Document:

Exhibit 4.1

 

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT,
dated as of __________, 2022 (“Agreement”) between 1847 Holdings LLC, a Delaware limited liability company (the “Company”),
and VStock Transfer, LLC (the “Warrant Agent”).

 

WITNESSETH

 

WHEREAS, pursuant to the
terms of that certain Underwriting Agreement (“Underwriting Agreement”), dated ____________, 2022, by and among the
Company and EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters set forth therein (the “Representative”),
the Company is engaged in a public offering (the “Offering”) of up to ________ units (each a “Unit”)
with each Unit consisting of one Common Share of the Company (collectively, the “Shares”), and two warrants (collectively,
the “Warrants”), each to purchase one Common Share (collectively, the “Warrant Shares”) at an exercise
price of $______1 per share, including ________
Shares and/or __________ Warrants issuable pursuant to the underwriters’ over-allotment option;

 

WHEREAS, upon the terms and
subject to the conditions hereinafter set forth and pursuant to an effective registration statement on Form S-1, as amended (File No.
333-259011) (the “Registration Statement”), and the terms and conditions of the Warrant Certificates, the Company wishes
to issue the Warrants in book entry form to the respective holders of the Warrants (the “Holders,” which term shall
include a Holder’s transferees, successors and assigns and “Holder(s)” shall include, if the Warrants are held
in “street name,” a Participant (as defined below) or a designee appointed by such Participant);

 

WHEREAS, the Shares and Warrants
to be issued in connection with the Offering shall be uncertificated, immediately separable and will be issued separately, but will be
purchased together as a Unit in the Offering; and

 

WHEREAS, the Company wishes
the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration,
transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s transfer
agent and registrar, the issuance, registration, transfer, exchange, exercise and replacement of the Warrant Shares in your capacity as
the Company’s transfer agent.

 

NOW, THEREFORE, in consideration
of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1. Certain Definitions.
For purposes of this Agreement, all capitalized terms not herein defined shall have the meanings hereby indicated:

 

(a) “Affiliate”
has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

 

		1	100% of unit offering price

 

     

     

    

 

(b) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are
open for use by customers on such day.

 

(c) “Close
of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not
a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

(d) “Person”
means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization,
government or political subdivision thereof or governmental agency or other entity.

 

(e) “Warrant
Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, representing such number of
Warrant Shares as is indicated therein, provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include
delivery of a Definitive Certificate or a Global Warrant (each as defined below).

 

All other capitalized terms
used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.

 

Section 2. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions
hereof, and the Warrant Agent hereby accepts such appointment.

 

Section 3. Global Warrants.

 

(a) The
Warrants shall be registered securities and shall be evidenced by a global warrant (the “Global Warrants”), in the
form of the Warrant Certificate, which shall be deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee
of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial
interests in the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the
Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with
respect to a Warrant in its account, a “Participant”).

 

(b) If
the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants, the Company may instruct the Warrant
Agent regarding other arrangements for book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer
necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to
deliver to the Warrant Agent for cancellation each Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each
Holder a Warrant Certificate.

 

    2

     

    

 

(c) A
Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate
Request Notice (as defined below). Upon written notice by a Holder to the Company and the Warrant Agent for the exchange of some or all
of such Holder’s Global Warrants for a separate certificate in the form attached hereto as Exhibit 1 (such separate certificate,
a “Definitive Certificate”) evidencing the same number of Warrants, which request shall be in the form attached hereto
as Exhibit 2 (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant Certificate Request
Notice by the Holder, the “Warrant Certificate Request Notice Date” and the surrender by the Holder to the Warrant
Agent of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate, a “Warrant Exchange”),
the Company and the Warrant Agent shall promptly effect the Warrant Exchange and the Company shall promptly issue and deliver to the Holder
a Definitive Certificate for such number of Warrants in the name set forth in the Warrant Certificate Request Notice. Such Definitive
Certificate shall be dated the original issue date of the Warrants, shall be executed either manually or by facsimile signature by an
authorized signatory of the Company, shall be in the form attached hereto as Exhibit 1 and shall be reasonably acceptable in all
respects to such Holder. In connection with a Warrant Exchange, the Company agrees to deliver the Definitive Certificate to the Holder
within ten (10) Business Days of the Warrant Certificate Request Notice pursuant to the delivery instructions in the Warrant Certificate
Request Notice (“Warrant Certificate Delivery Date”). If the Company fails for any reason to deliver to the Holder
the Definitive Certificate subject to the Warrant Certificate Request Notice by the Warrant Certificate Delivery Date, the Company shall
pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares evidenced by such Definitive
Certificate (based on the VWAP (as defined in the Warrants) of the Shares on the Warrant Certificate Request Notice Date), $10 per Business
Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Business Day after
such Warrant Certificate Delivery Date until such Definitive Certificate is delivered or, prior to delivery of such Warrant Certificate,
the Holder rescinds such Warrant Exchange. The Company covenants and agrees that, upon the date of delivery of the Warrant Certificate
Request Notice, the Holder shall be deemed to be the holder of the Definitive Certificate and, notwithstanding anything to the contrary
set forth herein, the Definitive Certificate shall be deemed for all purposes to contain all of the terms and conditions of the Warrants
evidenced by such Warrant Certificate and the terms of this Agreement, other than Sections 3(c), 3(d) and 9 herein, shall not apply to
the Warrants evidenced by the Definitive Certificate. Notwithstanding anything herein to the contrary, the Company shall act as warrant
agent with respect to any Definitive Certificate requested and issued pursuant to this section. Notwithstanding anything to the contrary
contained in this Agreement, in the event of inconsistency between any provision in this Agreement and any provision in a Definitive Certificate,
as it may from time to time be amended, the terms of such Definitive Certificate shall control.

 

    3

     

    

 

(d) A
Holder of a Definitive Certificate (pursuant to a Warrant Exchange or otherwise) has the right to elect at any time or from time to time
a Global Warrants Exchange (as defined below) pursuant to a Global Warrants Request Notice (as defined below). Upon written notice by
a Holder to the Company for the exchange of some or all of such Holder’s Warrants evidenced by a Definitive Certificate for a beneficial
interest in Global Warrants held in book-entry form through the Depositary evidencing the same number of Warrants, which request shall
be in the form attached hereto as Exhibit 3 (a “Global Warrants Request Notice” and the date of delivery of
such Global Warrants Request Notice by the Holder, the “Global Warrants Request Notice Date” and the surrender upon
delivery by the Holder of the Warrants evidenced by Definitive Certificates for the same number of Warrants evidenced by a beneficial
interest in Global Warrants held in book-entry form through the Depositary, a “Global Warrants Exchange”), the Company
shall promptly effect the Global Warrants Exchange and shall promptly direct the Warrant Agent to issue and deliver to the Holder Global
Warrants for such number of Warrants in the Global Warrants Request Notice, which beneficial interest in such Global Warrants shall be
delivered by the Depositary’s Deposit and Withdrawal at Custodian (“DWAC”) system to the Holder pursuant to the
instructions in the Global Warrants Request Notice. In connection with a Global Warrants Exchange, the Company shall direct the Warrant
Agent to deliver the beneficial interest in such Global Warrants to the Holder within ten (10) Business Days of the Global Warrants Request
Notice pursuant to the delivery instructions in the Global Warrants Request Notice (“Global Warrants Delivery Date”).
If the Company fails for any reason to deliver to the Holder Global Warrants subject to the Global Warrants Request Notice by the Global
Warrants Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares evidenced by such Global Warrants (based on the VWAP (as defined in the Warrants) of the Shares on the Global Warrants Request
Notice Date), $10 per Business Day (increasing to $20 per Business Day on the fifth Business Day after such liquidated damages begin to
accrue) for each Business Day after such Global Warrants Delivery Date until such Global Warrants are delivered or, prior to delivery
of such Global Warrants, the Holder rescinds such Global Warrants Exchange. The Company covenants and agrees that, upon the date of delivery
of the Global Warrants Request Notice, the Holder shall be deemed to be the beneficial holder of such Global Warrants.

 

Section 4. Form of Warrant
Certificates. The Warrant Certificate, together with the form of election to purchase Warrant Shares (“Notice of Exercise”)
and the form of assignment to be printed on the reverse thereof, shall be in the form of Exhibit 1 hereto.

 

Section 5. Registration.

 

The Warrant Agent will keep
or cause to be kept at one of its offices, or at the office of one of its agents, books (“Warrant Register”) for registration
and transfer of the Global Warrants issued hereunder. The Company will keep or cause to be kept at one of its offices, books for the registration
and transfer of any Definitive Certificates issued hereunder and the Warrant Agent shall not have any obligation to keep books and records
with respect to any Definitive Certificates. Such Company books shall show the names and addresses of the respective Holders of the Definitive
Certificates, the number of warrants evidenced on the face of each such Definitive Certificate and the date of each such Definitive Certificate.

 

    4

     

    

 

Section 6. Transfer, Split
Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect to the
Definitive Certificates, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph of Section
6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions applicable to the Definitive Certificates,
at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date (as such term is
defined in the Warrant Certificate), any Definitive Certificate may be transferred, split up, combined or exchanged for another Definitive
Certificate or Definitive Certificates, entitling the Holder to purchase a like number of Shares as the Definitive Certificate surrendered
then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Definitive Certificate shall
make such request in writing delivered to the Company, and shall surrender the Definitive Certificate to be transferred, split up, combined
or exchanged at the principal office of the Company. Any requested transfer of Warrants, whether in book-entry form or certificate form,
shall be accompanied by reasonable evidence of authority of the party making such request that may be required by the Company. Thereupon
the Company shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto
a Definitive Certificate or Definitive Certificates, as the case may be, as so requested. The Company may require payment from the Holder
of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination
or exchange of Definitive Certificates.

 

Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall
include an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of
loss, theft or destruction, of indemnity in customary form and amount (but, with respect to any Definitive Certificates, shall not include
the posting of any bond by the Holder), and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender
to the Company and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a new Warrant Certificate of
like tenor to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.

 

Section 7. Exercise
of Warrants; Exercise Price; Termination Date.

 

(a) The
Warrants shall be exercisable commencing on the Initial Exercise Date (as defined in the Warrant Certificate). The Warrants shall cease
to be exercisable and shall terminate and become void as set forth in the Warrant Certificate. Subject to the foregoing and to Section
7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon surrender of the Warrant Certificate, if required,
with the executed Notice of Exercise and payment of the Exercise Price (as defined in the Warrant Certificate), which may be made, at
the option of the Holder, by wire transfer or by certified or official bank check in United States dollars, to the Company at the principal
office of the Company. In the case of the Holder of a Global Warrant, the Holder shall deliver the executed Notice of Exercise and the
payment of the Exercise Price as described herein. Notwithstanding any other provision in this Agreement, a holder whose interest in a
Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the Depositary (or another established clearing
corporation performing similar functions), shall effect exercises by delivering to the Depositary (or such other clearing corporation,
as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by the
Depositary (or such other clearing corporation, as applicable). No ink-original Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. The Company hereby acknowledges and agrees
that, with respect to a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form
through the Depositary (or another established clearing corporation performing similar functions), upon delivery of irrevocable instructions
to such holder’s Participant to exercise such warrants, that solely for purposes of Regulation SHO under the Exchange Act that
such holder shall be deemed to have exercised such warrants.

 

    5

     

    

 

(b) Upon
receipt of a Notice of Exercise for a Cashless Exercise provided by a holder to the Depositary and/or the Company, as applicable (as provided
in Section 7(a) above), the Company will promptly calculate and transmit to the Warrant Agent the number of Warrant Shares issuable in
connection with such Cashless Exercise and deliver a copy of the Notice of Exercise to the Warrant Agent, which shall cause to be delivered
in accordance with the provisions of Section 7(c) such number of Warrant Shares in connection with such Cashless Exercise.

 

(c) Upon
the exercise of the Warrant Certificate pursuant to the terms of Section 2 of the Warrant Certificate, the Warrant Agent shall cause the
Warrant Shares underlying such Definitive Certificate or Global Warrant to be delivered to or upon the order of the Holder of such Definitive
Certificate or Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery
Date (as such term is defined in the Warrant Certificate). If the Company is then a participant in the DWAC system of the Depositary and
either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares
by Holder or (B) the Warrant is being exercised via Cashless Exercise, then the certificates for Warrant Shares shall be transmitted by
the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depositary through its DWAC system. For
the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(i) or 2(d)(iv) of
the Warrant Certificate, such obligation shall be solely that of the Company and not that of the Warrant Agent. Notwithstanding anything
else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder fails to duly deliver payment to the
Company of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s
Warrant as set forth in Section 7(a) hereof by the Warrant Share Delivery Date, the Warrant Agent will not be obligated to deliver such
Warrant Shares (via DWAC or otherwise) until following receipt by the Company of such payment, and the applicable Warrant Share Delivery
Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Company.

 

Section 8. Cancellation
and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall be surrendered to the Company for cancellation or in canceled form.

 

Section 9. Certain Representations;
Reservation and Availability of Shares or Cash.

 

(a) This
Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof
by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance
with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due authentication thereof
by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Warrant Certificate, constitute valid and
legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits
hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

 

    6

     

    

 

(b) The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Common Shares or
its authorized and issued Common Shares held in its treasury, free from preemptive rights, the number of Warrant Shares that will be sufficient
to permit the exercise in full of all outstanding Warrants.

 

(c) The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Warrant Shares upon
exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect
of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Warrant Shares
in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver
any certificate for Warrant Shares upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any
such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been
established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.

