Document:

Exhibit 4.1

 

DESCRIPTION OF SECURITIES

 

General 

 

The following is a summary of the material terms
of our shares as of December 31, 2021. The operating agreement provides for the issuance of our shares, the terms relating to distributions
with respect to our shares and the voting rights of holders of our shares. In addition, the terms of the series A senior convertible preferred
shares are governed by an amended and restated share designation, dated March 26, 2021, as amended.

 

The following description is subject to the provisions
of the Delaware Limited Liability Company Act. Certain provisions of the operating agreement are intended to be consistent with the General
Corporation Law of the State of Delaware, and the powers of our company, the governance processes and the rights of the holders of our
shares are generally intended to be similar in many respects to those that would exist if our company was a Delaware corporation under
the General Corporation Law of the State of Delaware, with certain exceptions.

 

The statements that follow are subject to and
are qualified in their entirety by reference to all of the provisions of the operating agreement and the share designation, copies of
which have been filed as exhibits to this annual report.

 

We are authorized to issue up to 500,000,000 common
shares, 4,450,460 series A senior convertible preferred shares and 1,000 allocation shares. As of December 31, 2021, we had 4,842,851
common shares and 1,818,182 series A senior convertible preferred shares issued and outstanding. In connection with the formation of our
company, our manager acquired 100% of the allocation shares for a capital contribution of $1,000 by our manager. Other than the allocation
shares held by our manager, we will not be authorized to issue any other allocation shares.

 

Common Shares

 

Distribution Rights. Holders of common
shares are entitled to receive ratably those distributions, if any, as may be declared from time to time by the board of directors out
of legally available funds.

 

Liquidation Rights. Upon our liquidation,
dissolution or winding up in accordance with the terms of the operating agreement, the then holders of common shares will be entitled
to share in our assets legally available for distribution, following payment to creditors and our series A senior convertible preferred
shares, in accordance with the positive balance in such holders’ tax-based capital accounts required by the operating agreement,
after giving effect to all contributions, distributions and allocations for all periods.

  

Voting Rights. The holders of common shares
are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Under the operating agreement,
any action to be taken by vote of shareholders other than for election of directors shall be authorized by the affirmative vote of the
majority of shares present or represented by proxy and entitled to vote. Directors are elected by a plurality of votes cast.

 

Other Rights. Holders of common shares
have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common
shares.

 

Series A Senior Convertible Preferred Shares

 

Dividend Rights. Holders of series A senior
convertible preferred shares are entitled to dividends at a rate per annum of 14.0% of the stated value ($2.00 per share, subject to adjustment).
Dividends shall accrue from day to day, whether or not declared, and shall be cumulative. Dividends shall be payable quarterly in arrears
on each dividend payment date in cash or common shares at our discretion. Dividends payable in common shares shall be calculated based
on a price equal to eighty percent (80%) of the volume weighted average price, or VWAP, for the common shares our principal trading market
during the five (5) trading days immediately prior to the applicable dividend payment date; provided, however, that if the common shares
are not registered, and rulemaking referred to below is effective on the payment date, the dividends payable in common shares shall be
calculated based upon the fixed price of $1.57; provided further, that we may only elect to pay dividends in common shares based upon
such fixed price if the VWAP for the five (5) trading days immediately prior to the applicable dividend payment date is $1.57 or higher.

 

    

     

    

 

Liquidation Rights. Subject to the rights
of our creditors and the holders of any senior securities or parity securities (in each case, as defined in the share designation), upon
any liquidation of our company or its subsidiaries, before any payment or distribution of our assets (whether capital or surplus) shall
be made to or set apart for the holders of securities that are junior to the series A senior convertible preferred shares as to the distribution
of assets on any liquidation of our company, including our common shares and allocation shares, each holder of outstanding series A senior
convertible preferred shares shall be entitled to receive an amount of cash equal to 115% of the stated value plus an amount of cash equal
to all accumulated accrued and unpaid dividends thereon (whether or not declared) to, but not including the date of final distribution
to such holders. If, upon any liquidation, the assets, or proceeds thereof, distributable among the holders of the series A senior convertible
preferred shares shall be insufficient to pay in full the preferential amount payable to the holders of the series A senior convertible
preferred shares and liquidating payments on any other shares of any class or series of parity securities as to the distribution of assets
on any liquidation, then such assets, or the proceeds thereof, shall be distributed among the holders of series A senior convertible preferred
shares and any such other parity securities ratably in accordance with the respective amounts that would be payable on such series A senior
convertible preferred shares and any such other parity securities if all amounts payable thereon were paid in full.

