Document:

Exhibit 10.15

 

 

 

DEBENTURE
PURCHASE AGREEMENT

 

This
DEBENTURE PURCHASE AGREEMENT, dated as of July 29, 2022 (this “Agreement”), is entered into by and among SMART FOR
LIFE, INC., a Delaware corporation (the “Company”), and the purchasers identified on the signature pages hereto (such
purchasers, together with their respective successors and permitted assigns, each a “Purchaser” and, collectively,
the “Purchasers”).

 

RECITALS

 

A. The
Company desires to raise capital in an amount of up to $4,000,000 through the sale and issuance of original issue discount subordinated
debentures, in substantially the form attached hereto as Exhibit A (each a “Debenture” and collectively, the
“Debentures”), to the Purchasers and the Purchasers desire to acquire the Debentures, all on the terms and conditions
set forth herein. The Debentures will have an original issue discount of 15% and an interest rate of 17.5%. The minimum purchase amount
for each Debenture is $100,000; provided, that the Company may accept other amounts in its sole discretion.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth in this Agreement,
the parties to this Agreement mutually agree as follows:

 

1. Authorization
and Sale.

 

(a) Issuance
of the Debentures. At each Closing (as defined below), the Company agrees to issue and sell to each Purchaser, and, subject to all
of the terms and conditions hereof, each Purchaser agrees to purchase, the Debentures for the purchase price set forth opposite such
Purchaser’s name on the signature page hereto.

 

(b) Initial
Closing. The initial closing of the purchase and sale of Debentures (the “Initial Closing”) will take place remotely
via the electronic exchange of documents and signatures at 10:00 a.m. Eastern Time on the date of this Agreement, or at such other time
and place as the Company and the Purchasers purchasing the Debentures in the Initial Closing may mutually agree.

 

    

     

    

 

(c) Additional
Closings. The Company may, without obtaining the signature, consent or permission of any of the Purchasers, sell and issue to the
Purchasers or to additional Purchasers (the “Additional Purchasers”) in one or more subsequent closings (each, an
“Additional Closing” and, together with the Initial Closing, each, a “Closing”), prior to June
30, 2022, which date may be extended in the sole discretion of the Company’s board of directors, additional Debentures (the “Additional
Debentures”) up to the aggregate purchase amount for all Debentures of $4,000,000; provided, however, that the
aggregate amount of all Debentures issued at the Initial Closing and all Additional Debentures issued at Additional Closings pursuant
to this Agreement may exceed $4,000,000 at the Company’s sole discretion. The Company and the Additional Purchasers purchasing
Additional Debentures at each Additional Closing will execute counterpart signature pages to this Agreement and such Additional Purchasers
will, upon delivery to the Company of such signature pages, become a party to, and bound by, this Agreement to the same extent as if
they had been Purchasers at the Initial Closing.

 

(d) Delivery.
At each Closing, the Company shall deliver to each Purchaser a Debenture in the purchase amount designated opposite such Purchaser’s
name on the signature page hereto, against delivery of payment of the purchase price therefor and delivery of a counterpart signature
page to this Agreement.

 

2. Representations
and Warranties of the Company. The Company hereby represents and warrants to each Purchaser as follows:

 

(a) Authorization.
All corporate action on the part of the Company, its officers and directors necessary for the authorization, execution and delivery of
this Agreement and the Debentures (collectively, the “Transaction Documents”), the performance of all obligations
of the Company thereunder, and the authorization, issuance, sale and delivery of the Debentures has been taken or will be taken prior
to the Initial Closing. The Transaction Documents, when executed and delivered by the Company, shall constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’
rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies. The Company has all requisite legal and corporate power to execute and deliver the Transaction Documents and to carry out and
perform its obligations thereunder.

 

(b) Valid
Issuance. The Debentures, when issued, sold and delivered in accordance with the terms hereof and thereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on
transfer under this Agreement, the Debentures, and applicable state and federal securities laws. Based in part upon the representations
of the Purchasers in this Agreement, the offer, issue, and sale of the Debentures are and will be exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with the exemption
provisions of Regulation D, Rule 506(c), promulgated under the Securities Act, and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit, or qualification requirements of all applicable state securities
laws.

 

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(c) Consents.
No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal,
state or local governmental authority on the part of the Company is required in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement, except for any notices of sale required to be filed with the
Securities and Exchange Commission under Regulation D of the Securities Act, or such post-closing filings as may be required under applicable
state securities laws, which will be timely filed within the applicable periods therefore.

