EXHIBIT 10.22

 

NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE
EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

 

COMMON SHARE PURCHASE WARRANT

 

1847 HOLDINGS LLC

 

Warrant Shares: 200,000

Date of Issuance: April 5, 2019 (“Issuance Date”)

 

This COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value
received (in connection with the issuance of the $714,285.71 secured convertible
promissory note to the Holder (as defined below) of even date (the “Note”),
Leonite Capital, LLC, a Delaware limited liability company (including any
permitted and registered assigns, each a “Holder”), is entitled, upon the terms
and subject to the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the date of issuance hereof, to purchase from
1847 Holdings LLC, a Delaware limited liability company (the “Company”), up to
200,000 common shares (the “Warrant Shares”) (whereby such number may be
adjusted from time to time pursuant to the terms and conditions of this Warrant)
at the Exercise Price per share then in effect. This Warrant is issued by the
Company as of the date hereof in connection with that certain securities
purchase agreement, dated April 5, 2019, by and between the Company and the
Holder (the “Purchase Agreement”).

 

Capitalized terms used in this Warrant shall have the meanings set forth in the
Purchase Agreement unless otherwise defined in the body of this Warrant or in
Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall
mean $1.25, subject to adjustment as provided herein (including but not limited
to cashless exercise), and the term “Exercise Period” shall mean the period
commencing on the Issuance Date and ending on 6:00 p.m. eastern standard time on
the five-year anniversary thereof.

 

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1. EXERCISE OF WARRANT.

 

(a) Mechanics of Exercise. Subject to the terms and conditions hereof, the
rights represented by this Warrant may be exercised in whole or in part at any
time or times during the Exercise Period by delivery of a written notice, in the
form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s
election to exercise this Warrant. The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder. Partial exercises
of this Warrant resulting in purchases of a portion of the total number of
Warrant Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an amount equal to
the applicable number of Warrant Shares purchased. On or before the third
Trading Day (the “Warrant Share Delivery Date”) following the date on which the
Company shall have received the Exercise Notice, and upon receipt by the Company
of payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which all or a portion of this
Warrant is being exercised (the “Aggregate Exercise Price” and together with the
Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer
of immediately available funds (or by cashless exercise, in which case there
shall be no Aggregate Exercise Price provided), the Company shall (or direct its
transfer agent to) issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the number of
Common Shares to which the Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Delivery Documents, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
of delivery of the certificates evidencing such Warrant Shares. If this Warrant
is submitted in connection with any exercise and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon
as practicable and in no event later than three Business Days after any exercise
and at its own expense, issue a new Warrant (in accordance with Section 6)
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised.

 

If the Company fails to cause its transfer agent to transmit to the Holder the
respective Common Shares by the respective Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise in Holder’s sole discretion,
and such failure shall be deemed an event of default under the Note to the
extent the Note remains outstanding and any portion thereof unpaid.

 

If the Market Price of one Common Share is greater than the Exercise Price and
the Warrant Shares are not registered under an effective non-stale registration
statement of the Company, the Holder may elect to receive Warrant Shares
pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value
of this Warrant determined in the manner described below (or of any portion
thereof remaining unexercised) by surrender of this Warrant and a Notice of
Exercise, in which event the Company shall issue to Holder a number of Common
Shares computed using the following formula:

 

X = Y (A-B)

     A

 

Where   X =    the number of Shares to be issued to Holder.

 

Y =    the number of Warrant Shares that the Holder elects to purchase under
this Warrant (at the date of such calculation).

 

A =    the Market Price (at the date of such calculation).

 

B =    Exercise Price (as adjusted to the date of such calculation).

 

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(b) No Fractional Shares. No fractional shares shall be issued upon the exercise
of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant
Shares (including fractions) issuable upon exercise of this Warrant may be
aggregated for purposes of determining whether the exercise would result in the
issuance of any fractional share. If, after aggregation, the exercise 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
then-current fair market value of a Warrant Share by such fraction.

 

(c) Holder’s Exercise Limitations. The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any portion of
this Warrant, to the extent that after giving effect to issuance of Warrant
Shares upon exercise as set forth on the applicable Notice of Exercise, the
Holder (together with the Holder’s Affiliates, and any other persons acting as a
group together with the Holder or any of the Holder’s Affiliates), would
beneficially own in excess of the Beneficial Ownership Limitation, as defined
below. For purposes of the foregoing sentence, the number of Common Shares
beneficially owned by the Holder and its Affiliates shall include the number of
Common Shares issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of Common Shares which
would be issuable upon (i) exercise of the remaining, non-exercised portion of
this Warrant beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or non-converted portion of any other
securities of the Company (including without limitation any other Common Share
Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for purposes of this
paragraph (d), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the
Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the extent that
the limitation contained in this paragraph applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any affiliates) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant is
exercisable, in each case subject to the Beneficial Ownership Limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such
determination.