  

Voting Rights. The series A senior convertible
preferred shares do not have any voting rights; provided that, so long as any series A senior convertible preferred shares are outstanding,
the affirmative vote of holders of a majority of series A senior convertible preferred shares, which majority must include Leonite Capital
LLC so long as it holds any series A senior convertible preferred shares, voting as a separate class (which we refer to herein as the
Requisite Holders), shall be necessary for approving, effecting or validating any amendment, alteration or repeal of any of the provisions
of the share designation. In addition, so long as any series A senior convertible preferred shares are outstanding, the affirmative vote
of such holders shall be required prior to our company’s (or Kyle’s or Wolo’s) creation or issuance of (i) any parity
securities; (ii) any senior securities; and (iii) any new indebtedness other than (A) intercompany indebtedness by Kyle’s or Wolo
in favor of our company, (B) indebtedness incurred in favor of the sellers of Kyle’s or Wolo in connection with the acquisition
of Kyle’s or Wolo, or (C) indebtedness (or the refinancing of such indebtedness) the proceeds of which are used to complete the
acquisition of Kyle’s or Wolo related expenses or working capital to operate the business of Kyle’s or Wolo. Notwithstanding
the foregoing, this shall not apply to any financing transaction the use of proceeds of which we will use to redeem the series A senior
convertible preferred shares and the warrants issued in connection therewith.

 

Conversion Rights. Each series A senior
convertible preferred share, plus all accrued and unpaid dividends thereon, shall be convertible, at the option of the holder thereof,
at any time and from time to time, into such number of fully paid and nonassessable common shares determined by dividing the stated value
($2.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by the conversion price of $1.75 per share; provided
that in no event shall the holder of any series A senior convertible preferred shares be entitled to convert any number of series A senior
convertible preferred shares that upon conversion the sum of (i) the number of common shares beneficially owned by the holder and its
affiliates and (ii) the number of common shares issuable upon the conversion of the series A senior convertible preferred shares with
respect to which the determination of this proviso is being made, would result in beneficial ownership by the holder and its affiliates
of more than 4.99% of the then outstanding common shares. This limitation may be waived (up to a maximum of 9.99%) by the holder and in
its sole discretion, upon not less than sixty-one (61) days’ prior notice to us.

 

Redemption. We may redeem in whole, or
upon the written consent of the Requisite Holders and in the manner provided for in such written consent, in part, the series A senior
convertible preferred shares by paying in cash therefore a sum equal to 115% of the stated value plus the amount of accrued and unpaid
plus any other amounts due pursuant to the terms of the series A senior convertible preferred shares. On
October 12, 2021, we redeemed 2,632,278 series A senior convertible preferred shares for a total redemption price, including dividends
through such date, of $6,395,645. 

 

Adjustments. The share designation contains
standard adjustments to the conversion price in the event of any share splits, share combinations, share reclassifications, dividends
paid in common shares, sales of substantially all of our assets, mergers, consolidations
or similar transactions. In addition, the share designation provides that if, but only if, the Requisite Holders provide us with at least
ten (10) business day’s prior written notice, then, from and after the date of such notice, the stated dividend rate, the stated
value and the conversion price shall automatically adjust as follows:

 

		●	On
                                            the first day of the 12th month following the
                                            issuance date of any series A senior convertible preferred shares, the stated dividend
                                            rate shall automatically increase by five percent (5.0%) per annum and the conversion price
                                            shall automatically adjust to the lower of the (i) initial conversion price and (ii) the
                                            price equal to the lowest VWAP of the ten (10) trading days immediately preceding such date.