 

(d) Compliance
with Other Instruments. The making and performance of this Agreement by the Company does not violate in any material respect (i) any
provision of its certificate of incorporation or bylaws or (ii) any provision of (A) any material mortgage, indenture, contract,
agreement or instrument to which it is a party or by which it is bound or of any judgment, decree, order or writ applicable to the Company
or any of its subsidiaries or (B) to its knowledge, any statute, rule or regulation applicable to the Company, which in either case
(A) or (B) of this clause (ii), has had or could reasonably be deemed to have, individually or in the aggregate, a material adverse effect
on the business, assets, properties, liabilities, operations, prospects or condition (financial or otherwise) of the Company and its
subsidiaries taken as a whole.

 

3. Representations
and Warranties of the Purchasers. Each Purchaser hereby represents and warrants to the Company with respect to such Purchaser as
follows:

 

(a) Power
and Authority. The Purchaser has the requisite power and authority to enter into this Agreement and to purchase the Debentures, subject
to all of the terms and conditions of this Agreement, and to carry out and perform all of its obligations hereunder.

 

(b) Due
Execution. This Agreement has been duly authorized, executed and delivered by the Purchaser, and, upon due execution and delivery
by the Company, this Agreement will be a valid and legally binding agreement of the Purchaser, enforceable against the Purchaser in accordance
with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
other laws of general application affecting enforcement of creditors’ rights generally, or (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies.

 

(c) Acquisition
for Purchaser’s Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation
to the Company, which by its execution hereof the Purchaser confirms, that the Debentures will be acquired for investment for its own
account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and that it has no present intention
of selling, granting participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents
that it does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer or grant participations
to such person, or to any third person, with respect to the Debentures.

 

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(d) No
Intention to Distribute. The Purchaser understands that the issuance and sale of the Debentures has not been registered under the
Securities Act on the grounds that the sale provided for in this Agreement is or will be exempt from registration under the Securities
Act, and that the Company’s reliance on such exemption is predicated in part on the Purchaser’s representations set forth
herein. The Purchaser realizes that the basis for the exemption may not be present if, notwithstanding such representations, the Purchaser
has in mind merely acquiring the Debentures for a fixed or determined period in the future. The Purchaser does not have any such intention.

 

(e) Accredited
Investor Status. The Purchaser represents that: (i) it is an “accredited investor” as such term is defined in Rule 501
of Regulation D promulgated under the Securities Act; (ii) its financial situation is such that it can afford to bear the economic risk
of holding the Debentures purchased by it for an indefinite period of time and suffer a complete loss of its investment in the Debentures;
(iii) its knowledge and experience in financial and business matters are such that it is capable of evaluating the merits and risks of
its purchase of the Debentures as contemplated by the Transaction Documents; (iv) it understands that its purchase of the Debentures
is a speculative investment; (v) the purchase of the Debentures by it has been duly and properly authorized and this Agreement has been
duly executed by it or on its behalf and constitutes its valid and legally binding obligation enforceable in accordance with its terms;
and (vi) it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the sale
of the Debentures. The Purchaser further represents that the Purchaser has completed the Accredited Investor Questionnaire set forth
on Exhibit B attached hereto, and that all answers by the Purchaser contained on the completed form that is returned to the Company
must be true and correct in all respects. The Purchaser agrees to provide any additional documentation the Company may reasonably request
to verify that the Purchaser meets applicable accredited investor financial suitability standards.

 

(f) No
Registration. The Purchaser understands that the Debentures may not be sold, transferred or otherwise disposed of without registration
under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Debentures
or an available exemption from registration under the Securities Act, the Debentures must be held indefinitely. In particular, the Purchaser
is aware that the Debentures may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of
that Rule are met. The Purchaser represents that, in the absence of an effective registration statement covering the Debentures, it will
sell, transfer, or otherwise dispose of the Debentures only in a manner consistent with its representations set forth herein and then
only in accordance with the provisions of Section 3(g) below.

