Document:

Exhibit 10.12

 

AMENDMENT NO. 1

TO THE

SECURITIES PURCHASE AGREEMENT

 

This AMENDMENT NO. 1 TO THE
SECURITIES PURCHASE AGREEMENT, dated November 8, 2021 (the “Amendment”), is entered into by and among Smart
for Life, Inc. (formerly Bonne Santé Group, Inc.), a Delaware corporation (the “Buyer”), Nexus
Offers, Inc. a Florida corporation (the “Company”), and Justin
Francisco and Steven Rubert, as the shareholders of the Company (each,
a “Seller” and together, the “Sellers”).

 

RECITALS

 

A.
The Buyer, the Company and the Sellers have previously entered in that certain Securities Purchase Agreement, dated July 21, 2021
(the “Securities Purchase Agreement”).

 

B. The parties hereto desire to amend the Securities Purchase Agreement as set forth herein.

 

C.
Pursuant to Section 8.3 of the Securities Purchase Agreement, the Securities Purchase Agreement may be amended only by an instrument
in writing signed on behalf of the Buyer, the Company and the Sellers.

 

AGREEMENT

 

NOW, THEREFORE, in consideration
of the foregoing premises and the respective representations and warranties, covenants and agreements contained herein, the parties hereto
agree as follows:

 

1.
Definitions. All capitalized terms used herein without definition shall have the meanings ascribed to them in the Asset
Purchase Agreement.

 

2.
Amendments.

 

A.    Section
2.1 of the Securities Purchase Agreement shall be amended and restated to read as follows:

 

“Purchase and Sale
of the Securities. Upon the terms and subject to the conditions set forth in this Agreement, the Buyer agrees to pay to the Sellers
for the Securities in the aggregate at the Closing approximately Six Million Dollars ($6,000,000) (the “Purchase Price”),
subject to adjustment as described in Section 2.2 below, by delivery of (i) cash in the amount of Two Million Two Hundred Thousand Dollars
($2,200,000) (the “Cash Portion”), payable by wire transfer or delivery of other immediately available funds to one
or more accounts at banks identified by Sellers to Buyer in writing at least two (2) business days prior to the Closing Date, (ii) a convertible
promissory note (“Buyer Note I”) in a form to be mutually agreed to between the Buyer and the Sellers in the aggregate
principal amount of One Million Nine Hundred Thousand Dollars ($1,900,000), and (iii) a non-convertible promissory note (“Buyer
Note II,” and together with Buyer Note I the “Buyer Notes”) in the form to be mutually agreed to in the aggregate
principal amount of One Million Nine Hundred Thousand Dollars ($1,900,000). The Buyer Notes will each bear interest at the rate of 5%
per annum and will be amortized on a 60-month straight line basis with a balloon payment on the 36th month. The Buyer Notes
will be subordinated to the senior indebtedness of the Buyer and the Company and will have a subordinated security interest (after the
senior secured indebtedness) covering all of the assets of the Company.

 

     

     

    

 

B.    Section
2.2 of the Securities Purchase Agreement shall be amended and restated to read as follows:

 

“Adjustments to Purchase Price.

 

(a)
Working Capital Adjustment.

 

(i)  
At the Closing, the Sellers shall deliver to the Buyer an unaudited, combined estimated balance sheet of the Company (the “Preliminary
Balance Sheet”) as of the Closing Date together with a certificate of the Sellers stating that the Preliminary Balance Sheet
was prepared in accordance with GAAP so as to present fairly in all material respects the financial condition of Company on a combined
basis as of such date.

 

(ii)       
Ninety days (90) after the Closing Date, the Buyer shall cause its auditor to prepare and deliver to the Sellers an unaudited,
combined balance sheet of the Company as of the Closing Date (the “Closing Date Balance Sheet”) and all calculations,
work papers and supporting documents (the “Supporting Documentation”) as of the Closing Date. The Closing Date Balance
Sheet shall be prepared in accordance with GAAP in a manner consistent with the Preliminary Balance Sheet so as to present fairly in all
material respects the financial condition of the Company.

 

(iii)      
If the Closing Working Capital exceeds the Minimum Working Capital, then the Buyer shall promptly (and, in any event, within fifteen
(15) days) pay to the Sellers an amount in cash that is equal to the deficiency. If the Minimum Working Capital exceeds the Closing Working
Capital, then the Sellers shall promptly (and, in any event, within fifteen (15) days) pay to the Buyer an amount in cash that is equal
to the deficiency.

