Exhibit 10.2


 


SECURITIES PURCHASE AGREEMENT


 


This SECURITIES
PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of ___________, 2021, by and between 1847 HOLDINGS
LLC, a Delaware limited liability company (the “Company”), and the undersigned subscribing investor (the “Purchaser”).


 


RECITALS


 


A. The Company
is seeking investors to invest up to Three Million Dollars ($3,000,000) (the “Offering”), in units of One Dollar and
Sixty-Five Cents ($1.65) each (each a “Unit” and collectively the “Units”). This Agreement is one
of a series of similar agreements being executed by other investors in this Offering (each an “Investor” and, collectively,
the “Investors”). The Preferred Shares (as defined below) being issued to the Purchaser shall rank equally without
preference or priority of any kind over Preferred Shares being issued to other Investors and all payments on account of dividends or redemption
with respect to any of the Preferred Shares or the Warrants shall be applied ratably and proportionately on the basis of the Stated Value
(as defined in the Designation) of the outstanding Preferred Shares or the number of Warrant Shares (as defined in the Warrant), as applicable,
represented thereby.


 


B. Each Unit consists
of one (1) Series A Senior Convertible Preferred Share (the “Preferred Share”), the certificate of designation of which
is attached hereto as Exhibit A (the “Designation”), and one (1) warrant to purchase one (1) Common Share, the
form of which is attached hereto as Exhibit B (the “Warrant” and, together with the Preferred Share and the
Common Shares to be acquired upon the conversion of the Preferred Share and/or exercise of the Warrant, the “Securities”).


 


C. The Warrant is exercisable for
a period of three (3) years at $2.50 per Common Share.


 


D. The Company
desires to sell, and the Purchaser desires to purchase, the number of Units set forth below on the terms and conditions set forth herein.


 


E. The Company
and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by
Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the Securities Act.


 


F. _______________ is the lead
investor (the “Lead Investor”) and is investing up to$2,000,000 in this Offering.


 


NOW THEREFORE,
in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the Company and the
Purchaser, intending to be legally bound, hereby agree as follows:


 


1.
PURCHASE OF UNITS


 


On the Closing
Date (as hereinafter defined), subject to the terms and conditions set forth in this Agreement, the Purchaser hereby agrees to
purchase, and the Company hereby agrees to sell, the number of Units of the Company indicated on the signature page below, at a
per-unit purchase price of One Dollar and Sixty-Five Cents ($1.65) per Unit, for the total purchase price set forth on the signature
page below (the “Purchase Price”).


 






     


     


    

 


2.
CLOSING AND DELIVERY


 


2.1
Closing Date. Subject to the satisfaction (or written
waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Units
pursuant to this Agreement (the “Closing Date”) shall be 4:00 PM, Eastern Time on the date first written above, or
such other mutually agreed upon time.


 


2.2
Closing. The closing of the transactions contemplated
by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties
(including via exchange of electronic signatures).


 


2.3
Delivery. At the Closing, or as promptly as commercially
reasonable thereafter, the Purchaser shall deliver the Purchase Price to the Company and the Company shall deliver to the Purchaser the
Preferred Shares, the Warrants and such other customary instruments of transfer, assumption, filings or documents, in form and substance
reasonably satisfactory to the Purchaser, as may be required to give effect to this Agreement.


 


3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY


 


Except as set forth
in the corresponding section of the Disclosure Schedule delivered to the Purchaser concurrently herewith and attached hereto as Schedule
I (the “Disclosure Schedule”) or as disclosed in the Disclosure Materials (as defined below), the Company hereby
makes the following representations and warranties as of the date hereof and as of the Closing Date to the Purchaser:


 


3.1 Organization,
Good Standing and Qualification. The Company and each of its Subsidiaries (as defined
below) is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the Company and its Subsidiaries has the requisite corporate or limited
liability company power to own and operate its properties and assets and to carry on its business as now conducted and as proposed
to be conducted. The Company and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing
as a foreign corporation or limited liability company in all jurisdictions in which the nature of its activities and of its
properties (both owned and leased) makes such qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not have or reasonably be expected to result in (i) a material adverse effect on the legality,
validity or enforceability of any Subscription Document, (ii) a material adverse effect on the results of operations, assets,
business or financial condition of Company and the Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s
ability to perform in any material respect on a timely basis its obligations under any Subscription Document (any of (i), (ii) or
(iii), a “Material Adverse Effect”) provided, however, that none of the following, either alone or taken together
with other changes, events, results, occurrences, developments or effects, will constitute, or be taken into account in determining
whether there has been or will be, a Material Adverse Effect: (a) changes, events, occurrences or developments in, or effects
or results arising from or relating to, general business or economic conditions affecting the industry in which the Company and its
Subsidiaries operate, (b) changes, events, occurrences or developments in, or effects or results arising from or relating to,
national or international political or social conditions, including the engagement by the United States in hostilities or the
escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation
of any military, cyber or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, asset, equipment or personnel of the United States, (c) changes, events, occurrences or
developments in, or effects or results arising from or relating to, financial, banking, or securities markets (including (w) any
disruption of any of the foregoing markets, (x) any change in currency exchange rates, (y) any decline or rise in the price of any
security, commodity, contract or index and (z) any increased cost, or decreased availability, of capital or pricing or terms related
to any financing for the Acquisition), (d) changes in, or effects arising from or relating to, any earthquake, hurricane, tsunami,
tornado, flood, mudslide or other natural disaster, pandemic (including COVID-19), weather condition, explosion or fire or other
force majeure event or act of God or (e) any change in, or effect arising from or related to changes in, GAAP or other accounting
requirements or principles or the interpretation thereof.


 






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3.2
Power. The Company has all requisite limited liability
company power to issue the Preferred Shares and Warrants and to execute and deliver this Agreement, the Designation, the Warrants and
the other instruments, documents and agreements being entered into at the Closing (each a “Subscription Document” and
collectively, the “Subscription Documents”) and to carry out and perform its obligations under the terms of the Subscription
Documents.


 


3.3
Subsidiaries. Section 3.3 of the Disclosure Schedule
sets forth a true and correct description of all of the Company’s Subsidiaries and the capitalization thereof (including options,
warrants and other such equity), pro forma as of the date hereof reflecting all pending acquisitions. For purposes of this Agreement,
the term “Subsidiary” means, with respect to the Company, any corporation or other entity of which at least a majority
of the outstanding shares of stock or other ownership interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors (or persons performing similar functions) of such corporation or entity (regardless of whether or not at the
time, in the case of a corporation, stock of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Company or one or more of its Affiliates
and the term “Affiliate” means, as to any person (the “Subject Person”), any other person that directly
or indirectly through one or more intermediaries controls or is controlled by, or is under direct or indirect common control with, the
Subject Person. For the purposes of this definition, “control” when used with respect to any person means the power to direct
the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, through representation
on such person’s board of directors or other management committee or group, by contract or otherwise. All references contained herein
to the terms Subsidiary or Affiliate, shall be applicable to all Subsidiaries and Affiliates whether they existed as of the date hereof
or were created, acquired, or otherwise came to be included in the foregoing terms subsequent to the date hereof.


