Document:

Exhibit 10.3

 

THE
LOVESAC COMPANY

RESTRICTED
STOCK UNITS AGREEMENT

 

The
Lovesac Company has granted to the Participant named in the Notice of Grant of Restricted Stock Units (the “Grant
Notice”) to which this Restricted Stock Units Agreement (the “Agreement”) is attached
an Award consisting of Restricted Stock Units (each, a “Unit”) subject to the terms and conditions set
forth in the Grant Notice and this Agreement. The Award has been granted pursuant to and shall in all respects be subject to the
terms conditions of The Lovesac Company 2017 Equity Incentive Plan (the “Plan”), as amended to the Date
of Grant, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges
receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Agreement and the Plan, (b) accepts
the Award subject to all of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to accept
as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Grant Notice,
this Agreement or the Plan.

 

1. Definitions
and Construction.

 

1.1 Definitions.
Capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan, unless otherwise defined
herein.

 

1.2 Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural
shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

 

2. Administration.

 

All
questions of interpretation concerning the Grant Notice, this Agreement, the Plan or any other form of agreement or other document
employed by the Company in the administration of the Plan or the Award shall be determined by the Board. All such determinations
by the Board shall be final, binding and conclusive upon all persons having an interest in the Award, unless fraudulent or made
in bad faith. Any and all actions, decisions and determinations taken or made by the Board in the exercise of its discretion pursuant
to the Plan or the Award or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding
sentence) shall be final, binding and conclusive upon all persons having an interest in the Award. Any Officer shall have the
authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility
of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right,
obligation, or election.

 

3. The
Award.

 

3.1 Grant
of Units. On the Date of Grant, the Participant shall acquire, subject to the provisions of this Agreement, the Total Number
of Units set forth in the Grant Notice, subject to adjustment as provided in Section 10. Each Unit represents a right to
receive on a date determined in accordance with the Grant Notice and this Agreement one (1) share of Stock.

 

     

     

    

 

3.2 No
Monetary Payment Required. The Participant is not required to make any monetary payment (other than applicable tax withholding,
if any) as a condition to receiving the Units or shares of Stock issued upon settlement of the Units, the consideration for which
shall be past services actually rendered or future services to be rendered to a Participating Company or for its benefit. Notwithstanding
the foregoing, if required by applicable law, the Participant shall furnish consideration in the form of cash or past services
rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock issued
upon settlement of the Units.

 

3.3 Termination
of the Award. The Award shall terminate upon the first to occur of (a) a Change in Control to the extent provided in
Section 8 or (b) the final settlement of all Vested Units in accordance with Section 6.

 

4. Vesting
of Units.

 

Units
acquired pursuant to this Agreement shall become Vested Units as provided in the Grant Notice. For purposes of determining the
number of Vested Units following an Ownership Change Event, credited Service shall include all Service with any corporation which
is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both
before and after the Ownership Change Event.

 

5. Company
Reacquisition Right.

 

5.1 Grant
of Company Reacquisition Right. In the event that the Participant’s Service terminates for any reason or no reason,
with or without cause, the Participant shall forfeit and the Company shall automatically reacquire all Units which are not, as
of the time of such termination, Vested Units (“Unvested Units”), and the Participant shall not be entitled
to any payment therefor (the “Company Reacquisition Right”).

 

5.2 Ownership
Change Event, Non-Cash Dividends, Distributions and Adjustments. Upon the occurrence of an Ownership Change Event,
a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property, or any other adjustment
upon a change in the capital structure of the Company as described in Section 10, any and all new, substituted or additional
securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend
policy) to which the Participant is entitled by reason of the Participant’s ownership of Unvested Units shall be immediately
subject to the Company Reacquisition Right and included in the terms “Units” and “Unvested Units” for
all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior to the
Ownership Change Event, dividend, distribution or adjustment, as the case may be. For purposes of determining the number of Vested
Units following an Ownership Change Event, dividend, distribution or adjustment, credited Service shall include all Service with
any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating
Company both before and after any such event.

 

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6. Settlement
of the Award.

 

6.1 Issuance
of Shares of Stock. Subject to the provisions of Section 6.3 below, the Company shall issue to the Participant
on the Settlement Date with respect to each Vested Unit to be settled on such date one (1) share of Stock. The Settlement Date
with respect to a Unit shall be the date set forth in the Grant Notice (an “Original Settlement Date”);
provided, however, that if the Original Settlement Date would occur on a date on which a sale by the Participant of the shares
to be issued in settlement of the Vested Units would violate the Trading Compliance Policy of the Company, the Settlement Date
for such Vested Units shall be deferred until the next day on which the sale of such shares would not violate the Trading Compliance
Policy, but in any event on or before the 15th day of the third calendar month following calendar year of the vesting date. Shares
of Stock issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as
may be required pursuant to Section 6.3, Section 7 or the Company’s Trading Compliance Policy.

 

6.2 Beneficial
Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion,
to deposit any or all shares acquired by the Participant pursuant to the settlement of the Award with the Company’s transfer
agent, including any successor transfer agent, to be held in book entry form, or to deposit such shares for the benefit of the
Participant with any broker with which the Participant has an account relationship of which the Company has notice. Except as
provided by the foregoing, a certificate for the shares acquired by the Participant shall be registered in the name of the Participant,
or, if applicable, in the names of the heirs of the Participant.

 

6.3 Restrictions
on Grant of the Award and Issuance of Shares. The grant of the Award and issuance of shares of Stock upon settlement
of the Award shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to
such securities. No shares of Stock may be issued hereunder if the issuance of such shares would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any
shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares as to which
such requisite authority shall not have been obtained. As a condition to the settlement of the Award, the Company may require
the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

6.4 Fractional
Shares. The Company shall not be required to issue fractional shares upon the settlement of the Award.

 

7. Tax
Withholding.

 

7.1 In
General. At the time the Grant Notice is executed, or at any time thereafter as requested by a Participating Company, the
Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees
to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance)
withholding obligations of the Participating Company, if any, which arise in connection with the Award, the vesting of Units or
the issuance of shares of Stock in settlement thereof. The Company shall have no obligation to deliver shares of Stock until the
tax withholding obligations of the Participating Company have been satisfied by the Participant.

