Exhibit 10.1


 


CONTRACT CHIEF FINANCIAL OFFICER AGREEMENT


 


THIS CONTRACT CHIEF FINANCIAL
OFFICER AGREEMENT (the “Agreement”) is dated as of the October 1, 2021. It is made and entered into by and between Karat
Packaging Inc., a Delaware corporation, located at 6185 Kimball Ave., Chino, CA 91708 (hereinafter referred to as the “Company"),
and PJ LLP, a California Limited Liability Partnership, located at 800 South Figueroa Street, Suite 780, Los Angeles, CA 90017 (hereinafter
referred to as “PJ”).


 


RECITALS


 


WHEREAS, PJ has specialized
financial skills, experience and knowledge to help the Company with its financial reporting requirements;


 


WHEREAS, the Company is
desirous of retaining (1) PJ to perform general finance and accounting advisory services and (2) Peter Lee, Partner and Co-Founder of
PJ, as Interim Chief Financial Officer, and PJ is desirous of continuing its existing relationship with the Company;


 


WHEREAS, the Company is
willing to enter into an agreement with PJ to provide services for the Company, including the services of Mr. Lee as Interim Chief Financial
Officer, but only upon the terms and condition provided for hereinafter; and


 


NOW, THEREFORE, IN CONSIDERATION
of the mutual promises made herein and certain additional valuable consideration, as provided for hereafter, it is AGREED, that


 


1.            SERVICES.
Engagement of PJ and in connection therewith agrees to perform the following services (the “Services”):


 


(a)         Interim
Chief Financial Officer (“Interim CFO”) services provided by Peter Lee (“Peter”). As Interim CFO, Peter will
consult on various accounting and financial reporting matters with the Company’s Board of Directors, the officers of the Company,
and the heads of the Company’s administrative staff, at reasonable times. Peter shall be responsible for the accuracy of the Company’s
financial results, including reviewing the Quarterly interim financial statements and the required preparation work for the year-end
audit. In net, Peter acts as an external part-time CFO providing the Company with the tools, systems and support necessary to complete
the financial reporting responsibilities of the business as required by the federal securities laws, including reviewing and executing
certifications required by such laws. Peter is expected to devote 40 hours per month to the business of the Company and to all of the
duties that may be required by the terms of this Agreement to the reasonable satisfaction of the Company. Peter is expected to attend
one monthly executive meeting at the Company’s corporate headquarters’ in Chino, CA during the Term of this Agreement. 



 


(b)         In addition,
PJ will also provide general finance and accounting advisory services, including assistance on Company specific projects utilizing its
firm’s personnel, as directed under Peter, and as outlined in Exhibit A. PJ is expected to devote no more than 90 hours
per month to the business of the Company. Under PJ’s discretion, any additional hours incurred in excess of 90 hours per month
is subject to billing at 85% of PJ’s standard hourly rates. 



 






    	 	 	 



     


    




 


The Company agrees to retain
PJ to provide such Services under the terms and conditions set forth herein. PJ agrees to render all Services under this Agreement in
a professional and business-like manner and in full accordance with the terms and conditions of this Agreement. During the Term of this
Agreement, PJ shall devote its energy, skill and best efforts to promote the Company’s business and affairs and to perform their
duties hereunder.


 


2.            TERM
AND SERVICE FEE. The Company shall pay PJ for their Services as follows:


 


2.1        TERM.
This Agreement is effective commencing October 8, 2021 and through March 31, 2022, unless it is terminated earlier in accordance with
Section 6 (the “Term”).


 


2.2        SERVICE
FEE. PJ will be paid a service fee of (1) $15,000 per month for the Interim CFO Services provided by Peter until such time as the
Company appoints a permanent CFO and (2) $20,000 per month for the finance and accounting advisory Services provided by its firm’s
personnel through the end of the Term. The service fee is due at the beginning of each month.


 


The compensation set out above will be
PJ’s sole compensation under this Agreement.


 


3.             INDEPENDENT
CONTRACTOR STATUS. PJ is an independent contractor. PJ and its firm’s personnel shall not be deemed for any purpose to be an
employee or agent of Company, and neither party shall have the power or authority to bind the other party to any contract or obligation.
PJ is not entitled to unemployment insurance or workers compensation insurance and PJ shall be solely responsible for timely remittance
to appropriate authorities of all federal, state, and local taxes and charges incident to the provision of and payment of compensation
for Services, and to the operation of PJ’s business, including but not limited to payment of worker’s compensation insurance
premiums, social security taxes (FICA, FUTA, OASDI, Medicare hospitalization), and federal and state income taxes (including quarterly
estimated taxes). PJ SHALL NOT HOLD ITSELF OUT OR OTHERWISE REPRESENT ITSELF TO ANY PERSON OR ENTITY AS ANYTHING OTHER THAN AN INDEPENDENT
CONTRACTOR OF THE COMPANY, REGARDLESS OF ANY TITLE OR DESIGNATION THAT PJ MAY HOLD WITH THE COMPANY.