 






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3.4
Authorization. All limited liability company action
on the part of the Company, its directors and its shareholders necessary for the authorization of the Subscription Documents and the execution,
delivery and performance of all obligations of the Company under the Subscription Documents, including the issuance and delivery of the
Preferred Shares, the Warrants, and the reservation of the Common Shares issuable upon conversion of the Preferred Shares and upon exercise
of the Warrant (collectively, the “Underlying Securities”) has been taken or will be taken prior to the issuance of
such Underlying Securities. The Subscription Documents, when executed and delivered by the Company, shall constitute valid and binding
obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy,
insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws. The Underlying
Securities, when issued in compliance with the provisions of the Subscription Documents, will be validly issued, fully paid and non-assessable
and free of any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment or other similar encumbrance
(“Lien”) and issued in compliance with all applicable federal and securities laws.


 


3.5
Governmental Consents. Neither Company nor any Subsidiary
is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any
court or other foreign, federal, state, local or other governmental authority or other person in connection with the execution, delivery
and performance by the Company of the Subscription Documents, other than (a) applicable Blue Sky filings, (b) such as have already been
obtained or such exemptive filings as are required to be made under applicable securities laws, (c) such other filings that have been
made pursuant to applicable state securities laws and post-sale filings pursuant to applicable state and federal securities laws which
the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of the
Purchaser set forth in Section 4 hereof, the Company has taken all action necessary to exempt: (i) the issuance and sale of the Units,
(ii) the issuance of the Underlying Securities upon due conversion of the Preferred Shares and due exercise of the Warrant, and (iii)
the other transactions contemplated by the Subscription Documents from the provisions of any preemptive rights, stockholder rights plan
or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the
Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s certificate
of formation, operating agreement, or other organizational documentation, as the case may be, that is or could reasonably be expected
to become applicable to the Purchaser as a result of the transactions contemplated hereby, including without limitation, the issuance
of the Preferred Shares and Warrants and the Underlying Securities (collectively, the “Securities”) and the ownership,
disposition or voting of the Securities by the Purchaser or the exercise of any right granted to the Purchaser pursuant to this Agreement
or the other Subscription Documents.


 






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3.6
Compliance with Laws. Neither Company nor any Subsidiary
is in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality
or agency thereof in respect of the conduct of its business or the ownership of its properties, which violation would have a Material
Adverse Effect on the Company.


 


3.7
Compliance with Other Instruments. Neither Company
nor any of its Subsidiaries is in violation or default of any term of its organizational documents, or of any provision of any mortgage,
indenture or contract to which it is a party and by which it is bound or of any judgment, decree, order or writ, other than such violations
that would not individually or in the aggregate have a Material Adverse Effect on the Company. The execution, delivery and performance
of the Subscription Documents, and the consummation of the transactions contemplated by the Subscription Documents will not result in
any such violation or be in conflict with, or constitute, with or without the passage of time and giving of notice, either a default under
any such provision, instrument, judgment, decree, order or writ or an event that results in the creation of any Lien upon any assets of
the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization or approval
applicable to the Company or any of its Subsidiaries, its business or operations or any of its assets or properties. The sale of the Preferred
Shares, the issuance of the Warrant and the subsequent issuance of the Underlying Securities are not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived or complied with.


 


3.8
Offering. Assuming the accuracy of the representations
and warranties of the Purchaser contained in Section 4 hereof, the offer, issue, and sale of Securities are and will be exempt from the
registration and prospectus delivery requirements of the Securities Act, and 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. No “bad
actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”)
is applicable to the Company or, to the Company’s knowledge, any person listed in the first paragraph of Rule 506(d)(1) of the Securities
Act, except for a Disqualification Event as to which Rule 506(d)(2)(ii)–(iv) or (d)(3), is applicable.


 


3.9
Capitalization. Company has authorized shares as
set forth in Section 3.9 of the Disclosure Schedule. All outstanding shares of capital stock are duly authorized, validly issued, fully
paid and non-assessable and have been issued in compliance with all applicable securities laws. Except for the Preferred Shares, Warrants
and the Underlying Securities or as otherwise listed in Section 3.9 of the Disclosure Schedule, there are no outstanding options, warrants,
script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any person any right to subscribe for or acquire, any Common Shares, or contracts,
commitments, understandings or arrangements by which Company or any Subsidiary is or may become bound to issue additional Common Shares,
or securities or rights convertible or exchangeable into shares of common stock. Except for previously issued Series A Preferred Shares
and their accompanying Warrants, which are being amended herewith and therewith, there are no price based anti-dilution or price adjustment
provisions contained in any security issued by Company (or in any agreement providing rights to security holders) and the issue and sale
of the Securities will not obligate Company to issue shares of common stock or other securities to any person (other than the Purchaser)
and will not result in a right of any holder of Company’s securities to adjust the exercise, conversion, exchange or reset price
under such securities. Except as set forth in Section 3.9 of the Disclosure Schedule, Company owns, directly or indirectly, all of the
capital stock of each Subsidiary free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and similar rights.


 






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3.10
SEC Reports; Financial Statements. The Company has
filed all reports and registration statements required to be filed by it under (i) the Securities Act and the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) of the Exchange Act, or (ii)
under the Alternative Reporting Standard as offered by OTC Markets Group, for the two years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto, being collectively
referred to herein as the “SEC Reports” and, together with the Disclosure Schedule to this Agreement, the “Disclosure
Materials”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading. Except as indicated in Section 3.10
of the Disclosure Schedule, the financial statements of the Company included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC or OTC Markets as applicable, with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.


 


3.11
Material Changes. Since the date of the latest financial
statements, (i) there has been no event, occurrence or development that, individually or in the aggregate, has had or that could result
in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables,
accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with
the SEC, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or affiliate,
except pursuant to existing Company stock-based plans or agreements.


 






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3.12
Litigation. There is no action, suit, inquiry, notice
of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”) which: (i) adversely affects or challenges
the legality, validity or enforceability of any of the Subscription Documents or the Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by governmental authority, or any litigation civil or otherwise, involving the Company or any current or former director
or officer of the Company or its Subsidiaries.


 


3.13
Labor Relations. Neither Company nor any Subsidiary
is a party to or bound by any collective bargaining agreements or other agreements with labor organizations. Neither Company nor any Subsidiary
has violated in any material respect any laws, regulations, orders or contract terms, affecting the collective bargaining rights of employees,
labor organizations or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’
health, safety, welfare, wages and hours. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect
to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect.


 


3.14
Regulatory Permits. Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses, except where the failure to possess such permits would not have or reasonably be expected
to result in a Material Adverse Effect (“Material Permits”), and neither Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any Material Permit.


 


3.15
Title to Assets. Except as set forth in Section 3.15
of the Disclosure Schedule, Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
that is material to the business of Company and the Subsidiaries and good and marketable title in all personal property owned by them
that is material to the business of Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property
by Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent
nor subject to penalties. Any real property and facilities held under lease by Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which Company and the Subsidiaries are in compliance.


 






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3.16
Taxes.


 


(a) Except as otherwise
itemized in Section 3.16 of the Disclosure Schedule, Company and its Subsidiaries have timely and properly filed all tax returns required
to be filed by them for all years and periods (and portions thereof) for which any such tax returns were due, except where the failure
to so file would not have a Material Adverse Effect; all such filed tax returns are accurate in all material respects; the Company has
timely paid all taxes due and payable (whether or not shown on filed tax returns), except where the failure to so pay would not have a
Material Adverse Effect; there are no pending assessments, asserted deficiencies or claims for additional taxes that have not been paid;
the reserves for taxes, if any, reflected in the financial statements are adequate, and there are no Liens for taxes on any property or
assets of the Company and any of its Subsidiaries (other than Liens for taxes not yet due and payable); there have been no audits or examinations
of any tax returns by any (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of
any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of
any nature (including any governmental or administrative division, department, agency, commission, instrumentality, official, organization,
unit, body or entity) and any court or other tribunal (a “Governmental Body”), and the Company or its Subsidiaries
have not received any notice that such audit or examination is pending or contemplated; no claim has been made by any Governmental Body
in a jurisdiction where the Company or any of its Subsidiaries does not file tax returns that it is or may be subject to taxation by that
jurisdiction; to the knowledge of the Company, no state of facts exists or has existed which would constitute grounds for the assessment
of any penalty or any further tax liability beyond that shown on the respective tax returns; and there are no outstanding agreements or
waivers extending the statutory period of limitation for the assessment or collection of any tax.