 

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7.2 Assignment
of Sale Proceeds. Subject to compliance with applicable law and the Company’s Trading Compliance Policy, if permitted
by the Company, the Participant may satisfy the Participating Company’s tax withholding obligations in accordance with procedures
established by the Company providing for delivery by the Participant to the Company or a broker approved by the Company of properly
executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale
with respect to some or all of the shares being acquired upon settlement of Units.

 

7.3 Withholding
in Shares. The Company shall have the right, but not the obligation, to require the Participant to satisfy all or any portion
of a Participating Company’s tax withholding obligations by deducting from the shares of Stock otherwise deliverable to
the Participant in settlement of the Award a number of whole shares having a fair market value, as determined by the Company as
of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined
by the applicable minimum statutory withholding rates.

 

8. Effect
of Change in Control.

 

In
the event of a Change in Control, except to the extent that the Board determines to cash out the Award in accordance with Section
13 of the Plan, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”),
may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations
under all or any portion of the outstanding Units or substitute for all or any portion of the outstanding Units substantially
equivalent rights with respect to the Acquiror’s stock. For purposes of this Section, a Unit shall be deemed assumed if,
following the Change in Control, the Unit confers the right to receive, subject to the terms and conditions of the Plan and this
Agreement, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of
a share of Stock on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if
such consideration is not solely common stock of the Acquiror, the Board may, with the consent of the Acquiror, provide for the
consideration to be received upon settlement of the Unit to consist solely of common stock of the Acquiror equal in Fair Market
Value to the per share consideration received by holders of Stock pursuant to the Change in Control. The Award shall terminate
and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that Units subject
to the Award are neither assumed or continued by the Acquiror in connection with the Change in Control nor settled as of the time
of the Change in Control.

 

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9. Right
of First Refusal.

 

9.1 Grant
of Right of First Refusal. Except as provided in Section 9.7, in the event the Participant, the Participant’s
legal representative, or other holder of shares acquired upon settlement of the Award proposes to sell, exchange, transfer, pledge,
or otherwise dispose of any such shares (the “Transfer Shares”) to any person or entity, including,
without limitation, any stockholder of a Participating Company, the Company shall have the right to repurchase the Transfer Shares
under the terms and subject to the conditions set forth in this Section (the “Right of First Refusal”).

 

9.2 Notice
of Proposed Transfer. Prior to any proposed transfer of the Transfer Shares, the Participant shall deliver written
notice (the “Transfer Notice”) to the Company describing fully the proposed transfer, including the
number of Transfer Shares, the name and address of the proposed transferee (the “Proposed Transferee”)
and, if the transfer is voluntary, the proposed transfer price, and containing such information necessary to show the bona fide
nature of the proposed transfer. In the event of a bona fide gift or involuntary transfer, the proposed transfer price shall be
deemed to be the Fair Market Value of the Transfer Shares, as determined by the Board in good faith. If the Participant proposes
to transfer any Transfer Shares to more than one Proposed Transferee, the Participant shall provide a separate Transfer Notice
for the proposed transfer to each Proposed Transferee. The Transfer Notice shall be signed by both the Participant and the Proposed
Transferee and must constitute a binding commitment of the Participant and the Proposed Transferee for the transfer of the Transfer
Shares to the Proposed Transferee subject only to the Right of First Refusal.

 

9.3 Bona
Fide Transfer. If the Company determines that the information provided by the Participant in the Transfer Notice is
insufficient to establish the bona fide nature of a proposed voluntary transfer, the Company shall give the Participant written
notice of the Participant’s failure to comply with the procedure described in this Section 9, and the Participant shall
have no right to transfer the Transfer Shares without first complying with the procedure described in this Section 9. The
Participant shall not be permitted to transfer the Transfer Shares if the proposed transfer is not bona fide.

 

9.4 Exercise
of Right of First Refusal. If the Company determines the proposed transfer to be bona fide, the Company shall have
the right to purchase all, but not less than all, of the Transfer Shares (except as the Company and the Participant otherwise
agree) at the purchase price and on the terms set forth in the Transfer Notice by delivery to the Participant of a notice of exercise
of the Right of First Refusal within thirty (30) days after the date the Transfer Notice is delivered to the Company. The Company’s
exercise or failure to exercise the Right of First Refusal with respect to any proposed transfer described in a Transfer Notice
shall not affect the Company’s right to exercise the Right of First Refusal with respect to any proposed transfer described
in any other Transfer Notice, whether or not such other Transfer Notice is issued by the Participant or issued by a person other
than the Participant with respect to a proposed transfer to the same Proposed Transferee. If the Company exercises the Right of
First Refusal, the Company and the Participant shall thereupon consummate the sale of the Transfer Shares to the Company on the
terms set forth in the Transfer Notice within sixty (60) days after the date the Transfer Notice is delivered to the Company (unless
a longer period is offered by the Proposed Transferee); provided, however, that in the event the Transfer Notice provides for
the payment for the Transfer Shares other than in cash, the Company shall have the option of paying for the Transfer Shares by
the present value cash equivalent of the consideration described in the Transfer Notice as reasonably determined by the Company.
For purposes of the foregoing, cancellation of any indebtedness of the Participant to any Participating Company shall be treated
as payment to the Participant in cash to the extent of the unpaid principal and any accrued interest canceled. Notwithstanding
anything contained in this Section to the contrary, the period during which the Company may exercise the Right of First Refusal
and consummate the purchase of the Transfer Shares from the Participant shall terminate no sooner than the completion of a period
of eight (8) months following the date on which the Participant acquired the Transfer Shares.