 

Section 10. Warrant Shares
Record Date. Each Person in whose name any certificate for Warrant Shares is issued (or to whose broker’s account is credited
Warrant Shares through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record
for the Warrant Shares represented thereby on, and such certificate shall be dated, the date on which submission of the Notice of Exercise
was made, provided that the Warrant Certificate evidencing such Warrant is duly surrendered (but only if required herein) and payment
of the Exercise Price (and any applicable transfer taxes) is received on or prior to the Warrant Share Delivery Date; provided, however,
that if the date of submission of the Notice of Exercise is a date upon which the Common Share transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding
day on which the Common Share transfer books of the Company are open.

 

Section 11. Adjustment
of Exercise Price, Number of Warrant Shares or Number of the Company Warrants. The Exercise Price, the number of Warrant Shares covered
by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of the Warrant
Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of the Warrant Certificate, the Holder
of any Warrant thereafter exercised shall become entitled to receive any Common Shares of the Company other than Warrant Shares, thereafter
the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 3 of the Warrant Certificate
and the provisions of Sections 7, 11 and 12 of this Agreement with respect to the Warrant Shares shall apply on like terms to any such
other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to the Warrant
Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of Warrant Shares purchasable from time to
time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

    7

     

    

 

Section 12. Certification
of Adjusted Exercise Price or Number of Warrant Shares. Whenever the Exercise Price or the number of Warrant Shares issuable upon
the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting
forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Warrant Agent and with each transfer agent for the Common Shares a copy of such certificate and (c) instruct the Warrant
Agent to send a brief summary thereof to each Holder of a Warrant Certificate.

 

Section 13. Fractional
Shares.

 

(a) The
Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional
Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such
fraction to the nearest whole Warrant (rounded down).

 

(b) The
Company shall not issue fractions of Warrant Shares upon exercise of Warrants or distribute stock certificates which evidence fractional
Warrant Shares. Whenever any fraction of Warrant Shares would otherwise be required to be issued or distributed, the actual issuance or
distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.

 

Section 14. Conditions
of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to
time of the Warrant Certificates shall be subject:

 

(a) The
Company agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross
negligence, or willful misconduct on the part of the Warrant Agent, finally adjudicated to have been directly caused by Warrant Agent
hereunder, including the reasonable costs and expenses of defending against any claim of such liability. The Warrant Agent shall be under
no obligation to institute or defend any action, suit, or legal proceeding in connection herewith or to take any other action likely to
involve the Warrant Agent in expense, unless first indemnified to the Warrant Agent’s satisfaction. The indemnities provided by
this paragraph shall survive the resignation or discharge of the Warrant Agent or the termination of this Agreement. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Warrant Agent be liable under or in connection with the Agreement for
indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including, but not limited, to lost
profits, whether or not foreseeable, even if the Warrant Agent has been advised of the possibility thereof and regardless of the form
of action in which such damages are sought, and the Warrant Agent’s aggregate liability to the Company, or any of the Company’s
representatives or agents, under this Section 14(a) or under any other term or provision of this Agreement, whether in contract, tort,
or otherwise, is expressly limited to, and shall not exceed in any circumstances, one (1) year’s fees received by the Warrant Agent
as fees and charges under this Agreement, but not including reimbursable expenses previously reimbursed to the Warrant Agent by the Company
hereunder.

 

    8

     

    

 

(b) In
acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the
Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of Warrant Certificates
or beneficial owners of Warrants.

 

(c) The
Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice of such counsel
shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the advice of such counsel.

 

(d) The
Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon
any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.

 

(e) The
Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same
rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they
may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent
for, any committee or body of Holders of the Warrants or other obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to
which the Company is a party.

 

(f) Unless
otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant
to any of the provisions of this Agreement or of the Warrant Certificates.

 

(g) The
Warrant Agent shall have no liability with respect to any invalidity of this Agreement or the Warrant Certificates (except as to the Warrant
Agent’s countersignature thereon).

 

(h) The
Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificate (except as to the
Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

 

(i) The
Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth and
no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment
of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under
any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificate. The
Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements
contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate
with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law.

 

    9

     

    

 

Section 15. Purchase or
Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may
be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent
or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the Warrant Agent or any
successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent shall succeed to the agency created
by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may
adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates
either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

In case at any time the name
of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and deliver such Warrant Certificates so countersigned; and in case
at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in
the Warrant Certificates and in this Agreement.

 

Section 16. Duties of Warrant
Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company, by its acceptance hereof, shall be bound:

 

(a) The
Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.

 

(b) Whenever
in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by
the Chief Executive Officer or Chief Financial Officer of the Company; and such certificate shall be full authentication to the Warrant
Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

    10

     

    

 

(c) Subject
to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence or willful misconduct,
or for any intentional breach by it of this Agreement.

 

(d) The
Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Warrant Certificate (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.

 

(e) The
Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement
or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the
number of Warrant Shares required under the provisions of Section 11 or 13 or responsible for the manner, method or amount of any such
change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise
of Warrants evidenced by the Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Shares to be issued pursuant
to this Agreement or any Warrant Certificate or as to whether any Warrant Shares will, when issued, be duly authorized, validly issued,
fully paid and nonassessable.

 

(f) Each
party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out
or performing by any party of the provisions of this Agreement.

 

(g) The
Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive
Officer or Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence or
willful misconduct.

 

(h) The
Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

 

    11

     

    

 

(i) The
Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct
of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.

 

Section 17. Change of Warrant
Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign and be discharged from its duties under this Agreement
upon 30 days’ notice in writing sent to the Company or such shorter period of time agreed to by the Company. The Company may remove
the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor Warrant
Agent, as the case may be, or such shorter period of time as agreed. If the office of the Warrant Agent becomes vacant by resignation,
termination or incapacity to act or otherwise, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant
Agent, then the Warrant Agent or any Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment
of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant Agent until a new
warrant agent is appointed. Any successor Warrant Agent (but not including the initial Warrant Agent), whether appointed by the Company
or by such a court, shall be a corporation organized and doing business under the laws of the United States or of a state thereof, in
good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by
federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities,
duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed, and except for executing and delivering documents as provided in the sentence that follows, the predecessor Warrant
Agent shall have no further duties, obligations, responsibilities or liabilities hereunder, but shall be entitled to all rights that survive
the termination of this Warrant Agreement and the resignation or removal of the Warrant Agent, including, but not limited to, its right
to indemnity hereunder. If for any reason it becomes necessary or appropriate or at the request of the Company, the predecessor Warrant
Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make,
execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such
successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

 

Section 18. Issuance of
New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company
may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price per share and the number or kind or class of shares or other securities or property purchasable
under the several Warrant Certificates made in accordance with the provisions of this Agreement.

 

    12

     

    

 

Section 19. Notices.
Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate
to or on the Company, (ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrant Certificate to or on
the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate shall be deemed given (a) on the
date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or another recognized
overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following the mailing
thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and (d) the date of transmission,
if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30 p.m. (New York City time) on a Business
Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email
attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the parties
at the following addresses (or at such other address for a party as shall be specified by like notice):

 

(a)          If
to the Company, to

 

1847 Holdings LLC

590 Madison Avenue, 21st Floor

New York, NY 10022

Attn: Ellery W. Roberts, Chief Executive Officer

Email:

 

with a copy (which shall not constitute notice) to:

 

Bevilacqua PLLC

1050 Connecticut Avenue, NW, Suite 500

Washington, DC 20036

Attention: Louis A. Bevilacqua

E-mail:

 

(b)          If
to the Warrant Agent, to

 

Vstock Transfer, LLC

18 Lafayette Place

Woodmere, NY 11598

Attention: Relationship Management

E-mail:

 

For any notice delivered by email to be deemed
given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business day following
such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c) If
to the Holder of any Warrant Certificate to the address of such Holder as shown on the registry books of the Company. Any notice required
to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding
any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice shall
be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

    13

     

    

 

Section 20. Supplements
and Amendments.

 

(a) The
Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrants
in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants or to surrender any
rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely
affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.

 

(b) In
addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority
of the Warrant Shares issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the
Holders of the Global Warrants; provided, however, that no modification of the terms (including but not limited to the adjustments described
in Section 11) upon which the Warrants are exercisable or the rights of holders of Warrants to receive liquidated damages or other payments
in cash from the Company or reducing the percentage required for consent to modification of this Agreement may be made without the consent
of the Holder of each outstanding Warrant Certificate affected thereby; provided further, however, that no amendment hereunder shall affect
any terms of any Warrant Certificate issued in a Warrant Exchange. As a condition precedent to the Warrant Agent’s execution of
any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states
that the proposed amendment complies with the terms of this Section 20.

 

Section 21. Successors.
All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.

 

Section 22. Benefits of
this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates
and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 23. Governing Law.
This Agreement and each Warrant Certificate and Global Warrant issued hereunder shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

 

Section 24. Counterparts.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument.

 

Section 25. Captions.
The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

 

Section 26. Information.
The Company agrees to promptly provide to the Holders of the Warrants any information it provides to the holders of its Common Shares,
except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities and Exchange
Commission.

 

[signature page follows]

 

    14

     

    

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	 	1847 HOLDINGS LLC
	 	 	 
	 	By:	            
	 	Name: 	 
	 	Title:	 
	 	 	 
	 	VSTOCK TRANSFER, LLC
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    15

     

    

 

EXHIBIT 1

 

Warrant Certificate

 

COMMON SHARE PURCHASE WARRANT

 

1847 HOLDINGS LLC

 

	Warrant Shares: _______ 	Initial Exercise Date: _________, 2022

 

THIS COMMON SHARE PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on _________, 2027
(the “Termination Date”) but not thereafter, to subscribe for and purchase from 1847 Holdings LLC, a Delaware limited
liability company (the “Company”), up to ______ Common Shares (as subject to adjustment hereunder, the “Warrant
Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section
2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust
Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s
right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence
shall not apply.

 

Section 1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of
the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on the Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share so reported, or (d) in all
other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Holders of
a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company.

 

“Board of Directors”
means the board of directors of the Company.

 

    16

     

    

 

“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to
remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar
orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic
funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers
on such day.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common Shares”
means the common shares of the Company and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Share Equivalents”
means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Shares, including,
without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exempt Issuance”
means the issuance of (i) Common Shares or options to employees, officers or directors of the Company or consultants to the Company pursuant
to any stock or option plan or other written agreement duly adopted for such purpose, by a majority of the non-employee members of the
Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, provided, however, such issuance (A) shall not exceed five (5.0%) of the Common Shares issued and outstanding as of the
date hereof, (B) shall be at no less than fair market value (as measured by the closing price of the Common Stock on the Trading Market
on the date of issuance) and (C) in the first year from the date hereof shall be issued as restricted securities; (ii) securities upon
the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into Common Shares issued and
outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in
connection with stock splits or combinations) or to extend the term of such securities; (iii) securities issued pursuant to acquisitions
or strategic transactions approved by a majority of the disinterested directors of the Company or securities issued in financing transactions,
the primary purpose of which is to finance acquisitions or strategic transactions approved by a majority of the disinterested directors
of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no
registration rights that require or permit the filing of any registration statement in connection therewith, and provided that any such
issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits
in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to a person or an entity whose primary business is investing in securities; (iv) an offering of up to $50
million of senior convertible preferred shares in a private placement offering, and the underlying Common Shares issuable upon conversion
of such securities; and (v) Common Shares, options or convertible securities issued in connection with sponsored research, collaboration,
technology license, development, investor or public relations, marketing or other similar agreements or strategic partnerships approved
a majority of the disinterested directors of the Company, but shall not include a transaction in which the Company is primarily issuing
such securities primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in securities.

 

    17

     

    

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Registration Statement”
means the Company’s registration statement on Form S-1, as amended (File No. 333-259011).

 

“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.

 

“Trading Day”
means a day on which the Common Shares are traded on a Trading Market.

 

“Trading Market”
means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or OTCQB
or OTCQX (or any successors to any of the foregoing).

 

“Transfer Agent”
means Vstock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, NY 11598
and a facsimile number of _______________, and any successor transfer agent of the Company.

 

“Underwriting Agreement”
means the underwriting agreement, dated as of _________2022, among the Company and EF Hutton, division of Benchmark Investments, LLC,
as representative of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with its terms.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date)
on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares
are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on the Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Shares
so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in
good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.

 

    18

     

    

 

“Warrant Agency Agreement”
means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.

 

“Warrant Agent”
means the Transfer Agent and any successor warrant agent of the Company.

 

“Warrants”
means this Warrant and other common share purchase warrants issued by the Company pursuant to the Registration Statement.

 

Section 2. Exercise.

 

(a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy
or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the
shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise
be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in
which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. Notwithstanding
the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this
Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises
made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction
form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable),
subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement,
in which case this sentence shall not apply.

 

    19

     

    

 

(b) Exercise
Price. The exercise price per Warrant Share under this Warrant shall be $________2,
subject to adjustment hereunder (the “Exercise Price”). The Holder shall not be entitled to the return or refund of
all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event
this Warrant shall not have been exercised prior to the Termination Date.

 

(c) Cashless
Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in
part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

		(A) =	as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise
or (z) the Bid Price of the Common Shares on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”)
as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

		(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and

 

		(X) =	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

 

2
100% of unit offering price

 

    20

     

    

 

Notwithstanding anything herein
to the contrary, but without limiting the rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
this Section 2(c) or to receive cash payments pursuant to Section 3(d)(i) and Section 3(d)(iv) herein, the Company shall not be required
to make any cash payments or net cash settlement to the Holder in lieu of delivery of the Warrant Shares. If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary
to this Section 2(c).

 

Notwithstanding anything herein
to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section
2(c).

 

(d) Mechanics
of Exercise.