 

(iv)    In
the event the Sellers do not agree with the Closing Working Capital as reflected on the Closing Date Balance Sheet, the Sellers shall
so inform the Buyer in writing within 20 days of the Sellers’ receipt thereof, such writing to set forth the objections of the Sellers
in reasonable detail. If the Sellers and the Buyer cannot reach agreement as to any disputed matter relating to the Closing Working Capital
within 15 days after notification by the Sellers to the Buyer of a dispute, they shall forthwith refer the dispute to an Independent Accounting
Firm mutually agreeable to the Sellers and the Buyer for resolution, with the understanding that such firm shall resolve all disputed
items within 20 days after such disputed items are referred to it. If the Buyer and the Sellers are unable to agree on the choice of an
Independent Accounting Firm, they shall select an Independent Accounting Firm by lot from up to three firms proposed by each of the Sellers
and Buyer (after excluding their respective regular outside accounting firms). Each of the Sellers and the Buyer shall bear one-half of
the costs of such accounting firm. The decision of the accounting firm with respect to all disputed matters relating to the Closing Working
Capital shall be deemed final and conclusive and shall be binding upon the Sellers and the Buyer. In addition, if the Sellers do not object
to the Closing Working Capital within the 20-day period referred to above, the Closing Working Capital shall be deemed final and conclusive
and binding upon the Sellers and the Buyer.

 

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(b)
Adjustment for Outstanding Indebtedness. The Cash Portion shall be decreased by the amount of any outstanding indebtedness
of the Company for borrowed money existing as of the Closing Date and the deducted amount shall be utilized to pay off such outstanding
indebtedness.

 

C.    Section
2.4(a) of the Securities Purchase Agreement shall be amended and restated to read as follows:

 

“(a) At the Closing,
the Buyer will (i) pay to the Sellers the Cash Portion of the Purchase Price, less $100,000 (the “Holdback Amount”)
in accordance with Section 2.5, and as adjusted in accordance with subsection 2.2(b) and, by paying such sum to the Sellers by transfer
of immediately available funds in accordance with instructions provided by the Sellers, and (ii) deliver to the Sellers all other documents,
instruments or certificates required to be delivered by the Buyer at or prior to the Closing pursuant to this Agreement, including, without
limitation, the Buyer Notes.”

 

 D. Section 2.5 shall be added to the Securities Purchase Agreement as follows:

 

“Section 2.5 Post-Closing
Matters. The parties hereto acknowledge that the closing conditions set forth in Section 7.1(h) have not been satisfied by the Sellers
as of the date hereof; however, the Buyer has agreed to proceed with the Closing, subject to the terms of this Section 2.5. Sellers hereby
covenant to use their commercially reasonable efforts to deliver to the Buyer, or cause to be delivered, as soon as reasonably practical
following the Closing, evidence that UCC No. 202002021110 filed against Nexus Offers, Inc. in favor of U.S. Small Business Administration
has been terminated. Promptly following delivery of such evidence of termination, the Buyer will pay to the Sellers the Holdback Amount
by transfer of immediately available funds in accordance with instructions provided by the Sellers.”

 

 E. Section 6.7 of the Securities Purchase Agreement shall be amended and restated to read as follows:

 

“6.7 Covenant
not to Compete. For a period of three years from and after the Closing (the “Noncompetition Period”), the Sellers
shall not engage directly or indirectly in any business that is competitive with (i) the current business of the Company; or (ii) the
business of the Buyer (in each case, the “Business”), in any geographic area in which the Business is conducted as
of the Closing Date; provided, however, that no owner of less than 1% of the outstanding stock of any publicly-traded corporation shall
be deemed to engage solely by reason thereof in any of its businesses. During the Noncompetition Period, the Sellers shall not induce
or attempt to induce any customer, or supplier of the Buyer or any affiliate of the Buyer to terminate its relationship with the Buyer
or any Affiliate of the Buyer or to enter into any business relationship to provide or purchase the same or substantially the same services
as are provided to or purchased from the Business which might harm the Buyer or any Affiliate of the Buyer. During the Noncompetition
Period, the Sellers shall not, on behalf of any entity other than the Buyer or an Affiliate of the Buyer, hire or retain, or attempt to
hire or retain, in any capacity any Person who is, or was at any time during the preceding twelve (12) months, an employee or officer
of the Company. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 0 is invalid
or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which
the judgment may be appealed.”

