Exhibit 10.1


 


Note Purchase Agreement


 


This
Securities Purchase Agreement (this “Agreement”), dated as of September 26, 2022, is entered into by and between
Farmmi, Inc., a Cayman Islands company (“Company”), and Streeterville
Capital, LLC, a Utah limited liability company, or its successors and/or assigns (“Investor”).


 


A.       Company
and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities
Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”).


 


B.       Investor
desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a Convertible Promissory
Note, in the form attached hereto as Exhibit A, in the original principal amount of $6,440,000.00 (the “Note”),
convertible into ordinary shares, $0.025 par value per share, of Company (the “Ordinary Shares”), upon the terms and
subject to the limitations and conditions set forth in such Note.


 


C.       This
Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.


 


D.       For
purposes of this Agreement: “Conversion Shares” means all Ordinary Shares issuable upon conversion of all or any portion
of the Note; and “Securities” means the Note and the Conversion Shares.


 


NOW, THEREFORE, in
consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Investor hereby agree as follows:


 


1.                  
Purchase and Sale of Securities.


 


1.1.            
Purchase of Securities. Company shall issue and sell to Investor and Investor shall purchase from Company the Securities.
In consideration thereof, Investor shall pay the Purchase Price (as defined below) to Company.


 


1.2.            
Form of Payment. On the Closing Date, Investor shall pay the Purchase Price to Company via wire transfer of immediately
available funds to a bank account designated by Company against delivery of the Note.


 


1.3.            
Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below,
the date of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be September 26,
2022, or another mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes to have
occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.


 


1.4.            
Collateral for the Note. The Note shall be unsecured.


 






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1.5.             Transaction
Expense Amount. The Note carries an original issue discount of $420,000.00 (the “OID”). In addition, Company
agrees to pay $20,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring and other
transaction costs incurred in connection with the purchase and sale of the Note (the “Transaction Expense
Amount”). The OID and Transaction Expense amount will be included in the initial principal balance of the Note. The
 “Purchase Price”, therefore, shall be $6,000,000.00, computed as follows: $6,440,000.00 initial principal
balance, less the OID, less the Transaction Expense Amount.


 


2.                  
Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date:
(i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable
in accordance with its terms; (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D of the 1933 Act, as amended, and is acquiring the Note for its own account, and not with a view to, or for sale in connection with,
the distribution thereof or of any interest therein; (iv) Investor, itself or through its officers, employees or agents, has sufficient
knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of an investment such as an
investment in the Note, and Investor, either alone or through its officers, employees or agents, has evaluated the merits and risks of
its purchase of the Note; and (v) Investor has no contract, arrangement or understanding with any broker, finder, investment bank, financial
intermediary or similar agent with respect to any of the transactions contemplated by this Agreement.


 