 

(i) Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company
through its Deposit and Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) two (2) Trading Days after delivery of the
aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per
Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery
Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is
a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading
Market with respect to the Common Shares as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Underwriting Agreement, the Company agrees to deliver the Warrant Shares
subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant
Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received by such Warrant Share Delivery Date.

 

(ii) Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.

 

    21

     

    

 

(iii) Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

(iv) Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its
broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares
to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such
exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Warrant Shares having a total purchase
price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrant Shares with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and,
upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver Warrant Shares upon exercise of the Warrant as required pursuant
to the terms hereof.

 

(v) No
Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole Warrant Share.

 

(vi) Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in
the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing
corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

(vii) Closing
of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

 

    22

     

    

 

(e) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting
as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant
Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of
Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by
the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without limitation, any other Common Share Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the
Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained
in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 2(e), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares
as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more
recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number
of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and
in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
or Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership
Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Common
Shares outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect
to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue
to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered
to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

Section 3. Certain Adjustments.

 

(a) Share
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes
a distribution or distributions on Common Shares or any other equity or equity equivalent securities payable in Common Shares (which,
for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding
Common Shares into a larger number of shares, (iii) combines (including by way of reverse split) outstanding Common Shares into a smaller
number of shares, or (iv) issues by reclassification of Common Shares any shares of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of Common Shares and such other shares of the Company (excluding
treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares and
such other shares of the Company (excluding treasury shares, if any) outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall
remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination
of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the
case of a subdivision, combination or re-classification.

 

    23

     

    

 

(b) Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall sell,
enter into an agreement to sell, or grant any option to purchase, or sell, enter into an agreement to sell, or grant any right to reprice,
or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Share
or Common Share Equivalents, at an effective price per share less than the Exercise Price then in effect (such lower price, the “Base
Share Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that
if the holder of the Common Share or Common Share Equivalents so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive Common Shares at an effective price per share that is less than the
Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance
at such effective price), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Exercise
Price shall be reduced and only reduced to equal the Base Share Price (subject to adjustment for reverse and forward stock splits, recapitalizations
and similar transactions following the Initial Issuance Date). Notwithstanding the foregoing, no adjustments shall be made, paid or issued
under this Section 3(b) in respect of an Exempt Issuance. The Company shall notify the Holder, in writing, no later than the Trading Day
following the issuance or deemed issuance of any Common Shares or Common Share Equivalents subject to this Section 3(b), indicating therein
the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to
this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares based upon
the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.

 

(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common
Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue
or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and
such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result
in the Holder exceeding the Beneficial Ownership Limitation).

 

    24

     

    

 

(d) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any
sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series
of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities,
cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares, (iv) the Company, directly or indirectly,
in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory
share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with
another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common Shares (not including
any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of capital stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one Warrant Share in such Fundamental Transaction,
and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the
event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount
of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity
the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant,
that is being offered and paid to the holders of Common Shares of the Company in connection with the Fundamental Transaction, whether
that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Common Shares are given the choice
to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders
of Common Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Shares
will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following such Fundamental Transaction)
in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option
Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable
Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for
a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date,
(B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental
Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being
offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii)
the highest VWAP during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction
(or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request
pursuant to this Section 3(e) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by
wire transfer of immediately available funds (or such other consideration) within the later of (i) five (5) Business Days of the Holder’s
election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations
of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and
shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares
of capital stock of such Successor Entity (or its parent entity) equivalent to the Warrant Shares acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value
of the Warrant Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of
capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of
such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant
with the same effect as if such Successor Entity had been named as the Company herein.

 

    25

     

    

 

(e) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number Common
Shares (excluding treasury shares, if any) issued and outstanding.

 

(f) Notice
to Holder.

 

(i) Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

(ii) Notice
to Allow Exercise by Holder. If (A) the Company shall declare a special nonrecurring dividend (or any other distribution in whatever
form) on or a redemption of the Common Shares, (B) the Company shall authorize the granting to all holders of the Common Shares rights
or warrants to subscribe for or purchase any shares of the Company or of any rights, (C) the approval of any shareholders of the Company
shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company (or any
of its Subsidiaries) is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share
exchange whereby the Common Shares are converted into other securities, cash or property, or (D) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be
delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register
of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record
is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record
shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided
in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to
exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein. For the avoidance of doubt, the notice provisions of this Section 3(e)(ii) shall
not apply to the Company’s recurring quarterly dividends.

 

    26

     

    

 

(g) Voluntary
Adjustment by Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of
this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the board of directors of the Company.

 

Section 4. Transfer of
Warrant.

 

(a) Transferability.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.

 

(b) New
Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined
with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers
or exchanges shall be dated the Initial Issuance Date of this Warrant and shall be identical with this Warrant except as to the number
of Warrant Shares issuable pursuant thereto.

 

(c) Warrant
Register. The Warrant Agent and/or the Company (with regard to any portion of the Warrant in certificated form issued pursuant to
the terms of the Warrant Agency Agreement) shall register this Warrant, upon records to be maintained by the Warrant Agent and/or the
Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company
and the Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

    27

     

    

 

Section 5. Miscellaneous.

 

(a) No
Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.

 

(b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

(c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

(d) Authorized
Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company
covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). Except and to the extent as waived
or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its articles of incorporation
or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights
of the Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i)
take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof, as may be necessary to enable the Company to perform its obligations
under this Warrant. Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto,
as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

    28

     

    

 

(e) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in
such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

(f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

(g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this
Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts
due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

(h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice
of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier
service, addressed to the Company, at 590 Madison Avenue, 21st Floor, New York, NY 10022, Attention: Ellery W. Roberts, Chief
Executive Officer, email address: eroberts@1847holdings.com, or such other email address or address as the Company may specify for such
purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall
be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed
to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Company. Any notice or
other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not
a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K.

 

    29

     

    

 

(i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Warrant Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.

 

(j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.

 

(k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.

 

(l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and
the Holder or the beneficial owner of this Warrant, on the other hand.

 

(m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

(n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

(o) Warrant
Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject
to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency
Agreement, the provisions of this Warrant shall govern and be controlling.

 

********************

 

(Signature Page Follows)

 

    30

     

    

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	1847 HOLDINGS LLC
	 	 	 
	 	By:	        
	 	Name: 	 
	 	Title:	

 

    31

     

    

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

TO: 1847 HOLDINGS LLC

 

(1) The undersigned hereby elects to purchase
________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith
payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicable box):

 

[ ] in lawful money of the United States; or

 

[ ] if permitted the cancellation of
such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account
Number:

 

_______________________________

_______________________________

_______________________________

 

Name of Holder: __________________________________________________________________________________   

 

Signature of Authorized Signatory of Holder: ___________________________________________________________   

 

Name of Authorized Signatory: ______________________________________________________________________ 

 

Title of Authorized Signatory: _______________________________________________________________________ 

 

Date:  _________________________________________________________________________________________

 

    32

     

    

 

EXHIBIT B

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this
form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to

 

	Name:	 	 
	 	 	(Please Print)
	Address:	 	 
	 	 	(Please Print)
	Phone Number	 	 
	Email Address	 	 
	 	 	 
	Dated:  ___,__________________	 	 
	Holder’s Signature:	 	 
	Holder’s Address:	 	 

 

    33

     

    

 

EXHIBIT 2

 

Form of Warrant Certificate Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: Vstock Transfer, LLC, as Warrant Agent for 1847 Holdings LLC (the
“Company”)

 

The undersigned Holder of Common Share Purchase
Warrants (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate
evidencing the Warrants held by the Holder as specified below:

 

1. Name of Holder of Warrants in form of Global Warrants: __________________________________________________ 

 

2. Name of Holder in Warrant Certificate
(if different from name of Holder of Warrants in form of Global Warrants):_______

 

3. Number of Warrants in name of Holder in form of Global Warrants:
__________________________________________ 

 

4. Number of Warrants for
which Warrant Certificate shall be issued: ___________________________________________

 

5. Number of Warrants in name of Holder
in form of Global Warrants after issuance of Warrant Certificate, if any: _______

 

6. Warrant Certificate shall
be delivered to the following address:

______________________________

______________________________

______________________________

______________________________

 

The undersigned hereby acknowledges and agrees
that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the
number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.

 

Name of Holder: __________________________________________________________________________________ 

 

Signature of Authorized Signatory of Holder: _________________________________________________________ ___

 

Name of Authorized Signatory: _______________________________________________________________________

 

Title of Authorized Signatory: ________________________________________________________________________

 

Date: ___________________________________________________________________________________________

 

    34

     

    

 

EXHIBIT 3

 

Form of Global Warrants Request Notice

 

GLOBAL WARRANTS REQUEST NOTICE

 

To: Vstock Transfer, LLC, as Warrant Agent for 1847 Holdings LLC (the
“Company”)

 

The undersigned Holder of Common Share Purchase
Warrants (“Warrants”) in the form of Warrants Certificates issued by the Company hereby elects to receive a Global
Warrant evidencing the Warrants held by the Holder as specified below:

 

1. Name of Holder of Warrants in form of Warrant Certificates:________________________________________________

 

2. Name of Holder in Global Warrant
(if different from name of Holder of Warrants in form of Warrant Certificates): ______

 

3. Number of Warrants in name of Holder in form of Warrant Certificates:________________________________________

 

4. Number of Warrants for which Global Warrant shall be issued:______________________________________________

 

5. Number of Warrants in name of Holder
in form of Warrant Certificates after issuance of Global Warrant, if any: _______

 

6. Global Warrant shall be
delivered to the following address:

______________________________

______________________________

______________________________

______________________________

 

The undersigned hereby acknowledges and agrees
that, in connection with this Global Warrant Exchange and the issuance of the Global Warrant, the Holder is deemed to have surrendered
the number of Warrants in form of Warrant Certificates in the name of the Holder equal to the number of Warrants evidenced by the Global
Warrant.

 

Name of Holder: __________________________________________________________________________________ 

 

Signature of Authorized Signatory of Holder: ___________________________________________________________ 

 

Name of Authorized Signatory:  ______________________________________________________________________

 

Title of Authorized Signatory:  _______________________________________________________________________

 

Date:  __________________________________________________________________________________________

 

 

35rcrt_ex101.htm

EXHIBIT 10.1
  
 FACTORING AGREEMENT
  
 This Factoring Agreement (the "Agreement") is made as of April 20, 2022, by and between CSNK Working Capital Finance Corp. d/b/a Bay View Funding ("Buyer") having a place of business at 224 Airport Parkway, Suite 200, San Jose, CA 95110-3730, and Recruiter.com Group, Inc., a Nevada Corporation, Recruiter.com, Inc., a Delaware Corporation, Recruiter.com, LLC, a Delaware Limited Liability Company, Recruiter.com Recruiting Solutions, LLC, a Delaware Limited Liability Company and Recruiter.com Consulting LLC, a Texas Limited Liability Company (individually and together hereinafter referred to as “Seller”) having its principal place of business and chief executive office at 123 Farmington Avenue, Suite 252, Bristol, CT 06010-4200 with an additional address located at 500 Seventh Avenue, New York, NY 10018-4502.
  
 Section 1.  DEFINITIONS.  When used herein, the following terms shall have the following meanings: 
  
 1.1.       “Account Balance” shall mean, on any given day, the gross amount of all Purchased Receivables unpaid on that day.
  
 1.2.       “Account Debtor” shall have the meaning set forth in the Uniform Commercial Code as enacted in the State of California (“UCC”) and shall include any person liable on any Receivable, including without limitation, any guarantor of the Receivable and any issuer of a letter of credit or banker's acceptance.
  
 1.3.       “ACH” shall mean the Automated Clearing House.
  
 1.4.       “ACH Fee” shall mean $10.00 for all ACH charges incurred by Buyer.
  
 1.5.       “Adjustments” shall mean all discounts, allowances, returns, disputes, counterclaims, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor with respect to any Purchased Receivable.
  
 1.6.       “Advance” shall have that meaning as set forth in Section 2.1 herein.
  
 1.7.       “Advance Percentage” shall be eighty five percent (85%), which may be adjusted pursuant to Section 13.13 herein.
  
 1.8.       “Avoidance Claim” shall mean the assertion, complaint, judgment or otherwise against Buyer, that any payment Buyer received with respect to any Receivable, whether the amount related thereto was paid by the Account Debtor, the Seller, or on behalf of Seller or for its benefit, or any lien granted to Buyer is avoidable (or recoverable from Buyer) under the United States Bankruptcy Code, any other debtor relief statute, including but not limited to, preference claims, fraudulent transfer claims, or through receivership, assignment for the benefit of creditors or any equivalent recovery law, rule or regulation which relates to the adjustment of debtor and creditor relations.  
  
 1.9.       “Collections” shall mean all good funds received by Buyer from or on behalf of an Account Debtor with respect to Purchased Receivables.
  
 1.10.    “Dispute” shall mean a dispute, claim, or defense of any kind whatsoever, whether valid or invalid, asserted by an Account Debtor, that may reduce the amount collectible by Buyer from an Account Debtor.  Buyer is under no obligation to investigate the merits of any Dispute.
  
 	 
	1
	

	 

  
 1.11.    “Early Termination Fee” shall have that meaning as set forth in Section 10 herein.  
  
 1.12.    “Event of Default” shall have that meaning as set forth in Section 9 herein.
  
 1.13.    “Facility Fee” shall have that meaning as set forth in Section 3.5 herein. 
  
 1.14.    “Factoring Fee” shall have that meaning as set forth in Section 3.6 herein.
  
 1.15.    “Initial Funding Date” shall mean the date in which Buyer makes the first purchase of any Receivable pursuant to this Agreement.  
  
 1.16.    “Initial Term” shall be twelve (12) months after the Initial Funding Date.   
  
