Exhibit 10.2


 


NEITHER THIS DEBENTURE NOR THE SECURITIES
INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.


 


RETO
ECO-SOLUTIONS, INC.


 


Convertible
Debenture


 


	Principal Amount:      $2,300,000


Debenture Issuance Date: March ___,
2021


Debenture Number: RETO-1


 


FOR VALUE RECEIVED,
RETO ECO-SOLUTIONS, INC., a British Virgin Islands company (the “Company”), hereby promises to pay to the order
of YA II PN, LTD., or its registered assigns (the “Holder”) the amount set out above as the Principal Amount (as
reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due,
whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms
hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate from the
date set out above as the Debenture Issuance Date (the “Issuance Date”) until the same becomes due and payable,
whether upon an Interest Date (as defined below), the Maturity Date or acceleration, conversion, redemption or otherwise (in each
case in accordance with the terms hereof). This Convertible Debenture (including all debentures issued in exchange, transfer or
replacement hereof, this “Debenture”) was originally issued pursuant to the Securities Purchase Agreement dated
March ____ 2021, as amended (the “Securities Purchase Agreement”) between the Company and the Buyers listed
on the Schedule of Buyers attached thereto. Certain capitalized terms used herein are defined in Section (13).


 


(1) GENERAL
TERMS


 


(a) Maturity
Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued
and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Debenture. The “Maturity Date”
shall be [________], 20221, as may
be extended at the option of the Holder. Other than as specifically permitted by this Debenture, the Company may not prepay or
redeem any portion of the outstanding Principal and accrued and unpaid Interest.


 








 












		1	Insert date 12 months from the issuance date of Debenture.



 






    


     


    

 


(b) Interest
Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to
5% (“Interest Rate”), which Interest Rate shall increase to an annual rate of 15% for so long as any Event of
Default remains uncured. Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to
the extent permitted by applicable law.


 


(c) Monthly
Payments. If, 90 days after the Debenture Issuance Date set forth above, and from time to time thereafter, the daily VWAP is
less than the Floor Price for a period of ten (10) consecutive Trading Days (each such occurrence, a “Triggering Event”),
then the Company shall make monthly amortization payments beginning on the 30th day after the date of the Triggering
Event. Each monthly payment shall be in an amount equal to the sum of (I) (i) the Principal Amount outstanding as of the Triggering
Date divided by the number of months remaining until the Maturity Date, (ii) the Redemption Premium (as defined below) in respect
of such Principal Amount, and (iii) accrued and unpaid interest hereunder as of each payment date less (II) the dollar amount of
any conversions made since the later of (i) the Triggering Event and (ii) the last monthly amortization payment, if any, paid by
the Company to the Holder. The obligation of the Company to make monthly payments hereunder shall cease if any time after the Triggering
Event the daily VWAP is greater than the Floor Price for a period of ten (10) consecutive Trading Days, unless a subsequent Triggering
Event occurs.


 


(d) Early
Redemption. The Company at its option shall have the right, but not the obligation, to redeem (“Optional Redemption”)
early a portion or all amounts outstanding under this Debenture as described in this Section; provided that (i) the trading
price of the Common Stock is less than the Fixed Conversion Price and (ii) the Company provides the Holder with at least 5 Business
Days’ prior written notice (each, a “Redemption Notice”) of its desire to exercise an Optional Redemption.
Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Convertible Debentures to be redeemed
and the applicable Redemption Premium. The “Redemption Amount” shall be equal to the outstanding Principal balance
being redeemed by the Company, plus the applicable Redemption Premium, plus all accrued and unpaid interest. After receipt of the
Redemption Notice, the Holder shall have 5 Business Days to elect to convert all or any portion of Convertible Debentures. On the
6th Business Day after the Redemption Notice, the Company shall deliver to the Holder the Redemption Amount with respect to the
Principal amount redeemed after giving effect to conversions effected during the 5 Business Day period.


 






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(2) EVENTS
OF DEFAULT.


