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: $2,500,000


Debenture Issuance Date: July __, 2021


Debenture Number: RETO-2


 


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 July __, 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
[____]1, 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.


 


(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;


 






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(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.


 


(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.


 






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(ii) “Conversion
Price” means, as of any Conversion Date (as defined below) or other date of determination the lower of (i) $1.50 (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.


 


(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.


 






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(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) Principal
Market Limitations. Notwithstanding anything in this Debenture to the contrary, the Company shall not issue any Common Shares upon
conversion of this Debenture, or otherwise, if the issuance of such Common Shares, together with any Common Shares issued in connection
with any related transactions that may be considered part of the same series of transactions, would exceed the aggregate number of Common
Shares that the Company may issue in a transaction in compliance with the Company’s obligations under the rules or regulations of
Nasdaq Stock Market LLC (the “Nasdaq”) 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 for issuances of shares in excess of such amount or (B) invokes the home country exemption and obtains a written opinion
from counsel to the Company that it may follow its home country practice, and therefore, such approval is not required. The Exchange Cap
shall be appropriately adjusted for any stock dividend, stock split, reverse stock split or similar transaction.


 


(iii)
If, 90 days after the Debenture Issuance Date set forth above, and from time to time thereafter, the daily VWAP is less than the $1.00
for a period of five (5) consecutive Trading Days (each such occurrence, a “Notification Event”), then the Holder shall
have the right to provide written notice to the Company (an “Event Notice”) requiring that the Company remove the Exchange
Cap within ten (10) days from the date of the Event Notice by invoking the home country exemption under the applicable rules of the Nasdaq
and obtaining a written opinion from counsel to the Company that it may follow its home country practice. The right of the Holder to provide
an Event Notice shall cease if any time after the occurrence of a Notification Event the daily VWAP is greater than $1.00 for a period
of ten (10) consecutive Trading Days, unless a subsequent Notification Event occurs.


 


(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.


 






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(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.


 


(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.


 






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(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.


 


(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.


 






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(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.


 


(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 email 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



 






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	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



 


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.


 






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(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.


 


(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.


 






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(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.


 


(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.


 






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(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.


 


(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]


 




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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:	



 




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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-2 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: 	



 


 


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