 1.17.    “Insolvent” shall mean with respect to an Account Debtor that such Account Debtor has filed, or has had filed against it, any bankruptcy case, or has made an assignment for the benefit of creditors.
  
 1.18.    “Invalid Invoice Fee” shall be Ten Percent (10%) of the face amount of any Purchased Receivable which violates Seller’s warranty in Section 6.1 herein.  
  
 1.19.    “Maximum Credit” shall have that meaning as set forth in Section 2.1 herein.
  
 1.20.    “Misdirected Payment Fee” shall be Ten Percent (10%) of the face amount of any Purchased Receivable for which Seller violates the warranty set forth in Section 3.3 herein. 
  
 1.21.    “Missing Notation Fee” shall be Ten Percent (10%) of the face amount of any Purchased Receivable for which Seller violates the warranty set forth in Section 2.5 herein. 
  
 1.22.    “Obligations” shall mean the obligation to pay and perform when due all debts and all obligations, liabilities, covenants, agreements, guarantees, warranties and representations of Seller to Buyer, of any and every kind and nature, whether heretofore, now or hereafter owing, arising, due or payable from Seller to Buyer; howsoever created, incurred, acquired, arising or evidenced; whether primary, secondary, direct, absolute, contingent, fixed, secured, unsecured, or otherwise; whether as principal or guarantor; acquired by assignment, liquidated or unliquidated; certain or uncertain; determined or undetermined; due or to become due; as a result of present or future advances or otherwise; joint or individual; pursuant to or caused by Seller’s breach of this Agreement, or any other present or future agreement or instrument, or created by operation of law or otherwise; evidenced by a written instrument or oral; created directly between Buyer and Seller or restitution claims owed by Seller to a third party and acquired by Buyer from such third party, monetary or nonmonetary.
  
 1.23.    “Online Reporting Service” shall mean the system set up on Buyer’s website where Seller provides Buyer with the pertinent data necessary for Buyer to purchase Receivables under this Agreement and otherwise administer this Agreement.
  
 1.24.    “Online Statement of Account” shall have that meaning as set forth in Section 3.1 herein.
  
 1.25.    “Payment Period” shall be ninety (90) calendar days from an invoice date.
  
 1.26.    “Permitted Lien” shall be the lien granted to (N/A).  
  
 	 
	2
	

	 

  
 1.27.    “Prime Rate” shall have that meaning as set forth in Section 3.7 herein.
  
 1.28.    “Purchased Receivables” shall mean all Receivables arising out of the invoices and other agreements identified on or delivered with any Schedule of Accounts delivered by Seller to Buyer which Buyer elects to purchase and for which Buyer makes an Advance.
  
 1.29.    “Receivable” shall mean accounts, chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, banker’s acceptances, and rights to payment, and all proceeds thereof.
  
 1.30.    “Reconciliation Period” shall, unless otherwise notified by Buyer to Seller, mean a weekly calendar period.
  
 1.31.    “Renewal Term” shall be a twelve (12) month period in which this Agreement is renewed pursuant to Section 10.  
  
 1.32.    “Replacement Financing” shall refer to an asset based loan or traditional bank loan from Heritage Bank of Commerce.
  
 1.33.     “Repurchased Receivable” shall refer to a Purchased Receivable which the Seller has become obligated to Repurchase under Section 4.1 hereof.
  
 1.34.    “Reserve” shall have that meaning as set forth in Section 2.4 herein.
  
 1.35.    “Returned Check Fee.”  Seller shall pay to Buyer a fee in the amount of $30.00 in the event a notice is received of a returned check for any payment processed on behalf of Seller.
  
 1.36.    “Schedule of Accounts” shall mean a Bill of Sale signed by a representative of Seller which accurately identifies the Receivables which Buyer, at its election, may purchase, and includes for each such Receivable the correct amount owed by the Account Debtor, the name and address of the Account Debtor, the invoice number, and the invoice date.
  
 1.37.    “Wire Fee” $20.00 for all domestic wire charges and $50.00 for all foreign wire charges incurred by Buyer.  
  
 1.38.    “Write Off Period” shall mean twelve (12) calendar months from the date Buyer purchases a Receivable.
  
 1.39.    UCC Definitions: all other capitalized terms not otherwise defined herein shall have that meaning as set forth in the UCC as enacted in the State of California.
  
 	 
	3
	

	 

  
 Section 2.  PURCHASE AND SALE OF RECEIVABLES  
  
 2.1.       Acceptance of Receivables.  Buyer shall have no obligation to purchase any Receivable listed on a Schedule of Accounts.  Upon acceptance, Buyer shall pay to Seller the Advance Percentage of the face amount of each Receivable Buyer desires to purchase minus ACH Fee, Wire Fee, Repurchased Receivables, Adjustments and other Obligations which are currently due under the Factoring Agreement.  Such payment shall be the "Advance" with respect to such Receivable.  The purchase price of any Receivables purchased hereunder shall be the sum of the Advance, plus any Reserve payable by Buyer to Seller relating to such Receivable.  The aggregate amount of all outstanding Advances shall not at any time exceed the lesser of Three Million Dollars ($3,000,000) (the Maximum Credit) or an amount equal to the sum of all undisputed Purchased Receivables multiplied by the Advance Percentage, less any funds in the Reserve (to be applied herein in Buyer’s sole discretion). Seller shall not request and Buyer shall not make an Advance that would cause the resulting total of all Advances to exceed the foregoing limitation.  In the event the aggregate outstanding Obligations shall at any time exceed the foregoing limitation, Seller shall immediately repay the Advances in the amount of such excess. 
  
 2.2.       ACH Authorization.  In order to facilitate the purchase of Receivables under this Agreement, and the payment of the Obligations, Seller irrevocably authorizes Buyer to initiate debits or credits through the ACH or any other wire transfer system in effect.
  
 2.3.       Effectiveness of Sale to Buyer.  Effective upon Buyer's payment of an Advance, and in consideration of the covenants of this Agreement, Seller will have absolutely sold, transferred and assigned to Buyer, all of Seller's right, title and interest in and to each Purchased Receivable applicable to such Advance and all proceeds thereof.
  
 2.4.       Establishment of a Reserve.  Upon the purchase by Buyer of each Purchased Receivable, Buyer shall, unless waived by Buyer in its sole discretion, establish a Reserve.  The Reserve shall be the amount by which the face amount of the Purchased Receivable exceeds the Advance or the Reserve may be established from collections which Buyer may receive on any Account, Purchased Receivable, or Proceeds of any other Collateral (the "Reserve").  The Reserve shall be a book balance maintained on the records of Buyer and shall not be a segregated fund, and may be accumulated by Buyer, or released to Seller, in any amount, in Buyer’s sole discretion.  In order to facilitate the payment and performance of all Obligations, Buyer may, at any time, in its sole discretion: (a) adjust the Reserve upward or downward; or (b) pay into the Reserve collections received on any Account, Purchased Receivable, or the Proceeds of any other Collateral.  Buyer’s maintenance of the Reserve shall not vest the Seller with any right title, or interest therein as it is understood that the Reserve is an account established to facilitate the payment and performance of all Obligations.  Buyer in its discretion may increase the Reserve to account for any potential Avoidance Claim.  
  
 2.5.       Offer to Sell Receivables.  Seller may, on the terms provided herein, from time to time factor, sell and assign to Buyer, Receivables acceptable to Buyer, in its sole discretion, at a discount below face value.  Seller will notify each Account Debtor of a Receivable purchased by Buyer that all payments thereon must be made only to Buyer.  Seller shall deliver to Buyer a signed Schedule of Accounts along with copies of invoices and purchase orders, contracts, and proof of delivery or completion of service, in a form acceptable to Buyer, in its sole discretion, with respect to any Receivable for which a request for purchase is made.  Buyer shall be entitled to rely on all of the information provided by Seller to Buyer on the Schedule of Accounts and to rely on the signature on any Schedule of Accounts as an authorized authentication by Seller.  Each invoice shall bear a notice, in form satisfactory to Buyer, that it has been sold and assigned to and is payable only to Buyer.  Seller’s failure to include such notice on the invoice shall result in the payment of the Missing Notation Fee as liquidated damages, as such damages shall be difficult to calculate or ascertain.  
  
 	 
	4
	

	 

  
 Section 3.  COLLECTIONS, CHARGES AND REMITTANCES
  
 3.1     Accounting.   Seller shall immediately upon sale of Receivables to Buyer, make proper entries on its books and records disclosing the sale thereof to Buyer.  Seller will, within fifteen (15) days of Buyer’s request therefor, furnish Buyer financial statements, tax records and all other information as reasonably requested by Buyer.  Buyer shall post all of Seller’s non-default account activity on Buyer’s website, which shall constitute Seller’s Online Statement of Account.  Provided that there is no Event of Default, Buyer shall provide Seller with continuous access to Seller to view the Online Statement of Account.  Seller shall be solely responsible for checking its Online Statement of Account.  Buyer shall not be required to send Seller any hard copies of any of the activities which constitute Seller’s Online Statement of Account unless (i) Seller is unable to access Seller’s Online Statement of Account for a period of three (3) consecutive business days, (ii) Seller informs Buyer of such access failure, and (iii) no Event of Default has occurred and is ongoing.  Any hard copies of Seller’s Online Statement of Account shall be deemed Seller’s Online Statement of Account for the purposes of this Agreement.  If Seller disputes any entry on the Online Statement of Account it shall, within thirty (30) days after the first posting of the event, send to Buyer a written exception to such event.  Unless Buyer receives a timely written exception to the activity posted to the Online Statement of Account, within thirty (30) days after it is first posted, the Online Statement of Account shall become an account stated and be deemed accepted by Seller and shall be conclusive and binding upon the Seller.      
  
 3.2     Audit Fees.  Buyer or its designee may conduct examinations of the Collateral and Seller's operations no more frequently than once per year, unless an Event of Default has occurred and is continuing, in which event the number of audits conducted will be in Buyer's reasonable discretion.  Seller shall pay Buyer audit fees reasonably incurred by Buyer, not to exceed $1,000.00 per day plus expenses per audit.  Audit fees shall be payable within thirty (30) days’ after receipt by Seller of request therefor from Buyer.  
  
 3.3     Collections.  All Collections will go directly to Buyer and Buyer shall apply all Collections to Seller's Obligations hereunder in such order and manner as Buyer may determine in its sole discretion.  Seller will hold in trust and safekeeping, as the sole property of Buyer, and immediately turn over to Buyer, in identical form received, any payment on a Purchased Receivable, or Receivable assigned to Buyer under this Agreement, that comes into Seller's possession.  In the event Seller comes into possession of a remittance comprising payments of both a Purchased Receivable and Receivable which has not been purchased by Buyer, Seller shall hold same in accordance with the provisions set forth above and immediately turn same over to Buyer, in identical form received.   Upon collection of such item and provided there is no Event of Default, Buyer shall remit to Seller its portion thereof.  Seller’s failure to comply with its duties under this Section shall result in the imposition of the Misdirected Payment Fee as liquidated damages, as such damages shall be difficult to calculate or ascertain.  Seller agrees to indemnify and save Buyer harmless from and against any and all claims, loss, costs and expenses caused by or arising out of the Receivables or any attempt by Buyer to collect same or resolve any Dispute, except to the extent the same results from the willful misconduct or gross negligence of Buyer.
  
 3.4     Crediting of Payments.   For purposes of determining availability under this Agreement, payments on Purchased Receivables and other payments with respect to the collateral and Obligations will be credited to the Purchased Receivables of Seller upon the date of Buyer's receipt of advice from Buyer's bank that such payments have been credited to Buyer's account or in the case of payments received directly in kind by Buyer, upon the date of Buyer's deposit thereof at Buyer's bank, subject in either case to final payment and collection. Solely for the purpose of calculating fees under this Agreement, payments on Purchased Receivables and other payments with respect to collateral and Obligations shall be deemed received by Buyer three (3) business days after the date of Buyer's receipt of advice from Buyer's bank that such payments have been credited to Buyer's account or in the case of payments received directly in kind by Buyer, three (3) business days after the date of Buyer's deposit thereof at Buyer's bank, subject in either case to final payment and collection.
  
 3.5     Facility Fee.  As consideration for Buyer forgoing other factoring transactions in the marketplace and for establishing the Maximum Credit, Seller shall pay Buyer on the date hereof, a facility fee (the "Facility Fee") in the amount of one half of one percent (0.50%) of the Maximum Credit, which fee is fully earned and non-refundable as of the date of this Agreement.  A Facility Fee will be charged for increases to the Maximum Credit, but only for the incremental increase.
  
 	 
	5
	

	 

  
 3.6     Factoring Fee.  Seller shall pay to Buyer upon purchase of Receivables by Buyer, a Factoring Fee ("Factoring Fee"), calculated by taking five hundred seventy five thousandths of one percent (0.575%) of the gross face value of a Purchased Receivable for the first thirty (30) day period from the date said Purchased Receivable is first purchased by Buyer, and a Factoring Fee of three tenths of one percent (0.30%) per fifteen (15) days thereafter (“Fee Period”) until the date said Purchased Receivable is paid in full or otherwise repurchased by Seller or otherwise written off by Buyer within the Write Off Period.
  
 3.6.1.  Seller and Buyer acknowledge and agree that the sale of accounts contemplated and covered hereby are fully intended by the parties hereto as true sales governed by the provisions of Section 306.103 of the Texas Finance Code and Section 9.109(e) of the Texas Business and Commerce Code, as each may be amended from time to time, and, accordingly, legal and equitable title in all of Seller’s accounts sold to and purchased by Buyer from time to time hereunder will pass to Buyer.
  