 


(a) An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether
it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body):


 


(i) the
Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this Debenture
or any other Transaction Document within five (5) Business Days after such payment is due;


 


(ii) the
Company or any subsidiary of the Company shall commence, or there shall be commenced against the Company or any subsidiary of the
Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company
or any subsidiary of the Company 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 the Company or any subsidiary of the Company or there is commenced against the Company or any subsidiary of the Company any
such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 61 days; or the Company or any subsidiary
of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding
is entered; or the Company or any subsidiary of the Company suffers any appointment of any custodian, private or court appointed
receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of sixty
one (61) days; or the Company or any subsidiary of the Company makes a general assignment for the benefit of creditors; or the
Company or any subsidiary of the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or the Company or any subsidiary of the Company shall call a meeting of its creditors with
a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary of the Company shall
by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate
or other action is taken by the Company or any subsidiary of the Company for the purpose of effecting any of the foregoing;


 


(iii) the
Company or any subsidiary of the Company shall default in any of its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by
which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any subsidiary of the Company in an amount exceeding $200,000, whether such indebtedness now exists
or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable and
such default is not cured within five (5) Business Days;


 


(iv) the
Common Stock shall cease to be quoted or listed for trading, as applicable, on any Primary Market for a period of 10 consecutive
Trading Days;


 


(v) the
Company or any subsidiary of the Company shall be a party to any Change of Control Transaction (as defined in Section (13) unless
in connection with such Change of Control Transaction this Debenture is retired;


 


(vi) the
Company’s (A) failure to cure a Conversion Failure by delivery of (I) the required number of shares of Common Stock or (II) the
Buy-In Price within five (5) Business Days after the applicable Conversion Failure or (B) notice, written or oral, to any holder
of the Debentures, including by way of public announcement, at any time, of its intention not to comply with a request for conversion
of any Debentures into shares of Common Stock that is tendered in accordance with the provisions of the Debentures, other than
pursuant to Section (4)(c);


 


 






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(vii) the
Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined herein) within five (5) Business
Days after such payment is due;


 


(viii) the
Company shall fail to observe or perform any other material covenant, agreement or warranty contained in, or otherwise commit any
material breach or default of any provision of this Debenture (except as may be covered by Section (2)(a)(i) through (2)(a)(ix)
hereof) or any Transaction Document (as defined in Section (13)) which is not cured within the time prescribed; or


 


(ix) any
Event of Default (as defined in the Other Debentures) occurs with respect to any Other Debentures.


 


(b) During
the time that any portion of this Debenture is outstanding, if any Event of Default has occurred and is continuing, the full unpaid
Principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration
shall become at the Holder’s election, immediately due and payable in cash. Furthermore, in addition to any other remedies, the
Holder shall have the right (but not the obligation) to convert this Debenture (subject to the beneficial ownership limitations
set out in Section (3)(c)) at any time after (x) an Event of Default (provided that such Event of Default is continuing) or (y)
the Maturity Date at the Conversion Price. The Holder need not provide and the Company hereby waives any presentment, demand, protest
or other notice of any kind, (other than required notice of conversion) and the Holder may immediately enforce any and all of its
rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and
annulled by Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon.


 


(3) CONVERSION
OF DEBENTURE. This Debenture shall be convertible into shares of Common Stock, on the terms and conditions set forth in
this Section (3).


 


(a) Conversion
Right. Subject to the provisions of Section (3)(c), at any time or times on or after the Issuance Date, the Holder shall be
entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable
shares of Common Stock in accordance with Section (3)(b), at the Conversion Rate (as defined below). The number of shares of Common
Stock issuable upon conversion of any Conversion Amount pursuant to this Section (3)(a) shall be determined by dividing (x) such
Conversion Amount by (y) the Conversion Price (the “Conversion Rate”). The Company shall not issue any fraction
of a share of Common Stock upon any conversion. All calculations under this Section (3) shall be rounded to the nearest $0.0001.
If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of
a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that
may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.