 


(b) Neither the Company
nor any of its Subsidiaries is a party to any tax-sharing agreement or similar arrangement with any other Person.


 


(c) The Company has
made all necessary disclosures required by Treasury Regulation Section 1.6011-4. The Company has not been a participant in a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4(b).


 


(d) No payment or
benefit paid or provided, or to be paid or provided, to current or former employees, directors or other service providers of the Company
will fail to be deductible for federal income tax purposes under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”).


 






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3.17
Patents and Trademarks. Company and the Subsidiaries
have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights,
licenses and other similar rights that are necessary or material for use in connection with their respective businesses and which the
failure to so have could have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). Neither Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used
by Company or any Subsidiary violates or infringes upon the rights of any Person. All such Intellectual Property Rights are enforceable.
Company and its Subsidiaries have taken reasonable steps to protect Company’s and its Subsidiaries’ rights in their Intellectual
Property Rights and confidential information (the “Confidential Information”). Each employee, consultant and contractor
who has had access to Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality
of such Confidential Information and has executed appropriate agreements that are substantially consistent with the Company’s standard
forms thereof. Except under confidentiality obligations, there has been no material disclosure of any of Company’s or its Subsidiaries’
Confidential Information to any third party.


 


3.18
Environmental Matters. Neither Company nor any Subsidiary
is in violation of any statute, rule, regulation, decision or order of any Governmental Body relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic
substances (collectively, “Environmental Laws”), owns or operates any real property contaminated with any substance
that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or
is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim has had or could reasonably
be expected to have a Material Adverse Effect, individually or in the aggregate; and there is no pending or, to the Company’s knowledge,
threatened investigation that might lead to such a claim.


 


3.19
Insurance. Company and the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the
businesses in which Company and the Subsidiaries are engaged. Neither Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in cost.


 


3.20 Transactions
with Affiliates and Employees. Except as disclosed in the Company’s audited financial
statements or the Disclosure Materials, none of the officers or directors of the Company and, to the knowledge of the Company, none
of the employees of the Company is presently a party to any transaction with Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, other than (a) for payment of salary or consulting fees
for services rendered, (b) reimbursement for expenses incurred on behalf of the Company and (c) for other employee benefits,
including stock option agreements under any stock option plan of Company.


 






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3.21
Brokers and Finders. Except as otherwise itemized
in Section 3.21 of the Disclosure Schedule, no person will have, as a result of the transactions contemplated by the Subscription Documents,
any valid right, interest or claim against or upon Company, any Subsidiary or the Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.


 


3.22
Questionable Payments. Neither Company nor any of
its Subsidiaries nor, to the Company’s knowledge, any of their respective current or former stockholders, directors, officers, employees,
agents or other persons acting on behalf of Company or any Subsidiary, has on behalf of Company or any Subsidiary or in connection with
their respective businesses: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate
funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious
entries on the books and records of Company or any Subsidiary; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment of any nature.


 


3.23
Solvency. The Company has not (a) made a general
assignment for the benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition
by its creditors; (c) suffered the appointment of a receiver to take possession of all, or substantially all, of its assets; (d) suffered
the attachment or other judicial seizure of all, or substantially all, of its assets; (e) admitted in writing its inability to pay its
debts as they come due; or (f) made an offer of settlement, extension or composition to its creditors generally.


 


3.24
Foreign Corrupt Practices Act. None of Company or
any of its Subsidiaries, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company or any of its
Subsidiaries, has, directly or indirectly: (a) used any funds, or will use any proceeds from the sale of the Securities, for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (b) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (c) failed to disclose fully any contribution made by Company or any of its Subsidiaries (or made by any person acting on their
behalf of which the Company is aware) or any members of their respective management which is in violation of any legal requirement, or
(d) has violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder which was applicable to Company or any of its Subsidiaries.


 






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3.25
Disclosures. Neither the Company nor any person acting
on its behalf has provided the Purchaser or its agents or counsel with any information that constitutes or might constitute material,
non-public information, other than the terms of the transactions contemplated hereby. The written materials delivered to the Purchaser
in connection with the transactions contemplated by the Subscription Documents do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which
they were made, not misleading.


 


3.26
Transfer Agent. Company represents and warrants that
it will not replace its transfer agent without Purchaser’s permission so long as any of the Preferred Shares are outstanding. The
Company acknowledges that any failure to comply with this Section shall constitute a material breach of this Agreement.


 


3.27
Shell Company Status. Set forth in Schedule 3.27
of the Disclosure Schedule is the Company’s representation as to its “Shell Company” status under Rule 144.


 


3.28
The Company agrees and acknowledges that so long as any obligations of the Company under any
of the Subscription Documents shall exist, it shall be obligated to provide Notice to the Purchaser in the event of a material change
to any representation or disclosure in any of the Subscription Documents, including but not limited to, the disclosures on the Disclosure
Schedule, and failure to provide such notice shall constitute a material breach of this Agreement and an Event of Default under the Designation.


 


4.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER


 


4.1
Purchase for Own Account. The Purchaser represents
that it is acquiring the Units for its own account and not with the view to transfer the Units or otherwise distribute them except in
compliance with the Securities Act.


 


4.2
Information and Sophistication. Without lessening
or obviating the representations and warranties of the Company set forth in Section 3, the Purchaser hereby: (a) acknowledges that it
has received all the information it has requested from the Company that it considers necessary or appropriate for deciding whether to
acquire the Units, (b) represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms
and conditions of the offering of the Units and to obtain any additional information necessary to verify the accuracy of the information
given the Purchaser and (c) further represents that it has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risk of this investment.


 






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4.3
Ability to Bear Economic Risk. The Purchaser acknowledges
that investment in the Units involves a high degree of risk, and represents that it is able, without materially impairing its financial
condition, to hold the Units for an indefinite period of time and to suffer a complete loss of its investment.


 


4.4
Accredited Investor Status. The Purchaser is an “accredited
investor” as such term is defined in Rule 501 under the Securities Act.


 


4.5
Existence; Authorization. The Purchaser is an individual,
corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of the state
of its organization, having full power and authority to own its properties and to carry on its business as conducted. The principal place
of business of the Purchaser is as shown on the Accredited Investor Questionnaire. The Purchaser has the requisite power and authority
to deliver this Agreement, perform its obligations set forth herein, and consummate the transactions contemplated hereby. The Purchaser
has duly executed and delivered this Agreement and has obtained the necessary authorization to execute and deliver this Agreement and
to perform his, her or its obligations herein and to consummate the transactions contemplated hereby. This Agreement, assuming the due
execution and delivery hereof by the Company, is a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser
in accordance with its terms.


