Document:

Exhibit 10.2

 

SUBSIDIARY
GUARANTEE

 

SUBSIDIARY
GUARANTEE, dated as of November 5, 2021 (this “Guarantee”), made by each of the signatories hereto (together with
any other entity that may become a party hereto as provided herein, the “Guarantors”), in favor of the purchasers
signatory (together with their permitted assigns, the “Purchasers”) to that certain Securities Purchase Agreement,
dated as of the date hereof, between Smart for Life, Inc., a Delaware corporation (the “Company”) and the Purchasers.

 

W
I T N E S S E T H:

 

WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated as of the date hereof, by and between the Company and the Purchasers (the
“Purchase Agreement”), the Company has agreed to sell and issue to the Purchasers, and the Purchasers have agreed
to purchase from the Company the Debentures, subject to the terms and conditions set forth therein; and

 

WHEREAS,
each Guarantor will directly benefit from the extension of credit to the Company represented by the issuance of the Debentures; and

 

NOW,
THEREFORE, in consideration of the premises and to induce the Purchasers to enter into the Purchase Agreement and to carry out the transactions
contemplated thereby, each Guarantor hereby agrees with the Purchasers as follows:

 

1.
Definitions. Unless otherwise defined herein, terms defined in the Purchase Agreement and used herein shall have the meanings
given to them in the Purchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder”
and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision
of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms of such terms. The following terms shall have the following
meanings:

 

“Guarantee”
means this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Obligations” means, in addition to all other costs
and expenses of collection incurred by Purchasers in enforcing any of such Obligations and/or this Guarantee, all of the liabilities and
obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be hereafter
contracted or acquired, or owing to, of the Company or any Guarantor to the Purchasers, including, without limitation, all obligations
under this Guarantee, the Debentures and any other instruments, agreements or other documents executed and/or delivered in connection
herewith or therewith, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly from any of the Purchasers as a preference, fraudulent transfer or
otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality
of the foregoing, the term “Obligations” shall include, without limitation: (i) principal of, and interest on the Debentures
and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Company or
any Guarantor from time to time under or in connection with this Guarantee, the Debentures and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company or any Guarantor. 

 

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2.
Guarantee.

 

(a)
Guarantee.

 

(i)
The Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Purchasers and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration
or otherwise) of the Obligations.

 

(ii)
Anything herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting the
rights of creditors generally (after giving effect to the right of contribution established in Section 2(b)).

 

(iii)
  Each Guarantor agrees that the Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights
and remedies of the Purchasers hereunder.

 

(iv)
The guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been satisfied by indefeasible payment in full.

 

(v)
No payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the Purchasers
from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off
or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other
than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect
of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations
are indefeasibly paid in full.

 

(vi)
Notwithstanding anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific performance
of which by the Guarantors is not reasonably possible (e.g. the issuance of the Company’s Common Stock), the Guarantors shall only be
liable for making the Purchasers whole on a monetary basis for the Company’s failure to perform such Obligations in accordance with the
Transaction Documents.

 

(b)
Right of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from
and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect limit the obligations
and liabilities of any Guarantor to the Purchasers and each Guarantor shall remain liable to the Purchasers for the full amount guaranteed
by such Guarantor hereunder.

 

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(c)
No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Purchasers, no Guarantor shall be entitled to be subrogated to any of the rights of the Purchasers against the Company or any
other Guarantor or any collateral security or guarantee or right of offset held by the Purchasers for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in respect
of payments made by such Guarantor hereunder, until all amounts owing to the Purchasers by the Company on account of the Obligations
are indefeasibly paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all
of the Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Purchasers, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Purchasers in the exact
form received by such Guarantor (duly indorsed by such Guarantor to the Purchasers, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Purchasers may determine.

 

(d)
Amendments, Etc. With Respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any
of the Obligations made by the Purchasers may be rescinded by the Purchasers and any of the Obligations continued, and the Obligations,
or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Purchasers, and the Purchase Agreement and the other Transaction Documents and any other documents
executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Purchasers
may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Purchasers for
the payment of the Obligations may be sold, exchanged, waived, surrendered or released. The Purchasers shall have no obligation to protect,
secure, perfect or insure any Lien at any time held by them as security for the Obligations or for the guarantee contained in this Section
2 or any property subject thereto.

 

(e)
Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the Purchasers upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between
the Company and any of the Guarantors, on the one hand, and the Purchasers, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives to the extent permitted
by law diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Company or any of the Guarantors
with respect to the Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed
as a continuing, absolute and unconditional guarantee of payment and performance without regard to (a) the validity or enforceability
of the Purchase Agreement or any other Transaction Document, any of the Obligations or any other collateral security therefor or guarantee
or right of offset with respect thereto at any time or from time to time held by the Purchasers, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance or fraud by Purchasers) which may at any time be available to or be asserted by the Company
or any other Person against the Purchasers, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Company
or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Company for the Obligations,
or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Purchasers may, but shall be under no obligation
to, make a similar demand on or otherwise pursue such rights and remedies as they may have against the Company, any other Guarantor or
any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Purchasers to make any such demand, to pursue such other rights or remedies or to collect any payments from the Company,
any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Company, any other Guarantor or any other Person or any such collateral security, guarantee or right of
offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Purchasers against any Guarantor. For the purposes hereof, “demand”
shall include the commencement and continuance of any legal proceedings.