 

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9.5 Failure
to Exercise Right of First Refusal. If the Company fails to exercise the Right of First Refusal in full (or to such
lesser extent as the Company and the Participant otherwise agree) within the period specified in Section 9.4, the Participant
may conclude a transfer to the Proposed Transferee of the Transfer Shares on the terms and conditions described in the Transfer
Notice, provided such transfer occurs not later than ninety (90) days following delivery to the Company of the Transfer Notice
or, if applicable, following the end of the period described in the last sentence of Section 9.4. The Company shall have
the right to demand further assurances from the Participant and the Proposed Transferee (in a form satisfactory to the Company)
that the transfer of the Transfer Shares was actually carried out on the terms and conditions described in the Transfer Notice.
No Transfer Shares shall be transferred on the books of the Company until the Company has received such assurances, if so demanded,
and has approved the proposed transfer as bona fide. Any proposed transfer on terms and conditions different from those described
in the Transfer Notice, as well as any subsequent proposed transfer by the Participant, shall again be subject to the Right of
First Refusal and shall require compliance by the Participant with the procedure described in this Section.

 

9.6 Transferees
of Transfer Shares. All transferees of the Transfer Shares or any interest therein, other than the Company, shall be
required as a condition of such transfer to agree in writing (in a form satisfactory to the Company) that such transferee shall
receive and hold such Transfer Shares or interest therein subject to all of the terms and conditions of this Agreement, including
this Section 9 providing for the Right of First Refusal with respect to any subsequent transfer. Any sale or transfer of
any Shares shall be void unless the provisions of this Section are met.

 

9.7 Transfers
Not Subject to Right of First Refusal. The Right of First Refusal shall not apply to any transfer or exchange of the
Shares if such transfer or exchange is in connection with an Ownership Change Event. If the consideration received pursuant to
such transfer or exchange consists of stock of a Participating Company, such consideration shall remain subject to the Right of
First Refusal unless the provisions of Section 9.9 result in a termination of the Right of First Refusal.

 

9.8 Assignment
of Right of First Refusal. The Company shall have the right to assign the Right of First Refusal at any time, whether
or not there has been an attempted transfer, to one or more persons as may be selected by the Company.

 

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9.9 Early
Termination of Right of First Refusal. The other provisions of this Agreement notwithstanding, the Right of First Refusal
shall terminate and be of no further force and effect upon the existence of a public market for the class of shares subject to
the Right of First Refusal. A “public market” shall be deemed to exist if (i) such stock is listed
on a national securities exchange (as that term is used in the Exchange Act) or (ii) such stock is traded on the over-the-counter
market and prices therefor are published daily on business days in a recognized financial journal.

 

10. Adjustments
for Changes in Capital Structure.

 

Subject
to any required action by the stockholders of the Company and the requirements of Section 409A of the Code to the extent applicable,
in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or
in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (other than
regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy) that has a material effect on
the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number of Units subject
to the Award and/or the number and kind of shares or other property to be issued in settlement of the Award, in order to prevent
dilution or enlargement of the Participant’s rights under the Award. For purposes of the foregoing, conversion of any convertible
securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any
and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock
pursuant to the Company’s dividend policy) to which the Participant is entitled by reason of ownership of Units acquired
pursuant to this Award will be immediately subject to the provisions of this Award on the same basis as all Units originally acquired
hereunder. Any fractional Unit or share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest
whole number. Such adjustments shall be determined by the Board, and its determination shall be final, binding and conclusive.

 

11. Rights
as a Stockholder, Director, Employee or Consultant.

 

The
Participant shall have no rights as a stockholder with respect to any shares which may be issued in settlement of this Award until
the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record
date is prior to the date the shares are issued, except as provided in Section 10. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between
a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified
term. Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company
or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service at any
time.

 

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12. Legends.

 

The
Company may at any time place legends referencing the Right of First Refusal and any applicable federal, state or foreign securities
law restrictions on all certificates representing shares of stock issued pursuant to this Agreement. The Participant shall, at
the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to
this Award in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified
by the Company, legends placed on such certificates may include, but shall not be limited to, the following:

 

12.1 “THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES,
THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.”

 

12.2 “THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND REPURCHASE OPTIONS IN FAVOR OF THE
CORPORATION OR ITS ASSIGNEE SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH HOLDER’S
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”

 

13. Compliance
with Section 409A.

 

It
is intended that any election, payment or benefit which is made or provided pursuant to or in connection with this Award that
may result in nonqualified deferred compensation within the meaning of Section 409A shall comply in all respects with the applicable
requirements of Section 409A (including applicable regulations or other administrative guidance thereunder, as determined by the
Board in good faith) to avoid the unfavorable tax consequences provided therein for non-compliance and the Award shall be so construed.
In connection with effecting such compliance with Section 409A, the following shall apply:

 

13.1 Separation
from Service; Required Delay in Payment to Specified Employee. Notwithstanding anything set forth herein to the contrary,
no amount payable pursuant to this Agreement on account of the Participant’s termination of Service which constitutes a
“deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code
(the “Section 409A Regulations”) shall be paid unless and until the Participant has incurred a “separation
from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that the Participant is a “specified
employee” within the meaning of the Section 409A Regulations as of the date of the Participant’s separation from service,
no amount that constitutes a deferral of compensation which is payable on account of the Participant’s separation from service
shall be paid to the Participant before the date (the “Delayed Payment Date”) which is first day of
the seventh month after the date of the Participant’s separation from service or, if earlier, the date of the Participant’s
death following such separation from service. All such amounts that would, but for this Section, become payable prior to the Delayed
Payment Date will be accumulated and paid on the Delayed Payment Date.

 

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13.2 Other
Changes in Time of Payment. Neither the Participant nor the Company shall take any action to accelerate or delay the payment
of any benefits under this Agreement in any manner which would not be in compliance with the Section 409A Regulations.

 

13.3 Amendments
to Comply with Section 409A; Indemnification. Notwithstanding any other provision of this Agreement to the contrary, the Company
is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay
the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion,
to be necessary or appropriate to comply with the Section 409A Regulations without prior notice to or consent of the Participant.
The Participant hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims
that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant
in connection with the Award, including as a result of the application of Section 409A.

 

13.4 Advice
of Independent Tax Advisor. The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service
with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement
will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award.
The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor
prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the
effect of or the advisability of entering into this Agreement.