 


4.6
No Regulatory Approval. The Purchaser understands
that no state or federal authority has scrutinized this Agreement or the Units offered pursuant hereto, has made any finding or determination
relating to the fairness for investment in the Units, or has recommended or endorsed the Units, and that the Units have not been registered
or qualified under the Securities Act or any state securities laws, in reliance upon exemptions from registration thereunder. The Units
may not, in whole or in part, be resold, transferred, assigned or otherwise disposed of unless they are registered under the Securities
Act or an exemption from registration is available, and unless the proposed disposition is in compliance with the restrictions on transferability
under federal and state securities laws.


 


4.7
Purchaser Received Independent Advice. The Purchaser
confirms that the Purchaser has been advised to consult with the Purchaser’s independent attorney regarding legal matters concerning
the Company and to consult with independent tax advisers regarding the tax consequences of investing in the Company. The Purchaser acknowledges
that Purchaser understands that any anticipated United States federal or state income tax benefits may not be available and, further,
may be adversely affected through adoption of new laws or regulations or amendments to existing laws or regulations. The Purchaser acknowledges
and agrees that the Company is providing no warranty or assurance regarding the ultimate availability of any tax benefits to the Purchaser
by reason of the subscription.


 






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4.8
Agreement to be Bound by Operating Agreement. The
Purchaser acknowledges receipt of a true and correct copy of the Second Amended and Restated Operating Agreement of the Company, dated
January 19, 2018 (as such may be amended, modified or restated from time to time, the “Operating Agreement”), a copy
of which is available on EDGAR at https://www.sec.gov/Archives/edgar/data/1599407/000147793218000387/efsh_ex31.htm, and further
acknowledges that Purchaser has read the Operating Agreement and understands and agrees to abide by all terms, covenants, conditions,
limitations, restrictions and provisions contained in the Operating Agreement. By execution of this Agreement, the Purchaser agrees to
be bound by the Operating Agreement and agrees that the Operating Agreement is binding upon and inures to the benefit of the heirs, legatees,
devisees, legal representatives, successors and permitted assigns of the Purchaser. 


 


4.9
Legends. The Purchaser understands that until such
time as the Preferred Shares, Warrants, and, upon the conversion of the Preferred Shares and the exercise of the Warrants in accordance
with its respective terms, the Underlying Securities, have been registered under the Securities Act or may be sold pursuant to Rule 144,
Rule 144A under the Securities Act or Regulation S without any restriction as to the number of securities as of a particular date that
can then be immediately sold, the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order
may be placed against transfer of the certificates for such Securities):


 


“NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE OR EXERCISABLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE PURCHASER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.”


 






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5.
FURTHER AGREEMENTS; POST-CLOSING COVENANTS


 


5.1
Use of Proceeds. Assuming that the full $3,000,000
is raised in the Offering, the Company shall use the proceeds from the Offering solely for the following purposes: (i) $2,975,000 for
the acquisition of all of the equity interests or substantially all of the assets of Wolo Manufacturing Corp., and Wolo Industrial Horn
and Signal, each a New York corporation (collectively “WOLO”) and related expenses, and (ii) $25,000 to cover the Lead
Investor’s legal fees incurred in connection with the Offering.


 


5.2
Form D; Blue Sky Laws. Company agrees to file a Form
D with respect to the Units as required under Regulation D and to provide a copy thereof to the Purchaser promptly after such filing.
Company shall take such action as Company shall reasonably determine is necessary to qualify the Securities for sale to the Purchaser
at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Purchaser on
or prior to the initial closing.


 


5.3
Registration Rights.


 


(a) Mandatory
Registration. The Company shall prepare, and, as soon as practicable but in no event later than thirty (30) days after the Closing
Date (the “Filing Deadline”), file with the SEC a Registration Statement under the Securities Act on appropriate form
covering the resale of the full amount of the Underlying Securities (collectively, the “Registrable Securities”).
The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the date (the “Effectiveness Deadline”), which shall be either (i) in the event
that the SEC does not review the Registration Statement, ninety (90) days after the Closing Date, or (ii) in the event that the SEC reviews
the Registration Statement, one hundred fifty (150) days after the Closing Date (but in any event, no later than two (2) Business Days
from the SEC indicating that it has no further comments on the Registration Statement).


 


(b) Limitation
on Registrable Securities. In the event that the staff of the SEC (the “Staff”) determines that the full amount
of the Registrable Securities cannot be registered on the Registration Statement due to limitations under Rule 415 of the Securities Act,
then Company shall: (i) register the resale of that portion of the Registrable Securities as the Staff may permit under its interpretations
of Rule 415, and (ii) undertake to register the remaining portion of the Registrable Securities as soon as registration would be permitted
under Rule 415, as determined by the Company in good faith based on the Staff’s publicly available interpretations of Rule 415.


 






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(c) Related Obligations.
At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 5.3(a) hereof, the Company
will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method
of disposition thereof and, pursuant thereto, the Company shall have the following obligations:


 


(i) The Company shall
submit to the SEC, within two (2) Business Days after the Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, a request
for acceleration of effectiveness of such Registration Statement to a time and date not later than two (2) Business Days after the submission
of such request. The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i)
the date as of which the Purchaser may sell all of the Registrable Securities covered by such Registration Statement without restriction
or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated
under the Securities Act or (ii) the date on which the Purchaser shall have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). The Company shall ensure that each Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses,
in the light of the circumstances in which they were made) not misleading.


 


(ii) The Company
shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement
and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of
in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.


 


(iii) The Company
shall furnish to the Purchaser without charge,


(i) promptly after the Registration
Statement including the Purchaser’s Registrable Securities is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference,
if requested by the Purchaser, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement,
ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number
of copies as the Purchaser may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus,
as the Purchaser may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities.


 






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(iv) The Company
shall notify the Purchaser in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as
a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact
or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information),
and, promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver
ten (10) copies of such supplement or amendment to the Purchaser (or such other number of copies as the Purchaser may reasonably request).
The Company shall also promptly notify the Purchaser in writing (i) when a prospectus or any prospectus supplement or post- effective
amendment has been filed, and when a Registration Statement or any post- effective amendment has become effective (notification of such
effectiveness shall be delivered to the Purchaser by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of
the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.


 


(v) The Company shall
use commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension
is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Purchaser who holds
Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of notice of the initiation
or threat of any proceeding for such purpose.


 


(vi) If the Purchaser
is required under applicable securities law to be described in the Registration Statement as an underwriter, at the reasonable request
of the Purchaser, the Company shall furnish to the Purchaser, on the date of the effectiveness of the Registration Statement and thereafter
from time to time on such dates as the Purchaser may reasonably request (i) a letter, dated such date, from the Company’s independent
certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the Purchaser, and (ii) an opinion, dated as of such date, of counsel representing the
Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering,
addressed to the Purchaser.


 


(vii) If the Purchaser
is required under applicable securities law to be described in the Registration Statement as an underwriter, upon the written request
of the Purchaser in connection with the Purchaser’s due diligence requirements, if any, the Company shall make available for inspection
by (i) the Purchaser and its legal counsel and (ii) one firm of accountants or other agents retained by the Purchaser (collectively, the
“Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector solely for the purpose of
establishing a due diligence defense under underwriter liability under the Securities Act, and cause the Company’s officers, directors
and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree
to hold in strict confidence and shall not make any disclosure (except to the Purchaser) or use of any Record or other information which
the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under
the Securities Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government
body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure
in violation of this or any other Transaction Document. The Purchaser agrees that it shall, upon learning that disclosure of such Records
is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and
allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and the Purchaser) shall be
deemed to limit the Purchaser’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable
laws and regulations.