 

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(f)
  Reinstatement. The guarantee contained in this Section 2 shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by the Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company
or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer
for, the Company or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

(g)
Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Purchasers without set-off or counterclaim
in U.S. dollars at the address set forth or referred to in the Signature Pages to the Purchase Agreement.

 

3.
Representations and Warranties. Each Guarantor hereby makes the following representations and warranties to Purchasers as of the
date hereof:

 

(a)
Organization and Qualification. The Guarantor is a corporation, duly incorporated, validly existing and in good standing under
the laws of the applicable jurisdiction set forth on Schedule 1, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The Guarantor has no subsidiaries other than those identified
as such on the Disclosure Schedules to the Purchase Agreement. The Guarantor is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate,
(x) adversely affect the legality, validity or enforceability of any of this Guaranty in any material respect, (y) have a material adverse
effect on the results of operations, assets, prospects, or financial condition of the Guarantor or (z) adversely impair in any material
respect the Guarantor’s ability to perform fully on a timely basis its obligations under this Guaranty (a “Material Adverse
Effect”).

 

(b)
Authorization; Enforcement. The Guarantor has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by this Guaranty, and otherwise to carry out its obligations hereunder. The execution and delivery of this
Guaranty by the Guarantor and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Guarantor. This Guaranty has been duly executed and delivered by the Guarantor and constitutes the
valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(c)
No Conflicts. The execution, delivery and performance of this Guaranty by the Guarantor and the consummation by the Guarantor
of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of its Certificate of Incorporation
or By-laws or (ii) conflict with, constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Guarantor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Guarantor is subject (including Federal and State securities laws
and regulations), or by which any material property or asset of the Guarantor is bound or affected, except in the case of each of clauses
(ii) and (iii), such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as could not, individually
or in the aggregate, have or result in a Material Adverse Effect. The business of the Guarantor is not being conducted in violation of
any law, ordinance or regulation of any governmental authority, except for violations which, individually or in the aggregate, do not
have a Material Adverse Effect.

 

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(d)
Consents and Approvals. The Guarantor is not required to obtain any consent, waiver, authorization or order of, or make any filing
or registration with, any court or other federal, state, local, foreign or other governmental authority or other person in connection
with the execution, delivery and performance by the Guarantor of this Guaranty.

 

(e)
Purchase Agreement. The representations and warranties of the Company set forth in the Purchase Agreement as they relate to such
Guarantor, each of which is hereby incorporated herein by reference, are true and correct as of each time such representations are deemed
to be made pursuant to such Purchase Agreement, and the Purchasers shall be entitled to rely on each of them as if they were fully set
forth herein, provided that each reference in each such representation and warranty to the Company’s knowledge shall, for the purposes
of this Section 3, be deemed to be a reference to such Guarantor’s knowledge.

 

(f)
  Foreign Law. Each Guarantor has consulted with appropriate foreign legal counsel with
respect to any of the above representations for which non-U.S. law is applicable. Such foreign counsel have advised each applicable Guarantor
that such counsel knows of no reason why any of the above representations would not be true and accurate. Such foreign counsel were provided
with copies of this Subsidiary Guarantee and the Transaction Documents prior to rendering their advice.

 

4.
Covenants.

 

(a)
  Each Guarantor covenants and agrees with the Purchasers that, from and after the date of
this Guarantee until the Obligations shall have been indefeasibly paid in full, such Guarantor shall take, and/or shall refrain from
taking, as the case may be, each commercially reasonable action that is necessary to be taken or not taken, as the case may be, so that
no Event of Default (as defined in the Debentures) is caused by the failure to take such action or to refrain from taking such action
by such Guarantor.

 

(b)
  Each Purchaser hereby acknowledges and agrees that the indebtedness evidenced by the Debenture
is subordinated in right of payment to the indebtedness that is described in Schedule 3.1(ff) of the Purchase Agreement (the “Senior
Indebtedness”) and certain rights of the holder of the Senior Indebtedness.