 

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F.    Section
7.1(k) of the Securities Purchase Agreement shall be amended and restated to read as follows:

 

“(k) [RESERVED]”

 

3.
Effect of Amendment. Except as amended as set forth above, the Securities Purchase Agreement shall continue in full force
and effect. In the event of a conflict between the provisions of this Amendment and the Securities Purchase Agreement, this Amendment
shall prevail and govern.

 

4.
Counterparts. This Amendment 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.

 

5.
Governing Law. This Amendment shall be governed by and construed under the laws of the State of Florida without regard to
the choice of law principles thereof.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be duly executed as of the date first above written.

 

	 	BUYER:
	 	 	 
	 	SMART FOR LIFE, INC.
	 	 	 
	 	By:	/s/ Darren Minton 
	 	Name:	Darren Minton
	 	Title:	President
	 	 	 
	 	COMPANY:
	 	 	 
	 	NEXUS OFFERS, INC.
	 	 	 
	 	By:	/s/ Justin Francisco 
	 	Name:	Justin Francisco
	 	Title:	 President
	 	 	 
	 	SELLERS:
	 	 	 
	 	JUSTIN FRANCISCO
	 	 	 
	 	/s/ Justin Francisco 
	 	 	 
	 	STEVEN RUBERT
	 	 	 
	 	/s/ Steven Rubert

 

 

5Exhibit 10.13

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT.

 

Smart for Life, Inc.

 

5% SECURED SUBORDINATED CONVERTIBLE
PROMISSORY NOTE

 

	$1,900,000	 	November 8, 2021

 

FOR VALUE RECEIVED,
Smart for Life, Inc. (formerly Bonne Santé Group, Inc.), a Delaware corporation (the
“Company”), promises to Justin Francisco and Steven Rubert (together, “Holder”) the principal sum
of One Million Nine Hundred Thousand Dollars ($1,900,000) (the “Principal”) together with accrued and unpaid interest
thereon, each due and payable on the date and in the manner set forth below.

 

This secured subordinated
convertible promissory note (the “Note”) is issued pursuant to the terms of that certain Securities Purchase Agreement,
dated July 21, 2021 (as may be amended from time to time, the “Purchase Agreement”), among the Company, the Holder,
and Nexus Offers, Inc. Capitalized terms used herein without definition shall have the meanings given to such terms in the Purchase Agreement.

 

The following is a statement
of the rights of the Holder of this Note and the terms and conditions to which this Note is subject, and to which the Holder, by acceptance
of this Note, agrees:

 

1. Principal
Repayment. The Principal along with any accrued, but unpaid interest shall be paid in one lump sum on the third anniversary date of
this Note (the “Maturity Date”), subject to the terms of Section 4 below.

 

2. Interest.
Interest (the “Interest”) shall accrue on the unpaid Principal from the date hereof until such Principal is repaid
in full at the rate of five percent (5%) per annum. The Principal along with any accrued, but unpaid Interest shall be paid in one lump
sum on the Maturity Date, subject to the terms of Section 4 below.

 

3. Redemption.
The Company will have the right to redeem all or any portion of the Note at any time prior to the Maturity Date without premium or penalty
of any kind. The redemption price will be payable in cash and is equal to the then outstanding principal amount of this Note plus accrued
but unpaid interest thereon.

 

     

     

    

 

4. Conversion;
Repayment Premium Upon Sale of the Company.

 

(a) In
the event that the Company issues and sells shares of its common stock to investors (the “Investors”) on or before
the Maturity Date or earlier acceleration of this Note in an initial public offering under the Securities Act of 1933, as amended (the
“Securities Act”), including an initial public offering under Regulation A of the Securities Act and concurrent listing
on a national securities exchange (an “Initial Public Offering”), then, the outstanding Principal balance of this Note
shall be automatically converted in whole into such common stock at a conversion price equal to the price per share paid by any Investor
in the Initial Public Offering, and otherwise on the same terms and conditions as given to the Investors (the “Conversion Shares”).
Upon such automatic conversion, any unpaid accrued Interest on this Note shall be converted into common stock on the same terms as the
Principal of the Note.