 


 






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(i) “Conversion
Amount” means the portion of the Principal and accrued Interest to be converted, redeemed or otherwise with respect to
which this determination is being made.


 


(ii) “Conversion
Price” means, as of any Conversion Date (as defined below) or other date of determination the lower of (i) $2.50 (the
“Fixed Conversion Price”), or (ii) 95% of the average of the two lowest daily VWAPs during the 10 consecutive
Trading Days immediately preceding the Conversion Date or other date of determination (the “Variable Conversion Price”),
but not lower than the Floor Price. The Conversion Price shall be adjusted from time to time pursuant to the other terms and conditions
of this Debenture.


 


(b) Mechanics
of Conversion.


 


(i) Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such
date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Company and (B) if required by Section (3)(b)(iii), surrender this Debenture to a nationally recognized overnight delivery
service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this
Debenture in the case of its loss, theft or destruction). On or before the third Business Day following the date of receipt of
a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not required to be placed
on certificates of Common Stock and provided that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”)
Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be
entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y)
if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address
as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled which certificates shall not bear any restrictive legends unless required
pursuant to rules and regulations of the Commission. If this Debenture is physically surrendered for conversion and the outstanding
Principal of this Debenture is greater than the Principal portion of the Conversion Amount being converted, then the Company shall
as soon as practicable and in no event later than three (3) Business Days after receipt of this Debenture and at its own expense,
issue and deliver to the holder a new Debenture representing the outstanding Principal not converted. The Person or Persons entitled
to receive the shares of Common Stock issuable upon a conversion of this Debenture shall be treated for all purposes as the record
holder or holders of such shares of Common Stock upon the transmission of a Conversion Notice.


 






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(ii) Company’s
Failure to Timely Convert. If within three (3) Trading Days after the Company’s receipt of the facsimile copy of a Conversion
Notice the Company shall fail to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC
for the number of shares of Common Stock to which the Holder is entitled upon such holder’s conversion of any Conversion Amount
(a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction
or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that
the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other out of pocket expenses, if any) for the shares of Common Stock
so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate
or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the Conversion Date.


 


(iii) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance with
the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion
Amount represented by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which
notice may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture.
The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions
or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender
of this Debenture upon conversion.


 


(c) Limitations
on Conversions.


 


(i) Beneficial
Ownership. The Holder shall not have the right to convert any portion of this Debenture or receive shares of Common Stock hereunder
to the extent that after giving effect to such conversion or receipt of such Shares, the Holder, together with any affiliate thereof,
would beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder)
in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion or receipt
of shares as payment of interest. Since the Holder will not be obligated to report to the Company the number of shares of Common
Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares
of Common Stock in excess of 4.99% of the then outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether
the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines
that the limitation contained in this Section applies, the determination of which portion of the Principal amount of this Debenture
is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a
Principal amount of this Debenture that, without regard to any other shares that the Holder or its affiliates may beneficially
own, would result in the issuance in excess of the permitted amount hereunder, the Company shall notify the Holder of this fact
and shall honor the conversion for the maximum Principal amount permitted to be converted on such Conversion Date in accordance
with Section (3)(a) and, any Principal amount tendered for conversion in excess of the permitted amount hereunder shall remain
outstanding under this Debenture. The provisions of this Section may be waived by a Holder (but only as to itself and not to any
other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.


 






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(ii) Nasdaq
Rule 5635(d) Limitations. The Company shall not issue any shares of Common Stock pursuant to the terms of this Debenture if
the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock that the Company may issue
upon conversion of the Debenture and the Other Debentures in compliance with the Company’s obligations under the rules or
regulations of the Nasdaq Capital Market (the number of shares which may be issued without violating such rules and regulations
is 4,824,586 and shall be referred to as the “Exchange Cap”), except that such limitation shall not apply in
the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Nasdaq Capital
Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to
the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Holder and Nasdaq agrees
that such approval is not required.


 


(d) Other
Provisions.