 

		●	On
                                            the first day of the 24th month following the
                                            issuance date of any series A senior convertible preferred shares, the stated dividend
                                            rate shall automatically increase by an additional five percent (5.0%) per annum, the stated
                                            value shall automatically increase by ten percent (10%) and the conversion price shall automatically
                                            adjust to the lower of the (i) initial conversion price and (ii) the price equal to
                                            the lowest VWAP of the ten (10) trading days immediately preceding such date.

 

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		●	On
                                            the first day of the 36th month following the
                                            issuance date of any series A senior convertible preferred shares, the stated dividend
                                            rate shall automatically increase by an additional five percent (5.0%) per annum, the stated
                                            value shall automatically increase by ten percent (10%) and the conversion price shall automatically
                                            adjust to the lower of the (i) initial conversion price and (ii) the price equal to the lowest
                                            VWAP of the ten (10) trading days immediately preceding the third adjustment date. 

 

Notwithstanding the foregoing, the conversion
price for purposes of the adjustments above shall not be adjusted to a number that is below $0.0075. In addition, if any legislation or
rules are adopted whereby the holding period of securities for purposes of Rule 144 of the Securities Act for convertible securities that
convert at market-adjusted rates is increased resulting in a longer holding period for convertible securities like the series A senior
convertible preferred shares and the unavailability at the time of conversion of Rule 144, the pricing provisions that are based upon
the lowest VWAP of the previous ten (10) trading days immediately preceding the relevant adjustment date shall be removed unless the common
shares issuable upon conversion are then registered under an effective registration statement.

 

Additional Equity Interest. On the third
adjustment date set forth above, we are required to cause Kyle’s and Wolo to issue to the holders of series A senior convertible
preferred shares, on a pro rata basis, a ten percent (10%) equity stake Kyle’s and/or Wolo. The holders of series A senior convertible
preferred shares issued in connection with the financing to complete the acquisition of Kyle’s shall receive the equity stake in
Kyle’s and the holders of series A senior convertible preferred shares issued in connection with the financing to complete the acquisition
of Wolo shall receive the equity stake in Wolo. We are required to cause Kyle’s and Wolo to grant to the holders of the series A
senior convertible preferred shares upon the issuance to them of such equity interest a right to receive an additional number of shares
of common stock of Kyle’s or Wolo if Kyle’s or Wolo issues to any third-party equity securities at a price below the acquisition
price (as defined below). Such additional number of shares of common stock of Kyle’s or Wolo to be issued in such instance shall
be equal to a number of shares of common stock of Kyle’s or Wolo which, when added to the number of shares of common stock of Kyle’s
or Wolo constituting the initial additional equity interest, would be equal to the total number of shares of common stock which would
have been issued to a holder of series A senior convertible preferred shares if the price per share of common stock of Kyle’s or
Wolo was equivalent to the price per equity security paid by such third-party in Kyle’s or Wolo. For purposes of this provision,
“acquisition price” means the price per share of Kyle’s and Wolo that was paid by us upon the acquisition of Kyle’s
and Wolo, respectively.

 

Other Rights. Holders of series A senior
convertible preferred shares have no preemptive or subscription rights for additional securities of our company.

 

Allocation Shares

 

Distribution Rights. Under the terms of
the operating agreement, we will pay a profit allocation to our manager, as holder of the allocation shares. See Item 1 “Business—Our
Manager—Our Manager as an Equity Holder—Manager’s Profit Allocation”
for a description of our manager’s profit allocation to be paid to our manager and an example of the calculation of the profit
allocation.

  

Liquidation
Rights. Upon a liquidation of our company, any accrued, but unpaid profit allocation due to our manager as a result of our manager’s
ownership of the allocation shares would be paid to our manager before any payment is made of any amounts due upon a liquidation to the
holders of our common shares but after payment is made to the holders of our series A senior convertible preferred shares.