 

(g) Restrictions
on Transfer. The Purchaser agrees that in no event will it make a transfer or disposition of any of the Debentures (other than pursuant
to an effective registration statement under the Securities Act, a Rule 144 sale in compliance with the terms of such Rule or, to the
Company’s reasonable satisfaction, pursuant to an exemption from the Securities Act), unless and until (i) the Purchaser has
notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances surrounding
the disposition, and (ii) if requested by the Company, at the expense of the Purchaser or transferee, it shall have furnished to
the Company an opinion of counsel, reasonably satisfactory to the Company, to the effect that such transfer may be made without registration
under the Securities Act.

 

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(h) Ability
to Bear Economic Risk. Each Purchaser acknowledges that investment in the Debentures involves a high degree of risk, and represents
that it is able, without materially impairing its financial condition, to hold the Debentures for an indefinite period of time and to
suffer a complete loss of its investment.

 

(i) Legend.
The Purchaser understands that Debenture will be endorsed with a legend substantially as follows (in addition to any other applicable
legends):

 

THIS
DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS
OF ANY FOREIGN JURISDICTION. THIS DEBENTURE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT
BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, RENOUNCED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY FOREIGN JURISDICTION,
OR THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS.

 

(j) Government
Consents. No consent, approval or authorization of or designation, declaration or filing with any state, federal, or foreign governmental
authority on the part of the Purchaser because of any special characteristic of such Purchaser is required in connection with the valid
execution and delivery of this Agreement by the Purchaser, and the consummation by the Purchaser of the transactions contemplated hereby;
provided, however, that the Purchaser makes no representations as to compliance with applicable state securities laws.

 

(k) Finders’
Fees. The Purchaser represents and warrants that it has retained no finder or broker in connection with the transactions contemplated
by this Agreement, and hereby agrees to indemnify and to hold the Company and any other Purchaser harmless of and from any liability
for any commission or compensation in the nature of a finder’s fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which such Purchaser or any of its employees or representatives are responsible.

 

(l) Residence.
The Purchaser is a legal resident of, and makes its principal legal residence or office in, the state set forth on the signature page
hereto and made all decisions relating to the transaction contemplated by this Agreement in such state.

 

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(m) Tax
Matters. The Purchaser has reviewed with its own tax advisors the federal, state, local and foreign tax consequences of this investment
and the transactions contemplated by this Agreement. With respect to such matters, the Purchaser relies solely on such advisors and not
on any statements or representations of the Company or any of its agents or representatives. The Purchaser understands that it (and not
the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated
by this Agreement.

 

4. Miscellaneous.

 

(a) Entire
Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties, and no party shall
be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth
herein or therein. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any third party any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

(b) Governing
Law. This Agreement shall be governed by and construed under the laws of the State of Florida, without regard to its conflicts of
laws or choice of law provisions.

 

(c) Consent
to Jurisdiction and Service of Process. EACH PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN FLORIDA
WILL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE PARTIES PERTAINING TO THIS AGREEMENT OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS
IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL AND THAT SERVICE SO MADE WILL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.

 

(d) Headings.
The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

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(e) Notices.
Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery
or three business days following deposit with the United States Post Office, by registered or certified mail, postage prepaid, or sent
by confirmed facsimile or electronic mail, addressed to such party at the address set forth on the signature page hereto, or at such
other address as such party shall have furnished in writing.

 

(f) Expenses.
Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery, and performance of this
Agreement.

 

(g) Attorneys’
Fees. Should any litigation or arbitration be commenced between the parties hereto concerning this Agreement, the party prevailing
in such litigation or arbitration shall be entitled, in addition to such other relief as may be granted, to a reasonable sum for attorneys’
fees and costs in such litigation or arbitration, which fees and costs shall be determined by the court or arbitrator, as the case may
be.

 

(h) Severability.
In case any provision of this Agreement shall be invalid, illegal or unenforceable, it shall to the extent practicable, be modified so
as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(i) Delays
or Omissions. No delay or omission to exercise any right, power or remedy accruing to the Company or any Purchaser or any subsequent
holder of any Debentures upon any breach, default or noncompliance of any Purchaser, any subsequent holder of any Debentures or the Company
under this Agreement shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default
or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on the part of the Company or the Purchaser of any breach,
default or noncompliance under this Agreement or any waiver on the Company’s or the Purchaser’s part of any provisions or
conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing and
that all remedies, either under this Agreement, by law, or otherwise afforded to the Company and the Purchaser, shall be cumulative and
not alternative.