 

For purposes of this paragraph, in determining the number of outstanding Common
Shares, a Holder may rely on the number of outstanding Common Shares as
reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the
Company or (C) a more recent written notice by the Company or its transfer agent
setting forth the number of Common Shares outstanding. Upon the request of a
Holder, the Company shall within two Trading Days confirm to the Holder the
number of Common Shares then outstanding. In any case, the number of outstanding
Common Shares shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or
its affiliates since the date as of which such number of outstanding Common
Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the
number of Common Shares outstanding immediately after giving effect to the
issuance of Common Shares issuable upon exercise of this Warrant. Upon no fewer
than 61 days’ prior notice to the Company, a Holder may increase or decrease the
Beneficial Ownership Limitation provisions of this paragraph and the provisions
of this paragraph shall continue to apply. Any such increase or decrease will
not be effective until the 61st day after such notice is delivered to the
Company and shall only apply to such Holder and no other Holder. The limitations
contained in this paragraph shall apply to a successor Holder of this Warrant.

 

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2. ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:

 

(a) Distribution of Assets. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common Shares, by way of return of capital or otherwise (including without
limitation any distribution of cash, shares or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case:

 

(i) any Exercise Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of Common Shares entitled
to receive the Distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such Exercise
Price by a fraction (i) the numerator of which shall be the Closing Sale Price
of the Common Shares on the Trading Day immediately preceding such record date
minus the value of the Distribution (as determined in good faith by the
Company’s Board of Directors) applicable to one Common Share, and (ii) the
denominator of which shall be the Closing Sale Price of the Common Shares on the
Trading Day immediately preceding such record date; and

 

(ii) the number of Warrant Shares shall be increased to a number of shares equal
to the number of Common Shares obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of Common
Shares entitled to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding clause (i); provided, however,
that in the event that the Distribution is of Common Shares of a company (other
than the Company) whose common stock is traded on a national securities exchange
or a national automated quotation system (“Other Shares of Common Stock”), then
the Holder may elect to receive a warrant to purchase Other Shares of Common
Stock in lieu of an increase in the number of Warrant Shares, the terms of which
shall be identical to those of this Warrant, except that such warrant shall be
exercisable into the number of Other Shares of Common Stock that would have been
payable to the Holder pursuant to the Distribution had the Holder exercised this
Warrant immediately prior to such record date and with an aggregate exercise
price equal to the product of the amount by which the exercise price of this
Warrant was decreased with respect to the Distribution pursuant to the terms of
the immediately preceding clause (i) and the number of Warrant Shares calculated
in accordance with the first part of this clause (ii).

 

(b) Proportional Adjustments of Outstanding Common Shares and Common Share
Dividends. If the Company shall at any time or from time to time after the date
hereof, issue additional Common Shares to all of its current shareholders on a
pro rata basis or pay a share dividend in Common Shares, then the Exercise Price
shall be proportionately adjusted. Any adjustments under this Section 2(b) shall
be effective at the close of business on the date the share split becomes
effective or the date of payment of the share dividend, as applicable. For the
avoidance of doubt, this adjustment shall not apply when shares of outstanding
Common Share are merged proportionally across all shareholders to form a smaller
number of outstanding shares.

 

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(c) Anti-dilution Adjustment. If at any time while this Warrant is outstanding,
the Company sells or grants (or has sold or granted, as the case may be) any
option to purchase or sells or grants any right to reprice, or otherwise
disposes of or issues (or has sold or issued, as the case may be, or announces
any sale, grant or any option to purchase or other disposition), any Common
Share or other securities convertible into, exercisable for or otherwise
entitled the any person or entity the right to acquire Common Shares at an
effective price per share that is lower than the then Exercise Price (such lower
price, the “Base Exercise Price” and such issuances, collectively, a “Dilutive
Issuance”) (it being agreed that if the holder of the Common Share or other
securities so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive Common Shares at an
effective price per share that is lower than the Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then the Exercise Price shall be reduced to a price
equal the Base Exercise Price, and the number of Warrant Shares issuable
hereunder shall be increased such that the aggregate Exercise Price payable
hereunder, after taking into account the decrease in the Exercise Price, shall
be equal to the aggregate Exercise Price prior to such adjustment. Such
adjustment shall be made whenever such Common Share or other securities are
issued, Notwithstanding the foregoing, no adjustment will be made under this
Section 2(c) in respect of an Exempt Issuance. For purposes of this Section
2(c), an “Exempt Issuance” shall have the meaning ascribed to such term in the
Note. In the event of an issuance of securities involving multiple tranches or
closings, any adjustment pursuant to this Section 2(c) shall be calculated as if
all such securities were issued at the initial closing.