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3.                   Company’s
Representations and Warranties. Except as set forth on the disclosure schedules (the “Disclosure Schedules”)
attached hereto with each numbered Schedule corresponding to the section number herein, Company represents and warrants to Investor
that as of the Closing Date: (i) Company is a corporation duly organized, validly existing and in good standing under the laws of
its state of incorporation and has the requisite corporate power to own its properties and to carry on its business as now being
conducted; (ii) Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such qualification necessary except where the failure to do could
not reasonably be expected to have a material adverse effect on the business or operations of Company; (iii) Company has registered
its Ordinary Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “1934 Act”),
and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction
Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized by Company and all necessary
actions have been taken; (v) this Agreement, the Note, and the other Transaction Documents have been duly executed and delivered by
Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; (vi) the execution
and delivery of the Transaction Documents by Company, the issuance of the Securities in accordance with the terms hereof, and the
consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not conflict with or
result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s formation
documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation,
any listing agreement for the Ordinary Shares, or (c) any existing applicable law, rule, or regulation or any applicable decree,
judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other
governmental body having jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization,
approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or
the stockholders or any lender of Company is required to be obtained by Company for the issuance of the Securities to Investor or
the entering into of the Transaction Documents; (viii) none of Company’s filings with the SEC contained, at the time they were
filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they were made, not misleading; (ix) during the last
twelve (12) months, Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company
with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such
report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company,
threatened against or affecting Company before or by any governmental authority or non-governmental department, commission, board,
bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material
adverse effect on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company
to perform its obligations under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that
has not been disclosed in a periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been
at any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer” is described in
Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or similar
payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or the
transactions contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance with all
applicable laws and regulations and only to a person or entity that is a registered investment adviser or registered broker-dealer;
(xiv) Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other
persons for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby
and Company shall indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders,
members, managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and reasonable attorneys’ fees) and expenses suffered in respect of any such claimed
Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or
representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or
representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into the
transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise
of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set forth in the
Transaction Documents; (xvi) Company acknowledges that the State of Utah has a reasonable relationship and sufficient contacts to
the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto such that the laws and
venue of the State of Utah, as set forth more specifically in Section 9.2 below, shall be applicable to the Transaction Documents
and the transactions contemplated therein; (xvii) Company acknowledges that Investor is not registered as a ‘dealer’
under the 1934 Act; and (xviii) Company has performed due diligence and background research on Investor and its affiliates and has
received and reviewed the due diligence packet provided by Investor. Company, being aware of the matters and legal issues described
in subsections (i) and (i) above, acknowledges and agrees that such matters, or any similar matters, have no bearing on the
transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such information or legal theory
as a defense to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify, reduce, rescind
or void such obligations.


 






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4.                   Company
Covenants. Until all of Company’s obligations under the Note are paid and performed in full, or within the timeframes
otherwise specifically set forth below, so long as Investor beneficially owns Company’s securities, Company will at all times
comply with the following covenants: (i) Company will timely file on the applicable deadline all reports required to be filed with
the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that
adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly
available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would permit such termination; (ii) the Ordinary Shares shall be listed or quoted for trading on
NYSE or NASDAQ; (iii) trading in Company’s Ordinary Shares will not be suspended, halted, chilled, frozen, reach zero bid or
otherwise cease trading on Company’s principal trading market; (iv) from the Closing Date until five (5) days after the Note
is satisfied in full, Company will not make any Restricted Issuance (as defined below) without Investor’s prior written
consent, which consent may be granted or withheld in Investor’s sole and absolute discretion; and (v) while Company may raise
any capital it deems necessary for its operations, Company shall not enter into any agreement or otherwise agree to any covenant,
condition, or obligation that locks up, restricts in any way or otherwise prohibits Company: (a) from entering into a variable rate
transaction with Investor or any affiliate of Investor, or (b) from issuing Ordinary Shares, preferred stock, warrants, convertible
notes, other debt securities, or any other Company securities to Investor or any affiliate of Investor. For purposes hereof, the
term “Restricted Issuance” means the issuance, incurrence or guaranty of any debt obligations other than trade
payables in the ordinary course of business, or the issuance of any securities that (1) have or may have conversion rights of any
kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion right
varies with the market price of the Ordinary Shares, (2) are or may become convertible into Ordinary Shares (including without
limitation convertible debt, warrants or convertible preferred shares), with a conversion price that varies with the market price of
the Ordinary Shares, even if such security only becomes convertible following an event of default, the passage of time, or another
trigger event or condition; or (3) have a fixed conversion price, exercise price or exchange price that is subject to being reset at
some future date at any time after the initial issuance of such debt or equity security (A) due to a change in the market price of
Company’s Ordinary Shares since the date of the initial issuance or (B) upon the occurrence of specified or contingent events
directly or indirectly related to the business of Company. For the avoidance of doubt, the issuance of Ordinary Shares under,
pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted
Issuance for purposes hereof if the number of Ordinary Shares to be issued is based upon or related in any way to the market price
of the Ordinary Shares, including, but not limited to, Ordinary Shares issued in connection with a Section 3(a)(9) exchange, a
Section 3(a)(10) settlement, or any other similar settlement or exchange. For the further avoidance of doubt, the term Restricted
Issuance does not include ATMs (as defined below), Public Offerings with no variable price components, stock issuances to non-US
persons, securities issued under Company stock plan or pursuant to a registration statement on Form S-8, or the issuance of common
stock in conjunction with acquisitions or transactions with a third party that includes a bona fide commercial relationship provided
that such issuances do not cause a change of control or have variable price mechanisms. For purposes hereof, the term
 “ATM” means a continuous primary offering, whereby Company, with the help of a FINRA-registered broker-dealer as
an agent, sells newly issued equity securities, registered off of a shelf-registration statement, into a securities exchange at
prevailing market prices.