 

(j) Amendments
and Waivers. Except as otherwise expressly provided herein, any term of this Agreement may be amended and the observance of any term
of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely) with the written consent of the Company and the Purchasers holding not less than a majority
of the then outstanding aggregate principal amount of the Debentures issued pursuant to this Agreement, voting together as a single group;
provided, however, that no such amendment or waiver shall reduce the aforesaid percentage of Purchasers required to consent
to any waiver or supplemental agreement, without the consent of the holders of all of the Debentures. Any amendment or waiver effected
in accordance with this Section shall be binding upon each Purchaser. Upon the effectuation of each such amendment or waiver, the Company
shall promptly give written notice thereof to the Purchaser that have not previously consented thereto in writing.

 

(k) Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

[SIGNATURE
PAGE FOLLOWS]

 

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IN
WITNESS WHEREOF, the parties have caused this Debenture Purchase Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the date and year first written above.

 

	
	COMPANY:
	 	 	 
	 	SMART FOR LIFE, INC.
	 	 	 
	 	By:	
	 	Name:	Alfonso J. Cervantes, Jr.
	 	Title:	Executive
    Chairman

  

	 	Address: 

                                                 

                                                990
Biscayne Blvd., Suite 503

Miami,
FL 33132

Attention:
Alfonso J. Cervantes, Jr.

Email:
aj.cervantes@smartforlifecorp.com

  

	 	PURCHASER:
	 	 	 
	 	 
	 	(Print Name Above)
	 	 	 
	 	 
	 	(Sign Above)
	 	 	 
	 	If an entity:
	 	 	 
	 	Name:	                    
	 	 	 
	 	Title:	                         
	 	 	 
	 	Address:	 
	 	 
	 	 
	 	 

 

	 	Purchase Amount: $	 

 

[SIGNATURE
PAGE TO DEBENTURE PURCHASE AGREEMENT]Exhibit 10.16

 

 

 

THIS DEBENTURE HAS BEEN ISSUED WITH “ORIGINAL
ISSUE DISCOUNT” FOR U.S. FEDERAL INCOME TAX PURPOSES. THE ISSUER WILL MAKE AVAILABLE TO ANY HOLDER OF THIS DEBENTURE: (1) THE ISSUE
PRICE AND ISSUE DATE OF THE DEBENTURE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE DEBENTURE, (3) THE YIELD TO MATURITY OF THE DEBENTURE,
AND (4) ANY OTHER INFORMATION REQUIRED TO BE MADE AVAILABLE BY U.S. TREASURY REGULATIONS UPON RECEIVING A WRITTEN REQUEST FOR SUCH INFORMATION
AT THE FOLLOWING ADDRESS: 990 BISCAYNE BLVD., SUITE 503, MIAMI, FL 33132.

 

THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION. THIS DEBENTURE HAS
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, RENOUNCED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY FOREIGN JURISDICTION, OR THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION
PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

 

SMART FOR LIFE, INC.

ORIGINAL ISSUE DISCOUNT SUBORDINATED DEBENTURE

 

	Principal Amount $_________	Original Issue Date: July 29, 2022
	Debenture Purchase Amount $_________	 

 

For value received, Smart
for Life, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of ___________________
(“Holder”) in lawful money of the United States of America the principal amount of $_______________ (the “Principal
Amount”), together with accrued and unpaid interest thereon, each due and payable on the date and in the manner set forth below.

 

This original issue discount
subordinated debenture (the “Debenture”) is one of a series of original issue discount subordinated debentures being
issued by the Company to additional holders pursuant to that certain Debenture Purchase Agreement, dated as of July 29, 2022, by and among
the Company and purchasers signatory thereto (the “Purchase Agreement”), and is subject to its terms. This Debenture
and the other original issue discount subordinated debentures issued pursuant the Purchase Agreement are collectively referred to herein
as the “Debentures.” In the event of any conflict between this Debenture and the Purchase Agreement, the terms of the
Purchase Agreement will control.

 

      

     

    

 

1. Original
Issue Discount. This Debenture has been issued with “original issue discount” of fifteen percent (15%) for U.S. Federal
income tax purposes. The Company will make available to any holder of this Debenture (i) the issue price and issue date of the Debenture,
(ii) the amount of original issue discount on the Debenture, (iii) the yield to maturity of the Debenture, and (iv) any other information
required to be made available by U.S. Treasury Regulations upon receiving a written request for such information at the following address:
990 Biscayne Blvd., Suite 503, Miami, FL 33132.