 

Voting
Rights. The operating agreement provides that the holder of allocation shares will not be entitled to any voting rights, except that
the holder of the allocation shares will have:

 

		●	voting
                                            rights in connection with the merger or consolidation of our company, the sale, lease or
                                            exchange of all or substantially all of our assets and certain other business combinations
                                            or transactions;

 

		●	a
                                            veto right with respect to the dissolution of our company in certain circumstances;

 

		●	a
                                            veto right with respect to the amendment of the provisions providing for distributions to
                                            the holders of allocation shares;

 

		●	a
                                            veto right to any amendment to the provisions entitling the holders of allocation shares
                                            to appoint and remove directors who will serve on our board of directors;

 

		●	a
                                            veto right to any amendment to the provision regarding the quorum and voting requirements
                                            for board meetings;

 

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		●	a
                                            veto right to any amendment to the provisions regarding the indemnification and liability
                                            of directors;

 

		●	a
                                            veto right with respect to any amendment of the provision of the operating agreement governing
                                            amendments thereof; and

 

		●	a
                                            veto right with respect to any amendment that would adversely affect the holder of allocation
                                            shares.

 

In
addition, the holder of the allocation shares has the right to appoint one (1) director to our board of directors for every four (4)
members constituting the entire board of directors. Any director appointed to our board of directors by the holder of the allocation
shares will not be required to stand for election by the holders of our common shares and will not have any special voting rights.

 

Other
Rights. Holders of allocation shares have no preemptive, conversion or subscription rights and there are no redemption or sinking
fund provisions applicable to the allocation shares.

 

Warrants

 

In
connection with the unit offering described in this annual report, we issued warrants for the purchase of an aggregate of 4,450,460 common
shares. Each warrant is exercisable within three years at an exercise price of $2.50 per common share (subject to adjustment, including
a full ratchet antidilution adjustment), which may be exercised on a cashless basis if the underlying warrant shares are not then registered
or otherwise freely tradeable. The warrants contains an ownership limitation, such that the we shall not effect any exercise of any warrant,
and the holder shall not have the right to exercise any portion of such warrant, to the extent that after giving effect to issuance of
common shares upon exercise such warrant, such holder, together with its affiliates, and any other persons acting as a group together
with such holder or any of its affiliates, would beneficially own in excess of 4.99% of the number of common shares outstanding immediately
after giving effect to the issuance of common shares issuable upon exercise of such warrant. Upon no fewer than 61 days’ prior
notice to us, a purchaser may increase or decrease such beneficial ownership limitation provisions and any such increase or decrease
will not be effective until the 61st day after such notice is delivered to us. 

 

We
may force the exercise of the warrants at any time after the one year anniversary of the date of the warrants, if (i) our company is
listed on a national securities exchange or the over-the-counter market, (ii) the underlying common shares are registered or the holder
of the warrant otherwise has the ability to trade the underlying common shares without restriction, (iii) the 30-day volume-weighted
daily average price of our common shares exceeds 200% of the exercise price, as adjusted and (iv) the average daily trading volume is
at least 100,000 common shares during such 30-day period.

 

We
may redeem the warrants held by any holder in whole (but not in part) by paying in cash to such holder as follows: (i) $0.50 per share
then underlying the warrant if within the first twelve (12) months of issuance; (ii) $1.00 per share then underlying the warrant if after
the first twelve (12) months, but before twenty-four (24) months of issuance; and (iii) $1.50 per share then underlying the warrant if
after twenty-four months, but before thirty-six (36) months.