 


(i) The
Company shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock
issuable upon conversion of all outstanding amounts under this Debenture; and within three (3) Business Days following the receipt
by the Company of a Holder’s notice that such minimum number of Underlying Shares is not so reserved, the Company shall promptly
reserve a sufficient number of shares of Common Stock to comply with such requirement.


 


(ii) All
calculations under this Section (3) shall be rounded to the nearest $0.0001 or whole share.


 


(iii) The
Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock
solely for the purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein
provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less
than such number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions set forth
herein) upon the conversion of the outstanding Principal amount of this Debenture and payment of interest hereunder. The Company
covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and
fully paid, nonassessable.


 


(iv) Nothing
herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (2) herein for
the Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.


 






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(4) Adjustments
to Conversion Price


 


(a) Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. If the Company, at any time while this Debenture is outstanding,
shall (a) pay a stock dividend or otherwise make a distribution or distributions on shares of Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock, (b) subdivide outstanding shares of Common Stock into a larger
number of shares, (c) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number
of shares, or (d) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then each
of the Fixed Conversion Price and the Floor Price shall be multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall
be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.


 


(b) Other
Events. If any event occurs of the type contemplated by the provisions of this Section (4) but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features, or issuing Convertible Securities with a variable conversion formula that is more favorable than this Debenture),
then the Company’s Board of Directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of
the Holder under this Debenture; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant
to this Section (4).


 


(c) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to ensure that the Holder will thereafter have the right to receive upon a conversion of this Debenture, at the Holder’s option,
(i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder
would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon
the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of
this Debenture) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other
assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts
as the Holder would have been entitled to receive had this Debenture initially been issued with conversion rights for the form
of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the
Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required
Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without
regard to any limitations on the conversion or redemption of this Debenture.


 


(d) Whenever
the Conversion Price is adjusted pursuant to Section (4) hereof, the Company shall promptly mail to the Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.


 






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(e) In
case of any (1) merger or consolidation of the Company or any subsidiary of the Company with or into another Person, or (2) sale
by the Company or any subsidiary of the Company of more than one-half of the assets of the Company in one or a series of related
transactions, a Holder shall have the right to (A) exercise any rights under Section (2)(b), (B) convert the aggregate amount of
this Debenture then outstanding into the shares of stock and other securities, cash and property receivable upon or deemed to be
held by holders of Common Stock following such merger, consolidation or sale, and such Holder shall be entitled upon such event
or series of related events to receive such amount of securities, cash and property as the shares of Common Stock into which such
aggregate Principal amount of this Debenture could have been converted immediately prior to such merger, consolidation or sales
would have been entitled, or (C) in the case of a merger or consolidation, require the surviving entity to issue to the Holder
a convertible Debenture with a Principal amount equal to the aggregate Principal amount of this Debenture then held by such Holder,
plus all accrued and unpaid interest and other amounts owing thereon, which such newly issued convertible Debenture shall have
terms identical (including with respect to conversion) to the terms of this Debenture, and shall be entitled to all of the rights
and privileges of the Holder of this Debenture set forth herein and the agreements pursuant to which this Debentures were issued.
In the case of clause (C), the conversion price applicable for the newly issued shares of convertible preferred stock or convertible
Debentures shall be based upon the amount of securities, cash and property that each share of Common Stock would receive in such
transaction and the Conversion Price in effect immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to receive
the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This provision
shall similarly apply to successive such events.


 


(5) REISSUANCE
OF THIS DEBENTURE.


 


(a) Transfer.
If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Debenture (in accordance with Section (5)(d)), registered in the name of the
registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued
and unpaid interest thereof) and, if less then the entire outstanding Principal is being transferred, a new Debenture (in accordance
with Section (5)(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by
acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of Section (3)(b)(iii) following conversion
or redemption of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal
stated on the face of this Debenture.


 


(b) Lost,
Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking
by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Debenture,
the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section (5)(d)) representing the outstanding
Principal.