 

14. Lock-Up
Agreement.

 

The
Participant hereby agrees that in the event of any underwritten public offering of stock, including an initial public offering
of stock, made by the Company pursuant to an effective registration statement filed under the Securities Act, the Participant
shall not offer, sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale of, or otherwise
dispose of any shares of stock of the Company or any rights to acquire stock of the Company for such period of time from and after
the effective date of such registration statement as may be established by the underwriter for such public offering; provided,
however, that such period of time shall not exceed one hundred eighty (180) days from the effective date of the registration statement
to be filed in connection with such public offering; provided, further, however, that such one
hundred eighty (180) day period may be extended for an additional period, not to exceed twenty (20) days, upon the request
of the Company or the underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research
reports and (ii) analyst recommendations and opinions, including but not limited to, the restrictions contained in NASD Rule
2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto). The foregoing limitation shall not
apply to shares registered in the public offering under the Securities Act. The Participant hereby agrees to enter into any agreement
reasonably required by the underwriters to implement the foregoing within a reasonable timeframe if so requested by the Company.

 

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15. Restrictions
on Transfer of Shares.

 

At
any time prior to the existence of a public market for the Stock, the Board may prohibit the Participant and any transferee of
such Participant from selling, transferring, assigning, pledging, or otherwise disposing of or encumbering any shares acquired
pursuant to the Award (each, a “Transfer”) without the prior written consent of the Board. The Board
may withhold consent for any reason, including without limitation any Transfer (i) to any individual or entity identified by the
Company as a potential competitor or considered by the Company to be unfriendly, or (ii) if such Transfer increases the risk of
the Company having a class of security held of record by such number of persons as would require the Company to register any class
of securities under the Exchange Act; or (iii) if such Transfer would result in the loss of any federal or state securities law
exemption relied upon by the Company in connection with the initial issuance of such shares or the issuance of any other securities;
or (iv) if such Transfer is facilitated in any manner by any public posting, message board, trading portal, Internet site,
or similar method of communication, including without limitation any trading portal or Internet site intended to facilitate secondary
transfers of securities; or (v) if such Transfer is to be effected in a brokered transaction; or (vi) if such Transfer would be
of less than all of the shares of Stock then held by the stockholder and its affiliates or is to be made to more than a single
transferee. No shares acquired pursuant to this Award may be sold, exchanged, transferred (including, without limitation, any
transfer to a nominee or agent of the Participant), assigned, pledged, hypothecated or otherwise disposed of, including by operation
of law in any manner which violates any of the provisions of this Agreement, and any such attempted disposition shall be void.
The Company shall not be required (a) to transfer on its books any shares which will have been transferred in violation of
any of the provisions set forth in this Agreement or (b) to treat as owner of such shares or to accord the right to vote
as such owner or to pay dividends to any transferee to whom such shares will have been so transferred.

 

16. Miscellaneous
Provisions.

 

16.1 Termination
or Amendment. The Board may terminate or amend the Plan or this Agreement at any time; provided, however, that except as provided
in Section 8 in connection with a Change in Control, no such termination or amendment may have a materially adverse effect
on the Participant’s rights under this Agreement without the consent of the Participant unless such termination or amendment
is necessary to comply with applicable law or government regulation, including, but not limited to, Section 409A. No amendment
or addition to this Agreement shall be effective unless in writing.

 

16.2 Nontransferability
of the Award. Prior to the issuance of shares of Stock on the applicable Settlement Date, neither this Award nor any Units
subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution and, for so long as the Company is relying on an order of the Securities and Exchange
Commission (the “SEC”) under Section 12(h) of the Exchange Act or a no-action position of the Staff
of the SEC relieving the Company from registration under Section 12(g) of the Exchange Act of the Units and the shares of Stock
subject thereto, the restrictions on transfer provided by Rule 12h-1(f) under the Exchange Act that would apply were the
Units subject to such rule (including the requirement under such rule that any permitted transferee may not further transfer the
Units). No Units subject to this Award, or the shares of Stock underlying such Units, shall, prior to the settlement of the Units,
be subject to any short position, “put equivalent position” or “call equivalent position” by the Participant,
as such terms are defined in Rule 16a-1 under the Exchange Act, until the Company becomes subject to Section 13 or Section 15(d)
of the Exchange Act or is no longer relying on such SEC order or SEC Staff no action position. All rights with respect to the
Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian
or legal representative.

 

    	 	10	 

     

    

 

16.3 Further
Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably
be necessary to carry out the intent of this Agreement.

 

16.4 Binding
Effect. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions
on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors
and assigns.

 

16.5 Delivery
of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness
only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for
the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other
party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing
from time to time to the other party.

 

(a) Description
of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice,
this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may
be delivered to the Participant electronically. In addition, if permitted by the Company, the Participant may deliver electronically
the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time
to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet
or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other
means of electronic delivery specified by the Company.

 

(b) Consent
to Electronic Delivery. The Participant acknowledges that the Participant has read Section 16.5(a) of this Agreement
and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice,
as described in Section 16.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of
any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic
delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents
fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 16.5(a)
or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic
mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service
or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents
described in Section 16.5(a).

 

    	 	11	 

     

    

 

16.6 Integrated
Agreement. The Grant Notice, this Agreement and the Plan shall constitute the entire understanding and agreement of the Participant
and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements,
understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect
to such subject matter. To the extent contemplated herein or therein, the provisions of the Grant Notice, this Agreement and the
Plan shall survive any settlement of the Award and shall remain in full force and effect.

 

16.7 Applicable
Law. This Agreement shall be governed by the laws of the State of Delaware as such laws are applied to agreements between
Delaware residents entered into and to be performed entirely within the State of Delaware.

 

16.8 Counterparts.
The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

 

12Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT,
dated as of October 26, 2017, between The Lovesac Company, a Delaware corporation (the “Company”) and Shawn Nelson
(the “Executive”). 

 

WHEREAS, the Company
is in the business of manufacturing, distributing and selling furniture in the retail market;

 

WHEREAS, the Company wishes to assure itself
of the management services of the Executive for the period provided in this Agreement, and the Executive desires to serve in the
employ of the Company for such period and upon the terms and conditions hereinafter provided; and

 

WHEREAS, the Company and Executive desire
to memorialize the terms and conditions of the Executive’s employment by a written agreement.