 

(c)
  Prior to the IPO Date, so long as any of the Obligations are outstanding, unless Purchasers
holding at least 51% of the aggregate principal amount of the then outstanding Debentures shall otherwise consent in writing, each Guarantor
will not directly or indirectly on or after the date of this Guarantee:

 

(i)
  other than Permitted Indebtedness (as defined in the Debenture), enter into, create, incur,
assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on
or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

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(ii)
other than Permitted Liens (as defined in the Debenture), enter into, create, incur, assume or suffer to exist any Liens of any kind,
on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom;

 

(iii)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

(iv)
 repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis
number of shares of its Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as
permitted or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers,
directors or employees of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and
directors during the term of this Debenture;

 

(v)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than (i) Indebtedness that is senior to
the Debentures and set forth on Schedule 3.1(ff) to the Purchase Agreement, (ii) Indebtedness set forth on Schedule 3.1(aa)
of the Purchase Agreement that is repaid from the proceeds of the IPO, (iii) the Debentures if on a pro-rata basis, and (iv) regularly
scheduled principal and interest payments as such terms are in effect as of the Original Issue Date, provided that such payments shall
not be permitted in the case of clause (v) if, at such time, or after giving effect to such payment, any Event of Default exist or occur;

 

(vi)
 pay cash dividends or distributions on any equity securities of the Company;

 

(vii)
 enter into any transaction with any Affiliate of the Company which would be required to be
disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved
by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

 

(viii)
enter into any agreement with respect to any of the foregoing

 

5.
Miscellaneous.

 

(a)
Amendments in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified
except in writing by the Purchasers.

 

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(b)
Notices. All notices, requests and demands to or upon the Purchasers or any Guarantor hereunder shall be effected in the manner
provided for in the Purchase Agreement, provided that any such notice, request or demand to or upon any Guarantor shall be addressed
to such Guarantor at its notice address set forth on Schedule 5(b).

 

(c)
No Waiver By Course Of Conduct; Cumulative Remedies. The Purchasers shall not by any act (except by a written instrument pursuant
to Section 5(a)), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced
in any default under the Transaction Documents or Event of Default. No failure to exercise, nor any delay in exercising, on the part
of the Purchasers, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Purchasers of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy
which the Purchasers would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

(d)
Enforcement Expenses; Indemnification.

 

(i)
Each Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee and the other Transaction
Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the
Purchasers.

 

(ii)
Each Guarantor agrees to pay, and to save the Purchasers harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable in connection with
any of the transactions contemplated by this Guarantee.

 

(iii)
 Each Guarantor agrees to pay, and to save the Purchasers harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement, performance and administration of this Guarantee to the extent the Company would
be required to do so pursuant to the Purchase Agreement.

 

(iv)
The agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Purchase Agreement
and the other Transaction Documents.

 

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(e)
Successor and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure to the
benefit of the Purchasers and their respective successors and assigns; provided that no Guarantor may assign, transfer or delegate any
of its rights or obligations under this Guarantee without the prior written consent of the Purchasers.

 

(f)
  Set-Off. Each Guarantor hereby irrevocably authorizes the Purchasers at any time and
from time to time while an Event of Default under any of the Transaction Documents shall have occurred and be continuing, without notice
to such Guarantor or any other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and appropriate and apply
any and all deposits, credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Purchasers to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Purchasers may elect, against and on account of the obligations and liabilities of such Guarantor to the
Purchasers hereunder and claims of every nature and description of the Purchasers against such Guarantor, in any currency, whether arising
hereunder, under the Purchase Agreement, any other Transaction Document or otherwise, as the Purchasers may elect, whether or not the
Purchasers have made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The
Purchasers shall notify such Guarantor promptly of any such set-off and the application made by the Purchasers of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Purchasers
under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Purchasers
may have.

 

(g)
Counterparts. This Guarantee may be executed by one or more of the parties to this Guarantee on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(h)
Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(i)
Section Headings. The Section headings used in this Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

 

(j)
Integration. This Guarantee and the other Transaction Documents represent the agreement of the Guarantors and the Purchasers with
respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Purchasers
relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Transaction Documents.

 

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(k)
Governing Laws. All questions concerning the construction, validity, enforcement and interpretation of this Guarantee shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof. Each of the Company and the Guarantors agree that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Guarantee (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan. Each of the Company and the Guarantors hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served
in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Guarantee and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Guarantee or the transactions contemplated hereby.

 

(l)
Acknowledgements. Each Guarantor hereby acknowledges that:

 

(i)
it has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents to which
it is a party;

 

(ii)
the Purchasers have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee or any
of the other Transaction Documents, and the relationship between the Guarantors, on the one hand, and the Purchasers, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and

 

(iii)
  no joint venture is created hereby or by the other Transaction Documents or otherwise exists
by virtue of the transactions contemplated hereby among the Guarantors and the Purchasers.

 

(m) Additional
Guarantors. The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date hereof to become a
Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of Annex 1
hereto.

 

(n)
Release of Guarantors. Each Guarantor will be released from all liability hereunder concurrently with the indefeasible repayment
in full of all amounts owed under the Purchase Agreement, the Debentures and the other Transaction Documents.

 

(o)
Seniority. The Obligations of each of the Guarantors hereunder rank senior in priority to any other Indebtedness (as defined in
the Purchase Agreement) of such Guarantor.

 

(p)
WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

 

*********************

 

(Signature
Pages Follow)

 

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IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above
written.

 

	SMART FOR LIFE, INC.	 
	 	 	 