 

2. Principal
Repayment. The outstanding Principal Amount of this Debenture and all accrued interest shall be due and payable on the earlier of
(i) the completion of the Company’s Next Equity Financing or (ii) July 29, 2024 or (iii) within 30 days after election of repayment
from the Holder so long as the election is after the 6-month anniversary of the Debenture (the “Maturity Date”). For
purposes hereof, “Next Equity Financing” means a bona fide transaction or series of transactions with the principal
purpose of raising capital in which the Company receives gross proceeds in excess of $20 million. The Maturity Date may be extended by
a written agreement between the Holder and the Company.

 

3. Interest.
Interest shall accrue on the unpaid Principal Amount from the date hereof until such Principal Amount is repaid in full at the rate of
17.5% per annum (the “Interest”). Interest shall be paid on the Maturity Date. All computations of the Interest rate
hereunder shall be made on the basis of a 365-day year.

 

4. Prepayment.
The Principal Amount and all accrued and unpaid Interest on this Debenture may be prepaid without penalty, in whole or in part, in the
Company’s sole discretion.

 

5. Events
of Default. An “Event of Default” shall occur hereunder:

 

(a) if
the Company shall default in the payment of the Principal Amount or any Interest on this Debenture, when and as the same shall become
due and payable and after written demand for payment thereof has been made and such amount remains unpaid for 30 business days after the
date of such notice;

 

(b) if
the Company shall default in the due observance or performance of any covenant, representation, warranty, condition or agreement on the
part of the Company to be observed or performed pursuant to the terms hereof or pursuant to the terms of the Purchase Agreement, and such
default is not remedied or waived within the time periods permitted therein, or if no cure period is provided therein, within 30 business
days after the Company receives written notice of such default; or

 

(c) if
the Company shall commence any proceeding in bankruptcy or for dissolution, liquidation, winding-up, composition or other relief under
state or federal bankruptcy laws, or if such proceedings are commenced against the Company, or a receiver or trustee is appointed for
the Company or a substantial part of its property, and such proceeding or appointment is not dismissed or discharged within 120 calendar
days after its commencement.

 

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6. Acceleration.
If an Event of Default under Section 5(c) above occurs, then the Principal Amount and all accrued and unpaid Interest on this Debenture
shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are expressly
waived. If any other Event of Default occurs and is continuing, the holders of not less than a majority of the then-outstanding aggregate
Principal Amount of the Debentures (the “Requisite Holders”), even without the consent of the Holder of this Debenture,
may declare the Principal Amount and all accrued and unpaid Interest on this Debenture to be due and payable immediately only upon written
notice to the Company. Upon any such declaration of acceleration, such Principal Amount and Interest shall become immediately due and
payable, and the Holder shall be entitled to exercise all of its rights and remedies hereunder and under the Purchase Agreement whether
at law or in equity. The failure of the Holder to declare this Debenture due and payable shall not be a waiver of its right to do so,
and the Holder shall retain the right to declare this Debenture due and payable unless the Holder shall execute a written waiver. The
Holder agrees that it cannot, and will not, seek to exercise any remedy against the Company without the consent of the Requisite Holders.

 

7. Subordination.

 

(a) All
claims of the Holder to the Principal Amount, Interest and any other amounts at any time owed under this Debenture (collectively, “Junior
Indebtedness”) are hereby expressly subordinated in right of payment, as herein set forth, to the prior payment in full of all
Senior Indebtedness (as defined below). In addition, the Junior Indebtedness is hereby expressly made pari passu in right of payment
to any other unsecured indebtedness incurred, now or in the future, by the Company in favor of any third party. For the purpose hereof,
“Senior Indebtedness” shall mean all indebtedness of the Company, whether outstanding on the date of execution of this
Debenture or thereafter created, to banks, insurance companies and other financial institutions or funds, unless in the instrument creating
or evidencing such indebtedness it is provided that such indebtedness is not senior in right of payment to this Debenture or otherwise
indicates that it is pari passu with other unsecured indebtedness of the Company.