 

IT IS THEREFORE AGREED AS FOLLOWS:

 

1. Employment
Duties and Acceptance.

 

1.1 Employment
by the Company. The Company shall employ the Executive, for itself and its subsidiaries and affiliates, for the Term (as herein
defined), to render exclusive and full-time services in the capacity of Chief Executive Officer of the Company. At all times while
the Executive is employed by the Company, the Executive shall be nominated for election, and if so elected shall continue to serve,
as a member of the Board of Directors of the Company (the “Board”).

 

1.2
Duties/Authority. The Executive shall have such responsibilities, powers and duties substantially consistent with those he
currently provides to the Company and customarily assigned to individuals serving in such position at comparable companies or
as may be reasonably required by the conduct of the business of the Company. The Executive will report to the Company’s
Board. The Executive shall devote a majority of Executive’s working time and efforts to the business and affairs of the
Company. Executive shall not, without the prior approval of the Company, whether for compensation or otherwise, directly or
indirectly, alone or as a member of any partnership or other organization, be actively engaged in or concerned with any other
business duties or personal pursuits which are in conflict with Executive’s duties under this Agreement. The
Executive’s reasonable participation in charitable organizations shall not be considered a violation of this
provision. 

 

1.3 Acceptance
of Employment by the Executive. The Executive accepts such employment and shall render the services described above. Subject
to appointment by the Board as such, the Executive may also serve during all or any part of the Term as an officer of any other
entity controlled by the Company, and as a director of the Company and of any other entity controlled by the Company, in each case
without any compensation therefor other than that specified in this Agreement.

 

     

     

    

 

1.4 Place
of Employment. The Executive’s principal place of employment shall be at the Company’s headquarters, subject to
such reasonable travel as the rendering of the services hereunder may require.

 

2. Term
of Employment. The stated term of employment under this Agreement (the “Term”) shall commence on the date
hereof and shall continue until terminated in accordance with Section 4 of this Agreement.

 

3. Compensation.

 

3.1 Salary.
As compensation for all services to be rendered pursuant to this Agreement, the Company shall pay the Executive during the Term
a salary of $325,000 per annum (the “Base Salary”), payable not less frequently than monthly, less such deductions
as shall be required to be withheld by applicable rules and regulations. The Base Salary shall not preclude raises, stock options,
incentive bonus plans and other compensation or incentives, as set forth herein or, should the Board, in its sole and absolute
discretion, so determine to provide such additional compensation or incentives to the Executive. The Executive shall recommend
a Base Salary amount to the Board (or a compensation committee thereof) each year, and the Board (or a compensation committee thereof)
shall review the Executive’s compensation and salary at least once per year (it being understood that the Board is under
no obligation to increase the Executive’s Base Salary).

 

3.2 Annual
Bonus.

 

(a) The Company
shall pay the Executive during the Term an annual bonus of up to 50% (except as otherwise provided below in this paragraph)
of the Base Salary (“Annual Bonus”), provided that Executive achieves performance targets determined by
the Board (or a compensation committee thereof). In the event that the Company achieves at least 90% of its annual EBITDA
target for the applicable completed fiscal year, the Annual Bonus in respect of such fiscal year shall be 45% of the Base
Salary. In the event that the Company achieves at least 110% of its annual EBITDA target for the applicable completed fiscal
year, the Annual Bonus in respect of such fiscal year shall be 60% of the Base Salary. In the event that the Company achieves
at least 120% of its annual EBITDA target for the applicable completed fiscal year, the Annual Bonus in respect of such
fiscal year shall be 75% of the Base Salary.

 

(b) The
Executive must remain employed through the bonus payment date to receive any Annual Bonus. The Annual Bonus will be determined
by the Board after receipt of the Company’s audited financials
for the applicable year.

 

3.3 Incentive
Compensation.

 

(a) The Executive
shall be awarded 120,000 restricted stock units (“RSUs”)on or about the date hereof, the terms of which shall
be governed by the Company’s 2017 Equity Incentive Plan and the applicable grant agreement. Half of such RSUs shall be subject
to time-based vesting and half of such RSUs shall be subject to performance vesting.

 

(b) Concurrently
with the execution of this Agreement, the Company and Executive are entering into grant notices with respect to the issuance of
options by Sac Acquisition LLC under its 2010 Unit Plan and the cancellation of options previously issued to the Executive pursuant
to the Sac Acquisition LLC 2007 Incentive Option Plan. 

 

    - 2 -

     

    

 

3.4 Participation
in Employee Benefit Plans. The Executive shall be permitted during the Term, if and to the extent eligible, to participate
on the same terms in any group life, hospitalization or disability insurance plan, health program, retirement savings plan or similar
benefit plan of the Company that is available generally to other senior executives and managers of the Company and its subsidiaries.
The Board may determine to offer the Executive participation in stock, phantom stock or profit based bonus or similar plans, to
the extent applicable, and may provide the Executive with additional fringe benefits.

 

3.5 Expenses.
Subject to policies applicable to senior executives of the Company generally, as may from time to time be established by the Board,
the Company shall pay or reimburse the Executive for reasonable travel, entertainment and other business expenses actually incurred
or paid by the Executive during the Term in the performance of the Executive’s services under this Agreement, and which expenses
are consistent with the Company’s policies in effect from time to time with respect to such travel, entertainment and other
business expenses, upon presentation of expense statements or vouchers or such other supporting information as it may require.

 

3.6 Vacation.
The Executive shall be entitled to four (4) weeks of paid vacation annually, on the terms set forth in the Company's vacation
policy.

 

3.7IPO-Related
Grant. In the event that (a) the Company consummates an initial public offering of its common stock (an “IPO”)
on or prior to March 31, 2019, (b) the Executive remains employed by the Company at the time of such IPO, and (c) Jack Krause
purchases IPO shares as provided in his employment agreement, then the Company shall promptly make an additional grant of RSUs
in an amount equal to the lesser of (i) the number of IPO shares purchased by Mr. Krause or (ii) the number of RSUs remaining
available for grant under the Company’s 2017 Equity Incentive Plan. The terms of such RSUs shall be governed by the Company’s
2017 Equity Incentive Plan and the applicable grant agreement, and will be subject to vesting as determined by the Board.