 3.7     Finance Fee.  Seller shall pay a Finance Fee to Buyer on the outstanding Advances under this Agreement at a floating rate per annum equal to the Prime Rate plus three and one quarter of one percent (Prime + three and one quarter of one percent (3.25%)) (the "Finance Rate"), which fee shall be payable and calculated as hereinafter set forth.  Seller shall pay such fee to Buyer on the first day of each month in an amount equal to (a) the quotient obtained by dividing the sum of the daily unpaid Advances outstanding on each day during the immediately preceding month by the actual number of days in such month (the "Average Daily Balance"), multiplied by (b) the quotient obtained by dividing the Finance Rate by 360, multiplied by (c) the actual number of days in the immediately preceding month.  The Finance Rate shall increase or decrease monthly, on the first day of each month, by the amount of any increase or decrease in the Prime Rate but at no time will the Finance Fee be less than six and three quarters of one percent (6.75%)(the “Floor Rate”).  For purposes of this Agreement, the "Prime Rate" is the Prime Rate publicly listed by the Western Edition of the Wall Street Journal on the first day of each month or, if the first day of such month is not a business day, on the last business day of the immediately preceding month.  In the event the Prime Rate listed by the Wall Street Journal is a range, the highest rate in the range shall be the "Prime Rate".   In no event shall the finance fee exceed the maximum rate of interest permitted by law.  
  
 3.8     Invalid Invoice Fee.  Seller shall pay Buyer the Invalid Invoice Fee immediately upon its accrual.
  
 3.9     Misdirected Payment Fee.  Seller shall pay Buyer the Misdirected Payment Fee immediately upon its accrual.  
  
 3.10   Missing Notation Fee.  Seller shall pay Buyer the Missing Notation Fee immediately upon its accrual.
  
 3.11   Monthly Minimum Fee. Buyer would not have entered into this Agreement and agreed to provide Seller with the factoring arrangements hereunder unless Seller guaranteed Buyer that the sum of the Finance and Factoring Fees paid to Buyer in each month would be at least one half of one percent (0.50%) of the Maximum Credit (the "Monthly Minimum Fee"). In the event the aggregate Finance and Factoring Fees paid during any month is less than the Monthly Minimum Fee, then Seller shall pay to Buyer the amount of any deficiency (the "Supplemental Fee"), which shall be in addition to any other fees payable under this agreement.  The Supplemental Fee, if any, for any month shall be calculated and due and payable on the first business day of the succeeding month and shall be payable for each month during the current Term of this Agreement regardless of whether this Agreement is terminated prior to the expiration of the then current term.
  
 3.12   Refund to Seller.  Provided that there does not then exist an Event of Default, as defined in Section 9, or any event or condition that with notice, lapse of time or otherwise would constitute an Event of Default, Buyer shall refund to Seller, the amount, if any, which Buyer owes to Seller at the end of the Reconciliation Period according to the accounting prepared by Buyer for that Reconciliation Period (the "Refund").  The Refund shall be an amount equal to:
  
 	 
	6
	

	 

  
 3.12.1.         The Reserve as of the beginning of that Reconciliation Period, plus
  
 3.12.2.         The Reserve created for each Purchased Receivable paid during that Reconciliation Period, minus
  
 3.12.3.         The Reserve created for each Repurchased Receivable, minus
  
 3.12.4.         The total for that Reconciliation Period of: 
  
 3.12.4.1.     Finance Fee; 
  
 3.12.4.2.     Factoring Fee; 
  
 3.12.4.3.     Adjustments and/or reserves for Avoidance Claims;
  
 3.12.4.4.     Repurchased Receivables, to the extent Buyer has agreed to accept payment thereof by deduction from the Refund; and
  
 3.12.4.5.     The Reserve for the Account Balance as of the first day of the following Reconciliation Period.  
  
 3.12.4.6.     In the event the formula set forth in this Section results in an amount due to Buyer from Seller, Seller shall immediately make such payment to Buyer or, in Buyer’s sole discretion, assign additional Receivables to Buyer.
  
 3.13   Standards Regarding Collections.  Buyer’s collection activities with respect to any Receivable, whether or not a Dispute exists, does not obligate Buyer to engage a collection agency or commence a legal action to collect any Receivable.  Seller acknowledges that Buyer is not a collection agency and does not provide debt collection services to Seller.  If a Receivable is not paid, for any reason, Buyer, in its sole discretion may engage a collection agency, attorney or other service provider to collect the Receivable and any fees and costs associated therewith shall constitute part of the Obligations.  Any actions which Buyer may take pursuant to this section, in its sole discretion, shall not alter Seller’s Obligations to repurchase any Receivable pursuant to Section 4 herein.
  
 Section 4.  RECOURSE AND REPURCHASE OBLIGATIONS   
  
 4.1.       Seller's Agreement to Repurchase.  Seller agrees to pay to Buyer on demand, and repurchase in the full face amount, or any unpaid portion of, any Purchased Receivable:
  
 4.1.1.     Which remains unpaid for the Payment Period; or
  
 4.1.2.     With respect to which there has been any breach of warranty or representation set forth in Section 6 hereof or any breach of any covenant contained in this Agreement; or
  
 4.1.3.     With respect to which the Account Debtor asserts any Dispute. 
  
 	 
	7
	

	 

  
 Section 5.  POWER OF ATTORNEY.  Seller grants to Buyer an irrevocable power of attorney coupled with an interest authorizing and permitting Buyer (acting through any of its employees, attorneys or agents) at any time, at its option but without obligation, with or without notice to Seller, and at Seller's sole expense, to do any or all of the following, in Seller's name or otherwise: (a) Execute on behalf of Seller any document that Buyer may, in its sole discretion, deem advisable in order to perfect, maintain or improve Buyer's security interests in the Collateral or other real or personal property intended to constitute Collateral, or in order to exercise a right of Seller or Buyer, or in order to fully consummate all the transactions contemplated under this Agreement, and all other present and future agreements; (b) At any time after the occurrence of an Event of Default, execute on behalf of Seller any document exercising, transferring or assigning any option to purchase, sell or otherwise dispose of or to lease (as lessor or lessee) any real or personal property; (c) Execute on behalf of Seller, any invoices relating to any Receivable, any draft against any Account Debtor and any notice to any Account Debtor, any proof of claim in bankruptcy, voting rights in any bankruptcy case, any Notice of Lien, claim of mechanic's, materialman's or other lien, or assignment of satisfaction of mechanic's, materialman's or other lien; (d) Except for invoice payments from Account Debtors, at any time after the occurrence of an Event of Default, take control in any manner of any cash or non-cash items of payment or proceeds of Collateral; endorse the name of Seller upon any instruments, notes, acceptances, checks, drafts, money orders, bills of lading, freight bills, chattel paper or other documents, evidence of payment or Collateral that may come into Buyer's possession; (e) Upon the occurrence of any Event of Default, to receive and open all mail addressed to Seller; and, in the exercise of such right, Buyer shall have the right, in the name of Seller, to notify the Post Office authorities to change the address for the delivery of mail addressed to Seller to any such other address as Buyer may designate in its sole discretion, such right to redirect mail granted to Buyer is irrevocable, Seller shall not have the right to notify the Post Office to change the address for delivery after Buyer has exercised such right, and Buyer in its sole discretion, may dispose of any mail it receives which is not related to the Collateral; (f) Upon the occurrence of any Event of Default, to direct any financial institution which is a participant with Buyer in extensions of credit to or for the benefit of Seller, or which is the institution with which any deposit account is maintained, to pay to Buyer all monies on deposit by Seller with said financial institution which are payable by said financial institution to Seller, regardless of any loss of interest, charge or penalty as a result of payment before maturity; (g) Endorse all checks and other forms of remittances received by Buyer  “Pay to the Order of Bay View Funding,” or in such other manner as Buyer may designate; (h) At any time after the occurrence of an Event of Default, pay, contest or settle any lien, charge, encumbrance, security interest and adverse claim in or to any of the Collateral, or any judgment based thereon, or otherwise take any action  to terminate or discharge the same; (i) Grant extensions of time to pay, compromise claims and settle Receivables and the like for less than face value and execute all releases and other documents in connection therewith; (j) Pay any sums required on account of Seller's taxes or to secure the release of any liens therefore, or both; (k) Settle and adjust, and give releases of, any insurance claim that relates to any of the Collateral and obtain payment therefor, and make all determinations and decisions with respect to any such policy of insurance and endorse Seller's name on any check, draft, instrument or other item of payment or the proceeds of such policies of insurance; (l) Instruct any accountant or other third party having custody or control of any books or records belonging to, or relating to, Seller to give Buyer the same rights of access and other rights with respect thereto as Buyer has under Section 6.2.9 of this Agreement; and (m) Take any action or pay any sum required of Seller pursuant to this Agreement, and any other present or future agreements, at any time after Seller’s period for providing such payment to Buyer has expired. Any and all sums paid and any and all costs, expenses, liabilities, obligations and attorneys' fees incurred by Buyer with respect to the foregoing shall be added to and become part of the Obligations and shall be payable on demand. In no event shall Buyer's rights under the foregoing power of attorney or any of Buyer's other rights under this Agreement be deemed to indicate that Buyer is in control of the business, management of properties of Seller. 
  
 Section 6.  SELLER'S WARRANTIES, REPRESENTATIONS AND COVENANTS.      
  
 6.1.       Receivables' Warranties, Representations and Covenants.  To induce Buyer to buy Receivables and to render its services to Seller, and with full knowledge that the truth and accuracy of the following are being relied upon by the Buyer in determining whether to accept Receivables as Purchased Receivables, Seller represents, warrants, covenants and agrees, with respect to each Schedule of Accounts delivered to Buyer and each Receivable described therein, that:
  
 6.1.1.     Seller is the absolute owner of each Receivable set forth in the Schedule of Accounts and has full legal right to sell, transfer and assign such Receivables;
  
 6.1.2.     The correct face amount of each Receivable is as set forth in the Schedule of Accounts and is not in Dispute;
  
 6.1.3.     The payment of each Receivable is not contingent upon the fulfillment of any obligation or contract, past or future, and any and all obligations required of the Seller have been fulfilled as of the date of the Schedule of Accounts;
  
 	 
	8
	

	 

  
 6.1.4.     Each Receivable set forth on the Schedule of Accounts is based on the actual sale and delivery of goods and/or services actually rendered on terms not to exceed sixty (60) days, does not represent a sale to a parent, subsidiary or affiliate of Seller, is presently due and owing to Seller, is not past due or in default, has not been previously sold, assigned, transferred, or pledged, is not a consignment sale or bill and hold transaction, and is free of any and all liens, security interests and encumbrances other than liens, security interests or encumbrances in favor of Buyer or any other division of or affiliate of Buyer;
  
 6.1.5.     There are no defenses, offsets, or counterclaims against any of the Purchased Receivables, and no agreement has been made under which the Account Debtor may claim any deduction or discount, except as otherwise stated in the Schedule of Accounts;
  
 6.1.6.     At the time that Buyer makes an Advance relating to a Receivable, the Account Debtors set forth in the Schedule of Accounts, are then not insolvent and Seller has no knowledge that the Account Debtors are insolvent or may become insolvent within the Payment Period;
  
 6.1.7.     Seller shall not take or permit any action to countermand notification to Account Debtors of Buyer's ownership of Purchased Receivables.
  
 6.1.8.     Each Receivable shall be set forth in an invoice or written agreement subject to Buyer’s approval, and all contractual terms between Seller and the Account Debtor have been fully disclosed to Buyer.    
  
 6.1.9.     Seller’s failure to comply with the warranty in this Section shall result in the imposition of the Invalid Invoice Fee as liquidated damages as such damages shall be difficult to calculate or ascertain.
  
 6.2.       Additional Warranties, Representations, and Covenants.  In addition to the foregoing warranties, representations and covenants, to induce Buyer to buy Receivables and to render its services to Seller, Seller hereby represents, warrants, covenants and agrees that:
  
 6.2.1.     Seller will not assign, transfer, sell or grant any security interest in any Collateral to any other party, without Buyer's prior written consent;
  
 6.2.2.     The Seller's name, form of organization, place of business and the place where the records concerning all receivables herein referred to are kept is set forth at the beginning of this Agreement, and Seller will give Buyer thirty (30) days advance notice in writing if such name, organization, place of business or record keeping is to be changed or a new place of business or record keeping is to be added and shall execute any documents necessary to perfect Buyer's interest in Purchased Receivables and the Collateral;
  
 6.2.3.     Seller shall pay all of its gross payroll for employees, and all federal and state taxes, as and when due, including, without limitation, all payroll and withholding taxes and state sales taxes; 
  
 6.2.4.     Seller has not, as of the time Seller delivers to Buyer a Schedule of Accounts, or as of the time Seller accepts any Advance from Buyer, filed a voluntary petition for relief under the United States Bankruptcy Code or had filed against it an involuntary petition for relief; or is the subject of any other insolvency proceeding;
  
 6.2.5.     Seller, if a corporation or limited liability company, is duly incorporated or organized and, at all times, in good standing under the laws of the States of Delaware, Nevada or Texas and is duly qualified in all States where such qualification is required.  Seller has all required licenses to operate its business and transacts business under no trade names or trade styles;
  
 	 
	9
	

	 

  
 6.2.6.     Seller is duly authorized to enter into this Agreement and to grant the security interest in the Collateral.                     
  
 6.2.7.     Seller is now, and at all times hereafter, the sole and lawful owner of the Collateral, and with the security interest granted to Buyer, the Collateral shall be free and clear of any claims, liens, encumbrances or other interests therein, except for any Permitted Lien;
  
 6.2.8.     All documents, reports, or other writings submitted to Buyer in connection with this Agreement shall be true and correct;
  
 6.2.9.     Seller shall provide immediate access to Buyer to its business premises or any location where any of the Collateral is stored, in order to inspect the Seller’s business operations, Collateral or any books, records or computer data which relates to or contains any information concerning the Collateral; 
  
 6.2.10.  There is no fact which Seller has not disclosed to Buyer in writing which could materially adversely affect the Collateral, or business or financial condition of the Seller, or which are necessary to disclose in order to keep the foregoing representations from being misleading;  
  
 6.2.11.  Seller is not in violation of any federal, state or local law;
  
 6.2.12.  Seller shall within five (5) business days notify Buyer in writing of any issue which may materially adversely affect the Collateral or Seller’s business;  
  
 6.2.13.  Seller shall not sell any of the Collateral or its assets outside the ordinary course of its business;
  
 6.2.14.  Any change in control or ownership of Seller shall require Buyer’s written consent.
  
 6.2.15.  Seller shall, at all times at its expense, insure all of the insurable Collateral by financially sound and reputable insurers acceptable to Buyer, against all forms of loss or damage, and shall provide that proceeds payable thereunder shall be payable directly to Buyer. Seller shall provide Buyer with the original or a certificate of each such policy of insurance which shall contain a provision requiring the insurer to give not less than twenty (20) days advance written notice to Buyer in the event of cancellation or termination of the policy for any reason whatsoever. If Seller fails to provide or pay for any such insurance, Buyer is authorized (but not obligated) to procure the same at Seller's expense. Seller agrees to deliver to Buyer, promptly as rendered, true and correct copies of all reports made to all insurance companies.  
  