 

(b)
To the extent the Company does not maintain an effective registration statement for the Underlying Shares, if the Company proposes to
register any of the Common Stock (other than pursuant to a Registration on Form S-4 or S-8 or any successor form), then, for a period
commencing on the date of the Purchase Agreement and terminating on the 2nd anniversary thereof, it will give written notice to the Holder
of its intention to effect such registration (the “Incidental Registration”), as soon as practicable but in no event
less than ten (10) business days before the anticipated filing date. Within five (5) business days of receiving such written notice of
an Incidental Registration, the Holder may make a written request (the “Piggy-Back Request”) that the Company include
in the proposed Incidental Registration all, or a portion, of the Underlying Shares reserved for the Holder, in connection with a conversion
of this Note. In addition, the Company shall cause such Underlying Shares to be included in such Incidental Registration and shall use
its best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit such Underlying Shares
which the Company has been requested to register pursuant to any timely Piggy-Back Request to the extent required to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the Underlying Shares so to be registered. Additionally, the Company
shall include on the next registration statement the Company files with SEC (or on the subsequent registration statement if such registration
statement is withdrawn) the Underlying Shares. This provision shall expire once the Conversion Shares may be freely sold by the Holder
under Rule 144 promulgated under the Securities Act, without restriction as to the volume of Conversion Shares that may be sold.

 

(c) In
the event that (i) an Initial Public Offering is not consummated prior to the Maturity Date, or (ii), there is a sale of all or substantially
all of the Company’s assets before the Maturity Date, then, at the election of the Holder made at least five days prior to the Maturity
Date, effective upon the Maturity Date, the outstanding Principal balance and any unpaid accrued Interest under this Note shall be due
and payable.

 

(d) If,
after aggregation, the conversion of this Note would result in the issuance of a fractional share, the Company shall, in lieu of issuance
of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying
the price per share paid by Investors in the Initial Public Offering for one share of common stock by such fraction.

 

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5. Events
of Default. In the event that any of the following (each, an “Event of Default”) shall occur:

 

(a) Non-Payment.
The Company shall default in the payment of the Principal of, or accrued Interest on, this Note as and when the same shall become due
and payable, whether by acceleration or otherwise; or

 

(b) Default
in Covenants. The Company shall default in any material manner in the observance or performance of any covenants or agreements set
forth in the Purchase Agreement; or

 

(c) Breach
of Representations and Warranties. The Company materially breaches any representation or warranty contained in the Purchase Agreement;
or

 

(d) Illegality
of Note. Any court of competent jurisdiction issues an order declaring the Note or any provision thereunder to be illegal;

 

(e) Cross
Default. There occurs with respect to any Senior Indebtedness: (i) a default with respect to any payment obligation thereunder that
then entitles the holder thereof to declare such indebtedness to be due and payable prior to its stated maturity, or (ii) any other default
thereunder that entitles, and has caused, the holder thereof to declare such indebtedness to be due and payable prior to its stated maturity;
or

 

(f) Bankruptcy. The
Company shall: (i) admit in writing its inability to pay its debts as they become due; (ii) apply for, consent to, or acquiesce in,
the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its property, or make a general
assignment for the benefit of creditors; (iii) in the absence of such application, consent or acquiesce in, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for any part of its property; or
(iv) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding
under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company, and, if
such case or proceeding is not commenced by the Company or converted to a voluntary case, such case or proceeding shall be consented
to or acquiesced in by the Company or shall result in the entry of an order for relief; then, and so long as such Event of Default
is continuing for a period of two (2) business days in the case of non-payment under Section 5(a) or for a period of thirty
(30) calendar days in the case of events under Sections 5(b) through 5(d) or for a period of five (5) calendar days in
the case of an event under Section 5(e) (and the event which would constitute such Event of Default, if curable, has not been
cured), by written notice to the Company from the Holder, all obligations of the Company under this Note shall be immediately due
and payable without presentment, demand, protest or any other action nor obligation of the Holder of any kind, all of which are
hereby expressly waived, and Holder may exercise any other remedies the Holder may have by contract, at law or in equity. If an
Event of Default specified in Section 5(f) above occurs, the principal of, and accrued interest on, the Note shall
automatically, and without any declaration or other action on the part of any Holder, become immediately due and payable and Holder
may exercise any other remedies the Holder may have by contract, at law or in equity. If the Purchase Agreement is assigned by the
Company pursuant to the terms thereof, for purposes of this Section 5, “Company” shall be deemed to include such
assignee.