 

4. Termination.

 

4.1 Termination
upon Death. If the Executive dies during the Term, this Agreement shall terminate.

 

4.2 Termination
upon Disability. If during the Term the Executive becomes physically or mentally disabled, whether totally or partially, so
that the Executive is unable substantially to perform Executive’s services hereunder (as determined, in good faith, by a
physician selected by the Board and reasonably acceptable to the Executive or the Executive’s legal representative, which
agreement as to acceptability will not be unreasonably delayed or withheld) for (a) a period of three consecutive months, or (b)
for shorter periods aggregating three months during any six month period, the Company may at any time after the last day of the
three consecutive months of disability or the day on which the shorter periods of disability equal an aggregate of three months,
by written notice to the Executive, terminate the Term of the Executive’s employment hereunder. Nothing in this Section 4.2
shall be deemed to extend the Term.

 

    - 3 -

     

    

 

4.3 Termination
for Cause. The Company may at any time by written notice to the Executive terminate the Term of the Executive’s employment
hereunder for Cause and the Executive shall have no right to receive any compensation or benefit hereunder on and after the effective
date of such notice except for the payment or provision, as applicable, of (i) the portion of the Base Salary for periods prior
to the effective date of termination accrued but unpaid (if any), (ii) all unreimbursed expenses for which Executive is otherwise
entitled to reimbursement pursuant to Section 3.5 (if any), and (iii) other payments, entitlements or benefits (if any), in accordance
with terms of the applicable plans, programs, arrangements or other agreements of the Company or any affiliate thereof (other than
any severance plan or policy) as to which the Executive held rights to such payments, entitlements or benefits, whether as a participant,
beneficiary or otherwise, on the date of termination (“Other Benefits”). For purposes hereof, the term “Cause”
shall mean; (a) conviction of the Executive for any crime constituting a felony in the jurisdiction in which committed, or for
any other criminal act against the Company or its subsidiaries involving dishonesty or willful misconduct intended to injure the
Company or its subsidiaries (whether or not a felony and whether or not criminal proceedings are initiated); (b) failure or refusal
of the Executive in any material respect to perform the duties of Executive’s employment or to follow the lawful and proper
directives of the Company’s Chief Executive Officer, provided such duties or directives are consistent with this Agreement
and such failure or refusal continues uncured for a period of thirty (30) days after written notice thereof specifying the nature
of such failure or refusal and requesting that it be cured is given by the Company to the Executive; (c) breach by the Executive
of the provisions of Sections 5.1, 5.2, 5.3, 5.4, or 5.5; or (d) any willful or intentional act of the Executive committed for
the purpose, or having the reasonably foreseeable effect, of injuring the Company, its subsidiaries or their business or reputation
or of improperly or unlawfully converting for the Executive’s own personal benefit any property of the Company or the subsidiaries.

 

4.4 Termination
with Good Reason or without Cause. During the Term, (1) the Executive may terminate Executive’s employment with the
Company at any time with Good Reason (as defined below), and (2) the Company may terminate the Executive’s employment without
Cause, upon ten (10) days’ written notice to the other party thereto. In either such case, provided the Executive
has not breached and does not breach the provisions of Sections 5.1, 5.2, 5.3, 5.4, or 5.5 and the Executive has entered into
and not revoked a general release of claims without additional post-termination restrictions included therein in form reasonably
satisfactory to the Company so that it becomes effective within sixty (60) days after Executive’s termination of employment,
the Executive shall continue to receive for a period of 18 months from the Executive’s date of termination (i) Executive’s
Base Salary as in effect on the date of such notice, payable in accordance with the Company’s payroll schedule, (ii) coverage
in the Company’s group health plan under COBRA, if elected, at the subsidized employee rate, (iii) the payment or provision
of Other Benefits, and (iv) coverage under the term life insurance policy (or be reimbursed for the premiums therefor) and the
Company’s directors’ and officers’ liability indemnification and insurance coverage. If the severance benefits
hereunder are considered “deferred compensation” subject to Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the period to consider and revoke the release spans two tax years, the severance will
begin to be paid in the second tax year even if the release becomes effective in the earlier tax year. For purposes of this Agreement,
“Good Reason” means (a) the assignment to the Executive of duties and responsibilities not commensurate
with Executive’s position with the Company, (b) the failure of the Company to provide compensation and benefits to
the Executive as required herein, (c) a reduction in the Executive’s Base Salary without Executive’s consent, or (d) the
failure of the Company to adhere in any substantial manner to any of its other covenants herein, provided that any of the foregoing
continues for a period of twenty (20) days after written notice thereof, specifying the nature thereof and requesting that it
be cured, is given by the Executive to the Company. No severance will be paid for a “Good Reason” termination unless
Executive terminates employment within 60 days after the first occurrence of the condition and the Company has not cured such
condition within 30 days after written notice thereof (which notice shall state that such condition constitutes Good Reason) from
the Executive.

 

    - 4 -

     

    

 

4.5 Voluntary
Termination. The Executive may terminate Executive’s employment with the Company at any time in Executive’s sole
and absolute discretion upon giving at least sixty (60) days advance written notice to such effect to the Company (a “Voluntary
Termination”). In the event the Executive’s employment is terminated during the Term by the Executive’s Voluntary
Termination (other than termination by the Executive for Good Reason), then the Executive shall be entitled only to receive Executive’s
Base Salary payable through the date of such Voluntary Termination.

 

4.6 Compensation
Upon Disability. In the event of termination of this Agreement by reason of disability as set forth in Section 4.2 hereof,
the Company shall pay to the Executive (a) the Executive’s Base Salary on the date of termination for four (4) months, payable
in accordance with the provisions of Section 3.1 hereof and (b) all benefits from the Company and its employee benefit plans earned
and accrued as of such termination date.