	By: 	/s/
    Alfonso J. Cervantes, Jr.	 
	Name: 	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 
	 	 
	BONNE SANTÉ NATURAL MANUFACTURING,
    INC.	 
	 	 
	By:	/s/ Alfonso
    J. Cervantes, Jr.	 
	Name: 	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 
	 	 
	DOCTORS SCIENTIFIC ORGANICA, LLC	 
	 	 
	By: 	/s/ Alfonso
    J. Cervantes, Jr.	 
	Name: 	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 
	 	 
	OYSTER MANAGEMENT SERVICES, LTD	 
	 	 
	By:	/s/ Alfonso
    J. Cervantes, Jr.	 
	Name: 	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 
	 	 
	LAWEE ENTERPRISES, LLC	 
	 	 
	By:	/s/ Alfonso
    J. Cervantes, Jr.	 
	Name: 	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 
	 	 
	US MEDICAL CARE HOLDINGS, LLC	 
	 	 
	By: 	/s/ Alfonso
    J. Cervantes, Jr.	 
	Name: 	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 
	 	 
	NEXUS OFFERS, INC.	 
	 	 
	By:	/s/ Alfonso
    J. Cervantes, Jr.	 
	Name:	Alfonso J. Cervantes, Jr.	 
	Executive Chairman	 

 

    10

     

    

 

SCHEDULE
1

 

GUARANTORS

 

The
following are the names, notice addresses and jurisdiction of organization of each Guarantor.

 

	NAME AND ADDRESS	 	JURISDICTION OF

 INCORPORATION	 	COMPANY

 OWNED BY

 PERCENTAGE	 
	SMART FOR LIFE, INC.	 	DELAWARE	 	 	100	%
	BONNE SANTÉ NATURAL MANUFACTURING, INC.	 	FLORIDA	 	 	100	%
	DOCTORS SCIENTIFIC ORGANICA LLC, LLC	 	FLORIDA	 	 	100	%
	OYSTER MANAGEMENT SERVICES, LTD	 	FLORIDA	 	 	100	%
	LAWEE ENTERPRISES, LLC	 	FLORIDA	 	 	100	%
	US MEDICAL CARE HOLDINGS, LLC	 	FLORIDA	 	 	100	%
	NEXUS OFFERS, INC.	 	FLORIDA	 	 	100	%

 

    11

     

    

 

Annex
1 to

SUBSIDIARY
GUARANTEE

 

ASSUMPTION
AGREEMENT, dated as of ____ __, ______ made by ______________________________, a ______________ corporation (the “Additional
Guarantor”), in favor of the Purchasers pursuant to the Purchase Agreement referred to below. All capitalized terms not defined
herein shall have the meaning ascribed to them in such Purchase Agreement.

 

W I T N E S S E T H :

 

WHEREAS,
Smart for Life, Inc., a Delaware corporation (the “Company”) and the Purchasers have entered into a Securities Purchase
Agreement, dated as of November __, 2021 (as amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”);

 

WHEREAS,
in connection with the Purchase Agreement, the Subsidiaries of the Company (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of November __, 2021 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”)
in favor of the Purchasers;

 

WHEREAS,
the Purchase Agreement requires the Additional Guarantor to become a party to the Guarantee; and

 

WHEREAS,
the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;

 

NOW,
THEREFORE, IT IS AGREED:

 

1.
Guarantee. By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 5(m) of the
Guarantee, hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein
as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor
thereunder. The information set forth in Annex 1 hereto is hereby added to the information set forth in Schedule 1 to the Guarantee.
The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 3 of the
Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after giving effect to this Assumption Agreement)
as if made on and as of such date.

 

2.
Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

 

    12

     

    

 

IN
WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

	 	[ADDITIONALGUARANTOR]
	 	 	 
	 	By:	                                          
	 	Name:	 
	 	Title:	 

 

 

13Exhibit
10.3

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES

 

Original
Issue Date: November 5, 2021

 

$140,625.00

 

12%
Unsecured SUBORDINATED CONVERTIBLE DEBENTURE

DUE
November 30, 2022

 

THIS
12% UNSECURED SUBORDINATED CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued 12% Unsecured Subordinated
Convertible Debentures of Smart for Life, Inc., a Delaware corporation (the “Company”), having its principal place
of business at 990 Biscayne Blvd., Suite 503, Miami, Florida 33132, designated as its 12% Unsecured Subordinated Convertible Debenture
due November 30, 2022 (this debenture, the “Debenture” and, collectively with the other debentures of such series,
the “Debentures”).

 

FOR
VALUE RECEIVED, the Company promises to pay to ANSON EAST MASTER FUND LP or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $140,625.00 on November 30, 2022 (the “Maturity Date”)
or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder
on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture
is subject to the following additional provisions:

 

Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms
not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following
meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

    1

     

    

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant
Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that
is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary
thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment
for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that
it is generally unable to pay its debts as they become due, (h) the Company or any Significant Subsidiary thereof, by any act or failure
to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action
for the purpose of effecting any of the foregoing.

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).

 

“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” 
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any 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 33%
of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together
with the Debentures), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with
the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less
than 66% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries,
taken as a whole) sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three year period of more than one-half of the members 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 Original Issue Date (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), or (e) 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 in clauses (a) through (d) above.

 

    2

     

    

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with the terms
hereof.

 

“Debenture
Register” shall have the meaning set forth in Section 2(c).

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“Effectiveness
Period” shall have the meaning set forth in the Registration Rights Agreement.

 

“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have paid all liquidated
damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there is an effective Registration Statement pursuant
to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to
the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable
future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares issuable in lieu of cash payments
of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information requirements
as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to the
Transfer Agent and the Holder, (d) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction
Documents are listed or quoted for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common
Stock on a Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction
Documents, (f) there is no existing Event of Default and no existing event which, with the passage of time or the giving of notice, would
constitute an Event of Default, (g) the issuance of the Conversion Shares issuable upon conversion in full of the Optional Redemption
Amount to the Holder would not violate the limitations set forth in Section 4(d) herein, (h) there has been no public announcement of
a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the applicable Holder
is not in possession of any information provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees,
agents or Affiliates, that constitutes, or may constitute, material non-public information, (j) for each Trading Day in a period of 60
consecutive Trading Days prior to the applicable date in question, the daily trading volume for the Common Stock on the principal Trading
Market exceeds $500,000 per Trading Day and (k) the electronic transfer by the Company of shares of Common Stock through the Depository
Trust Company or another established clearing corporation is no longer available or is subject to a “chill”.

 

    3

     

    

 

“Event
of Default” shall have the meaning set forth in Section 8(a).

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“IPO”
means the initial public offering of the Corporation.

 

“IPO
Date” means the date that the Registration Statement and the registration statement registering the shares to be issued in
the IPO is declared effective by the Commission or such other date as the Registration Statement is effective such that the Underlying
Shares may be freely transferred and the Company’s Common Stock is listed on a Trading Market.

 

“Late
Fees” shall have the meaning set forth in Section 2(d).

 

“Mandatory
Default Amount” means the sum of (a) the greater of (i) following the IPO Date, the outstanding principal amount of this Debenture,
plus all accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded
(if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion
Price, multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever
has a higher VWAP, or (ii) 120% of the outstanding principal amount of this Debenture, plus 100% of accrued and unpaid interest hereon,
and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.

 

“New
York Courts” shall have the meaning set forth in Section 9(d).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Optional
Redemption” shall have the meaning set forth in Section 6.

 

    4

     

    

 

“Optional
Redemption Amount” means the sum of (a) 115% of the then outstanding principal amount of the Debenture, (b) accrued but unpaid
interest and (c) all liquidated damages and other amounts due in respect of the Debenture.

 

“Optional
Redemption Date” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Notice” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Period” shall have the meaning set forth in Section 6.

 

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

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) the Indebtedness existing on the Original Issue Date
and set forth on Schedule 3.1(aa) attached to the Purchase Agreement, (c) lease obligations and purchase money indebtedness of
up to $100,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect to
newly acquired or leased assets and (d) indebtedness that (i) is expressly subordinate to the Debentures pursuant to a written subordination
agreement with the Purchasers that is acceptable to each Purchaser in its sole and absolute discretion and (ii) matures at a date later
than the 91st day following the Maturity Date.

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith
and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established
in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated
Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for
the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) Liens incurred in connection with Permitted
Indebtedness under clauses (a), (b) and (d) thereunder, and (d) Liens incurred in connection with Permitted Indebtedness under clause
(c) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired
or leased.

 

    5

     

    

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of November 5, 2021 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated July 1, 2021, among the Company and the original Holders.

 

“Registration
Statement” means a registration statement on Form S-1 meeting the requirements set forth in the Registration Rights Agreement
and covering the resale of the Underlying Shares by each Holder as provided for in the Registration Rights Agreement.

 

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

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange (or any successors to any of the foregoing).

 

“VWAP”
means, following the IPO Date, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)).

 

Section
2. Interest.

 

a)
Payment of Interest. The outstanding principal balance of this Debenture shall bear interest accruing from the date made to the
IPO Date at the rate of twelve percent (12%) per annum. Interest shall be due and payable in cash on the earliest of the Conversion Date
(as to the amount being converted), the Optional Redemption Date (as to the amount being redeemed) and or the Maturity Date.

 

b)
Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue daily commencing on the Original Issue Date until the date of payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.

 

    6

     

    

 

c)
Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 15% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily
from the date such interest is due hereunder through and including the date of actual payment in full.

 

d)
Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of
this Debenture without the prior written consent of the Holder.

 

Section
3. Registration of Transfers and Exchanges.

 

a)
Different Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.

 

b)
Investment Representations. This Debenture has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.

 

c)
Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent
of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

a)
Voluntary Conversion. At any time after the six-month anniversary of the IPO Date until this Debenture is no longer outstanding,
the principal amount of this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder,
at any time and from time to time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect
conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the principal amount of this Debenture to be converted and the date on which such conversion
shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion,
the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be
required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless
the entire principal amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted in which case the
Holder shall surrender this Debenture as promptly as is reasonably practicable after such conversion without delaying the Company’s
obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall have the effect of lowering the outstanding
principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Company shall maintain records
showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion
within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this
Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture,
the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.

 

    7

     

    

 

b)
Conversion Price. The conversion price for this Debenture shall equal 50% of the “effective” IPO price per share of
Common Stock to the public (such that, if the IPO price is $10 for a unit consisting of 2 shares of Common Stock, the “effective”
price per share is $5.00 and the Conversion Price hereunder is $2.50, subject to adjustment herein (the “Conversion Price”);
provided, however, the Conversion Price shall be reduced, and only reduced, after the IPO Date to the lower of the Conversion
Price on the IPO Date and the lowest VWAP during the 10 Trading Days immediately following the IPO Date provided that the Conversion
Price shall not be reduced to less than $1.00, subject to adjustment for reverse and forward stock splits and the like. For the avoidance
of doubt, the current proposed structure of the securities being sold in the IPO is the sale of units consisting of one share, one warrant
with an exercise price equal to 50% of the unit price and a second warrant with an exercise price equal to 100% of the unit price, but
the second warrant automatically becomes exercisable on a cashless basis without the payment of any consideration on the tenth day following
the IPO Date. Assuming an IPO price per Unit of $10.00, the effective price would be $5.00.

 

c)
Mechanics of Conversion.

 

i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y)
the Conversion Price.

 

ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”),
the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after the earlier of (i) the
six month anniversary of the Original Issue Date or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon
the conversion of this Debenture and (B) a bank check in the amount of accrued and unpaid interest. On or after the earlier of (i) the
six-month anniversary of the Original Issue Date or (ii) the Effective Date, the Company shall deliver any Conversion Shares required
to be delivered by the Company under this Section 4(c) electronically through the Depository Trust Company or another established clearing
corporation performing similar functions. As used herein, “Standard Settlement Period” means the standard settlement
period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect
on the date of delivery of the Notice of Conversion.

 

    8

     

    

 

iii.
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company
at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Company shall promptly
return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return to the Company the Conversion
Shares issued to such Holder pursuant to the rescinded Conversion Notice.

 

iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon
conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a
waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Debenture shall elect
to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder
or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless
an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have
been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding
principal amount of this Debenture, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence
of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company
fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $10,000 of principal amount being converted, $50
per Trading Day (increasing to $100 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to
accrue) for each Trading Day after such Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof
for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief. 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.

 

    9

     

    

 

v.
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market
transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share
Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies
available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage
commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the
Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise
to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if
surrendered) this Debenture in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion
shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had
timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual
sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Conversion Shares upon conversion of this Debenture as required pursuant to the terms hereof.

 

    10

     

    

 

vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out
of its authorized and unissued shares of Common Stock for the sole 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 (and the other holders of the Debentures), not less than such aggregate number of shares of the Common
Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments
and restrictions of Section 5) upon the conversion of the then 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 authorized, validly
issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered
for public resale in accordance with such Registration Statement (subject to such Holder’s compliance with its obligations under
the Registration Rights Agreement).

 

vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Debenture.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share.

 

viii.
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Debenture shall be made without charge to
the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion
Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Debenture so converted
and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that
such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and
all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.

 

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d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall not have
the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable
Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common
Stock issuable upon conversion of this Debenture with respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon (i) conversion of the remaining, unconverted principal amount of this Debenture
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation
contained herein (including, without limitation, any other Debentures or the Warrants) beneficially owned by the Holder or any of its
Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Debenture is convertible
(in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which principal amount
of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be
deemed to be the Holder’s determination of whether this Debenture may be converted (in relation to other securities owned by the
Holder together with any Affiliates or Attribution Parties) and which principal amount of this Debenture is convertible, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company,
or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common
Stock outstanding.  Upon the written or oral request (which may be via email) of a Holder, the Company shall within one Trading
Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Debenture, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock
was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture. The Holder, upon
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the Holder and the Beneficial Ownership Limitation
provisions of this Section 4(d) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until
the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained
herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this Debenture.

 

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Section
5. Certain Adjustments.

 

a)
Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of
interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a
reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding
immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately 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)
Subsequent Equity Sales. If, at any time while this Debenture is outstanding and prior to the IPO Date, the Corporation or any
Subsidiary, as applicable sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or
issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock (such issuances, collectively, a “Dilutive Issuance”) at a price per
share of Common Stock using a pre-money valuation of the Corporation equal to the lesser of (i) $17,000,000.00 and (ii) the last pre-money
valuation used by the Corporation in connection with a Dilutive Issuance (if the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to
receive shares of Common Stock at an effective price per share that uses a lower valuation, such issuance shall be deemed to have occurred
at such lower valuation) (the pre-money valuation used in respect of such Dilutive Issuance, “Dilutive Issuance Valuation”),
then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance, the Conversion Price shall be
reduced to equal the product of (i) the then Conversion Price and (ii) the quotient obtained by dividing (A) the Dilutive Issuance Valuation
as to such Dilutive Issuance and (B) the lower of $9,000,000 and the immediately prior Dilutive Issuance Valuation. The adjustment provided
for in this Section 7(b) shall not apply to an Exempt Issuance (as defined in the Purchase Agreement).

 

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c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however,
that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

d)
Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Debenture, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Debenture (without regard to any limitations on conversion hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution
to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would
not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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e)
Fundamental Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly, in one
or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all
of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or
other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization 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, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon
any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in
Section 4(d) on the conversion of this Debenture), the number of shares of Common Stock of the successor or acquiring corporation or
of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture is
convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of
this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in
such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. The
Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Debenture and the other Transaction Documents
(as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form
and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental
Transaction and shall, at the option of the holder of this Debenture, deliver to the Holder in exchange for this Debenture a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Debenture which is convertible
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon conversion of this Debenture (without regard to any limitations on the conversion of this Debenture)
prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting
the economic value of this Debenture immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Debenture
and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Debenture and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

 

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g)
Notice to the Holder.

 

i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

 

ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company(and all of its Subsidiaries, taken as a whole)
is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last address as it shall
appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice
or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such
notice. Following the IPO Date, to the extent that any notice provided hereunder constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to convert this Debenture during the 20-day period commencing on the date
of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

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Section
6. Optional Redemption at Election of Company. Subject to the provisions of this Section 6, at any time after the IPO Date,
the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice is deemed
delivered hereunder, the “Optional Redemption Notice Date” which shall not be prior to the IPO Date) of its irrevocable
election to redeem some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to the Optional
Redemption Amount on the 60th Trading Day following the Optional Redemption Notice Date (such date, the “Optional
Redemption Date”, such 60 Trading Day period, the “Optional Redemption Period” and such redemption, the
“Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company
may only effect an Optional Redemption if each of the Equity Conditions shall have been met (unless waived in writing by the Holder)
on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through
and including the date payment of the Optional Redemption Amount is actually made in full. If any of the Equity Conditions shall cease
to be satisfied at any time during the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice
by notice to the Company within 3 Trading Days after the first day on which any such Equity Condition has not been met (provided that
if, by a provision of the Transaction Documents, the Company is obligated to notify the Holder of the non-existence of an Equity Condition,
such notice period shall be extended to the third Trading Day after proper notice from the Company) in which case the Optional Redemption
Notice shall be null and void, ab initio. The Company covenants and agrees that it will honor all Notices of Conversion tendered
from the time of delivery of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. The
Company’s determination to pay an Optional Redemption in cash shall be applied ratably to all of the holders of the then outstanding
Debentures based on their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement. The payment
of cash or issuance of Common Stock, as applicable, pursuant to an Optional Redemption shall be payable on the Optional Redemption Date.
If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by the applicable due date, interest
shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law until such
amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Optional Redemption Amount remains
unpaid after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate such
Optional Redemption, ab initio, and, with respect to the Company’s failure to honor the Optional Redemption, the Company
shall have no further right to exercise such Optional Redemption. The Holder may elect to convert the outstanding principal amount of
the Debenture pursuant to Section 4 prior to actual payment in cash for any redemption under this Section 6 by the delivery of a Notice
of Conversion to the Company.

 

Section
7. Negative Covenants. Prior to the IPO Date, as long as any portion of this Debenture remains outstanding, unless the holders
of at least 50.1% in principal amount of the then outstanding Debentures shall have otherwise given prior written consent, the Company
shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom;

 

b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

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c)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

d)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock
or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under the Transaction
Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers, directors or employees of the Company,
provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Debenture;

 

e)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than (i) Indebtedness that is senior to
the Debentures and set forth on Schedule 3.1(ff) to the Purchase Agreement, (ii) Indebtedness set forth on Schedule 3.1(aa)
of the Purchase Agreement that is repaid from the proceeds of the IPO, (iii) the Debentures if on a pro-rata basis, and (iv) regularly
scheduled principal and interest payments as such terms are in effect as of the Original Issue Date, provided that such payments shall
not be permitted in the case of clause (v) if, at such time, or after giving effect to such payment, any Event of Default exist or occur;

 

f)
pay cash dividends or distributions on any equity securities of the Company;

 

g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of
the Company (even if less than a quorum otherwise required for board approval); or

 

h)
enter into any agreement with respect to any of the foregoing.

 

Section
8. Events of Default.