 Section 7.  NOTICE OF ADJUSTMENTS.  In the event of a breach of any of the representations, warranties, or covenants set forth in Section 6, or in the event any Dispute is asserted by any Account Debtor, Seller shall promptly advise Buyer and shall, subject to the Buyer's approval, resolve such disputes and advise Buyer of an Adjustment.  Until the disputed Purchased Receivable is repurchased by Seller and the full amount of the Purchased Receivable is paid, Buyer shall remain the absolute owner of any Purchased Receivable which is subject to Adjustment or repurchase under Section 4.1 hereof, and any rejected, returned, or recovered personal property, with the right to take possession thereof at any time.
  
 	 
	10
	

	 

  
 Section 8.  SECURITY INTEREST.  As security and collateral for the Obligations, Seller hereby grants Buyer a continuing security interest in, and assigns to Buyer, all of Seller's right, title and interest in, all now owned and after acquired Accounts, Equipment, Inventory, Financial Assets, Chattel Paper, Electronic Chattel Paper, Letters of Credit, Letters of Credit Rights, General Intangibles, Investment Property, Deposit Accounts, Documents, Instruments, Supporting Obligations, Commercial Tort Claims, the Reserve, motor vehicles, all books, records, files and computer data relating to the foregoing, and all proceeds (including insurance proceeds) of the foregoing (the “Collateral”).  Seller hereby authorizes Buyer to file any document it deems necessary to perfect its security interest in the Collateral, including but not limited to UCC-1 financing statements and any applicable amendments or continuation statements.  
  
 Section 9. DEFAULT AND REMEDIES UPON DEFAULT.     
  
 9.1.      Events of Default. If any one or more of the following events shall occur, any such event shall constitute an Event of Default by Seller: (a) Any warranty, representation, statement, report or certificate made or delivered to Buyer by Seller or any of Seller's officers, members, employees or agents now or hereafter is incorrect, false, untrue or misleading in any material respect; (b) Seller shall fail to perform or comply with or otherwise shall breach, any other term or condition contained in this Agreement, or any other agreement whether now or hereafter existing between Buyer and Seller; (c) Seller shall fail to pay or perform any other Obligation when due; (d) A material impairment of the prospect of payment or performance of the Obligations or a material impairment of the value of the Collateral or any impairment in the priority of Buyer's security interests; (e) Any event shall arise which may result or actually result in the acceleration of the maturity of the indebtedness of Seller to others under any loan or other agreement or undertaking now or hereafter existing; (f) Seller shall fail promptly to perform or comply with any term or condition of any agreement now or hereafter existing with any third party resulting in an actual or potential material adverse effect on Seller's business; (g) Any levy, assessment, attachment, seizure, lien or encumbrance for any cause or reason whatsoever, upon all or any part of the Collateral or any other asset of Seller (unless discharged by payment, release or fully bonded against not more than thirty (30) days after such event has occurred); (h) Dissolution, termination of existence, insolvency or business failure of Seller; or appointment of a receiver, trustee or custodian, for all or any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by or against Seller under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, now or hereafter in effect; or entry of a court order which enjoins, restrains or in any way prevents Seller from conducting all or any part of its business; or failure to pay any foreign, federal, state or local tax or other debt of Seller; (i) A notice of lien, levy or assessment is filed of record with respect to any of Seller's assets by the United States or any department, agency or instrumentality thereof, or by any state, county, municipal or other governmental agency, or if any taxes or debts now or hereafter owing to any one or more of them becomes a lien, whether choate or otherwise, upon all or any of the Collateral or any other assets of Seller (other than a lien for real property taxes which are not yet due and payable); (j) Death or insolvency or incompetency of any guarantor of any or all of the Obligations; appointment of a conservator or guardian of the person of any such guarantor; appointment of a conservator, guardian; trustee, custodian or receiver of all or any part of the assets, property or estate of, any such guarantor; revocation or termination of, or limitation of liability upon, any guaranty of any or all of the Obligations; or commencement of proceedings by or against any guarantor or surety for Seller under any bankruptcy or insolvency law; or the breach by the Guarantor of any Obligation or any other agreement with Buyer; (k) Seller makes any payment on account of any indebtedness or obligation which has been subordinated to the Obligations or if any person who has subordinated such indebtedness or obligation terminates or in any way limits his subordination agreement; (l) Seller shall generally not pay its debts as they become due or shall enter into any agreement (whether written or oral), or offer to enter into any such agreement, with all or a significant number of its creditors regarding any moratorium or other indulgence with respect to its debts or the participation of such creditors or their representatives in the supervision, management or control of the business of Seller; (m) Seller shall conceal, remove or permit to be concealed or removed any part of its property, with intent to hinder, delay or defraud its creditors, or make or suffer any transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent transfer, voidable transaction, or similar law, or shall make any transfer of its property to or for the benefit of any creditor at a time when other creditors similarly situated have not been paid;  (n) any change in ownership or control of Seller; or (o) Buyer at any time, acting in good faith and in a commercially reasonable manner, deems itself insecure.
  
 	 
	11
	

	 

  
 9.2.       Remedies. Upon the occurrence of any Event of Default, and at any time thereafter, Buyer, at its option, and without notice or demand of any kind (all of which are hereby expressly waived by Seller) may do any one or more of the following: (a) Cease advancing money or extending credit to or for the benefit of Seller under this Agreement, and any other document or agreement; (b) Accelerate and declare all or any part of the Obligations to be immediately due, payable, and performable, notwithstanding any deferred or installment payments allowed by any instrument evidencing or relating to any Obligation; (c) Take possession of any or all of the Collateral wherever it may be found, and for that purpose Seller hereby authorizes Buyer without judicial process to enter onto any of the Seller's premises without hindrance to search for, take possession of, keep, store, or remove any of the Collateral and remain on such premises or cause a custodian to remain thereon in exclusive control thereof without charge for so long as Buyer deems necessary in order to complete the enforcement of its rights under this Agreement or any other agreement; provided, however, that should Buyer seek to take possession of any or all of the Collateral by Court process or through a receiver, Seller hereby irrevocably waives: (i) any bond and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession; (ii) any demand for possession prior to the commencement of any suit or action to recover possession thereof; and (iii) any requirement that Buyer retain possession of and not dispose of any such Collateral until after trial or final judgment; (d) Require Seller to assemble any or all of the Collateral and make it available to Buyer at a place or places to be designated by Buyer which is reasonably convenient to Buyer and Seller, and to remove the Collateral to such locations as Buyer may deem advisable; (e) place a receiver in exclusive control of Seller’s business and/or any or all of the Collateral, in order to assist Buyer in enforcing its rights and remedies; (f) Sell, ship, reclaim, lease or otherwise dispose of all or any portion of the Collateral in its condition at the time Buyer obtains possession or after further manufacturing, processing or repair; at any one or more public and/or private sale(s) (including execution sales); in lots or in bulk; for cash, exchange for other property or on credit; and to adjourn any such sale from time to time without notice other than oral announcement at the time scheduled for sale. Buyer shall have the right to conduct such disposition on Seller's premises without charge for such time or times as Buyer deems fit, or on Buyer's premises, or elsewhere and the Collateral need not be located at the place of disposition. Buyer may directly or through any affiliated company purchase or lease any Collateral at any such public disposition and, if permissible under applicable law, at any private disposition. Any sale or other disposition of Collateral shall not relieve Seller of any liability Seller may have if any Collateral is defective as to title or physical condition at the time of sale; (g) Demand payment of, and collect any Accounts, Instruments, Chattel Paper, Supporting Obligations and General Intangibles comprising part or all of the Collateral; or (h) Demand and receive possession of any of Seller's federal and state income tax returns and the books, records and accounts utilized in the preparation thereof or referring thereto. Any and all attorneys' fees, expenses, costs, liabilities and obligations incurred by Buyer with respect to the foregoing shall be added to and become part of the Obligations, shall be due on demand, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations.
  
 9.3.       Application of Proceeds.  The proceeds received by Buyer from the disposition of or collection of any of the Collateral shall be applied to such extent and in such manner as Buyer shall determine, in its sole discretion. If any deficiency shall arise, Seller shall remain liable to Buyer therefor. In the event that, as a result of the disposition of any of the Collateral, Buyer directly or indirectly enters into a credit transaction with any third party, Buyer shall have the option, exercisable at any time, in its sole discretion, of either reducing the Obligations by the principal amount of such credit transaction or deferring the reduction thereof until the actual receipt by Buyer of good funds therefore from such third party.  
  
 9.4.       Online Access.  Upon an Event of Default, all of Seller’s rights and access to any online internet services that Buyer makes available to Seller shall be provisional pending Seller’s curing of all such Events of Default.  During such period of time, Buyer may limit or terminate Seller’s access to online services.  Seller acknowledges that the information Buyer makes available to Seller through online internet access, both before and after an Event of Default, constitutes and satisfies any duty to respond to a request for accounting or request regarding a statement of account that is referenced in the UCC.
  
 9.5.       Standards of Commercial Reasonableness.  After an Event of Default, the parties acknowledge that it shall be presumed commercially reasonable and Buyer shall have no duty to undertake to collect any Account, including those in which Buyer receives information from an Account Debtor that a Dispute exists.  Furthermore, in the event Buyer undertakes to collect or enforce an obligation of an Account Debtor or any other person obligated on the Collateral and ascertains that the possibility of collection is outweighed by the likely costs and expenses that will be incurred, Buyer may at any such time cease any further collection efforts and such action shall be considered commercially reasonable.  Before Seller may, under any circumstances, seek to hold Buyer responsible for taking any commercially unreasonable action, Seller shall first notify Buyer in writing, of all of the reasons why Seller believes Buyer has acted in any commercially unreasonable manner and advise Buyer of the action that Seller believes Buyer should take.
  
 	 
	12
	

	 

  
 9.6.       Formation of New Entity.  In the event Seller or any one or more of its principals, officers or directors during the term of this Agreement or while Seller remains liable to Buyer for any of the Obligations, (i) forms a new entity;  or (ii) has failed to disclose to Buyer at the time of the Effective Date of this Agreement an existing entity, that does business similar to that of Seller, whether in the form of a corporation, partnership, limited liability company or otherwise, such entity shall be deemed to have expressly assumed the obligations due Buyer by Seller under the Agreement.  Upon the formation of any such entity, Buyer, in addition to all of its available remedies, shall be deemed to have been granted an irrevocable power of attorney with authority to file a new financing statement with the appropriate secretary of state or UCC filing office naming the newly formed successor business or undisclosed existing business, as a debtor or new debtor.  Buyer shall have the right to notify the successor entity’s or undisclosed existing entity’s Account Debtors of Buyer’s security interest, its right to collect all Accounts, and to notify any new secured party who has sought to obtain a competing security interest of Buyer’s right in such entity’s assets.  Seller shall indemnify Buyer, pursuant to Section 13.3 herein, from any claims against Buyer which arises out of Buyer exercising any of its rights hereunder.  
  
 9.7.       Remedies Cumulative. In addition to the rights and remedies set forth in this Agreement, Buyer shall have all the other rights and remedies accorded a secured party under the UCC and under any and all other applicable laws and in any other instrument or agreement now or hereafter entered into between Buyer and Seller and all of such rights and remedies are cumulative and none is exclusive. Exercise or partial exercise by Buyer of one or more of its rights or remedies shall not be deemed an election, nor bar Buyer from subsequent exercise or partial exercise of any other rights or remedies. The failure or delay of Buyer to exercise any rights or remedies shall not operate as a waiver thereof, but all rights and remedies shall continue in full force and effect until all of the Obligations have been fully paid and performed.
  