 

5. Confidentiality,
Intellectual Property, Noncompete, Nonsolicitation, and Non-Disparagement.

 

5.1 Nondisclosure
and Nonuse of Confidential Information. The Executive will not disclose or use at any time during or after the Term any Confidential
Information (as defined below) of which the Executive is or becomes aware, whether or not such information is developed by him,
except to the extent that such disclosure or use is directly related to and required by the Executive’s performance of duties
assigned to the Executive pursuant to this Agreement. Under all circumstances and at all times, the Executive will take all appropriate
steps to safeguard Confidential Information in Executive’s possession and to protect it against disclosure, misuse, espionage,
loss and theft. For purposes hereof, “Confidential Information” means information that is not generally known
to the public and that was or is used, developed or obtained by the Company or its subsidiaries in connection with their business.
It shall not include information (a) required to be disclosed by court or administrative order, (b) lawfully obtainable from other
sources or which is in the public domain through no fault of the Executive; or (c) the disclosure of which is consented to in writing
by the Company.

 

    - 5 -

     

    

 

5.2 Ownership
of Intellectual Property. In the event that the Executive as part of Executive’s activities on behalf of the Company
generates, authors or contributes to any invention, design, new development, device, product, method of process (whether or not
patentable or reduced to practice or comprising Confidential Information), any copyrightable work (whether or not comprising Confidential
Information) or any other form of Confidential Information relating directly or indirectly to the business of the Company as now
or hereinafter conducted (collectively, “Intellectual Property”), the Executive acknowledges that such Intellectual
Property is the sole and exclusive property of the Company and hereby assigns all right title and interest in and to such Intellectual
Property to the Company. Any copyrightable work prepared in whole or in part by the Executive during the Term will be deemed “a
work made for hire” under Section 201(b) of the Copyright Act of 1976, as amended, and the Company will own all of the rights
comprised in the copyright therein. The Executive will promptly and fully disclose all Intellectual Property and will cooperate
with the Company to protect the Company’ interests in and rights to such Intellectual Property (including providing reasonable
assistance in securing patent protection and copyright registrations and executing all documents as reasonably requested by the
Company, whether such requests occur prior to or after termination of Executive’s employment hereunder).

 

5.3 Delivery
of Materials upon Termination of Employment. As requested by the Company, from time to time and upon the termination of the
Executive’s employment with the Company for any reason, the Executive will promptly deliver to the Company all copies and
embodiments, in whatever form or medium, of all Confidential Information or Intellectual Property in the Executive’s possession
or within Executive’s control (including written records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information
or Intellectual Property) irrespective of the location or form of such material and, if requested by the Company, will provide
the Company with written confirmation that all such materials have been delivered to the Company. Executive shall be permitted
to retain a copy of this Agreement and other documents concerning Executive’s entitlement to compensation to enforce the
terms of this Agreement or any other rights afforded by law to Executive.

 

5.4 Noncompetition.
The Executive acknowledges that during Executive’s employment with the Company, he will become familiar with trade secrets
and other Confidential Information concerning the Company, its subsidiaries and their respective predecessors, and that Executive’s
services will be of special, unique and extraordinary value to the Company. In addition, the Executive hereby agrees that at any
time during the Term, and after termination of employment, for the duration of the Noncompetition Period (as defined below), the
Executive will not directly or indirectly own, manage, control, participate in, consult with, render services for or in any manner
engage in any business competing with the businesses of the Company or its subsidiaries as such businesses exist or are in process
or being planned as of the termination of employment, within any county in which the Company or its subsidiaries have operating
locations, leases, options to lease or acquire property, or definitive plans known to the Executive at the time of termination
to engage in such businesses. The “Noncompetition Period” shall be 18 months following the termination of employment.
It shall not be considered a violation of this Section 5.4 for the Executive to be a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business
of such corporation.

 

    - 6 -

     

    

 

5.5 Nonsolicitation.
The Executive hereby agrees that (a) during the Term and for a period of 18 months after the termination of employment (the “Nonsolicitation
Period”) the Executive will not, directly or indirectly through another entity, actively induce or attempt to induce
any employee of the Company or its subsidiaries to leave the employ of the Company or its subsidiaries, or in any way interfere
with the relationship between the Company or its subsidiaries and any employee thereof or otherwise employ or receive the services
of any individual who was an employee of the Company or its subsidiaries at any time during such Nonsolicitation Period or within
the three-month period prior thereto and (b) during the Nonsolicitation Period, the Executive will not induce or attempt to induce
any customer, supplier, client, insurer, reinsurer, broker, licensee or other business relation of the Company or its subsidiaries
to cease doing business with the Company or its subsidiaries.

 

5.6 Enforcement
of Noncompete and Nonsolicitation. If, at the enforcement of Sections 5.4 or 5.5, a court holds that the duration, scope or
area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration,
scope or area reasonable under such circumstances will be substituted for the stated duration, scope or area and that the court
will be permitted to revise the restrictions contained in Sections 5.4 or 5.5 to cover the maximum duration, scope and area permitted
by law.

 

5.7 Equitable
Relief. The Executive acknowledges that (a) the covenants contained herein are reasonable, (b) the Executive’s services
are unique, and (c) a breach or threatened breach by him of any of Executive’s covenants and agreements with the Company
contained in Sections 5.1, 5.2, 5.3, 5.4, or 5.5 could cause irreparable harm to the Company for which they would have no adequate
remedy at law. Accordingly, and in addition to any remedies which the Company may have at law, in the event of an actual or threatened
breach by the Executive of Executive’s covenants and agreements contained in Sections 5.1, 5.2, 5.3, 5.4, or 5.5, the Company
shall have the absolute right to apply to any court of competent jurisdiction for such injunctive or other equitable relief as
such court may deem necessary or appropriate in the circumstances.

 

5.8 Non-Disparagement.
During the time that Executive is employed by the Company and thereafter, without limitation of time, Executive shall not at any
time make, publish or communicate to any person or entity, including, but not limited to, the customers or suppliers of the Company
or any of its affiliates, any Disparaging (as defined below) remarks, comments or statements concerning Company, any other equity
holders of the Company, or any affiliates of any of the foregoing. The Company shall instruct its Directors and Officers not to
make any Disparaging comments or statements concerning Executive. “Disparaging”
remarks, comments or statements are those that impugn the character, honesty, integrity, morality, business acumen or abilities
of the individual or entity being disparaged.