 






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(viii) The Company
shall hold in confidence and not make any disclosure of information concerning the Purchaser provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant
to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction or (iv) such information
has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information concerning the Purchaser is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written notice to the Purchaser and allow the Purchaser, at the Purchaser’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.


 


(ix) The Company
shall cooperate with the Purchaser and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable
such certificates to be in such denominations or amounts, as the case may be, as the Purchaser may reasonably request and registered in
such name as the Purchaser may request.


 


(x) If requested
by the Purchaser, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such
information as the Purchaser reasonably requests to be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price
being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable
make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by the Purchaser.


 


(xi) The Company
shall use commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.


 


(xii) The Company
shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.


 


(xiii) Within two
(2) Business Days after a Registration Statement that covers Registrable Securities is ordered effective by the SEC, the Company shall
deliver to the transfer agent for such Registrable Securities (with copies to the Purchaser) confirmation that such Registration Statement
has been declared effective by the SEC.


(xiv) Notwithstanding
anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public information
concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors and its counsel,
in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”);
provided, that the Company shall promptly (i) notify the Purchaser in writing of the existence of material, non-public information giving
rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information
to the Purchaser) and the date on which the Grace Period will begin, and (ii) notify the Purchaser in writing of the date on which the
Grace Period ends; and, provided further, that the Grace Periods shall not exceed an aggregate of thirty (30) Trading Days during any
365-day period and the first day of any Grace Period must be at least fifteen (15) days after the last day of any prior Grace Period (each,
an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall
begin on and include the date the Purchaser receives the notice referred to in clause (i) and shall end on and include the later of the
date the Purchaser receives the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 5.3(c)(v)
hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall
again be bound by the first sentence of Section 5.3(c)(iv) with respect to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended
Common Shares to a transferee of any Purchaser in accordance with the terms of this Agreement in connection with any sale of Registrable
Securities with respect to which a Purchaser has entered into a contract for sale, and delivered a copy of the prospectus included as
part of the applicable Registration Statement (unless an exemption from such prospectus delivery requirement exists), prior to the Purchaser’s
receipt of the notice of a Grace Period and for which the Purchaser has not yet settled.


 






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(xv) Neither the
Company nor any Subsidiary or affiliate thereof shall identify the Purchaser as an underwriter in any public disclosure or filing with
the SEC or any applicable Trading Market and the Purchaser being deemed an underwriter by the SEC shall not relieve the Company of any
obligations it has under this Agreement and any other documents or instruments executed and delivered in connection with the Agreement.


 


(d) Obligations of the Purchaser.


 


(i) At least five
(5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify the Purchaser in writing
of the information the Company requires from the Purchaser in order to have that Purchaser’s Registrable Securities included in
such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant
to this Agreement with respect to the Registrable Securities of a particular Purchaser that the Purchaser shall furnish to the Company
such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities and shall execute
such documents in connection with such registration as the Company may reasonably request.


 


(ii) Each Purchaser,
by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless the Purchaser has notified the Company in writing of the
Purchaser’s election to exclude all of the Purchaser’s Registrable Securities from such Registration Statement.


 






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(iii) Each Purchaser
agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.3(c)(v) or the
first sentence of 5.3(c)(iv), the Purchaser will immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until the Purchaser’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 5.3(c)(v) or the first sentence of 5.3(c)(iv) or receipt of notice that no supplement or amendment is required.
Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended Common Shares to a transferee
of the Purchaser in accordance with the terms of this Agreement in connection with any sale of Registrable Securities with respect to
which the Purchaser has entered into a contract for sale prior to the Purchaser’s receipt of a notice from the Company of the happening
of any event of the kind described in Section 5.3(c)(v) or the first sentence of 5.3(c)(iv) and for which the Purchaser has not yet settled.


 


(iv) Each Purchaser
covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement


 


(e) Expenses of
Registration. All reasonable expenses, other than underwriting discounts and commissions incurred in connection with registrations,
filings or qualifications pursuant to Section 5.3, including, without limitation, all registration, listing and qualifications fees, printers
and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.


 


(f) Reports under
the Exchange Act. With a view to making available to the Purchaser the benefits of Rule 144 promulgated under the Securities Act or
any other similar rule or regulation of the SEC that may at any time permit the Purchaser to sell securities of the Company to the public
without registration (“Rule 144”), the Company agrees to:


 


(i) make and keep
public information available, as those terms are understood and defined in Rule 144, during the Reporting Period;


 


(ii) file with the
SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and


 


(iii) furnish to
the Purchaser so long as the Purchaser owns Registrable Securities, promptly upon request during the Reporting Period, (i) a written statement
by the Company, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii)
a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company and


(iii) such other information as may
be reasonably requested to permit the Purchaser to sell such securities pursuant to Rule 144 without registration.


 






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(g) Assignment
of Registration Rights. The rights under Section 5.3 shall be automatically assignable by a Purchaser to any transferee of all or
any portion of the Purchaser’s Registrable Securities if: (i) the Purchaser agrees in writing with the transferee or assignee to
assign such rights and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee
or assignee and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the
Securities Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by
clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained
herein; and (v) such transfer shall have been made in accordance with the applicable requirements of this Agreement.


 


(h) Indemnification.


 


(i) Company Indemnification.
The Company will indemnify the Purchaser (if Registrable Securities held by the Purchaser are included in the securities as to which such
registration is being effected), each of its officers and directors, partners, members and each person controlling the Purchaser within
the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on (A) any untrue
statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such Registration Statement, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading, or (B) any violation by the Company of the Securities Act, the Exchange Act, state securities
laws or any rule or regulation promulgated under such laws applicable to the Company in connection with any such registration, and in
each case, the Company will reimburse the Purchaser, each of its officers and directors, partners, members and each person controlling
the Purchaser, for any legal and any other expenses reasonably incurred, as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case
to the extent that any such claim, loss, damage, liability or expense arises out of or is based on (X) any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by an
instrument duly executed by the Purchaser or controlling person, and stated to be specifically for use therein, (Y) the use by a Purchaser
of an outdated or defective prospectus after the Company has notified the Purchaser in writing that the prospectus is outdated or defective
or (Z) a Purchaser’s (or any other indemnified person’s) failure to send or give a copy of the prospectus or supplement (as
then amended or supplemented), if required, pursuant to Rule 172 under the Securities Act (or any successor rule) to the Persons asserting
an untrue statement or alleged untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such person if such statement or omission was corrected in such prospectus or supplement;
provided, further, that the indemnity agreement contained in this Section 5.3(h)(i) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not
be unreasonably withheld).


 






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(ii) Purchaser
Indemnification. The Purchaser will, if Registrable Securities held by the Purchaser are included in the securities as to which such
registration is being effected, indemnify the Company, each of its directors and officers, other holders of the Company’s securities
covered by such Registration Statement, each person who controls the Company within the meaning of Section 15 of the Securities Act, and
each such holder, each of its officers and directors and each person controlling such holder within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (A) any untrue statement
(or alleged untrue statement) of a material fact contained in any such Registration Statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, and only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such Registration Statement, prospectus, offering circular or other document in reliance upon
and in conformity with written information furnished to the Company by an instrument duly executed by the Purchaser and stated to be specifically
for use therein, or (B) any violation by the Purchaser of the Securities Act, the Exchange Act, state securities laws or any rule or regulation
promulgated under such laws applicable to the Purchaser, and in each case, the Purchaser will reimburse the Company, each other holder,
and directors, officers, persons, underwriters or control persons of the Company and the other holders for any legal or any other expenses
reasonably incurred, as such expenses are incurred, in connection with investigating or defending any such claim, loss, damage, liability
or action; provided, that the indemnity agreement contained in this Subsection 5.3(h)(ii) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such indemnifying Purchaser
(which consent shall not be unreasonably withheld or delayed). The liability of any Purchaser for indemnification under this Section 5.3(h)(ii)
in its capacity as a seller of Registrable Securities shall not exceed the amount of net proceeds to the Purchaser of the securities sold
in any such registration.