 

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6. Covenants.
The Company hereby agrees that, so long as the Note remains outstanding and unpaid, or any other amount is owing to the Holder hereunder:

 

(a) The
Company will not, without providing at least 30 days’ prior written notice to the Holder, change its legal name, identity, type of organization,
jurisdiction of organization, corporate structure, location of its chief executive office or its principal place of business or its organizational
identification number. The Company will, prior to any change described in the preceding sentence, take all actions requested by the Holder
to maintain the perfection and priority of the Holder’s security interest in the Collateral.

 

(b) The
Company shall, at its own cost and expense, defend title to the Collateral and the lien and security interest of the Holder therein against
the claim of any person claiming against or through the Company and shall maintain and preserve such perfected security interest for so
long as this Note shall remain in effect.

 

(c) The
Company will not sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant any option with respect to, restrict, or
grant, create, permit or suffer to exist any mortgage, pledge, lien, security interest, option, right of first offer, encumbrance or other
restriction or limitation of any nature whatsoever on, any of the Collateral or any interest therein except with the prior written consent
of the Holder.

 

(d) The
Company will keep the Collateral in good order and repair and will not use the same in violation of law or any policy of insurance thereon.
The Company will permit the Holder, or its designee, to inspect the Collateral at any reasonable time, wherever located.

 

7. Subordination.

 

(a) All
claims of the Holder to principal, interest and any other amounts at any time owed under this Note (collectively, “Junior Indebtedness”)
is hereby expressly subordinated in right of payment, as herein set forth, to the prior payment in full of all Senior Indebtedness (as
defined below). 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 material “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 (A) such acceleration has not been waived or (B) 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 Note, and (y) if the Company is permitted under the terms of the Senior Indebtedness
to pay an amount due and owing under this Note 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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(b) 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 holder of the Senior Indebtedness, or its 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.

 

(c) 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 where the holder has actual knowledge of a Senior Indebtedness payment default 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.

 

(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 Note 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.

 

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

 

(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, 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.

 

(k) For
purposes hereof, “Senior Indebtedness” means, with respect to the Company, all senior secured indebtedness of the Company,
whether outstanding on the date of the execution of this Note or thereafter created, to banks, insurance companies, other financial institutions,
private equity funds, hedge funds or other similar funds.

 

8. Security
Agreement.

 

(a) Grant
of Security Interest. To secure the prompt performance and repayment of each and all of the obligations of the Company hereunder to
the Holder and its assigns, the Company hereby pledges, grants, assigns and transfers to the Holder and its assigns a continuing lien
on and security interest in and to all of the following property of the Company, whether now owned or later acquired (collectively the
“Collateral”):

 

(i) All
accounts, accounts receivable, contract rights, general intangibles related to or arising from any account, debit balances, note, documents,
chattel paper, instruments, acceptances, drafts or other forms of obligations and receivables of the Company arising from the sale or
lease of inventory or rendition of services by the Company, or on behalf of the Company, in the ordinary course of its business or otherwise
(all of the foregoing being herein collectively called “Accounts”), whether or not the same are listed on any schedules,
assignments or reports furnished to the Holder from time to time, whether such Accounts are now existing or are created at any time hereafter,
and all proceeds therefrom including without limitation, proceeds of insurance thereon and all guaranties, securities, and liens which
the Company may hold for the payment of any Accounts, including without limitation, all rights of stoppage in transit, replevin and reclamation
and all other rights and remedies of unpaid vendor or lienor, and any liens held by the Company as a mechanic, contractor, subcontractor,
processor, materialman, machinist, manufacturer, artisan, or otherwise.

 

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(ii) All
documents, instruments, documents of title, policies and certificates of insurance, guaranties, securities, chattel paper (both tangible
and electronic), deposits, proceeds of insurance, cash, liens or other property relating to Accounts and owned by the Company or in which
the Company has an interest, which are now or may hereafter be in the possession of the Company or as to which the Company may now or
hereafter control possession by documents of title or otherwise.

 

(iii) All
books, records, customer lists, supplier lists, ledgers, evidences of shipping invoices, purchase orders, sales orders, computer records,
lists, software, programs, and all other such evidences of the Company’s business records related to the Accounts, including all
cabinets, drawers, etc. that may hold same, all whether now existing or hereafter arising or acquired.

 

(iv) All
of the Company’s tangible property of whatever nature or description, whether real or personal, now or hereafter used, owned, held
or leased, including without limitation all goods, furniture, fixtures, vehicles, equipment, inventory and supplies.