 






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5.                  
Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to
Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:


 


5.1.            
Investor shall have executed this Agreement and delivered the same to Company.


 


5.2.            
Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.


 


6.                  
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Securities at
the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions
are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:


 


6.1.            
Company shall have executed this Agreement and the Note and delivered the same to Investor.


 






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6.2.            
 Company shall have delivered to Investor a fully executed Irrevocable Letter of Instructions to Transfer Agent (the “TA
Letter”) substantially in the form attached hereto as Exhibit B acknowledged and agreed to in writing by Company’s
transfer agent (the “Transfer Agent”).


 


6.3.            
Company shall have delivered to Investor a fully executed Officer’s Certificate substantially in the form attached hereto
as Exhibit C evidencing Company’s approval of the Transaction Documents.


 


6.4.            
Company shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto as
Exhibit D to be delivered to the Transfer Agent.


 


6.5.            
 Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company
herein or therein.


 


7.                  
Reservation of Shares. On or before the date that is six (6) months from the Purchase Price Date (as defined in the Note)
(such date, the “Authorized Increase Date”), Company will reserve a number of Ordinary Shares equal to at least two
(2) times the number of Ordinary Shares obtained by dividing the Outstanding Balance (as defined in the Note) of the Note on the Authorized
Increase Date by the Redemption Conversion Price (as defined in the Note) on the Authorized Increase Date (the “Share Reserve”).
Company further agrees to add additional Ordinary Shares to the Share Reserve in increments of 500,000 shares as and when requested by
Investor if as of the date of any such request the number of shares being held in the Share Reserve is less than two (2) times the number
of Ordinary Shares obtained by dividing the Outstanding Balance (as defined in the Note) as of the date of the request by the Redemption
Conversion Price on the request date.


 


8.                  
Participation Right. Beginning on the Closing Date and ending on the date that the Note is paid in full, Company hereby
grants to Investor a participation right, whereby Investor shall have the right to participate at Investor’s discretion in up to
thirty percent (30%) of the amount sold in any debt or equity financing of Company (other than ATMs or Public Offerings with no variable
price components) (the “Participation Right”). Within two (2) Trading Days following the consummation of a financing
transaction covered by the Participation Right, Company will provide Investor with written notice of the consummation of such transaction,
along with copies of the transaction documents. Investor will then have up to five (5) calendar days to elect to purchase up to thirty
percent (30%) of the amount of debt or equity securities issued in such transaction on the most favorable terms and conditions offered
to any other purchaser of the same securities. The parties agree that in the event Company breaches its obligations with respect to the
Participation Right, Investor’s sole and exclusive remedy shall be to receive, as liquidated damages, an amount equal to twenty
percent (20%) of the amount Investor would have been entitled to invest under the Participation Right. For the avoidance of doubt, Company’s
breach of its obligations with respect to the Participation Right will not be considered a Trigger Event (as defined in the Note) under
the Note.  


 


9.                  
Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction
Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision
set forth in this Section 9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall
govern.


 






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9.1.             Arbitration
of Claims. The parties shall submit all Claims (as defined in Exhibit E) arising under this Agreement or any other
Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of
the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E attached hereto (the
 “Arbitration Provisions”). For the avoidance of doubt, the parties agree that the injunction described in Section
9.3 below may be pursued in an arbitration that is separate and apart from any other arbitration regarding all other Claims arising
under the Transaction Documents. The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally
binding on the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company
represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel
about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the
expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration
Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees
that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.


 


9.2.            
Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah,
without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees
that the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of
the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes
hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and
notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other
agreement between the Transfer Agent and Company, such litigation specifically includes, without limitation any action between or involving
Company and the Transfer Agent under the TA Letter or otherwise related to Investor in any way (specifically including, without limitation,
any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing
Ordinary Shares to Investor for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal
jurisdiction of any state or federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such
court for the purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where
Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares
to Investor for any reason) outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper
venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of
any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company
covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance with Section 9.11
below prior to bringing or filing, any action (including without limitation any filing or action against any person or entity that is
not a party to this Agreement, including without limitation the Transfer Agent) that is related in any way to the Transaction Documents
or any transaction contemplated herein or therein, including without limitation any action brought by Company to enjoin or prevent the
issuance of any Ordinary Shares to Investor by the Transfer Agent, and further agrees to timely name Investor as a party to any such action.
Company acknowledges that the governing law and venue provisions set forth in this Section 9.2 are material terms to induce Investor to
enter into the Transaction Documents and that but for Company’s agreements set forth in this Section 9.2 Investor would not have
entered into the Transaction Documents.


 






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9.3.             Specific
Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to
perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It
is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of
this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which Investor may be entitled under the Transaction Documents, at law or in equity. Company
specifically agrees that: (a) following an Event of Default (as defined in the Note) under the Note, Investor shall have the right
to seek and receive injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its Ordinary Shares or
preferred stock to any party unless the Note is being paid in full simultaneously with such issuance; and (b) following a breach of
Section 4(i) above, Investor shall have the right to seek and receive injunctive relief from a court or arbitrator invalidating such
lock-up. Company specifically acknowledges that Investor’s right to obtain specific performance constitutes bargained for
leverage and that the loss of such leverage would result in irreparable harm to Investor. For the avoidance of doubt, in the event
Investor seeks to obtain an injunction from a court or an arbitrator against Company or specific performance of any provision of any
Transaction Document, such action shall not be a waiver of any right of Investor under any Transaction Document, at law, or in
equity, including without limitation its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents, nor shall
Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata
or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.


 


9.4.            
Cayman Proceeding. Notwithstanding anything herein or in any of the other Transaction Documents to the contrary and without
limiting any other rights and remedies set forth in the Transaction Documents, each of Company and Investor agrees that: (a) Investor
has the right to make an application to the Cayman Islands Court to wind up Company pursuant to Cayman Islands statutes, regulations and
rules, specifically but not limited to the Cayman Islands Companies Act (2021 Revision) as amended, (a “Cayman Proceeding”)
following an Event of Default under the Note if Company fails to cure the Event of Default within (15) Trading Day after receipt of written
notice by Company; (b) the Cayman Islands will be the exclusive venue for the Cayman Proceeding; (c) the Cayman Proceeding will be governed
by Cayman Islands law; and (d) in the event Investor brings a Cayman Proceeding and the Cayman Islands Court rules that there is a bona
fide dispute between the parties with respect to the debt that needs to be resolved, then such dispute between the parties will immediately
be removed to Utah for arbitration pursuant to the Arbitration Provisions.


 


9.5.            
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic
calculation under the Transaction Documents, including without limitation, calculating the Outstanding Balance, Conversion Price, Conversion
Shares, or VWAP (as defined in the Note) (each, a “Calculation”), Company or Investor (as the case may be) shall submit
any disputed Calculation via email or facsimile with confirmation of receipt (i) within two (2) Trading Days after receipt of the applicable
notice giving rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at any
time after Investor learned of the circumstances giving rise to such dispute. If Investor and Company are unable to agree upon such Calculation
within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor (as the case may be), then Investor will
promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar Systems”). Investor shall
cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later than ten (10) Trading Days from
the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation shall be binding upon all
parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by the incorrect party, or if
both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by Unkar Systems. In
the event Company is the losing party, no extension of the Delivery Date (as defined in the Note) shall be granted and Company shall incur
all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents. Notwithstanding
the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting firm other than
Unkar Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will be replaced with
references to such independent, reputable investment bank or accounting firm so designated by Investor.


 






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9.6.            
 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail
(including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission
method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.


 


9.7.            
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.


 


9.8.            
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified
to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.


 


9.9.            
Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company
nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all
prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated
by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into between Company and
Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents.
To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the
Transaction Documents shall govern.


 


9.10.         
Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both
parties hereto.


 


9.11.         
Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall
be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor
or by email to an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation
which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the
United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express
courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following
addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given
to each of the other parties hereto):


 


If to Company:


 


Farmmi, Inc.


Attn: Yefang Zhang, Chief Executive
Officer


Floor 1, Building No. 1, 888
Tianning Street, Liandu District


Lishui, Zhejiang Province


People’s Republic of China
323000


 






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


 





Kaufman
 & Canoles, P.C.


1021 E. Cary Street, Suite 1400


Two James Center


Richmond, VA 23219


Attn: Anthony W. Basch


Email: awbasch@kaufcan.com


 


If to Investor:


 


Streeterville Capital, LLC


Attn: John Fife


303 East Wacker Drive, Suite 1040


Chicago, Illinois 60601


 


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


 


Hansen Black Anderson Ashcraft PLLC


Attn: Jonathan Hansen


3051 West Maple Loop Drive, Suite 325


Lehi, Utah 84043


 


9.12.         
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be
performed by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the
need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its
duties hereunder, whether directly or indirectly, without the prior written consent of Investor, and any such attempted assignment or
delegation shall be null and void.


 


9.13.         
Survival. The representations and warranties of the parties and the agreements and covenants set forth in this Agreement
shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of each party. Each party
agrees to indemnify and hold harmless the other party and all its officers, directors, employees, attorneys, and agents for loss or damage
arising as a result of or related to any material breach by the other party of any of its representations, warranties and covenants set
forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.


 


9.14.         
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


9.15.         
Investor’s Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction
Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and
remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in
equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor
may deem expedient.


 






     10


     


    

 


9.16.          Attorneys’
Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the other to
interpret or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party
all costs and expenses, including reasonable attorneys’ fees incurred therein, including the same with respect to an
appeal. The “prevailing party” shall be the party in whose favor a judgment is entered, regardless of whether
judgment is entered on all claims asserted by such party and regardless of the amount of the judgment; or where, due to the
assertion of counterclaims, judgments are entered in favor of and against both parties, then the judge or arbitrator shall determine
the “prevailing party” by taking into account the relative dollar amounts of the judgments or, if the judgments involve
nonmonetary relief, the relative importance and value of such relief. Nothing herein shall restrict or impair an arbitrator’s
or a court’s power to award fees and expenses for frivolous or bad faith pleading. If (i) the Note is placed in the hands
of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced
through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under the Note or to enforce
the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or other proceedings
affecting Company’s creditors’ rights and involving a claim under the Note; then Company shall pay the costs incurred by
Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other
proceeding, including, without limitation, reasonable attorneys’ fees, expenses, deposition costs, and disbursements.


 


9.17.         
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by
the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision
or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent
or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.


 


9.18.         
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH
PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND
A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT
SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.


 


9.19.         
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement
and the other Transaction Documents.


 


9.20.         
Voluntary Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked
any questions needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction
Documents and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or
has waived the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any
duress or undue influence by Investor or anyone else.


 






     11


     


    

 


9.21.          Document
Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements,
instruments, documents, and items and records governing, arising from or relating to any of Company’s loans, including,
without limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper
originals. The parties hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that
such images shall be accorded the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such
images in lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or
other proceedings, and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this
Agreement or any other Transaction Document shall be deemed to be of the same force and effect as the original manually executed
document.


 


[Remainder of page intentionally left blank;
signature page follows]





 






     12


     


    

 


IN WITNESS WHEREOF, the undersigned
Investor and Company have caused this Agreement to be duly executed as of the date first above written.


 


 


	 	INVESTOR:
	 	 
	 	Streeterville
    Capital, LLC
	 	 
	 	By:	 
	 	 	John
    M. Fife, President




  


	 	COMPANY:
	 	 
	 	Farmmi,
    Inc.
	 	 
	 	By:	 
	 	 	Yefang
    Zhang, Chief Executive Officer




 


[Signature Page to Securities Purchase Agreement]


 









     


     


    

 


ATTACHED EXHIBITS:


 


		Exhibit	A                   
Note



		Exhibit	B                   
Irrevocable Transfer Agent Instructions



		Exhibit	C                   
Secretary’s Certificate



		Exhibit	D                   
Share Issuance Resolution



		Exhibit	E                   
Arbitration Provisions



 






     


     


    

 





Exhibit
E


 


ARBITRATION PROVISIONS


 


1.       Dispute
Resolution. For purposes of this Exhibit E, the term “Claims” means any disputes, claims, demands, causes
of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies whatsoever
arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications between
the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of
formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory
claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration Provisions (defined
below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor’s pursuit of an injunction or other Claim
pursuant to these Arbitration Provisions or with a court will not later prevent Investor under the doctrines of claim preclusion, issue
preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a separate arbitration in the future. The parties
to this Agreement (the “parties”) hereby agree that the Claims may be arbitrated in one or more Arbitrations pursuant
to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all other Claims). The term “Claims”
specifically excludes a dispute over Calculations. The parties to the Agreement hereby agree that the arbitration provisions set forth
in this Exhibit E (“Arbitration Provisions”) are binding on each of them. As a result, any attempt to rescind
the Agreement (or these Arbitration Provisions) or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document
invalid or unenforceable for any reason is subject to these Arbitration Provisions. As a result, any attempt to rescind the Agreement
(or these Arbitration Provisions) or any other Transaction Document) or declare the Agreement (or these Arbitration Provisions) or any
other Transaction Document invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these
Arbitration Provisions. Any capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in the Agreement.


 


2.       Arbitration.
Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted exclusively
in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right
provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the arbitrator rendered
pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon the parties, (b) the sole
and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator,
and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the
Appeal Right, any costs or fees, including without limitation reasonable attorneys’ fees, incurred in connection with or incident
to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement.
The Arbitration Award shall include default interest (as defined or otherwise provided for in the Note, “Default Interest”)
(with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award.
Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.


 


3.       The
Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act,
U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding
the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation
between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions
shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict
with or vary from these Arbitration Provisions.


 


4.       Arbitration
Proceedings. Arbitration between the parties will be subject to the following:


 


4.1       Initiation
of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by
giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under
Section 9.11 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration
will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.11 of
the Agreement (the “Service Date”). After the Service Date, information may be delivered, and notices may be
given, by email or fax pursuant to Section 9.11 of the Agreement or any other method permitted thereunder. The Arbitration Notice
must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims
in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.


 






     


     


    

 


4.2       Selection
and Payment of Arbitrator.


 


(a) Within ten (10)
calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated
as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated
persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed
Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has submitted
to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators
to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators
in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice
of such selection to Company.


 


(b) If Investor fails
to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above,
then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that
are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then,
within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to
Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor
fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to
Investor.


 


(c) If a Proposed Arbitrator
chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator
may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator
declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise
unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.


 


(d) The date that the
Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve
as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator resigns
or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue
the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator
shall be selected under the then prevailing rules of the American Arbitration Association.


 


(e) Subject to Paragraph
4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or
fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default
Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.


 


4.3       Applicability
of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil
Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the
filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence
shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties’
intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between
the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.


 


4.4       Answer
and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the
Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline,
the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such
party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.


 






     


     


    

 





4.5       Related
Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal
proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to
the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration
Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party
files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will
be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails
to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall
be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal
or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined
in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation
Proceedings pursuant to the Arbitration Act.


 


4.6       Discovery.
Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:


 


(a) Written discovery
will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written
discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration.
The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these
Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:


 


(i)       To
facts directly connected with the transactions contemplated by the Agreement.


 


(ii)       To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less
expensive than in the manner requested.


 


(b) No party shall be
allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including
discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions
(excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by
the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated
attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition
fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice, then such party
shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must pay the party defending
the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is deemed to be waived as set
forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys’ fees are
unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.


 


(c) All discovery
requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator and
the other party. The party submitting the written discovery requests must include with such discovery requests a detailed
explanation of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of
Civil Procedure. The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery
requests, to submit to the arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written
discovery requests and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys’
fees and costs and/or challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will
within three (3) calendar days make a finding as to the likely attorneys’ fees and costs associated with responding to the
discovery requests and issue an order that (i) requires the requesting party to prepay the attorneys’ fees and costs
associated with responding to the discovery requests, and (ii) requires the responding party to respond to the discovery requests as
limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery
requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery requests
fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs
associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may
be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery
requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production
subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before
the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth
above.


 






     


     


    

 


(d) In order to allow
a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration
Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not
satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify
such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.


 


(e) Each party may submit
expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement
Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of
all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications, including
a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which the expert has
testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid
for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness one (1) time for
no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in
the expert report.


 


4.6       Dispositive
Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure
(a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator
and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion. Within seven
(7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum
in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar days of delivery
of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and
to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If the applicable party
shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required
above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.


 


4.7       Confidentiality.
All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation
information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party
agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including
without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes
public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such
information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other
party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior
to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives and legal counsel on a need
to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration
Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information
and confidential information upon the written request of either party.


 


4.8       Authorization;
Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the
arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration proceedings
to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must
be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and
directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a
scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable
the arbitrator to render a decision prior to the end of such 120-day period.


 






     


     


    

 





4.9       Relief.
The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator
may not award exemplary or punitive damages.


 


4.10       Fees
and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and
(b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.


 


5.       Arbitration
Appeal.


 


5.1       Initiation
of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period of
thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant elects
to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel of arbitrators
as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the “Appeal
Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect
to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also
pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of
the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant
delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of
this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned.
In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within
the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an
Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph
5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’
agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.


 


5.2       Selection
and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of
the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration
panel (the “Appeal Panel”).


 


(a)       Within ten (10)
calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are
designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five
(5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of
doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator
who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after
the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice
to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select
three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators
from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.


 


(b)
       If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators
within ten (10) calendar days after the Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to
the Appellee so designating the Proposed Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as
 “neutrals” or qualified arbitrators by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice
to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice of its selected
arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such selected arbitrators to serve on the
Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the arbitrators selected by the
Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members of the Appeal Panel from
the Appellant’s list of five (5) arbitrators by providing written notice of such selection to the Appellee.


 






     


     


    

 


(c)        If a selected
Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may
select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed
Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5)
designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process
shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators who have already
agreed to serve shall remain on the Appeal Panel.


 


(d)        The date that
all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email) delivered to
both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal Commencement
Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including
via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead
arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration
Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon
the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal
Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings,
a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel.
If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected
under the then prevailing rules of the American Arbitration Association.


 


(d)        Subject to Paragraph
5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.


 


5.3       Appeal
Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct
a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions
of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious
disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery,
together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal
Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit
the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits,
and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the Arbitration Award.


 


5.4       Timing.



 


(a)       Within
seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel
copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum
to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph
(a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall
fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required
above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed
regardless.


 






     


     


    

 





(b)        Subject
to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days
of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).


 


5.5       Appeal
Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator on
the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and
make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.


 


5.6       Relief.
The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper
under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may
not award exemplary or punitive damages.


 


5.7       Fees
and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded
the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and
the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which,
for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any
part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other
expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation
in connection with the Appeal).


 


6.        Miscellaneous.


 


6.1       Severability.
If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified
to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions
shall remain unaffected and in full force and effect.


 


6.2       Governing
Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles
therein.


 


6.3       Interpretation.
The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation
of, these Arbitration Provisions.


 


6.4       Waiver.
No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party
granting the waiver.


 


6.5       Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.


 


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