 






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(c) Debenture
Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Debenture or Debentures (in accordance with Section (5)(d)) representing in the aggregate the
outstanding Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal
as is designated by the Holder at the time of such surrender.


 


(d) Issuance
of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such
new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section (5)(a) or Section 5(5)(c),
the Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection
with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance
of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the
Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued
and unpaid Interest from the Issuance Date.


 


(6) NOTICES. Any
notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing
by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered personally
or (ii) one (1) Business Day after deposit with an overnight courier service with next-day international delivery specified, in
each case, properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and
e-mail addresses for such communications shall be:


 


 


	If to the Company, to:	RETO ECO-SOLUTIONS, INC.
	 	c/o Beijing REIT Technology Development Co., Ltd.
	 	Building X-702, 60 Anli Road, Chaoyang District, Beijing, People’s Republic of China 100101
	 	Attention: Hengfang Li
	 	
        Telephone: (+86) 10-64827328

        Email: ir@retoeco.com

	 	 
	With Copy to:	
        William Rosenstadt

        Ortoli Rosenstadt LLP

        366 Madison Avenue, 3rd Floor

        New York, NY 10017

        Telephone:  212-588-0022

E-Mail:  wsr@orllp.legal

	 	 
	If to the Holder:	YA II PN, LTD.
	 	
        c/o Yorkville Advisors Global, LLC

        1012 Springfield Avenue

	 	Mountainside, NJ 07092
	 	Attention: Mark Angelo
	 	Telephone: 201-985-8300
	 	Email:  Legal@yorkvilleadvisors.com


 






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or at such other address
and/or email and/or to the attention of such other person as the recipient party has specified by written notice given to each
other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the
recipient of such notice, consent, waiver or other communication, (ii) electronically generated by the sender’s email service provider
containing the time, date, recipient email address or (iii) provided by a nationally recognized overnight delivery service, shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service
in accordance with clause (i), (ii) or (iii) above, respectively.


 


(7) Except
as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute
and unconditional, to pay the Principal of, interest and other charges (if any) on, this Debenture at the time, place, and rate,
and in the coin or currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture
is outstanding, the Company shall not and shall cause its subsidiaries not to, without the consent of the Holder, (i) amend its
certificate of incorporation, memorandum or articles of association, bylaws or other charter documents so as to adversely affect
any rights of the Holder; (ii) repay, repurchase or offer to repay, repurchase or otherwise acquire shares of Common Stock or other
equity securities; or (iii) enter into any agreement with respect to any of the foregoing.


 


(8) This
Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the
right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the
terms hereof.


 


(9) This
Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts
of laws thereof. Each of the parties consents to the jurisdiction of the Supreme Court of the State of New York located in the
City of New York, Borough of Manhattan, and the U.S. District Court for the Southern District of New York in connection with
any dispute arising under this Debenture and hereby waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions. THE PARTIES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’
ACCEPTANCE OF THIS AGREEMENT.


 






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(10) If
the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly for
all fees, costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action
in connection with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or
in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any
sums which become due to the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal;
or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder.


 


(11) Any
waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon
strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. Any waiver must be in
writing.


 


(12) If
any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the Principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture,
and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.


 


(13) CERTAIN DEFINITIONS
 For purposes of this Debenture, the following terms shall have the following meanings:


 


(a) “Approved
Stock Plan” means a stock option plan that has been approved by the Board of Directors of the Company, pursuant to which
the Company’s securities may be issued only to any employee, officer, or director for services provided to the Company.


 


(b) “Bloomberg”
means Bloomberg Financial Markets.


 


(c) “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or
a day on which banking institutions are authorized or required by law or other government action to close.