 

(v) All
of the Company’s payment intangibles, instruments, letters of credit, letter-of-credit rights, money, deposit accounts, investment
property, commodity contracts, and commodity accounts.

 

(vi) All
of the Company’s intangible property of whatever nature or description, including without limitation, all intellectual property,
general intangibles, software, trade names, trademarks, service marks, computer programs (including source code and object code), patents
and copyrights now owned or hereafter acquired.

 

(vii) All
renewals, substitutions, replacements, additions, accessions, proceeds, and products of any and all the foregoing.

 

The Company’s grant
of such security interests to the Holder shall secure the payment and performance of the indebtedness, obligations and liabilities of
the Company to the Holder of every kind and description, direct and indirect, absolute and contingent, due or to become due, now existing
or hereafter arising, that relate to this Note and the rights and remedies created hereunder, and all legal and other professional fees
incurred in connection with any of the foregoing. The security interest granted to the Holder hereunder shall be prior to all other interests
in the Collateral. Terms used in the preceding collateral description shall have the respective meanings accorded such terms in the Uniform
Commercial Code as enacted in the state of Delaware as of the date of this Agreement.

 

    7

     

    

 

(b) The
Company hereby agrees that the Holder shall have all the rights and remedies of a secured party under the Uniform Commercial Code as in
effect from time to time in the State of Delaware. The Company agrees that at any time, and from time to time, at the request of the Holder,
the Company shall execute and deliver (or cause to be executed and delivered) any and all such further instruments and/or documents (including
without limitation, UCC-1 financing statements) as the Holder may consider reasonably necessary or desirable in order to effectuate, complete,
perfect or preserve and maintain the lien created hereby. Upon any failure by the Company to do so, the Holder may make, execute, record,
file, re-record or refile any and all such instruments and documents for and in the name of the Company; the Company hereby irrevocably
appoints the Holder as the agent and attorney-in-fact of the Company to do so; and the Company shall reimburse the Holder, on demand,
for all costs and expenses incurred by the Holder in connection therewith, such amount being added to the indebtedness arising under the
Note.

 

(c) The
security interest created hereunder shall terminate upon the irrevocable payment in full by the Company to the Holder of any and all indebtedness,
obligations and liabilities arising from, or in any way related to, the Note.

 

(d) Events
of Default; Acceleration of Maturity. If an Event of Default (as defined below) shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any governmental authority), then, in addition to the remedies
provided for elsewhere in this Note or as a matter of law and without limitation thereof, at the option of the Holder exercised by written
notice to the Company, the Holder may (A) foreclose the liens and security interests created under this Note or under any other agreement
relating to the Collateral, by any available judicial process, (B) enter any premises where any of the Collateral may be located for the
purpose of taking possession or removing the same, and (C) sell, assign, lease or otherwise dispose of the Collateral or any part thereof,
either at public or private sale or at any broker’s board, in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such terms as shall be acceptable to the Holder, all at the sole option of the Holder and as the
Holder, in its sole discretion, may deem advisable and to the extent permitted by law, the Holder may bid or become a purchaser at any
such sale, and the Holder shall have the right, at its option, to apply or be credited with the amount of all or any part of the obligations
owing by the Company to the Holder under this Note, against the purchase price bid by the Holder at any such sale. The net cash proceeds
resulting from the collection, liquidation, sale, lease or other disposition of the Collateral (including, without limitation a sale where
the Holder is the purchaser) shall be applied first to the expenses (including reasonable attorneys’ and other professional fees)
of retaking, holding, storing, processing and preparing the Collateral for sale, selling, collecting, liquidating and the like, and then
to the satisfaction of all such obligations, application as to particular obligations or against principal or any interest to be in the
sole discretion of the Holder. The Holder shall give the Company at least five (5) Business Days prior written notice of the time and
place of any public sale of Collateral.

 

(e) Suits for Enforcement.
In case any one or more of the Events of Default shall have occurred and be continuing, the Holder may proceed to protect and enforce
rights of the Holder either by suit in equity or by action at law, or both, whether for the specific performance of any covenant or agreement
in this Note or in aid of the exercise of any power granted in this Note, including without limitation, possession or foreclosure on the
Collateral securing the Note, or the Holder may proceed to enforce the payment of the Note or to enforce any other legal or equitable
right of the Holder.

 

    8

     

    

 

 (f) Remedies Cumulative.
No remedy herein conferred upon the Holder is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

 

 (g) Remedies Not
Waived. No course of dealing between the Company and the Holder and no delay in exercising any rights hereunder shall operate as a
waiver of any rights of the Holder.