 

a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and
whether such event 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.
any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts owing to
a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured
within 3 Trading Days;

 

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ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures or in any Transaction Document,
which failure is not cured, if possible to cure, within the earlier to occur of (A) 10 Trading Days after notice of such failure sent
by the Holder or by any other Holder to the Company and (B) 15 Trading Days after the Company has become or should have become aware
of such failure;

 

iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall
occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company
or any Subsidiary is obligated (and not covered by clause (vi) below);;

 

iv.
any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect
in any material respect as of the date when made or deemed made;

 

v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

vi.
the Company or any Subsidiary shall default on any of its obligations under 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 that (a) involves an obligation greater
than $500,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.
After the IPO Date, the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be
eligible to resume listing or quotation for trading thereon within five Trading Days;

 

viii.
the Company (and all of its Subsidiaries, taken as a whole) shall be a party to any Change of Control Transaction or Fundamental Transaction
or shall agree to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether
or not such sale would constitute a Change of Control Transaction);

 

ix.
any Person shall breach the Lock-Up Agreements delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;

 

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x.
following the IPO Date, the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another
established clearing corporation is no longer available or is subject to a “chill”;

 

xi.
the Company abandons the IPO; or

 

xii.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective
property or other assets for more than $500,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or
unstayed for a period of 45 calendar days.

 

b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued
but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at
the Holder’s election, immediately due and payable in cash; provided, however, that in the case of all Events of Default other
than those described in 8(a)(iii)(B), (vi), (viii) and (xii) (the “Mandatory Default Exclusions”) an amount equal
to the Mandatory Default Amount shall be paid. Commencing 5 days after the occurrence of any Event of Default that results in the eventual
acceleration of this Debenture, the interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum
or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount (or, in the case of an Event
of Default involving a Mandatory Default Exclusion, the outstanding principal amount of this Debenture, plus accrued but unpaid interest,
liquidated damages and other amounts owing in respect thereof through the date of acceleration) the Holder shall promptly surrender this
Debenture to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the
Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights
as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

    20

     

    

 

Section
9. Miscellaneous.

 

a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by email attachment, or sent by a nationally recognized
overnight courier service, addressed to the Company, at the address set forth above, or such other email address, or address as the Company
may specify for such purposes by notice to the Holder delivered in accordance with this Section 9(a).  Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by email attachment,
or sent by a nationally recognized overnight courier service addressed to each Holder at the email address or address of the Holder appearing
on the books of the Company, or if no such email attachment or address appears on the books of the Company, at the principal place of
business of such Holder, as set forth in the Purchase Agreement.  Any notice or other communication or deliveries hereunder shall
be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email
attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date,
(ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via email attachment to the email
address set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

b)
Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation
of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.

 

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

 

    21

     

    

 

d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough
of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York
Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding
to enforce any provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or
proceeding.

 

e)
Waiver. Any waiver by the Company or 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 Company
or 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 on any
other occasion. Any waiver by the Company or the Holder must be in writing.

 

f)
Severability. 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 violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. 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 Debenture, 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 impede 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.

 

    22

     

    

 

g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Debenture
shall be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at
law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture.  The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining
any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security
being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the
Holder to confirm the Company’s compliance with the terms and conditions of this Debenture.

 

h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.

 

i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be
deemed to limit or affect any of the provisions hereof.

 

Section
10. Disclosure. Following the IPO Date, upon receipt or delivery by the Company of any notice in accordance with the terms of
this Debenture, unless the Company has in good faith determined that the matters relating to such notice do not constitute material,
nonpublic information relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt
or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the
Company believes that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so
shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall
be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries.

 

Section
11. Subordination. By acceptance of this Debenture, the Holder hereby acknowledges and agrees that the indebtedness evidenced
by this Debenture is subordinated in right of payment to the indebtedness that is described in Schedule 3.1(ff) of the Purchase
Agreement (the “Senior Indebtedness”) and certain rights of the holder of the Senior Indebtedness.

 

(Signature
Page Follows)

 

    23

     

    

 

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

 

	 	SMART
    FOR LIFE, INC.
	 	 	 
	 	By:	/s/
    Alfonso J. Cervantes, Jr.
	 	Name: 	Alfonso
    J. Cervantes, Jr.
	 	Title:	Executive
    Chairman
	 	 	 
	 	Email for delivery of Notices:

 

     

     

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

 

The
undersigned hereby elects to convert principal under the 12% Unsecured Subordinated Convertible Debenture due November 30, 2022 of Smart
for Life, Inc., a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith
such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for
any conversion, except for such transfer taxes, if any.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d) of the Exchange
Act.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer
of the aforesaid shares of Common Stock.

 

	Conversion
    calculations:	 	 
	 	 	Date
    to Effect Conversion:
	 	 	 
	 	 	Principal
    Amount of Debenture to be Converted:
	 	 	 
	 	 	Number
    of shares of Common Stock to be issued:
	 	 	 
	 	 	Signature:
	 	 	 
	 	 	Name:
	 	 	 
	 	 	Address
    for Delivery of Common Stock Certificates:
	 	 	 
	 	 	Or
	 	 	 
	 	 	DWAC
    Instructions:
	 	 	 
	 	 	Broker
    No:                                 
	 	 	Account
    No:

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