 

(b) No
payment under Junior Indebtedness shall be made by the Company, nor shall the Holder exercise any remedies under the Junior Indebtedness
(including taking any legal action (whether judicial or otherwise) to collect the Junior Indebtedness), if, at the time of such payment,
exercise or immediately after giving effect thereto, (i) there shall exist any “Default” or “Event of Default”
under any agreements governing any of the Senior Indebtedness or (ii) the maturity of any of the Senior Indebtedness has been accelerated
and such acceleration has not been waived or such Senior Indebtedness has not been paid in full; provided, however, that
(x) in the event that the holder of any Senior Indebtedness accelerates such Senior Indebtedness, then the Holder may accelerate the indebtedness
evidenced by this Debenture, and (y) if the Company is permitted under the terms of the Senior Indebtedness to pay an amount due and owing
under this Debenture and fails to make such payment, then so long as the terms of the Senior Indebtedness do not prohibit such action,
the Holder may exercise its rights to be paid such amount, but only such amount (and Holder shall not be permitted to accelerate hereunder).

 

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(c) Upon
any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all Senior Indebtedness of the Company shall first be paid in full, or payment
thereof provided for in money, before any payment is made under Junior Indebtedness; and upon any such dissolution or winding up or liquidation
or reorganization, any distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which
the Holder as holder of the Junior Indebtedness would be entitled except for the provisions hereof, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the Holder
if received by Holder, directly to the holders of the Senior Indebtedness (pro rata to each such holder on the basis of the respective
amounts of such Senior Indebtedness held by such holder), or their representatives, to the extent necessary to pay all such Senior Indebtedness
in full, in money, after giving effect to any concurrent prepayment or distribution to or for the benefit of the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holder with respect to the Junior Indebtedness. If the holders of the
Senior Indebtedness in good faith believe Holder may fail to timely file a proof of claim in any such proceeding, the holder(s) of the
Senior Indebtedness may do so for Holder.

 

(d) In
the event that any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities,
prohibited by the foregoing shall be received by the Holder before all the Senior Indebtedness is paid in full, or provisions made for
such payment, in accordance with its terms, such payment or distribution shall be held for the benefit of, and shall be paid over or delivered
to, the holders of the Senior Indebtedness or their representative or representatives, as their respective interests may appear, for application
to the payment of all the Senior Indebtedness remaining unpaid to the extent necessary to pay all such Senior Indebtedness in full, in
money, in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.

 

(e) The
provisions hereof are solely for the purpose of defining the relative rights of the holders of the Senior Indebtedness on the one hand
and the Holder as holder of the Junior Indebtedness on the other hand, and nothing herein shall impair, as between the Company and the
Holder, the obligations of the Company under the Junior Indebtedness, which are unconditional and absolute. With this in mind, notwithstanding
the other provisions of this Section 7, if and so long as all documents governing the Senior Indebtedness permit one of the actions restricted
by this Section 7, the restriction shall be waived and the restricted action permitted hereunder.

 

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(f) No
right of any present or future holder of any Senior Indebtedness to enforce the subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of the Company or any act or failure to act, in good faith,
by any such holder of the Senior Indebtedness, or any noncompliance by the Company with the terms, provisions and covenants hereof, regardless
of any knowledge thereof any holder of the Senior Indebtedness may have or be otherwise charged with. Without in any way limiting the
generality of the foregoing, the holders of the Senior Indebtedness may, at any time and from time to time, without the consent of or
notice to the Holder, without incurring responsibility to the Holder and without impairing or releasing the subordination provided in
this Debenture or the obligations hereunder of the Holder to the holders of the Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment of, or create, renew or alter, the Senior Indebtedness,
or otherwise amend or supplement in any manner the Senior Indebtedness or any instrument evidencing the same or any agreement under which
the Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise
securing the Senior Indebtedness; (iii) release any person liable or contingently liable in any manner for the payment or collection of
the Senior Indebtedness; and/or (iv) exercise or refrain from exercising any rights against the Company or any other person.

 

(g) Each
holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of this Debenture,
shall be entitled to rely on the subordination provisions set forth in this Debenture.

 

(h) Notwithstanding
the provisions of this Section 7, the Holder shall not be charged with knowledge of the existence of facts which would prohibit the making
of any payments on the Junior Indebtedness unless and until the holder(s) of the Senior Indebtedness or their representatives send written
notice to Holder of same.

 

(i) Subject
to the payment in full of all the Senior Indebtedness, the Holder as holder of the Junior Indebtedness shall be subrogated to the rights
of the holders of the Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness
until the Senior Indebtedness shall be paid in full.