 

3. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding,
(i) the Company effects any merger of the Company with or into another entity
and the Company is not the surviving entity (such surviving entity, the
“Successor Entity”), (ii) the Company effects any sale of all or substantially
all of its assets in one or a series of related transactions, (iii) any tender
offer or exchange offer (whether by the Company or by another individual or
entity, and approved by the Company) is completed pursuant to which holders of
Common Shares are permitted to tender or exchange their Common Shares for other
securities, cash or property and the holders of at least 50% of the Common
Shares accept such offer, or (iv) the Company effects any reclassification of
the Common Shares or any compulsory share exchange pursuant to which the Common
Shares are effectively converted into or exchanged for other securities, cash or
property (other than as a result of a subdivision or combination of Common
Shares) (in any such case, a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive
the number of Common Shares of the Successor Entity or of the Company and any
additional consideration (the “Alternate Consideration”) receivable upon or as a
result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of Common Shares for which this
Warrant is exercisable immediately prior to such event (disregarding any
limitation on exercise contained herein solely for the purpose of such
determination). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one Common Share in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Shares are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
Successor Entity in such Fundamental Transaction shall issue to the Holder a new
warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration.

 

  5

   

 

4. NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by
amendment of its certificate of formation, operating agreement or through any
reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any Common Shares receivable
upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable Common
Shares upon the exercise of this Warrant, and (iii) shall, for so long as this
Warrant is outstanding, have authorized and reserved, free from preemptive
rights, a sufficient number of Common Shares to provide for the exercise of the
rights represented by this Warrant (without regard to any limitations on
exercise).

 

5. WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically
provided herein, this Warrant, in and of itself, shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company. In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on the Holder to purchase any securities (upon exercise of this Warrant or
otherwise) or as a shareholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.

 

6. REISSUANCE.

 

(a) Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen,
mutilated or destroyed, the Company will, on such terms as to indemnity or
otherwise as it may reasonably impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

(b) Issuance of New Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like
tenor with this Warrant, and shall have an issuance date, as indicated on the
face of such new Warrant which is the same as the Issuance Date.

 

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7. TRANSFER.

 

(a) Notice of Transfer. The Holder agrees that, if practicable, but without any
obligation to do so, it will give written notice to the Company of its intent to
transfer this Warrant or any Warrant Shares, describing briefly the manner of
any proposed transfer. Promptly upon receiving such written notice, the Company
shall present copies thereof to the Company’s counsel. If the proposed transfer
may be effected without registration or qualification (under any federal or
state securities laws), the Company, as promptly as practicable, shall notify
the Holder thereof, whereupon the Holder shall be entitled to transfer this
Warrant or to dispose of Warrant Shares received upon the previous exercise of
this Warrant, all in accordance with the terms of the notice delivered by the
Holder to the Company; provided, however, that an appropriate legend may be
endorsed on this Warrant or the certificates for such Warrant Shares respecting
restrictions upon transfer thereof necessary or advisable in the opinion of
counsel and satisfactory to the Company to prevent further transfers which would
be in violation of Section 5 of the Securities Act and applicable state
securities laws; and provided further that the prospective transferee or
purchaser shall execute the Assignment of Warrant attached hereto as Exhibit B
and such other documents and make such representations, warranties, and
agreements as may be required solely to comply with the exemptions relied upon
by the Company for the transfer or disposition of the Warrant or Warrant Shares.

 

(b) If the proposed transfer or disposition of this Warrant or such Warrant
Shares described in the written notice given pursuant to this Section 7 may not
be effected without registration or qualification of this Warrant or such
Warrant Shares, the Holder will limit its activities in respect to such transfer
or disposition as are permitted by law.

 

(c) Any transferee of all or a portion of this Warrant shall succeed to the
rights and benefits of the initial Holder of this Warrant under Sections 4.1 and
4.3 (subject, however, to the limitations set forth in Section 4.2), 4.4 and 4.5
of the Purchase Agreement (registration rights, expenses, and indemnity).

 

8. NOTICES. Whenever notice is required to be given under this Warrant, unless
otherwise provided herein, such notice shall be given in accordance with the
notice provisions contained in the Purchase Agreement. The Company shall provide
the Holder with prompt written notice (i) immediately upon any adjustment of the
Exercise Price, setting forth in reasonable detail, the calculation of such
adjustment and (ii) at least 20 days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Shares, (B) with respect to any grants, issuances
or sales of any shares or other securities directly or indirectly convertible
into or exercisable or exchangeable for Common Shares or other property, pro
rata to the holders of Common Shares or (C) for determining rights to vote with
respect to any Fundamental Transaction, dissolution or liquidation, provided in
each case that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.