 






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(d) “Change
of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through
legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of
the voting securities of the Company (except that the acquisition of voting securities by the Holder or any other current holder
of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement
at one time or over time of more than one-half of the members of the board of directors of the Company (other than as due to the
death or disability of a member of the board of directors) which is not approved by a majority of those individuals who are members
of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any
date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members
on the date hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of the assets of the Company or any subsidiary
of the Company in one or a series of related transactions with or into another entity, or (d) the execution by the Company of an
agreement to which the Company is a party or by which it is bound, providing for any of the events set forth above in (a), (b)
or (c). No transfer to a wholly-owned subsidiary shall be deemed a Change of Control Transaction under this provision.


 


(e) “Closing
Bid Price” means the price per share in the last reported trade of the Common Stock on a Primary Market or on the exchange
which the Common Stock is then listed as quoted by Bloomberg.


 


(f) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.


 


(g) “Commission”
means the Securities and Exchange Commission.


 


(h) “Common
Stock” means ordinary shares in the capital of the Company with a par value of $0.0001 each and shares of any other class
into which such shares may hereafter be changed or reclassified.


 


(i) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(j) “Floor
Price” means $0.50 per share.


 


(k) “Fundamental
Transaction” means any of the following: (1) the Company effects any merger or consolidation of the Company with
or into another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly owned subsidiary
of the Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash
or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property.


 






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(l) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities


 


(m) “Other
Debentures” means any other debentures issued pursuant to the Securities Purchase Agreement, and any other debentures,
notes, or other instruments issued in exchange, replacement, or modification of the foregoing.


 


(n) “Original
Issue Date” means the date of the first issuance of this Debenture regardless of the number of transfers and regardless
of the number of instruments, which may be issued to evidence such Debenture.


 


(o) “Person”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.


 


(p) “Primary
Market” means any of the New York Stock Exchange, the NYSE MKT, the Nasdaq Global Market, the Nasdaq Global Select Market,
or the OTC QB, and any successor to any of the foregoing markets or exchanges.


 


(q) “Redemption
Premium” means 20% of the Principal amount being redeemed.


 


(r)
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


(s) “Trading
Day” means a day on which the shares of Common Stock are quoted or traded on a Primary Market on which the shares of
Common Stock are then quoted or listed; provided, that in the event that the shares of Common Stock are not listed or quoted, then
Trading Day shall mean a Business Day.


 


(t) “Transaction
Document(s)” shall mean this Debenture, along with the Securities Purchase Agreement, and any other documents or agreements
entered into in connection with the foregoing.


 


(u) “Underlying
Shares” means the shares of Common Stock issuable upon conversion of this Debenture or as payment of interest in accordance
with the terms hereof.


 


(v) “VWAP”
means, for any security as of any date, the daily dollar volume-weighted average price for such security on the Primary Market
as reported by Bloomberg through its “Historical Prices – Px Table with Average Daily Volume” functions, or,
if no dollar volume-weighted average price is reported for such security by Bloomberg.


 


[Signature Page Follows]


 




    


     


    

 


IN WITNESS WHEREOF,
the Company has caused this Convertible Debenture to be duly executed by a duly authorized officer as of the date set forth above.


 


	 	COMPANY:
	 	RETO ECO-SOLUTIONS, INC.
	 	
         

	 	By:	                               
	 	Name: 	 
	 	Title:	 


 




    


     


    

 


EXHIBIT I

CONVERSION NOTICE


 


(To be executed by the Holder in order
to Convert the Debenture)


 


TO: RETO ECO-SOLUTIONS, INC.


 


Via Email: 


 


The undersigned hereby
irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Debenture No. RETO-1 into shares
of Common Stock of RETO ECO-SOLUTIONS, INC., according to the conditions stated therein, as of the Conversion Date written
below.


 


Conversion Date:


Principal Amount to be Converted:


Accrued Interest to be Converted:


Total Conversion Amount to be converted:


Fixed Conversion Price: 


Variable Conversion Price:


Applicable
Conversion Price:


Number of shares of Common Stock to be issued:




 


Please issue the shares of Common Stock
in the following name and to the following address:


Issue to:


 


	Authorized Signature:	 	 
	Name:	 	 
	Title:	 	 
	Broker DTC Participant Code:	 	 
	Account Number: