or under any other “Transaction Documents” (as hereinafter defined)
(collectively, the “Redemption Amount”). The Company shall deliver the
Redemption Amount to the Holder on the tenth (10th) business day after the date
of the Redemption Notice.

 

Section 1.03 Mandatory Redemption at Maturity. On the Maturity Date, the Company
shall redeem this Debenture for the Redemption Amount, which Redemption Amount
shall be due and payable to the Holder by no later than 5:00 P.M., EST, on the
Maturity Date.

 

Section 1.04 Interest Calculations; Payment Application. Interest shall be
calculated on the basis of a 360-day year, and shall accrue daily on the
outstanding principal amount outstanding from time to time for the actual number
of days elapsed, commencing on the Effective Date until payment in full of the
outstanding principal, together with all accrued and unpaid interest and other
amounts which may become due hereunder or under any Transaction Documents, has
been made.

 

ARTICLE II

 

Section 2.01 Securities Purchase Agreement. This Debenture is being issued in
connection with the Purchase Agreement. All of the agreements, conditions,
covenants, provisions, representations, warranties and stipulations contained in
any of the Transaction Documents which are to be kept and performed by the
Company are hereby made a part of this Debenture to the same extent and with the
same force and effect as if they were fully set forth herein, and the Company
covenants and agrees to keep and perform them, or cause them to be kept or
performed, strictly in accordance with their terms.

 

ARTICLE III

 

Section 3.01 Conversion of Debenture. At any time following the completion of
the Qualified Offering and while this Debenture is outstanding, the Holder may,
at its sole option, convert this Debenture into shares of the Company’s
anticipated Series B Convertible Preferred Stock (the “Series B Preferred”), at
the offering price per share of the Series B Preferred, as set forth in the
applicable document governing the Qualified Offering.

 

Section 3.02 Issuance of Common Stock. (a) Upon the conversion of the Debenture
in accordance with Section 3.01 above in connection with a Qualified Offering at
a price per Series B Preferred of not less than Two United States Dollars
(US$2.00), the Company shall issue to the Holder fifty thousand (50,000) shares
of the Company’s common stock, par value $0.00001 per share.

 

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(b) Upon the conversion of the Debenture in accordance with Section 3.01 above
in connection with a Qualified Offering at a price per Series B Preferred of
less than Two United States Dollars (US$2.00) per share, the number the
Company’s common stock issuable to the Holder upon conversion of the Debenture
shall be increased such that the aggregate value of the common shares issued
pursuant to this Section 3.01 shall be not less than One Hundred Thousand United
States Dollars (US$100,000) based upon a per share price equal to the offering
price in the Qualified Offering.

 

ARTICLE IV

 

Section 4.01 Events of Default. The occurrence of any of the following events
shall constitute an “Event of Default” hereunder: (i) the Company shall fail to
pay any interest, principal or other charges due under this Debenture or any
other Transaction Documents on the date when any such payment shall be due and
payable; (ii) the Company makes an assignment for the benefit of creditors;
(iii) any order or decree is rendered by a court which appoints or requires the
appointment of a receiver, liquidator or trustee for the Company, and the order
or decree is not vacated within thirty (30) days from the date of entry thereof;
(iv) any order or decree is rendered by a court adjudicating the Company
insolvent, and the order or decree is not vacated within thirty (30) days from
the date of entry thereof; (v) the Company files a petition in bankruptcy under
the provisions of any bankruptcy law or any insolvency act; (vi) the Company
admits, in writing, its inability to pay its debts as they become due; (vii) a
proceeding or petition in bankruptcy is filed against the Company and such
proceeding or petition is not dismissed within thirty (30) days from the date it
is filed; (viii) the Company files a petition or answer seeking reorganization
or arrangement under the bankruptcy laws or any law or statute of the United
States or any other foreign country or state; (ix) any written warranty,
representation, certificate or statement of the Company and/or Guarantor in this
Debenture, the Purchase Agreement or any other Transaction Document or any other
agreement with Holder shall be false or misleading in any material respect when
made or deemed made; and (x) the Company shall fail to perform, comply with or
abide by any of the stipulations, agreements, conditions and/or covenants
contained in this Debenture or any of the other Transaction Documents on the
part of the Company to be performed complied with or abided by, and such failure
continues or remains uncured for thirty (30) days following written notice from
the Holder to the Company.

 

Section 4.02 Remedies. Upon the occurrence of an Event of Default that is not
timely cured within an applicable cure period hereunder, the interest on this
Debenture shall immediately accrue at an interest rate equal to eighteen percent
(18%) per annum, and, in addition to all other rights or remedies the Holder may
have, at law or in equity, the Holder may, in its sole discretion, accelerate
full repayment of all principal amounts outstanding hereunder, together with
accrued interest thereon, together with all reasonable attorneys’ fees,
paralegals’ fees and costs and expenses incurred by the Holder in collecting or
enforcing payment hereof (whether such fees, costs or expenses are incurred in
negotiations, all trial and appellate levels, administrative proceedings,
bankruptcy proceedings or otherwise), and together with all other sums due by
the Company hereunder and under the Transaction Documents, all without any
relief whatsoever from any valuation or appraisement laws, and payment thereof
may be enforced and recovered in whole or in part at any time by one or more of
the remedies provided to the Holder at law, in equity, or under this Debenture
or any of the other Transaction Documents.

 

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Execution Version

 

Section 4.03 Liquidated Damages. Upon the occurrence of an Event of Default for
failure to pay principal or interest (and only for such payment default),
following a five (5) day written notice to the Company and opportunity to cure
(the date of expiration of such notice period, the “Payment Default Date”), in
addition to any other rights or remedies the Holder may have hereunder, under
the Purchase Agreement, or under applicable law, until such time as the Event of
Default is cured by the Company, the Company shall pay liquidated damages to the
Holder in an amount equal to one percent (1%) of the issued and outstanding
common stock of the Company as of that date which is thirty (30) days following
the Payment Default Date and the Company shall pay the Holder one percent (1%)
of the issued and outstanding common stock of the Company for each thirty (30)
day period thereafter, provided however, that in the event that the Event of
Default for failure to pay principal or interest is continuing for more than
ninety (90) days following the Payment Default Date, the Company shall (instead
of one percent (1%)) pay the Holder two percent (2%) of the issued and
outstanding common stock of the Company on that date which is one hundred twenty
(120) days following the Payment Default Date, and two percent (2%) of the
issued and outstanding common stock of the Company for each thirty (30) day
period thereafter. The liquidated damages provided in this Section shall
continue until such Event of Default for failure to pay principal or interest is
cured by the Company.

 

ARTICLE V

 

Section 5.01 Usury Savings Clause. Notwithstanding any provision in this
Debenture or the other Transaction Documents to the contrary, the total
liability for payments of interest and payments in the nature of interest,
including, without limitation, all charges, fees, exactions, or other sums which
may at any time be deemed to be interest, shall not exceed the limit imposed by
the usury laws of the jurisdiction governing this Debenture or any other
applicable law. In the event the total liability of payments of interest and
payments in the nature of interest, including, without limitation, all charges,
fees, exactions or other sums which may at any time be deemed to be interest,
shall, for any reason whatsoever, result in an effective rate of interest, which
for any month or other interest payment period exceeds the limit imposed by the
usury laws of the jurisdiction governing this Debenture, all sums in excess of
those lawfully collectible as interest for the period in question shall, without
further agreement or notice by, between, or to any party hereto, be applied to
the reduction of the outstanding principal balance due hereunder immediately
upon receipt of such sums by the Holder hereof, with the same force and effect
as though the Company had specifically designated such excess sums to be so
applied to the reduction of the principal balance then outstanding, and the
Holder hereof had agreed to accept such sums as a penalty-free payment of
principal; provided, however, that the Holder may, at any time and from time to
time, elect, by notice in writing to the Company, to waive, reduce, or limit the
collection of any sums in excess of those lawfully collectible as interest,
rather than accept such sums as a prepayment of the principal balance then
outstanding. It is the intention of the parties that the Company does not intend
or expect to pay, nor does the Holder intend or expect to charge or collect any
interest under this Debenture greater than the highest non-usurious rate of
interest which may be charged under applicable law.

 

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Execution Version

 

ARTICLE VI

 

Section 6.01 Exercise of Remedies. The remedies of the Holder as provided herein
and in any of the other Transaction Documents shall be cumulative and concurrent
and may be pursued singly, successively or together, at the sole discretion of
the Holder, and may be exercised as often as occasion therefor shall occur; and
the failure to exercise any such right or remedy shall in no event be construed
as a waiver or release thereof.

 

Section 6.02 Waivers. The Company and all others who are, or may become liable
for the payment hereof: (i) severally waive presentment for payment, demand,
notice of nonpayment or dishonor, protest and notice of protest of this
Debenture or any other Transaction Documents, and all other notices in
connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Debenture and the other Transaction Documents, except as
specifically provided in this Debenture or any other Transaction Document; (ii)
expressly consent to all extensions of time, renewals or postponements of time
of payment of this Debenture and any other Transaction Documents from time to
time prior to or after the maturity of this Debenture without notice, consent or
further consideration to any of the foregoing; (iii) expressly agree that the
Holder shall not be required first to institute any suit, or to exhaust its
remedies against the Company or any other person or party to become liable
hereunder or against any collateral that may secure this Debenture in order to
enforce the payment of this Debenture; and (iv) expressly agree that,
notwithstanding the occurrence of any of the foregoing (except the express
written release by the Holder of any such person), the undersigned shall be and
remain, directly and primarily liable for all sums due under this Debenture.

 

Section 6.03 No Waiver. Holder shall not be deemed, by any act of omission or
commission, to have waived any of its rights or remedies hereunder unless such
waiver is in writing and signed by Holder, and then only to the extent
specifically set forth in the writing. A waiver on one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy to a
subsequent event.

 

ARTICLE VII

 

Section 7.01 Notice. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Debenture must be in
writing and in each case properly addressed to the party to receive the same in
accordance with the information below, and will be deemed to have been
delivered: (i) if mailed by certified mail, return receipt requested, postage
prepaid and properly addressed to the address below, then three (3) business
days after deposit of same in a regularly maintained U.S. Mail receptacle; or
(ii) if mailed by Federal Express, UPS or other nationally recognized overnight
courier service, next business morning delivery, then one (1) business day after
deposit of same in a regularly maintained receptacle of such overnight courier;
or (iii) if hand delivered or sent by email, then upon hand delivery or receipt
thereof to the address indicated on or prior to 5:00 p.m., EST, on a business
day. Any notice hand delivered after 5:00 p.m., EST, shall be deemed delivered
on the following business day. Notwithstanding the foregoing, notice, consents,
waivers or other communications referred to in this Debenture may be sent by
facsimile, e-mail, or other method of delivery, but shall be deemed to have been
delivered only when the sending party has confirmed (by reply e-mail or some
other form of written confirmation from the receiving party) that the notice has
been received by the other party. The addresses and facsimile numbers for such
communications shall be as set forth below, unless such address or information
is changed by a notice conforming to the requirements hereof.