 

9. AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Holder.

 

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10. GOVERNING LAW. This Warrant shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Warrant shall be brought only in the state
courts or federal courts located in Rockland County, New York. The parties to
this Warrant hereby irrevocably waive any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Warrant or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to
process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law.

 

11. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

 

12. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall
have the following meanings:

 

(a) “Nasdaq” means The Nasdaq Stock Market (www.Nasdaq.com).

 

(b) “Closing Sale Price” means, for any security as of any date, (i) the last
closing trade price for such security on the Principal Market, as reported by
Nasdaq, or, if the Principal Market begins to operate on an extended hours basis
and does not designate the closing trade price, then the last trade price of
such security prior to 4:00 p.m., New York time, as reported by Nasdaq, or (ii)
if the foregoing does not apply, the last trade price of such security in the
over-the-counter market for such security as reported by Nasdaq, or (iii) if no
last trade price is reported for such security by Nasdaq, the average of the bid
and ask prices of any market makers for such security as reported by the OTC
Markets. If the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Sale Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder. All such determinations to be appropriately adjusted
for any share dividend, share split, share combination or other similar
transaction during the applicable calculation period.

 

(c) “Common Share” means the Common Shares of the Company and any other class of
securities into which such securities may hereafter be reclassified or changed.

 

(d) “Common Share Equivalents” means any securities of the Company that would
entitle the holder thereof to acquire at any time Common Shares, including
without limitation any debt, preferred shares, rights, options, warrants or
other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Shares.

 

(e) “Principal Market” means the primary national securities exchange or over
the counter market on which the Common Shares are then traded.

 

(f) “Market Price” means the highest traded price of the Common Shares during
the thirty (30) Trading Days prior to the date of the respective Exercise
Notice.

 

(g) “Trading Day” means (i) any day on which the Common Shares are listed or
quoted and traded on its Principal Market, (ii) if the Common Shares are not
then listed or quoted and traded on any national securities exchange, then a day
on which trading occurs on any over-the-counter markets, or (iii) if trading
does not occur on the over-the-counter markets, any Business Day.

 

* * * * * * *

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as
of the Issuance Date set forth above.

 

  1847 HOLDINGS LLC       /s/ Ellery W. Roberts

 

Ellery W. Roberts     Chief Executive Officer  

 

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EXHIBIT A

 

EXERCISE NOTICE

 

(To be executed by the registered holder to exercise this Common Share Purchase
Warrant)

 

THE UNDERSIGNED holder hereby exercises the right to purchase _________________
of the Common Shares (“Warrant Shares”) of 1847 Holdings LLC., a Delaware
limited liability company (the “Company”), evidenced by the attached copy of the
Common Share Purchase Warrant (the “Warrant”). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in the
Warrant.

 

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as (check one):

 

¨  a cash exercise with respect to _________________ Warrant Shares; or

¨  by cashless exercise pursuant to the Warrant.

 

2. Payment of Exercise Price. If cash exercise is selected above, the holder
shall pay the applicable Aggregate Exercise Price in the sum of $_____________
to the Company in accordance with the terms of the Warrant.

 

 

3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________________ Warrant Shares in accordance with the terms of the Warrant.

 

Date: ____________________

 

 

 

 

(Print Name of Registered Holder)

 

          By:

 

Name:

    Title:  

 

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EXHIBIT B

 

ASSIGNMENT OF WARRANT

 

(To be signed only upon authorized transfer of the Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
____________________ the right to purchase _______________ Common Shares of
Inception Mining, Inc., to which the within Common Share Purchase Warrant
relates and appoints ____________________, as attorney-in-fact, to transfer said
right on the books of Inception Mining, Inc. with full power of substitution and
re-substitution in the premises. By accepting such transfer, the transferee has
agreed to be bound in all respects by the terms and conditions of the within
Warrant.

 

Dated: ___________________

 

 

 

 

 

(Signature) *

 

 

 

 

 

 

 

 

(Name)

 

 

 

 

 

 

 

 

(Address)

 

 

 

 

 

 

 

 

(Social Security or Tax Identification No.)

 

 

* The signature on this Assignment of Warrant must correspond to the name as
written upon the face of the Common Share Purchase Warrant in every particular
without alteration or enlargement or any change whatsoever. When signing on
behalf of a corporation, partnership, trust or other entity, please indicate
your position(s) and title(s) with such entity.

 

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