 Section 10.  EFFECTIVENESS TERM.  This Agreement shall only become effective upon execution and delivery by Seller and acceptance by Buyer and, unless earlier terminated as provided in this Agreement, shall continue in full force and effect for the Initial Term and shall be deemed automatically renewed for a Renewal Term, and will continue to renew for each Renewal Term thereafter unless this Agreement is terminated.  Unless earlier terminated as provided in this Agreement, all Obligations shall be due and payable in full at the expiration of the Initial Term or last Renewal Term, and if the Obligations are not timely paid by the expiration of the Initial Term or such Renewal Term, then, in Buyer’s sole discretion, this Agreement may be renewed for a Renewal Term. This Agreement may be terminated prior to the end of the Initial Term or any Renewal Term as follows: (a) Seller may terminate this Agreement at the end of the Initial Term or Renewal Term without payment of an Early Termination Fee, provided Seller gives at least sixty (60) days, but not to exceed ninety (90) days written notice prior to the end of the Initial Term or any Renewal Term; (b) Seller may terminate this Agreement at any time without payment of an Early Termination Fee, provided Seller gives at least thirty (30) days’ notice and Buyer is paid off through Replacement Financing;  (c) Seller may terminate this Agreement at any time after giving Buyer at least sixty (60) days prior written notice and paying Buyer an Early Termination Fee equal to one half of one percent (0.50%) of the Maximum Credit multiplied by the number of months remaining in the then-current Term (the "Early Termination Fee").  Any partial month remaining in such Term shall constitute a full month for the purpose of calculating the Early Termination Fee.  Any such termination shall be effective upon payment to Buyer in full of all Obligations, including the Early Termination Fee; and (d) This Agreement shall automatically terminate following the occurrence of an Event of Default under Section 9.  Upon any such termination following an Event of Default, all Obligations, including the Early Termination Fee, shall be due and payable in full.  In recognition of the Buyer's right to have its attorneys' fees and other expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Seller, Buyer shall not be required to record any terminations or satisfactions of any of Buyer's liens on the Collateral unless and until Seller has executed and delivered to Buyer a general release in a form acceptable to Buyer.  Seller understands that this Section constitutes a waiver of its rights under Section 9-513 of the UCC. If this Agreement is terminated and Seller enters into a new financing transaction with any other financing source, Buyer is under no obligation to enter into any form of agreement with the new financing source.
  
 Notwithstanding the foregoing, any termination of this Agreement shall not affect Buyer's security interest in the Collateral,  Buyer's ownership of the Purchased Receivables, Buyer’s Indemnity portion of the Obligations, any other rights granted to Buyer or Seller’s Obligations, and this Agreement shall continue to be effective, and Buyer's rights and remedies hereunder, including rights granted under this Agreement, the UCC, at law or in equity  shall survive such termination, until all Indemnity Obligations, and other Obligations incurred under this Agreement or in connection herewith have been completed and satisfied in full.
  
 	 
	13
	

	 

  
 Section 11.  PARTICIPATIONS; ASSIGNMENTS.  Seller understands that Buyer may from time to time transfer and assign its rights under this Agreement to one or more assignees.  Seller hereby consents to these transfers and assignments by Buyer to one or more assignees.  Seller hereby consents that any such assignee may exercise the rights of the Buyer hereunder.  Seller further hereby consents and acknowledges that any and all defenses, claims or counterclaims that it may have against the Buyer shall be limited to, and may only be brought against Buyer and may not extend to any assignee, including, but not limited to, any claims which pertain to this Agreement.  Seller consents to Buyer releasing any and all information regarding Seller and any guarantors to any assignee or potential assignee and waives any and all claims pertaining to the release of such information.  Seller and Buyer intend that any and all direct or indirect assignees of the Buyer of the type set forth above shall be the third party beneficiaries of this Agreement.
  
 Section 12.  ONLINE USER STANDARDS.
  
 12.1.          Online Conducting of Business.  Buyer and Seller intend to conduct virtually all of the transactions contemplated by this Agreement via email and Buyer’s Online Reporting Service.  Buyer is the sole and exclusive owner of the Online Reporting Service.  Seller hereby accepts a non-exclusive, non-transferable right to access the Online Reporting Service, upon the terms and subject to the conditions contained herein.
  
 12.2.          Standards Regarding Conducting Business Online.  Seller and Buyer agree as follows:
  
 12.2.1.      Buyer shall have the right to terminate Seller’s access to the Online Reporting Service upon the occurrence of an Event of Default.
  
 12.2.2.      Seller shall not:  (i) copy the Online Reporting Service nor otherwise reproduce the same other than for normal system operation backup; (ii) translate, adapt, vary, or modify the Online Reporting Service; or (iii) disassemble, decompile or reverse engineer the Online Reporting Service.
  
 12.2.3.      Buyer shall not be liable to Seller for any loss or damage whatsoever or howsoever caused, whether caused by tort (including negligence), breach of contract, or otherwise arising directly or indirectly in connection with the use of the Online Reporting Service.
  
 12.2.4.      Buyer expressly excludes liability for any indirect, special, incidental or consequential loss or damage whether caused by tort (including negligence), breach of contract or otherwise, which may arise in respect of the Online Reporting Service, its use, or in respect of equipment or property, or for loss of profit, business, revenue, goodwill or anticipated savings.
  
 12.2.5.      Seller acknowledges that any and all of the copyright, trademarks, trade names, patents, trade secrets and other intellectual property rights subsisting in or used in connection with the Online Reporting Service, including all documentation and manuals relating thereto, are, and shall remain, the sole property of the Buyer. Seller shall not, during or at any time after the expiry or termination of its use of the Online Reporting Service, in any way question or dispute the ownership by Buyer thereof.
  
 12.2.6.      To the extent permitted by applicable law, Buyer excludes all warranties with respect to the Online Reporting Service, either express or implied, including, but not limited to, any implied warranties of satisfactory quality or fitness for any particular purpose.
  
 12.2.7.      Seller is solely responsible for virus scanning the Online Reporting Service, and Buyer makes no representations or warranties regarding any virus associated with the Online Reporting Services.
  
 12.2.8.      All information, data, drawings, specifications, documentation, software listings, source or object code which Buyer may have imparted and may from time to time impart to the Seller relating to the Online Reporting Service is proprietary and confidential. Seller hereby agrees that it shall use the same solely in accordance with the provisions of this Agreement and that it shall not, at any time during or after expiry or termination of this Agreement, disclose the same, whether directly or indirectly, to any third party.
  
 	 
	14
	

	 

  
 Section 13. GENERAL.
  
 13.1     Notices. Any written notice to be given under this Agreement will be in writing addressed to the respective party as set forth in the heading to this Agreement and will be personally served, telecopied or sent by overnight courier service or United States mail and will be deemed to have been given: (a) if delivered in person, when delivered; (b) if delivered by telecopy or e-mail, on the date of transmission if transmitted on a business day before 4:00 p.m. (Pacific Time) or, if not, on the next succeeding business day; (c) if delivered by overnight courier, two (2) business days after delivery to such courier properly addressed; or (d) if by U.S. Mail, four (4) business days after depositing in the United States mail, with postage prepaid and properly addressed. If there is more than one Seller, notice to any shall constitute notice to all; if Seller is a corporation, partnership or limited liability company, the service upon any member of the Board of Directors, general partner, managing member, officer, employee or agent shall constitute service upon Seller.
  
 13.2     Payment in Full Checks. Seller authorizes Buyer to accept, endorse and deposit on behalf of Seller any checks tendered by an Account Debtor “in full payment” of its obligation to Seller. Seller shall not assert against Buyer any claim arising therefrom, irrespective of whether such action by Buyer affects an accord and satisfaction of Seller’s claims, under Section 3-311 of the UCC.
  
 13.3     Indemnity. Seller shall indemnify and hold Buyer harmless from and against any and all Avoidance Actions, claims, debts, losses, demands, actions, causes of action, lawsuits, damages, penalties, judgments, liabilities, costs and expenses (including, without limitation, attorneys’ fees), of any kind or nature which Buyer may sustain or incur in connection with, or arising from, this Agreement, any other present or future agreement, or the breach by Seller of any representation, warranty, covenant or provision contained herein or therein, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Buyer relating in any way to Seller, except to the extent the same results from the willful misconduct or gross negligence of Buyer. Notwithstanding any other provision of this Agreement to the contrary, the indemnity agreement set forth in this Section shall survive termination of this Agreement and if Seller refuses to honor its obligation to indemnity Buyer, Buyer shall be entitled to all rights and remedies under this Agreement, the UCC, at law or in equity.
  
 13.4     Attorneys’ Fees and Costs. Seller shall forthwith pay to Buyer the amount of all actual attorneys' fees and all filing, recording, publication, search and other costs incurred by Buyer under and pursuant to this Agreement, or any other present or future agreement, or in connection with any transaction contemplated hereby or thereby, or with respect to the Collateral or the defense or enforcement of Buyer's interests (whether or not Buyer files a lawsuit against Seller), including, without limitation, charges of auditors, set-up charges, bank charges, and all office and other expenses and costs. Without limiting the generality of the foregoing, Seller shall, with respect to each and all of the foregoing, pay all actual attorneys' fees and costs Buyer incurs in order to: obtain legal advice, enforce, or seek to enforce, any of its rights; prosecute actions against, or defend actions by, Account Debtors; commence, intervene in, respond to, or defend any action or proceeding; initiate any complaint to be relieved of the effect of the automatic stay in bankruptcy in order to commence or continue any foreclosure or other disposition of the Collateral or to commence or continue any action or other proceeding against Seller for relating to the Collateral; file or prosecute a claim or right in any action or proceeding, including, but not limited to, any probate claim, bankruptcy claim, third-party claim, secured creditor claim or reclamation complaint, examine, audit, count, test, copy, or otherwise inspect any of the Collateral or any of Seller's books and records; or protect, obtain possession of, lease, dispose of, or otherwise enforce any security interest in or lien on the Collateral or represent Buyer in any litigation with respect to Seller's affairs. In the event Buyer brings any lawsuit against Seller predicated on a breach of this Agreement, or in any manner relates to this Agreement, Buyer shall be entitled to recover its costs and attorneys' fees, including, but not limited to, attorneys' fees and costs incurred in the enforcement of, execution upon or defense of any order, decree, award or judgment. All attorneys' fees and costs to which Buyer may be entitled pursuant to this Section shall immediately become part of Seller's Obligations and shall be due on demand.
  
 13.5     Benefit of Agreement. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of the parties hereto; provided, however, that Seller may not assign or transfer any of its rights under this Agreement without the prior written consent of Buyer, and any prohibited assignment shall be void. No consent by Buyer to any assignment shall relieve Seller or any guarantor from its liability for the Obligations. Without limiting the generality of the foregoing, all rights and benefits of Buyer under this Agreement may be exercised by any institution with which Buyer maintains any rediscount, factoring or other relationship and by any other person or entity designated by Buyer.
  
 	 
	15
	

	 

  
 13.6     Joint and Several Liability.  The liability of each Seller shall be joint and several and the compromise of any claim with, or the release of, any Seller shall not constitute a compromise with, or a release of, any other Seller.
  
 13.7     General Waivers. The failure of Buyer at any time or times hereafter to require Seller strictly to comply with any of the provisions, warranties, terms or conditions of this Agreement or any other present or future instrument or agreement between Seller and Buyer shall not waive or diminish any right of Buyer thereafter to demand and receive strict compliance therewith and with any other provision warranty, term and condition; and any waiver of any default shall not waive or affect any other default, whether prior or subsequent thereto and whether of the same or of a different type. None of the provisions, warranties, terms or conditions of this Agreement or other instrument or agreement now or hereafter executed by Seller and delivered to Buyer shall be deemed to have been waived by any act or knowledge of Buyer or its agents or employees, but only by a specific written waiver signed by an officer of Buyer and delivered to Seller. Seller waives any and all notices or demands which Seller might be entitled to receive with respect to this Agreement, or any other agreement by virtue of any applicable law. Seller hereby waives demand, protest, notice of protest and notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, Account, general intangible, document or guaranty at any time held by Buyer on which Seller is or may in any way be liable, and notice of any action taken by Buyer unless expressly required by this Agreement. Seller hereby ratifies and confirms whatever Buyer may do pursuant to this Agreement and agrees that Buyer shall not be liable for the safekeeping of the Collateral or any loss or damage thereto, or diminution in value thereof, from any cause whatsoever, any act or omission of any carrier, warehouseman, bailee, forwarding agent or other person, or any act of commission or any omission by Buyer or its officers, employees, agents, or attorneys, or any of its or their errors of judgment or mistakes of fact or of law.
  
 13.8     Electronic Signatures. The parties intend to conduct the business contemplated by this Agreement by electronic means.  Each document, which is the subject of this Agreement, that a party has transmitted electronically to the other shall be intended as and constitute an original and deemed to contain a valid signature of the party for all purposes acknowledging, consenting to, authorizing and approving the terms of this Agreement or any subject matter applicable thereto.  In furtherance of the above, Seller hereby authorizes Buyer to regard the Seller’s printed name or electronic approval for any document, agreement, assignment schedule or invoice as the equivalent of a manual signature by one of the Seller’s authorized officers or agents.  Seller’s failure to promptly deliver to Buyer any schedule, report, statement or other information required by this Agreement or any document related thereto shall not affect, diminish, modify or otherwise limit Buyer’s security interests in the Collateral or rights and remedies under this Agreement.  Buyer may rely upon, and assume the authenticity of, any such approval and material applicable to such approval as the duly confirmed, authorized and approved signature of Seller by the person approving same which constitute an Authenticated Record for purposes of the UCC and shall satisfy the requirements of any applicable statute of frauds.  
  
 13.9     Section Headings; Construction. Section headings are used herein for convenience only. Seller acknowledges that the same may not describe completely the subject matter of the applicable Section, and the same shall not be used in any manner to construe, limit, define or interpret any term or provision hereof. This Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this Agreement shall be construed strictly against Buyer or Seller under any rule of construction or otherwise.
  