 

9. Mutilated,
Destroyed, Lost or Stolen Note. If this Note shall become mutilated or defaced, or be destroyed, lost or stolen, the Company shall
execute and deliver a new note of like principal amount in exchange and substitution for the mutilated or defaced Note, or in lieu of
and in substitution for the destroyed, lost or stolen Note. In the case of a mutilated or defaced Note, the Holder shall surrender such
Note to the Company. In the case of any destroyed, lost or stolen Note, the Holder shall furnish to the Company: (i) evidence to its satisfaction
of the destruction, loss or theft of such Note and (ii) such security or indemnity (which shall not include the posting of any bond) as
may be reasonably required by the Company to hold the Company harmless.

 

10. Waiver
of Demand, Presentment, etc. The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, bringing of suit and diligence in taking any action
to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereunder,
regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.
The Company agrees that, in the event of an Event of Default, to reimburse the Holder for all reasonable costs and expenses (including
reasonable legal fees of one counsel) incurred in connection with the enforcement and collection of this Note.

 

11. Payment.
All payments with respect to this Note shall be made in lawful money of the United States of America, at the address of the Holder as
of the date hereof or as designated in writing by the Holder from time to time. The receipt by the Holder of immediately available funds
shall constitute a payment of Principal and Interest hereunder and shall satisfy and discharge the liability for Principal and Interest
on this Note to the extent of the sum represented by such payment.

 

12. Assignment.
The rights and obligations of the Company and the Holder of this Note shall be binding upon, and inure to the benefit of, the successors
and permitted assigns of the parties hereto. To complete an assignment or transfer this Note, the Holder shall deliver a completed and
executed Form of Assignment attached hereto as Exhibit A and surrender and deliver this Note, duly endorsed, to the Company’s
office or such other address which the Company shall designate, upon receipt of which a new Note, in substantially the form of this Note
(any such new Note, a “New Note”), evidencing the portion of this Note so transferred shall be issued to the transferee
and a New Note evidencing the remaining portion of this Note not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Note by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations
in respect of the New Note that the Holder has in respect of this Note. Interest and principal are payable only to the registered Holder
of this Note set forth on the books and records of the Company.

 

    9

     

    

 

13. Amendment;
Waiver; Modification. Any provision of this Note, including, without limitation, the due date hereof, and the observance of any term
hereof, may be amended, waived or modified (either generally or in a particular instance and either retroactively or prospectively) only
with the written consent of the Company and the Holder.

 

14. 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.

 

15. Governing
Law and Arbitration. This Note shall be governed in all respects, including validity, interpretation and effect, by the internal laws
of the State of Florida. Any dispute shall be resolved by arbitration conducted pursuant to Section 10.7 of the Purchase Agreement. The
provisions of this Section 15 shall survive the entry of any judgment, and will not merge, or be deemed to have merged, into any judgment.

 

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

 

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

 

[Signature page follows]

 

    10

     

    

 

IN WITNESS WHEREOF, the
Company has duly executed and delivered this Note as of the day and year first above written.

 

	 	Smart for Life, Inc.
	 	 
	 	By:	 /s/ Darren Minton
	 	Name: 	 Darren Minton
	 	Title:	 President

 

    11

     

    

 

Exhibit A

 

Form
of Assignment

 

TO: Smart for Life, Inc.

 

FOR VALUE RECEIVED, the undersigned
hereby sells, assigns and transfers unto ___________________ (name), __________________________________________ (address),
US$____________ of 5% Secured Subordinated Convertible Promissory Note (“Note”) of Smart for Life, Inc. (the “Company”),
including any and all accrued and unpaid interest owing thereon, registered in the name of the undersigned on the records of the Company
represented by the within certificate, and irrevocably appoints ___________________ the attorney of the undersigned to transfer the said
securities on the books or register with full power of substitution.

 

DATED this ________ day of,
__________________, 20 ____.

 

	
    _______________________________

(Signature of Registered Note Holder)

     

    ________________________________ 

    (Print name of Registered Note Holder)

     
	 	 

Instructions:

 

		1.	Signature of Holder must be the signature of the person appearing on the
face of the Note.

 

		2.	If the transfer of Note is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, the certificate
must be accompanied by evidence of authority to sign satisfactory to the Company.

 

 

12

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