 


(iii) Notice and
Procedure. Each party entitled to indemnification under this Section 5.3(h) (the “Indemnified Party”) shall give
written notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action and provided further, that the
Indemnifying Party shall not assume the defense for matters as to which there is a conflict of interest or there are separate and different
defenses. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party
(whose consent shall not be unreasonably withheld), consent to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.


 






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(iv) Contribution.
If the indemnification provided for in this Section 5.3(h) is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any losses, claims, damages or liabilities referred to herein, the Indemnifying Party, in lieu of indemnifying such
Indemnified Party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection with the untrue statement or omission that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party
or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, that in no event shall any contribution by a Purchaser hereunder exceed the proceeds from the offering
received by the Purchaser. The amount paid or payable by a party as a result of any loss, claim, damage or liability shall be deemed to
include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses
incurred by such party in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section 5.3(h) was available to such party in accordance with its terms.


 


(v) Survival.
The obligations of the Company and the Purchaser under this Section 5.3(h) shall survive completion of any offering of Registrable Securities
in a Registration Statement and the termination of this Agreement. The indemnity and contribution agreements contained in this Section
5.3(h) are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or
limitation of other remedies or causes of action that the parties may have under the this Agreement and any other documents or instruments
executed and delivered in connection with the Agreement.


 


5.4
Legal Counsel Opinions.


 


Upon the request
of the Purchaser from time to time, Company shall be responsible (at its cost) for promptly supplying to Company’s transfer agent
and the Purchaser a customary legal opinion letter of its counsel (the “Legal Counsel Opinion”) to the effect that
the resale of the Underlying Securities by the Purchaser or its affiliates, successors and assigns is exempt from the registration requirements
of the Securities Act pursuant to Rule 144 (provided the requirements of Rule 144 are satisfied and provided the Underlying Securities
are not then registered under the Securities Act for resale pursuant to an effective registration statement). Should Company’s legal
counsel fail for any reason to issue the Legal Counsel Opinion, the Lead Purchaser may (at Company’s cost) secure another legal
counsel to issue the Legal Counsel Opinion, and Company will instruct its transfer agent to accept such opinion. Company shall not impede
the removal by its stock transfer agent of the restricted legend from any common stock certificate upon receipt by the transfer agent
of a Rule 144 Opinion Letter. COMPANY HEREBY AGREES THAT IT MAY NEVER TAKE THE POSITION THAT IT IS A “SHELL COMPANY” IN
CONNECTION WITH ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE UNLESS THE COMPANY HAS SOUGHT THE ADVICE OF ITS COUNSEL AND ITS COUNSEL
HAS INDICATED THAT IT MUST TAKE SUCH POSITION AS A MATTER OF APPLICABLE LAW.


 


5.5
Listing. Company will, so long as the Purchaser owns
any of the Securities, maintain the listing and trading of its Common Shares on the OTCQB or any equivalent exchange or electronic quotation
system or a national securities exchange and will comply in all respects with Company’s reporting, filing and other obligations
under the bylaws or rules of the Financial Industry Regulatory Authority, or FINRA, and such exchanges, as applicable, as well as with
the SEC. Company shall promptly provide to the Purchaser copies of any notices it receives from the OTCQB and any other exchanges or electronic
quotation systems on which the Common Shares are then traded regarding the continued eligibility of the common stock for listing on such
exchanges and quotation systems.


 






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5.6
Information and Observer Rights.


 


(a) As long as the
Purchaser owns at least five percent (5%) of the Securities originally purchased hereunder, Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by Company pursuant to the
Exchange Act. As long as the Purchaser owns at least five percent (5%) of the Securities originally purchased hereunder, if Company is
not required to file reports pursuant to such laws, it will prepare and furnish to the Purchaser and simultaneously make publicly available
in accordance with Rule 144(c) such information as is required for the Purchaser to sell the Securities under Rule 144. Company further
covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time
to time to enable the Purchaser to sell the Securities without registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.


 


(b) As long as the
Lead Investor owns at least five percent (5%) of the Securities originally purchased by the Lead Investor, if the Lead Investor notifies
Company in writing (including by electronic mail) that it wishes to attend meetings of Company’s Board of Directors and that it
acknowledges that it will receive material nonpublic information and consents to the same, Company shall invite a designated representative
of the Lead Investor to attend all meetings of Company’s Board of Directors in a nonvoting observer capacity and, in this respect,
and subject to the Lead Investor having informed Company that it wishes to attend, Company shall give such representative copies of all
notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided
to such directors; provided, however, that such representative shall agree to hold in confidence and trust and to act in
a fiduciary manner with respect to all information so provided; and provided further, that Company reserves the right to withhold
any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at
such meeting could adversely affect the attorney-client privilege between Company and its counsel or result in disclosure of trade secrets
or a conflict of interest. For avoidance of doubt, the Company shall not provide Lead Investor any material non-public information unless
specifically requested by Lead Investor.


 


5.7
Confidentiality. The Purchaser agrees that it will
keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) the terms
and conditions of this Agreement or any confidential information obtained from the Company pursuant to the terms of this Agreement (including
notice of Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known
to the public in general (other than as a result of a breach of this Section 5.7 by the Purchaser), (b) is or has been independently developed
or conceived by the Purchaser without use of the Company’s confidential information, or (c) is or has been made known or disclosed
to the Purchaser by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided,
however, that the Purchaser may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals
to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective
purchaser of any Securities from the Purchaser, if such prospective purchaser agrees to be bound by the provisions of this Section 5.7;
(iii) to any existing or prospective affiliate, partner, member, stockholder, or wholly owned subsidiary of the Purchaser in the ordinary
course of business, provided that the Purchaser informs such person that such information is confidential and directs such person to maintain
the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Purchaser notifies the Company
within three (3) Business Days of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.


 






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5.8
Restrictions on Activities. Commencing as of the
date first above written, and so long as Preferred Shares remain outstanding, the Company shall not, directly or indirectly, without the
Lead Purchaser’s prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its business;
(b) sell, divest, change the structure of any material assets other than in the ordinary course of business unless as a result of such
sale, divestiture or change, the use of proceeds is to redeem the Securities; (c) solicit any offers for, respond to any unsolicited offers
for, or conduct any negotiations with any other person or entity in respect of any variable rate debt transactions (i.e., transactions
where the conversion or exercise price of the security issued by the Company varies based on the market price of the common stock); or
(d) accept a Merchant-Cash-Advance in which it sells future receivables at a discount or any other factoring transactions, or similar
financing instruments or financing transactions, whether a transaction similar to the one contemplated hereby or any other investment.


 


5.9
Other Restrictions. Unless approved in writing by
the Lead Purchaser, Company and each Subsidiary shall not enter into an agreement or amend an existing agreement to effect any sale of
securities involving, or convert any securities previously issued under, a Variable Rate Transaction or a merchant cash advance transaction
in which it sells future receivables at a discount, or a substantially similar transaction. The term “Variable Rate Transaction”
means a transaction in which Company or any Subsidiary (i) issues or sells any convertible securities either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the trading prices of, or quotations for, the shares of common stock
at any time after the initial issuance of such convertible securities, or (B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of such convertible securities or upon the occurrence of specified or contingent
events directly or indirectly related to the business of Company or the Subsidiary, as the case may be, or the market for the common stock,
other than pursuant to a customary “weighted average” or “full-ratchet” anti-dilution provision, or (ii) enters
into any agreement (including, without limitation, an “equity line of credit” or an “at- the-market offering”)
whereby Company or any Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive”
or “participation” rights). The Purchaser shall be entitled to obtain injunctive relief against Company and its Subsidiaries
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.


 






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5.10
Sale of Assets; Issuance of Equity or Debt. The Company
shall not sell any material assets or any securities of the following Subsidiaries: 1847 Neese Inc., 1847 Asien Inc., 1847 Cabinet Inc.
and WOLO following its acquisition by the Company, in each case, unless all of the proceeds of such sale are first used to redeem the
Preferred Shares then outstanding.


 


5.11
Participation Rights. For a period of twelve (12)
months from the date hereof, in the event Company, WOLO or any other Subsidiary of the Company existing on the date hereof, proposes to
offer and sell any of its securities (“New Securities”), whether in the form of debt, Equity Financing (defined below),
or any other financing transaction (each a “Future Offering”), the Lead Purchaser (but not any other Purchaser) shall
have the right, but not the obligation, to participate in the Future Offering in an amount up to the aggregate amount of the Lead Purchaser’s
investment in the Securities hereunder (the “Participation Right”). For the avoidance of doubt, an “Equity
Financing” shall mean Company’s sale of its Common Shares or any securities conferring the right to purchase Company’s
Common Shares or securities convertible into, or exchangeable for (with or without additional consideration), Common Shares. The Participation
Right shall not apply to Excluded Issuances (as defined below). In connection with each Participation Right, Company shall provide written
notice to the Lead Purchaser of the terms and conditions of the Future Financing at least ten (10) Business Days prior to the anticipated
first closing of such Future Financing (the “FF Notice”). If the Lead Purchaser shall elect to exercise its Participation
Right, it shall notify Company, in writing, of such election within five days (the “Participation Notice”). In the
event the Lead Purchaser does not return a Participation Notice to Company within such five (5) day period, the Participation Right granted
hereunder shall terminate and be of no further force and effect; provided, however, that such Participation Right shall be reinstated
if the anticipated closing referenced in the FF Notice does not occur within sixty days of the Lead Purchaser’s receipt of the FF
Notice. For purposes of this Agreement, “Excluded Issuance” means (i) New Securities issuable under the Company’s
equity incentive plans or other compensation arrangements; (ii) New Securities issuable upon a stock split, stock dividend, or any subdivision
of the Company’s Common Stock; (iii) New Securities issued to banks, equipment lessors or other financial institutions, or to real
property lessors, pursuant to a debt financing, equipment leasing or real property leasing or similar transaction; (iv) New Securities
issued to suppliers or third party service providers in connection with the provision of goods or services; (v) New Securities issued
pursuant to the acquisition of another person by the Company by merger, purchase of substantially all of the assets or other reorganization
or to a joint venture agreement; and (vi) New Securities issued in connection with collaboration, technology license, development, marketing
or other similar agreements or strategic partnerships.


 






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5.12
Terms of Future Financings. Unless otherwise agreed
to by the Lead Purchaser, so long as the Purchaser holds any of the Preferred Shares, upon any issuance of (or announcement of intent
to effect an issuance of) any security, or amendment to (or announcement of intent to effect an amendment to) any security that was originally
issued before the issue date, by the Company, with any term that the Purchaser reasonably believes is more favorable to the holder of
such security than, or with a term in favor of the holder of such security that the Purchaser reasonably believes was not similarly provided,
to the Purchaser in the Subscription Documents, then (i) the Company shall notify the Purchaser of such additional or more favorable term
within five (5) Business Days of the new issuance and/or amendment (as applicable) of the respective security, which notice may include
the filing of a current report on Form 8-K that discloses the issuance of such new security, and (ii) such term, at Purchaser’s
option, shall become a part of the transaction documents with the Purchaser (regardless of whether the Company complied with the notification
provision of this Section 5.12). The types of terms contained in another security that may be more favorable to the purchaser of such
security include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest
rates, original issue discounts, stock sale price, private placement price per share, and warrant coverage. If Purchaser elects to have
the term become a part of the transaction documents with the Purchaser, then the Company shall immediately deliver to the Purchaser acknowledgment
of such adjustment and/or shall take such further action as the Purchaser may reasonably require (including executing and delivering amendments
to applicable transaction documents) to implement such adjustments in form and substance reasonably satisfactory to the Purchaser (the
“Acknowledgment”) within five (5) Business Days of Company’s receipt of request from Purchaser (the “Adjustment
Deadline”), provided that Company’s failure to timely provide the Acknowledgement shall not affect the automatic amendments
contemplated hereby.


 


5.13
Breach of Covenants. The Company acknowledges and
agrees that if the Company breaches any covenants set forth in this Section 5, in addition to any other remedies available to the Purchaser
pursuant to this Agreement, it will be considered an Event of Default under the Designation.


 


5.14
Transfer Agent Instructions. Company shall issue
irrevocable instructions to Company’s transfer agent to issue certificates, registered in the name of the Purchaser or its nominee,
upon conversion of the Preferred Shares and exercise of the Warrants, in such amounts as specified from time to time by the Purchaser
to Company in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that
Company proposes to replace its transfer agent, Company shall provide, prior to the effective date of such replacement,
fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including but not
limited to the provision to irrevocably reserve sufficient Common Shares for issuance upon any conversion of the Preferred Shares and
exercise of the Warrants) signed by the successor transfer agent to the Company and the Purchaser. Prior to registration of the Underlying
Securities under the Securities Act or the date on which the Underlying Securities may be sold pursuant to Rule 144 without any restriction
as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive
legend specified in Section 4.9 of this Agreement or a similar legend prescribed by the Company’s transfer agent. The Company warrants
that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5.14 will be given by Company
to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of Company as and to the
extent provided in this Agreement and the Units; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder
its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for Common Shares to be issued
to the Purchaser upon exercise of the Warrants or conversion of or otherwise pursuant to the Preferred Shares as and when required by
the Designation and this Agreement; (iii) it will not fail to remove (or direct its transfer agent not to remove or impair, delay, and/or
hinder its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any Common Shares issued to the Purchaser upon exercise of the Warrants or conversion of, or otherwise pursuant to
the Preferred Shares as and when required by the Designation and this Agreement and (iv) it will provide any required corporate resolutions
and issuance approvals to its transfer agent within one (1) Business Day of each conversion of the Preferred Shares or exercise of the
Warrants. Nothing in this Section shall affect in any way the Purchaser’s obligations and agreement set forth in Section 5.3 hereof
to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Purchaser provides Company,
at the cost of Company, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions,
to the effect that a public sale or transfer of such Securities may be made without registration under the Securities Act and such sale
or transfer is effected or (ii) the Purchaser provides reasonable assurances that the Securities can be sold pursuant to Rule 144, Company
shall permit the transfer, and, in the case of the Securities, promptly instruct its transfer agent to issue one or more certificates,
free from restrictive legend, in such name and in such denominations as specified by the Purchaser. Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Purchaser, by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, Company acknowledges that the remedy at law for a breach of its obligations under this Section 5.14
may be inadequate and agrees, in the event of a breach or threatened breach by Company of the provisions of this Section, that the Purchaser
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other security being required.


 






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5.15
Monitoring Fee. Upon the occurrence and during the
continuation of an Event of Default (as defined in the Designation) or a material breach of this Agreement, the Company shall pay the
Lead Purchaser a monthly monitoring fee (the “Monitoring Fee”) in the amount of Five Thousand Dollars ($5,000) per
month commencing in the month in which the Event of Default or material breach of this Agreement occurs and continuing until the Event
of Default or material breach of this Agreement is cured.


 


5.16
Compliance with 1934 Act; Public Information Failures.
For so long as the Purchaser beneficially owns any of the Securities, the Company shall comply with the reporting requirements of the
1934 Act and shall continue to be subject to the reporting requirements of the 1934 Act. During the period that the Purchaser beneficially
owns the Securities, if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation,
the failure to satisfy the current public information requirements under Rule 144(c) or (ii) if the Company has ever been an issuer described
in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2),
and, in either such case, the Purchaser is otherwise unable to sell any of the Securities owned by the Purchaser because such shares are
not otherwise freely transferrable (each, a “Public Information Failure”) then, as partial relief for the damages to
the Purchaser by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of
any other remedies available pursuant to this Agreement, the Units, or at law or in equity), the Company shall pay to the Purchaser an
amount in cash equal to three percent (3%) of the Purchase Price on each day of a Public Information Failure and on every thirtieth (30th)
day (pro-rated for periods totaling less than thirty (30) days) thereafter until the date such Public Information Failure is cured, but
subject to a cap of ten percent (10%). The payments to which the Purchaser shall be entitled pursuant to this Section 5.16 are referred
to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier
of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third Business
Day after the event or failure giving rise to the Public Information Failure Payments is cured.


 


5.17
Further Assurances. Each of the Purchaser and the
Company agrees and covenants that at any time and from time to time it will execute and deliver to the other party such further instruments
and documents and take such further action as the other party may reasonably require within three (3) Business Days of any such request
in order to carry out the full intent and purpose of this Agreement and to comply with state or federal securities laws or other regulatory
approvals.


 


6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL


 


The obligation
of the Company hereunder to issue and sell the Units to the Purchaser at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion:


 


(a) The Purchaser
shall have executed this Agreement and delivered the same to the Company.


 


(b) The Purchaser
shall have delivered the Purchase Price in accordance with Section 1 above.


 


(c) The representations
and warranties of the Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing Date,
as though made at that time (except for representations and warranties that speak as of a specific date), and the Purchaser shall have
performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to
be performed, satisfied or complied with by the Purchaser at or prior to the Closing Date.


 






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(d) No litigation,
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


7.
CONDITIONS TO THE PURCHASER’S OBLIGATION TO PURCHASE


 


The obligation
of the Purchaser hereunder to purchase the Units, on the Closing Date, is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, provided that these conditions are for the Purchaser’s sole benefit and may be waived by the
Purchaser at any time in its sole discretion:


 


(a) The Company shall
have executed this Agreement and delivered the same to the Purchaser.


 


(b) The Company shall
have delivered to the Purchaser the Units in accordance with Section 1 above.


 


(c) Company shall
have delivered to the Purchaser the Warrant.


 


(d) Company shall
have delivered executed Subscription Documents, or such other instruments as contemplated by this Agreement.


 


(e) The Company has
provided the Purchaser with a current schedule of liabilities and the results of a current certified UCC search that is of a date within
ten (10) days of the Closing Date.


 


(f) The Irrevocable
Transfer Agent Instructions, in form and substance satisfactory to the Purchaser, shall have been delivered to and acknowledged in writing
by Company’s Transfer Agent.


 


(g) The representations
and warranties of the Company shall be true and correct in all material respects as of the date when made and as of Closing Date, as though
made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied
and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.


 


(h) No litigation,
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 






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(i) No event shall
have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change
in the Exchange Act reporting status of the Company or the failure of the Company to be timely in its Exchange Act reporting obligations.


 


(j) Company shall
have delivered to the Purchaser (i) a certificate evidencing the formation and good standing of Company and each of its Subsidiaries in
such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction, as of a date
within ten (10) days of the Closing Date; (ii) resolutions adopted by the Company’s Board of Directors at a duly called meeting
or by unanimous written consent authorizing this Agreement and all other documents, instruments and transactions contemplated hereby.


 


8.
MISCELLANEOUS


 


8.1
Binding Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement,
expressed 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.


 


8.2
Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed under the laws of the State of New York, without giving effect to conflicts of laws principles. Each
party to this Agreement hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in Rockland
County, New York for the adjudication of any dispute hereunder or in connection with any transaction contemplated hereby, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof (certified or registered mail, return receipt requested) 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 manner permitted by law.


 


8.3
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) 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.


 






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8.4
Titles and Subtitles. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.


 


8.5
Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next Business Day, (c) five (5)
days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the Company and to the Purchaser at the addresses set forth on the signature page to this Agreement or at such other
addresses as the Company or Purchaser may designate by ten (10) days’ advance written notice to the other parties hereto.


 


8.6
Modification; Waiver. No modification or waiver of
any provision of this Agreement or consent to departure therefrom shall be effective only upon the written consent of the Company and
Investors holding a majority of the then outstanding Preferred Shares, which majority must include the Lead Investor.


 


8.7
Expenses. The Company and the Purchaser shall each
bear its respective expenses and legal fees incurred with respect to this Agreement and the transactions contemplated herein; provided,
however, that the Lead Investor may retain $25,000 of the Purchase Price to cover its expenses incurred in connection with this Agreement
and the transactions contemplated hereby.


 


8.8
Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to the Purchaser, upon any breach or default of the Company under the Subscription
Documents shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default
be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character by Purchaser of any breach or default under this Agreement, or any waiver by any Purchaser of any
provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing
and that all remedies, either under this Agreement, or by law or otherwise afforded to the Purchaser, shall be cumulative and not alternative.


 


8.9
Remedies Cumulative. No remedy herein conferred upon
any party 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.


 


8.10
Attorneys’ Fees. In the event that any party
hereto institutes any legal suit, action, or proceeding, including arbitration, against another party in respect of a matter arising out
of or relating to this Agreement, the prevailing party in the suit, action, or proceeding shall be entitled to receive, in addition to
all other damages to which it may be entitled, the costs incurred by such party in conducting the suit, action or proceeding, including
reasonable attorneys’ fees and expenses, and court costs.


 


8.11
Equitable Remedies. Each party hereto acknowledges
that a breach or threatened breach by such party of any of its obligations under this Agreement would give rise to irreparable harm to
the other parties, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened
breach by such party of any such obligations, each of the other parties hereto shall, in addition to any and all other rights and remedies
that may be available to them in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an
injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement
to post bond).


 


8.12
Entire Agreement. This Agreement and the Exhibits
hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically
set forth herein.


 


[Signature Page Follows]


 




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In
Witness Whereof, the parties have executed this Agreement as of the date first written above.


 


	COMPANY:	 	PURCHASER:
	 	 	 
	1847 Holdings LLC	 	 
	 	 	 	 	 
	By:	 	 	By:	 
	Name:	Ellery W. Roberts	 	Name:	 
	Title: 	Chief Executive Officer	 	Title:	 


 


	Address:	590 Madison Avenue	 	Address:	 
	 	21st Floor	 	 	 
	 	New York, NY 10022
	 	 	 
	 	 	 	Number of Units: _______________
	 	 	 	 
	 	 	 	Purchase Price: $_______________


 


 


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