 

5.9 Nothing
in this agreement prohibits or restricts the parties from contacting, assisting, responding to, providing truthful testimony to
or filing charges with any regulatory organization, authority or agency (e.g., the EEOC, IRS, SEC or FINRA), or from complying
with any court or administrative order or subpoena, or from providing any other disclosure required by law.

 

    - 7 -

     

    

 

6. Other
Provisions.

 

6.1 Notices.
Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally,
via facsimile or other electronic means, sent by overnight delivery service with delivery signature required, or sent with return
receipt requested by certified, registered, or express mail, postage prepaid to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice, and shall be deemed given when so delivered personally, upon
confirmation of receipt when delivered via facsimile or other electronic means, or if mailed, two days after the date of mailing,
as follows:

 

if to the Company, at:

 

The Lovesac Company

2 Landmark Square, Suite 300 

Stamford, CT 06901 

Attention: Chairman of the Board of Directors

 

Copy to:

 

Mistral Capital Management,
LLC 

650 Fifth Ave., 31st Floor 

New York, New York, 10019 

Attention: William Phoenix

 

and

 

Satori Capital 

2501 N. Harwood St., 20th Floor 

Dallas, TX 75201 

Attention: John Grafer

 

if to the Executive, to the Executive at:

 

Shawn Nelson

3 Purdy Lane

Darien, CT 06820

 

Each of the foregoing shall be entitled to specify a different
address by giving notice as aforesaid to each of the other persons or entities listed above.

 

6.2 Entire
Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and
supersedes and nullifies any prior understandings, agreements or representations by or among the parties, written or oral, that
may have related in any way to the subject matter hereof including, without limitation, any prior employment agreement or separation
agreement.

 

    - 8 -

     

    

 

6.3 Waivers
and Amendments. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions
hereof may be waived, only by a written instrument signed by the parties making specific reference to this Agreement, or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

 

6.4 Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with and subject to, the laws of the State
of New York applicable to agreements made and to be performed entirely within such state.

 

6.5 Acknowledgments.
The Executive acknowledges that the Executive has read this entire Agreement, has had the opportunity to consult with an attorney,
and fully understands the terms of this Agreement. The Executive is satisfied with the terms of this Agreement and agrees that
its terms are binding upon the Executive and the Executive's heirs, assigns, executors, administrators, and legal representatives.

 

6.6 Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and
permitted assigns. No rights or obligations of the Executive under this Agreement may be assigned or transferred by the Executive
other than Executive’s right to compensation and benefits hereunder, which may be transferred by will or operation of law
subject to the limitations of this Agreement. No rights or obligations of the Company under this Agreement may be assigned or transferred
by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation or amalgamation
or scheme of arrangement in which the Company is not the continuing entity, or the sale or liquidation of all or substantially
all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes by operation of law or in writing duly executed by the assignee or
transferee all of the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually
or as a matter of law, as if no such assignment or transfer had taken place. Failure of the Company to obtain such express assumption
and agreement at or prior to the effectiveness of any such assignment, merger, consolidation, amalgamation or scheme of arrangement
shall be a breach of this Agreement and shall entitle the Executive to such compensation and benefits from the Company in the same
amount and on the same terms to which the Executive would be entitled hereunder if the Company had terminated Executive’s
employment without Cause.

 

6.7 Counterparts.
This Agreement may be executed in two or more counterparts (which may be effectively delivered by facsimile or other electronic
means), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

6.8 Headings.
The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of
this Agreement

 

    - 9 -

     

    

 

6.9 Severability.
If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction
of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority
to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

6.10 Section
409A.

 

(i) If
the Company determines in good faith that any provision of this Agreement would cause the Executive to incur an additional tax,
penalty, or interest under Section 409A of the Code and the applicable guidance thereunder (“Section 409A”),
the Company and the Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion
to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions
of Section 409A or causing the imposition of such additional tax, penalty, or interest under Section 409A. The preceding provision,
however, shall not be construed as a guarantee by the Company of any particular tax effect to the Executive under this Agreement.

 

(ii) “Termination
of employment,” or words of similar import, as used in this Agreement means, for purposes of any payments under this Agreement
that are payments of deferred compensation subject to Section 409A, the Executive’s “separation from service”
as defined in Section 409A. For purposes of Section 409A, the right to a series of installment payments under this Agreement shall
be treated as a right to a series of separate payments.

 

(iii) With
respect to any reimbursement of expenses of, or any provision of in-kind benefits to, Executive, as specified under this Agreement,
such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses
eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible
for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement
providing for the reimbursement of expenses referred to in Section 105(b) of the Code; (2) the reimbursement of an eligible expense
shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement
or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

 

(iv) If
a payment obligation under this Agreement or other compensation arrangement arises on account of Executive’s separation from
service while the Executive is a “specified employee” (as defined under Section 409A and determined in good faith by
the Compensation Committee), any payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1),
after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid
within six (6) months after such separation from service shall accrue without interest and shall be paid within 15 days after the
end of the six-month period beginning on the date of such separation from service or, if earlier, within 15 days after the appointment
of the personal representative or executor of the Executive’s estate following his death.

 

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6.11 Attorneys
Fees. The prevailing party in any litigation between the Company and the Executive concerning the parties’ employment
relationship and/or any claim arising from this Agreement shall be entitled to an award of the reasonable legal fees and disbursements
incurred by such party.

 

signature page follows

 

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IN WITNESS WHEREOF, the parties have executed
this Agreement the date first above written.

 

		The Lovesac Company
	 	 	 
	 	By: 	/s/ Jack A. Krause
	 	Name:	Jack A. Krause
	 	Title: 	President and Chief Operating Officer
	 	 	 
	 	EXECUTIVE:
	 	 	 
	 	/s/ Shawn Nelson
	 	Name: Shawn Nelson

 

 

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