 

(j) The
Holder shall confirm (in writing) the above subordination provisions if requested by any holder of the Senior Indebtedness, and shall
execute and deliver such additional subordination agreements, consistent with the foregoing as any holder of Senior Indebtedness may require.

 

8. Attorney’s
Fees. If the indebtedness represented by this Debenture or any part thereof is collected in bankruptcy, receivership or other judicial
proceedings or if this Debenture is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition
to the principal amount and interest payable hereunder, reasonable attorneys’ fees and costs incurred by Holder.

 

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9. Mutilated,
Destroyed, Lost or Stolen Debenture. If this Debenture shall become mutilated or defaced, or be destroyed, lost or stolen, the Company
shall execute and deliver a new debenture of like principal amount in exchange and substitution for the mutilated or defaced Debenture,
or in lieu of and in substitution for the destroyed, lost or stolen Debenture. In the case of a mutilated or defaced Debenture, the Holder
shall surrender such Debenture to the Company. In the case of any destroyed, lost or stolen Debenture, the Holder shall furnish to the
Company a lost affidavit in customary form (including customary indemnification).

 

10. Waiver
of Notice of Presentment. The Company hereby waives presentment, demand for performance, notice of non-performance, protest, notice
of protest and notice of dishonor. No delay on the part of Holder in exercising any right hereunder shall operate as a waiver of such
right or any other right.

 

11. Non-Waiver.
The failure of the Holder to enforce or exercise any right or remedy provided in this Debenture or at law or in equity upon any default
or breach shall not be construed as waiving the rights to enforce or exercise such or any other right or remedy at any later date. No
exercise of the rights and powers granted in or held pursuant to this Debenture by the Holder, and no delays or omissions in the exercise
of such rights and powers shall be held to exhaust the same or be construed as a waiver thereof, and every such right and power may be
exercised at any time and from time to time.

 

12. Usury.
Notwithstanding anything herein to the contrary, this Debenture is subject to the express condition that at no time shall the Company
be obligated or required to pay Interest hereunder at a rate which could subject the Holder to either civil or criminal liability as a
result of being in excess of the maximum contract rate which is permitted by law. If, by the terms of this Debenture, the Company is at
any time required or obligated to pay Interest at a rate in excess of the maximum contract rate which is permitted by law, the rate of
Interest under this Debenture shall be immediately reduced to the maximum contract rate which is permitted by law and all Interest payable
hereunder shall be computed at the maximum contract rate permitted by law, and the portion of all prior Interest payments in excess of
the maximum contract rate permitted by law shall be applied to and shall be deemed to have been payments made for the reduction of the
outstanding Principal Amount of this Debenture.

 

13. Assignment.
This Debenture and the rights hereunder may not be assigned or transferred by the Holder, other than to an affiliate of the Holder, without
the prior written consent of the Company, provided that any affiliate transferee, prior to effectiveness of such transfer, must
agree in writing to be subject to the terms of this Debenture to the same extent as if such affiliate transferee were the original holder,
and provided further that the Holder must give written notice to the Company of its intention to effect such transfer. Any purported
assignment in contravention of this Section 13 shall be null and void. Subject to the foregoing, this Debenture shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

    6

     

    

 

14. Amendment.
Any term of this Debenture may be amended, and any provision hereof waived, with the written consent of the Company and the Requisite
Holders, even without the consent of the Holder hereof. Any amendment effected in accordance with this Section 14 shall be binding upon
each holder of all Debentures (including the Holder), each future holder of any Debentures, and the Company.

 

15. Notices.
Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given
if given in accordance with the provisions of the Purchase Agreement.

 

16. Governing
Law. This Debenture is being delivered in and shall be construed in accordance with the laws of the State of Florida, without regard
to its conflicts of laws or choice of law provisions.

 

17. Headings.
The descriptive headings contained in this Debenture are included for convenience of reference only and will not affect in any way the
meaning or interpretation of this Debenture.

 

18. Severability.
If one or more provisions of this Debenture are held to be unenforceable under applicable law, such provisions shall be excluded from
this Debenture, and the balance of this Debenture shall be interpreted as if such provisions were so excluded and shall be enforceable
in accordance with its terms.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF,
the Company has duly executed and delivered this Debenture as of the date first above written.

 

	 	Smart For Life, Inc.
	 	 	 
	 	By:	
	 	Name:  	Alfonso J. Cervantes, Jr.
	 	Title:	Executive Chairman

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