 

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Execution Version

 

If to the Company: MamaMancini’s Holdings, Inc.   25 Branca Road   East
Rutherford, NJ 07073   Attention: Carl Wolf   E-Mail: carl@mamamancinis.com    
With a copy to: Lucosky Brookman LLP (which shall not constitute notice) 101
Wood Avenue South, 5th Floor   Woodbridge, NJ 08830   Attn: Joseph M. Lucosky,
Esq.   E-Mail: jlucosky@lucbro.com     If to the Holder: Manatuck Hill Partners,
LLC   1465 Post Road East,   Westport, CT, 06880   (203) 418–4400   Attn: Tom
Scalia   E-Mail: tom@manatuckhill.com     With a copy to: Seward & Kissel LLP
(which shall not constitute notice) One Battery Park Plaza   New York, NY 10004
  Attn: Edward Horton   E-Mail: horton@sewkis.com

 

Section 7.02 Governing Law. This Debenture shall be delivered and accepted in
and shall be deemed to be a contract made under and governed by the internal
laws of the State of New York, without regard to conflict of laws principles.

 

Section 7.03 Severability. In the event any one or more of the provisions of
this Debenture shall for any reason be held to be invalid, illegal, or
unenforceable, in whole or in part, in any respect, or in the event that any one
or more of the provisions of this Debenture operates or would prospectively
operate to invalidate this Debenture, then and in any of those events, only such
provision or provisions shall be deemed null and void and shall not affect any
other provision of this Debenture. The remaining provisions of this Debenture
shall remain operative and in full force and effect and shall in no way be
affected, prejudiced, or disturbed thereby.

 

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Execution Version

 

Section 7.04 Entire Agreement and Amendments. This Debenture, together with the
other Transaction Documents represents the entire agreement between the parties
hereto with respect to the subject matter hereof and thereof, and there are no
representations, warranties or commitments, except as set forth herein and
therein. This Debenture may be amended only by an instrument in writing executed
by the parties hereto.

 

Section 7.05 Binding Effect. This Debenture shall be binding upon the Company
and the successors and assigns of the Company and shall inure to the benefit of
the Holder and the successors and assigns of the Holder.

 

Section 7.06 Assignment. The Holder may from time to time sell or assign, in
whole or in part, or grant participations in, this Debenture and/or the
obligations evidenced hereby with the prior written consent of the Company. The
holder of any such sale, assignment or participation, if the applicable
agreement between Holder and such holder o provides, shall be: (i) entitled to
all of the rights obligations and benefits of Holder (to the extent of such
holder’s interest or participation); and (ii) deemed to hold and may exercise
the rights of setoff or banker’s lien with respect to any and all obligations of
such holder to the Company (to the extent of such holder’s interest or
participation) , in each case as fully as though the Company was directly
indebted to such holder. Holder may in its discretion give notice to the Company
of such sale, assignment or participation; however, the failure to give such
notice shall not affect any of Holder’s or such holder’s rights hereunder.

 

Section 7.07 Lost or Mutilated Debenture. If this Debenture shall be mutilated,
lost, stolen or destroyed the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture or in lieu of or
in substitution for a lost, stolen or destroyed Debenture a new Debenture for
the principal amount of this Debenture so mutilated, lost stolen or destroyed ,
but only upon receipt of evidence of such loss, theft or destruction of such
Debenture, and of the ownership hereof, reasonably satisfactory to the Company.

 

Section 7.08 WAIVER OF JURY TRIAL. THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY WITH RESPECT
TO ANY LITIGATION BASED ON THIS DEBENTURE, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS DEBENTURE OR ANY OTHER TRANSACTION DOCUMENTS, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE COMPANY AGREES AND CONSENTS TO
THE GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY
ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS DEBENTURE FROM THE
COMPANY. THE COMPANY’S REASONABLE RELIANCE UPON SUCH INDUCEMENT I HEREBY
ACKNOWLEDGED.

 

[signature page follows]

 

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Execution Version

 

IN WITNESS WHEREOF with the intent to be legally bound hereby, the Company as
executed this Convertible, Redeemable Debenture as of the date first written
above.

 

MAMAMANCINI’S HOLDINGS, INC.

 

By:     Name: Carl Wolf   Title: Chief Executive Officer  

 

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