 13.10   Limitation of Actions. Seller agrees that any claim or cause of action by Seller against Buyer, its directors, officers, employees, agents, accountants or attorneys, based upon, arising from, or relating to this Agreement, or any other present or future agreement, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Buyer, its directors, officers, employees, agents, accountants, or attorneys, relating in any way to Seller, shall be barred unless asserted by Seller by the commencement of an action or proceeding in a court of competent jurisdiction by the filing of a complaint within two (2) years after the first act, occurrence or omission upon which such claim or cause of action, or any part thereof, is based, and the service of a summons and complaint on an officer of Buyer, or on any other person authorized to accept service on behalf of Buyer, within thirty (30) days thereafter. Seller agrees that such six-month period provided herein shall not be waived, tolled, or extended except by the written consent of Buyer, in its sole and absolute discretion. This provision shall survive any termination, however arising, of this Agreement and any other present or future agreement.
  
 	 
	16
	

	 

  
 13.11   Severability. Should any provision, clause or condition of this Agreement be held by any court of competent jurisdiction to be void, invalid, inoperative, or otherwise unenforceable, such defect shall not affect any other provision, clause or condition, and the remainder of this Agreement shall be effective as though such defective provision, clause or condition had not been a part hereof.
  
 13.12   Integration. This Agreement and such other written agreements, documents and instruments as may be executed in connection herewith shall be construed together and constitute the entire, only and complete agreement between Seller and Buyer, and all representations, warranties, agreements, and undertakings heretofore or contemporaneously made, which are not set forth herein or therein, are superseded hereby.
  
 13.13   Amendment. The terms and provisions of this Agreement may not be waived, altered, modified or amended except in a writing executed by Seller and a duly authorized officer of Buyer.
  
 13.14   Time of Essence. Time is of the essence in the performance by Seller of each and every obligation under this Agreement.
  
 13.15   Governing Law; Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and thereunder and all rights and obligations of Buyer and Seller shall be governed, construed and interpreted in accordance with the internal laws of the State of California. Seller: (i) agrees that all actions or proceedings relating directly or indirectly this Agreement or any of the Obligations shall, at the sole option of Buyer, be litigated in courts located within said state, and that, at the sole option of Buyer, the exclusive venue therefore shall be Santa Clara County, California; (ii) consents to the jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights Seller may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding.
  
 13.16 Waiver of Right to Jury Trial/ Judicial Reference/ Arbitration. 
  
 13.16.1        Jury Waiver.  To the fullest extent permitted by applicable law, Buyer and Seller each hereby irrevocably and expressly waive all right to a trial by jury in any action, proceeding, or cross-complaint (whether based upon contract, tort, or otherwise) arising out of or relating to this Agreement, the obligations or any of the transactions contemplated hereby or thereby or the parties’ actions in the negotiation, administration, or enforcement hereof or thereof.  Buyer and Seller each acknowledges that such waiver is made with full knowledge and understanding of the nature of the rights and benefits waived hereby, and with the benefit of advice of counsel of its choosing.
  
 13.16.2        Judicial Reference.  Buyer and Seller each prefer that any dispute between them be resolved in litigation subject to the jury trial waiver set forth herein, but the California Supreme Court has held that such pre-dispute jury trial waivers are unenforceable.  This section will be applicable until: (a) the California Supreme Court holds that a pre-dispute jury trial waiver provision similar to that contained herein is valid or enforceable; or (b) the California legislature passes legislation and the governor of the State of California signs into law a statute authorizing pre-dispute jury trial waivers and as a result such waivers become enforceable.
  
 Accordingly, Buyer and Seller each  knowingly and voluntarily agree that any civil action or proceeding involving a dispute arising out of or relating to this Agreement, shall be tried solely through a judicial reference as  provided in sections 638 through 645.2 of the California Code of Civil Procedure ("CCP") and as described herein (the “Judicial Reference”).  Buyer and Seller further realize that by agreeing to Judicial Reference as provided in CCP sections 638 through 645.2, the parties will have waived their rights to trial by jury.
  
 Buyer and Seller each further agree that the referee shall be a retired Judge or Justice selected by mutual written agreement of the parties.  If the parties do not agree, the referee shall be selected by the Trial Court.  Buyer and Seller further agree that the filing of any law and motion hearings or the initiation of any hearings to obtain any form of a pre-judgment remedy shall not operate as a waiver of the parties’ right to trial solely through a Judicial Reference.
  
 	 
	17
	

	 

  
 A request for appointment of a referee may be heard on an ex parte or expedited basis, and Buyer and Seller agree that irreparable harm would result if ex parte relief is not granted.  The referee shall be appointed to sit with all the powers provided by law.  The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California.  The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a trial, including without limitation motions for summary judgment or summary adjudication.  The referee shall issue a decision pursuant to CCP section 644 and the referee's decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court.  The final judgment or order entered by the referee shall be fully appealable as provided by law.  Buyer and Seller reserve the right to receive findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial, which new trial, if granted, is also to be a reference proceeding under this provision.
  
 13.16.3    Arbitration.  Although Buyer and Seller each prefer that any dispute between them be resolved solely through a bench trial or the Judicial Reference as set forth in this section, the California Supreme Court has held that a trial court may refuse to enforce a Judicial Reference agreement, and deny a motion for appointment of a referee under CCP section 638, where there is a possibility of conflicting rulings on a common issue of law or fact, or based on considerations of judicial economy specifically, the duplication of efforts, increased costs, potential delays in resolution, and an unmitigated burden on the Superior Court.
  
 Accordingly, if the trial court refuses to enforce the appointment of a judicial referee (and no successor statute is enacted) Buyer and Seller knowingly and voluntarily agree to submit and settle any dispute, controversy or claim arising out of relating to this Agreement to arbitration.  This Agreement to submit to arbitration is presently effective but shall be enforced only in the event that the Jury Waiver and the Judicial Reference provision as set forth above and as provided in CCP sections 638 through 645.1, is held unenforceable.  The arbitration shall be conducted in Santa Clara, County, in the State of California and administered by a retired Judge or Justice selected by mutual written agreement of the parties who shall be governed by the same procedure as if the parties were proceeding by the above Judicial Reference procedure.  Buyer and Seller further agree that the filing of any law and motion hearings or the initiation of any hearings to obtain any form of a pre-judgment remedy shall not operate as a waiver of the parties’ right to submit and settle any dispute, controversy or claim arising out of relating to this Agreement to arbitration.
  
 The arbitration procedure shall be governed by the substantive and procedural laws of the State of California, including all aspects of its arbitration law pursuant to the California Arbitration Act (“CAA”), sections 1280 through 1294.2 of the Code of Civil Procedure as amended from time to time.  If a conflict exists between the provisions of the CAA and this Agreement, the language of this Agreement shall control.  Buyer and Seller shall have all rights of discovery and remedies as they would in a California civil action pursuant to CCP section 1283.05, and the arbitration shall be governed by all of the applicable rules set forth in the Civil Discovery Act, CCP sections 2016.010 through 2036.050.  All rules of evidence applicable to proceedings at law in the State of California will be applicable to the arbitration proceeding and the arbitrator is at all times required to strictly conform to these rules.  The arbitrator shall prepare in writing and provide to the parties an award including factual findings explaining the reasons on which their decision is based.
  
 The arbitrator shall not have the power to commit (a) errors of law or legal reasoning, (b) errors of fact, or (c) errors with regards to mixed questions of law and fact.  In addition, the arbitrator shall not reach factual conclusions unsupported by substantial evidence.  Furthermore, the arbitrator shall not have the power to render an award (a) not based on proper admissible evidence, (b) based on evidence not presented at the hearing, or (c) not in conformity with the substantive and procedural law of the State of California.
  
 In any arbitration arising out of or related to this Agreement, the arbitrator is not empowered to award punitive or exemplary damages, except where permitted by statute, and Buyer and Seller waive any right to recover any such damages.
  
 	 
	18
	

	 

  
 If the arbitrator exceeds any of the foregoing specific powers, the award may be vacated or corrected by filing a petition pursuant to the CAA in the time frame provided in CCP sections 1280 through 1294.2 in the Superior Court for the County of Los Angeles, in the State of California.  The award is subject to review for legal error, factual error, confirmation, correction or vacatur only in a California State Court of competent jurisdiction and only pursuant to the CAA.
  
 In reviewing the award, the Superior Court shall sit as if it were an Appellate Court, in all respects, including but not limited to the scope of review.  The decision of the Superior Court is, itself, subject to review by the California Appellate Courts.  The supervising Court shall have the power to review (a) whether the findings of fact rendered by the arbitrators are supported by substantial evidence and (b) whether, as a matter of law based on such findings of fact the award should be confirmed, corrected or vacated.  Upon such determination, judgment shall be entered in favor of either party consistent therewith.
  
 If any portion of this arbitration provision is held invalid or unenforceable, the remainder shall still be valid and enforceable and the arbitrator and/or supervising Court as applicable shall have the power to amend the arbitration procedures set forth herein so that this Agreement shall remain enforceable and binding.
  
 Buyer and Seller each acknowledge that the judicial referee or arbitrator will charge fees and costs to conduct the Judicial Reference or arbitration.  Buyer and Seller each agree to initially divide equally all Judicial Reference or arbitration fees and the compensation of the judicial referee or arbitrator.  Notwithstanding the foregoing, the parties each further acknowledge that the judicial referee or arbitrator may decide that one party or the other is the prevailing party in which event the non-prevailing party will be obligated to reimburse the prevailing party for all of the fees and costs imposed in connection with the Judicial Reference or the arbitration.
  
 THE PARTIES each prefer that any dispute between them be resolved in litigation subject to the Jury Trial Waiver set forth herein, but the TEXAS Supreme Court has held that such pre-dispute jury trial waivers are unenforceable.  IN THE EVENT THAT BUYER IN ITS SOLE DISCRETION ELECTS TO BRING ANY ACTION IN TEXAS, THEN This Section will be applicable until: (i) the TEXAS Supreme Court holds that a pre-dispute jury trial waiver provision similar to that contained in herein is valid or enforceable; or (ii) the TEXAS Legislature passes legislation and the governor of the State of TEXAS signs into law a statute authorizing pre-dispute jury trial waivers, and, as a result, such waivers become enforceable.  ACCORDINGLY, THE PARTIES EACH AGREE THAT ANY CIVIL ACTION OR PROCEEDING INVOLVING A DISPUTE ARISING OUT OF OR RELATING TO THIS NOTE,  SHALL BE TRIED SOLELY THROUGH A JUDICIAL REFERENCE AS  PROVIDED IN TEXAS CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE PARTIES EACH FURTHER AGREE TO THE APPOINTMENT OF JAMS AS THE REFEREE APPOINTED TO CONDUCT THE TRIAL AND SUCH OTHER RELATED PROCEEDINGS.  THE PARTIES FURTHER AGREE THAT THE FILING OF ANY LAW AND MOTION HEARINGS OR THE INITIATION OF ANY HEARINGS TO OBTAIN ANY FORM OF A PREJUDGMENT REMEDY SHALL NOT OPERATE AS A WAIVER OF THE PARTIES’ RIGHT TO TRIAL SOLELY THROUGH A JUDICIAL REFERENCE.  THE PARTIES EACH ACKNOWLEDGE THAT THE JUDICIAL REFEREE WILL LIKELY CHARGE FEES AND COSTS OVER AND ABOVE THE FEES AND COSTS NORMALLY CHARGED BY A COURT.  THE PARTIES EACH AGREE TO INITIALLY EVENLY SPLIT THE FEES AND COSTS OF SUCH REFEREE BETWEEN THE PARTIES. NOTWITHSTANDING THE FOREGOING, THE PARTIES EACH FURTHER ACKNOWLEDGE THAT THE REFEREE MAY DECIDE THAT ONE PARTY OR THE OTHER IS THE PREVAILING PARTY; IN WHICH EVENT, THE NON-PREVAILING PARTY WILL BE OBLIGATED TO REIMBURSE THE PREVAILING PARTY FOR ALL OF THE COSTS AND FEES PAID IN CONNECTION WITH THE HIRING OF THE REFEREE
  
 	 
	19
	

	 

  
 THE REST OF THIS PAGE IS INTENTIONALLY BLANK
  
 SIGNATURE PAGE FOLLOWS
  
 IN WITNESS WHEREOF, Seller has executed and delivered this Agreement for acceptance by Buyer as of the day and year above written.  If this Agreement is not witnessed by an authorized employee of Buyer, Seller must have their signature acknowledged by a Notary Public. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument.
  
 	 SELLER
  
 RECRUITER.COM GROUP, INC.
  
 By: /s/ Miles Jennings
  
 Name/Title: MILES JENNINGS, PRESIDENT/COO
  
 RECRUITER.COM, LLC
  
 By: /s/ Miles Jennings
  
 Name/Title: MILES JENNINGS, PRESIDENT/COO OF
 MANAGING MEMBER RECRUITER.COM GROUP, INC.
  
 RECRUITER.COM RECRUITING SOLUTIONS, LLC
  
 By: /s/ Miles Jennings
  
 Name/Title: MILES JENNINGS, PRESIDENT/COO OF
 MANAGING MEMBER RECRUITER.COM GROUP, INC.
  
 BUYER
  
 CSNK WORKING CAPITAL FINANCE CORP. D/B/A BAY VIEW FUNDING
  
 By: /s/ Andrew Aquino
  
 Title: Senior Vice President
  
 Date: 4/27/22
	 RECRUITER.COM, INC.
  
 By: /s/ Miles Jennings
  
 Name/Title: MILES JENNINGS, PRESIDENT/CEO
  
 RECRUITER.COM CONSULTING LLC
  
 By: /s/ Miles Jennings
  
 Name/Title: MILES JENNINGS, PRESIDENT/COO OF
  
 MANAGING MEMBER RECRUITER.COM GROUP, INC
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

  
 	 
	20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00344-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00344-of-00352.parquet"}]]