 

October
8, 2021, we issued to Leonite a five-year warrant for the purchase of 250,000 common shares with an exercise price of $0.01 per share
and a five-year warrant for the purchase of 500,000 common shares with an exercise price of $2.50 per share. The exercise price is subject
to standard adjustments, including a full ratchet antidilution adjustment, and the warrants may be exercised on a cashless basis if the
underlying warrant shares are not then registered or otherwise freely tradeable. The warrants contains an ownership limitation, such
that the we shall not effect any exercise of any warrant, and the holder shall not have the right to exercise any portion of such warrant,
to the extent that after giving effect to issuance of common shares upon exercise such warrant, such holder, together with its affiliates,
would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving effect to the issuance
of common shares issuable upon exercise of such warrant. Upon no fewer than 61 days’ prior notice to us, a holder may increase
or decrease such beneficial ownership limitation provisions (up to a maximum of 9.99%) and any such increase or decrease will not be
effective until the 61st day after such notice is delivered to us. 

 

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Convertible
Promissory Notes

 

On
October 8, 2021, we issued to two institutional investors, including Leonite, secured convertible promissory notes in the aggregate principal
amount of $24,860,000. The notes bear interest at a rate per annum equal to the greater of (i) 4.75% plus the U.S. prime rate that appears
in The Wall Street Journal from time to time or (ii) 8%; provided that, upon an event of default (as defined in the notes), such
rate shall increase to 24% or the maximum legal rate. The holders of the notes may, in their sole discretion, elect to convert any outstanding
and unpaid principal portion of the notes, and any accrued but unpaid interest on such portion, into our common shares at a conversion
price equal to $2.50 (subject to standard adjustments, including a full ratchet antidilution adjustment). Notwithstanding the foregoing,
the notes contain a beneficial ownership limitation, which provides that we shall not effect any conversion to the extent that after
giving effect to the conversion, the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of
common shares outstanding immediately after giving effect to the issuance of common shares upon such conversion. Upon no fewer than
61 days’ prior notice to us, a holder may increase or decrease such beneficial ownership limitation (up to a maximum of 9.99%)
and any such increase or decrease will not be effective until the 61st day after such notice is delivered to us.

 

On
October 8, 2021, our subsidiary 1847 Cabinet issued 6% subordinated convertible promissory notes in the aggregate principal amount of
$5,880,345 to the sellers of High Mountain and Innovative Cabinets. The notes bear interest at a rate of six percent (6%) per annum and
are due and payable on October 8, 2024; provided that upon an event of default (as defined in the notes), such interest rate shall increase
to ten percent (10%) per annum. The notes are convertible into shares of common stock of 1847 Cabinet. In addition, on October 8, 2021,
we entered into an exchange agreement with the holders, pursuant to which we granted them the right to exchange all of the principal
amount and accrued but unpaid interest under the notes as may be the outstanding from time to time or any portion thereof for a number
of our common shares to be determined by dividing the amount to be converted by an exchange price equal to the higher of (i) the 30-day
volume weighted average price for our common shares on the primary national securities exchange or over-the-counter market on which our
common shares are traded over the thirty (30) trading days immediately prior to the applicable exchange date or (ii) $2.50 (subject to
equitable adjustments for stock splits, stock combinations, recapitalizations and similar transactions).

 

Agreement
to be Bound by our Operating Agreement; Power of Attorney 

 

By
purchasing our shares, you will be admitted as a member of our company and will be deemed to have agreed to be bound by the terms of
the operating agreement. Pursuant to the operating agreement, each shareholder and each person who acquires a share from a shareholder
grants to certain of our officers (and, if appointed, a liquidator) a power of attorney to, among other things, execute and file documents
required for our qualification, continuance or dissolution. The power of attorney also grants certain of our officers the authority to
make certain amendments to, and to make consents and waivers under and in accordance with, our operating agreement.

 

Ratification
of Agreements 

 

The
operating agreement provides that each holder, by acquiring shares, ratifies and confirms the various agreements entered into by our
company, including but not limited to, the management services agreement, the supplemental put provision of the operating agreement,
and that the execution of any of these agreements does not constitute a breach of any duty existing under the operating agreement or
otherwise existing at law, in equity or otherwise by any persons, including our manager, approving, negotiating or executing such agreements
on behalf our company.

 

Waiver
of Jury Trial

 

Our
operating agreement provides that, to the extent permitted by law, holders of common shares waive the right to a jury trial of any claim
they may have against us arising out of or relating to our operating agreement, including any claim under the U.S. federal securities
laws. If we opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable under the facts
and circumstances of that case in accordance with applicable case law. 

 

Election
by Our Company 

 

The
operating agreement provides that our board of directors may, without the vote of holders of our shares, cause our company to elect to
be treated as a corporation for United States federal income tax purposes if the board receives an opinion from a nationally recognized
financial advisor to the effect that our market valuation is expected to be significantly lower as a result of our company continuing
to be treated as a partnership for United States federal income tax purposes than if our company instead elected to be treated as a corporation
for United States federal income tax purposes.

 

Amendment
of the Operating Agreement 

 

The
operating agreement may be amended by a majority vote of our board of directors, except that amending the following provisions requires
an affirmative vote of at least a majority of the then outstanding common shares:

  

		●	the
                                            purpose or powers of our company;

 

		●	an
                                            increase in the number of common shares authorized for issuance;

 

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		●	the
                                            distribution rights of the common shares;

 

		●	the
                                            voting rights relating to the common shares;

 

		●	the
                                            hiring of a replacement manager following the termination of the management services agreement;

 

		●	the
                                            merger or consolidation of our company, the sale, lease or exchange of all or substantially
                                            all of our assets and certain other business combinations or transactions;

  

		●	the
                                            right of our shareholders to vote on the dissolution, winding up and liquidation of our company;
                                            and

 

		●	the
                                            provision of the operating agreement governing amendments thereof.

 

Anti-Takeover
Provisions 

 

Certain
provisions of the management services agreement and the operating agreement may make it more difficult for third parties to acquire control
of our company by various means. These provisions could deprive our shareholders of opportunities to realize a premium on the shares
owned by them. In addition, these provisions may adversely affect the prevailing market price of our shares. These provisions are intended
to:

 

		●	protect
                                            our manager and its economic interests in our company;

 

		●	protect
                                            the position of our manager and its rights to manage the business and affairs of our company
                                            under the management services agreement;

 

		●	enhance
                                            the likelihood of continuity and stability in the composition of our board of directors and
                                            in the policies formulated by our board of directors;

 

		●	discourage
                                            certain types of transactions which may involve an actual or threatened change in control
                                            of our company;

 

		●	discourage
                                            certain tactics that may be used in proxy fights;

 

		●	encourage
                                            persons seeking to acquire control of our company to consult first with our board of directors
                                            to negotiate the terms of any proposed business combination or offer; and

 

		●	reduce
                                            the vulnerability of our company to an unsolicited proposal for a takeover that does not
                                            contemplate the acquisition of all of the outstanding shares or that is otherwise unfair
                                            to our shareholders.

 

Anti-Takeover
Effects of the Management Services Agreement 

 

The
limited circumstances in which our manager may be terminated means that it will be very difficult for a potential acquirer of our company
to take over the management and operation of our business. Under the terms of the management services agreement, our manager may only
be terminated by us in certain limited circumstances. Furthermore, our manager has the right to resign and terminate the management services
agreement upon 120 days’ notice.

 

Upon
the termination of the management service agreement, seconded officers, employees, representatives and delegates of our manager and its
affiliates who are performing the services that are the subject of the management services agreement, will resign their respective position
with us and cease to work at the date of our manager’s termination or at any other time as determined by our manager. Any director
on our board of directors appointed by the holder of the allocation shares may continue serving on our board of directors subject to
our manager’s continued ownership of the allocation shares and subject to such director’s removal by the holder of the allocation
shares.

 

If
we terminate the management services agreement, our company and its businesses must cease using the term “1847,” including
any trademarks based on the name of our company that may be licensed to them by our manager under a license grant in the management services
agreement, entirely in their businesses and operations within 180 days of our termination of the management services agreement.
The license grant requires our company and its businesses to change their names to remove any reference to the term “1847”
or any reference to trademarks licensed to them by our manager upon termination of the license which would occur upon termination of
the management services agreement.

  

    6

     

    

 

Anti-Takeover
Provisions in the Operating Agreement 

 

A
number of provisions of the operating agreement also could have the effect of making it more difficult for a third-party to acquire,
or of discouraging a third-party from acquiring, control of our company. The operating agreement prohibits the merger or consolidation
of our company with or into any limited liability company, corporation, statutory trust, business trust or association, real estate investment
trust, common-law trust or any other unincorporated business, including a partnership, or the sale, lease or exchange of all or substantially
all of our property or assets unless, in each case, our board of directors adopts a resolution by a majority vote approving such action
and unless such action is approved by the affirmative vote of the holders of a majority of each of the outstanding common shares and
allocation shares entitled to vote thereon.

 

In
addition, the operating agreement contains provisions based generally on Section 203 of the General Corporation Law of the State
of Delaware which prohibits us from engaging in a business combination with an interested holder of our common shares unless such business
combination is approved by the affirmative vote of the holders of 66 2/3% of each of the outstanding common shares and allocation shares,
excluding shares held by the interested holder or any affiliate or associate of the interested holder of interests.

 

Subject
to the right of our manager to appoint directors and any successor in the event of a vacancy, the operating agreement authorizes our
board of directors to increase the size of the board of directors and to fill vacancies on our board of directors. This provision could
prevent a holder of common shares from effectively obtaining an indirect majority representation on our board of directors by permitting
the existing board of directors to increase the number of directors and to fill the vacancies with its own nominees. The operating agreement
also provides that directors may be removed, with or without cause, only by the affirmative vote of holders of two-thirds of the then
outstanding common shares. A director appointed by our manager may only be removed by our manager, as holder of the allocation shares.

 

The
operating agreement provides that special meetings may only be called by the chairman of our board of directors or by resolution adopted
by our board of directors.

 

The
operating agreement also provides that holders of common shares seeking to bring business before an annual meeting of members or to nominate
candidates for election as directors at an annual meeting of members must provide notice thereof in writing to us not less than 120 days
and not more than 150 days prior to the anniversary date of the preceding year’s annual meeting of members or as otherwise
required by requirements of the Exchange Act. In addition, the holders of common shares furnishing such notice must be a holder of record
on both (i) the date of delivering such notice and (ii) the record date for the determination of members entitled to vote at
such meeting. The operating agreement specifies certain requirements as to the form and content of a member’s notice. These
provisions may preclude members from bringing matters before members at an annual meeting or from making nominations for directors at
an annual or special meeting.

 

Authorized but unissued shares are available for
future issuance, without further approval of our shareholders. These additional shares may be utilized for a variety of purposes, including
future public offerings to raise additional capital or to fund acquisitions, as well as option plans for our employees. The existence
of authorized but unissued shares could render more difficult or discourage an attempt to obtain control of our company by means of a
proxy contest, tender offer, merger or otherwise.

 

In addition, our board of directors has broad
authority to amend the operating agreement, as discussed above. Our board of directors could, in the future, choose to amend the operating
agreement to include other provisions which have the intention or effect of discouraging takeover attempts.

 

Transfer Agent and Registrar 

 

The transfer agent and registrar for our common
shares is VStock Transfer, LLC. The address for VStock Transfer, LLC is 18 Lafayette Pl, Woodmere, NY 11598, and the telephone number
is (212) 828-8436.

 

 

 

7Exhibit 10.32

 

1847 HOLDINGS LLC

590 Madison Avenue, 21st
Floor New York, NY 10022

 

March 23, 2022

 

Via Email

 

Ms. Vernice Howard 127 Albany Place

Upper Marlboro, MD 20774

Email: vhoward@1847holdings.com

 

		Re:	Letter Agreement Regarding the Assignment, Assumption,

and Amendment of the Employment Agreement
of Vernice Howard

 

Dear Vernice:

 

You have been an
employee of 1847 Holdings LLC since on or about September 7, 2021, according to terms in the September 7, 2021 offer letter to you (the
“Employment Agreement”), a copy of which is attached hereto as Exhibit A for reference. As a result of recent administrative
changes, 1847 Holdings LLC wishes to transfer your employment to its subsidiary, 1847 HQ Inc., such that you will be an employee of 1847
HQ Inc. and not of 1847 Holdings LLC. This transfer will not affect your compensation, title, or duties, all of which will remain the
same. To effectuate this transfer, 1847 Holdings LLC wishes to assign all its rights and delegate all its obligations and liabilities
under its Employment Agreement with you to 1847 HQ Inc., which wishes to assume all those obligations and liabilities, according to the
terms in the numbered paragraphs below.

 

		1.	Effective March 23, 2022, (the “Effective Date”), 1847 Holdings LLC (“Assignor”)
assigns to 1847 HQ Inc. (“Assignee”) all of its rights under the Employment Agreement and delegates all of its obligations
and liabilities under the Employment Agreement to Assignee, and Assignee assumes and becomes responsible for all of Assignor’s obligations
and liabilities under the Employment Agreement.

 

		2.	Vernice Howard (“Executive”) hereby consents to the assignment, delegation, and assumption
of the rights, obligations, and liabilities under the Employment Agreement described in Paragraph 1 and to being, as of the Effective
Date, an employee of Assignee and not of Assignor.

 

		3.	Although Executive will be an employee of Assignee and not of Assignor as of the Effective Date, Executive
will continue to be an officer of Assignor, specifically, its chief financial officer. For purposes of clarity, Executive will not be
entitled to any additional compensation for serving as Assignor’s chief financial officer because the compensation, if any, to which
Executive may be entitled for serving as such officer is included in Executive’s salary and other compensation provided for under
the Employment Agreement.

 

		4.	The original Employment Agreement is hereby amended as follows:

 

		a.	References to “1847 Holdings LLC” in the original Employment Agreement are replaced with “1847 HQ Inc.”;

 

     

     

    

 

 

		b.	The first and second sentences in the first paragraph of the original Employment Agreement are replaced
with: “It is my privilege and pleasure to offer you the position of Chief Financial Officer with 1847 HQ Inc. (the ‘Company’),
subject to the terms herein. As the Chief Financial Officer, your responsibilities include the financial reporting requirements of the
Company’s parent, 1847 Holdings LLC (‘Parent Entity’), as well as the financials of the Company and the portfolio companies
of the Parent Entity.”;

 

		c.	References to “Company” in the original Employment Agreement are replaced with “1847
HQ Inc.,” except those references to “Company” in the bulleted section entitled “BASE SALARY,” which are
instead replaced with “Parent Entity”; and,

 

		d.	References to “subsidiaries” in the bulleted section entitled “NON-COMPETITION”
of the original Employment Agreement are replaced with “affiliates.”

 

		5.	For clarity, Assignor, Assignee, and Executive agree that the transactions contemplated by this letter
agreement do not result in a termination or separation from service that entitles Executive to severance under the Employment Agreement.

 

		6.	Each party to this letter agreement warrants and agrees that she or it has had an opportunity to consult
with counsel of its own choosing before executing this agreement. This letter agreement may be executed in one or more counterparts, all
of which together shall constitute but one agreement. This letter agreement may be modified only by a writing signed by all the parties
hereto.

 

If the terms in
the numbered paragraphs above are acceptable to you, please execute the enclosed copy of this letter in the space provided below to note
your acceptance of those terms and return the letter to me. Assignor and Assignee have accepted those terms as of the Effective Date,
as noted by their signatures below.

 

Regards,

 

	1847 HOLDINGS LLC	 	1847 HQ INC.
	 	 	 
	By:	/s/ Ellery Roberts	 	By:	Ellery Roberts
	 	Ellery Roberts Chief Executive Officer	 	 	Ellery Roberts Chief Executive Officer

 

ACCEPTED AND AGREED TO AS OF THE EFFECTIVE DATE:

 

	Vernice Howard	 	/s/ Vernice Howard	 	3/23/2022
	Print Name	 	Signature	 	Date

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