 


4.            BEST
EFFORTS OF PJ. PJ is expected to devote the minimum hours per month, as set forth in Subsection 1(b), to the business of the Company
and to all of the duties that may be required by the terms of this Agreement to the reasonable satisfaction of the Company. PJ shall at
all times faithfully, with diligence and to the best of their ability, experience and talents, perform all the duties that may be required
of and from them pursuant to the express and implicit terms hereof to the reasonable satisfaction of the Company. Such Services shall
be rendered at such place or places as the Company and/or PJ shall in good faith require or as the interest, needs, business or opportunity
of the Company shall require.


 


5.            EXPENSES.
PJ is authorized to incur reasonable expenses. The Company shall reimburse PJ for all such out-of-pocket expenses on the presentation
by PJ, from time to time, of an itemized account of such expenditures in accordance with the guidelines set forth by the Internal Revenue
Service.


 


6.            TERMINATION.
PJ can terminate this Agreement by giving the Company sixty (60) days notice to the Company. The Company can terminate this Agreement
by giving PJ sixty (60) days notice. The Company can terminate this Agreement immediately, without penalties, by demonstrating willful
misconduct, malfeasance, gross negligence or other like conduct adversely affecting the best interests of the Company, including, without
limitation, (i) the failure or neglect by PJ to perform their duties hereunder; (ii) the commission of any felony against the Company,
including, without limitation, any fraud against the Company, any of its affiliates, clients or customers of the Company.


 






    	 	 	 



     


    

 


7.             CONFIDENTIALITY.
PJ shall not divulge to others any information they may obtain during the course of their Term relating to their Services for the Company
without first obtaining written permission of the Company.


 


8.            
RETURN OF DOCUMENTS. On termination of PJ’s Services with the Company, or at any time upon the request of the Company or its
affiliates, PJ shall return to the Company all documents, including all copies thereof, and all other property relating to the business
or affairs of the Company, including, without limitation, customer lists, agents or representatives lists, commission schedules and information
manuals, letters, materials, reports, lists and records (all such documents and other property being hereinafter referred to collectively
as the “Materials”), in its possession or control, no matter from whom or in what manner they may have acquired such property.
PJ acknowledges and agrees that all of the Materials are property of the Company and releases all claims of right of ownership thereto.


 


During the Term of PJ’s
services to the Company, PJ may accumulate records containing data that should be reflected in the Company’s books and records.
The Company will determine that all such data, if necessary, will so be reflected. Accordingly, the Company will not expect PJ to maintain
copies of such records in our possession.


 


9.   
          REPORTING. Upon request of the Company, PJ shall provide regular reports to the Company.


 


10.          OTHER
ACTIVITIES. During the Term of PJ’s Services to the Company, PJ is free to engage in other business activities, except that
PJ may not accept work, enter into contracts, or accept obligations inconsistent or incompatible with PJ’s obligations or the scope
of Services to be rendered for the Company under this Agreement.


 


11.          INDEMNIFICATION.


 


11.1       
Of Company by PJ. At all times after the effective date of this Agreement, PJ shall indemnify the Company and its officers, members,
managers, employees, owners, subcontractors, sublicensees, affiliates, subsidiaries, successors, and assigns (collectively, the “Company
Indemnitees”) from all damages, liabilities, expenses, claims, or judgments (including interest, penalties, reasonable attorneys’
fees, accounting fees, and expert witness fees) (collectively, the “Claims”) that the Company Indemnitees may incur and that
arise from:


  


	 	(i)	
    PJ’s negligence or willful misconduct
arising from PJ’s carrying out of its obligations under this Agreement; 



 


	 	(ii)	
    PJ’s breach of any of its obligations
or representations under this Agreement; or 



 


	 	(iii)	PJ’s breach of its express representation that it is an independent contractor and in compliance with all applicable laws related to work as an independent contractor.


 


11.2        Of
PJ by Company. At all times after the effective date of this Agreement, the Company shall indemnify PJ and its officers, members,
managers, employees, agents, contractors, sublicensees, affiliates, subsidiaries, successors, and assigns (collectively, the “PJ
Indemnitees”) from all Claims that PJ indemnitees may incur arising from:


 






    	 	 	 



     


    

 


	 	(i)	
    The Company’s operation of its business; 



 


	 	(ii)	
    The Company’s breach or alleged breach
of, or its failure or alleged failure to perform under, any agreement to which it is a party; or 



 


	 	(iii)	The Company’s breach of any of its obligations or representations under this Agreement. However, the Company is not obligated to indemnify PJ indemnitees if any of these Claims result from PJ indemnitees’ own actions or inactions.


 


12.          FORCE
MAJEURE. A party will not be considered in breach of or in default because of, and will not be liable to the other party for, any
delay or failure to perform its obligations under this Agreement by reason of pandemic, fire, earthquake, flood, explosion, strike, riot,
war, terrorism, or similar event beyond that party’s reasonable control (each a “Force Majeure Event”). However, if
a Force Majeure Event occurs, the affected party shall, as soon as practicable, notify the other party of the Force Majeure Event and
its impact on performance under this Agreement and use reasonable efforts to resolve any issues resulting from the Force Majeure Event
and perform its obligations under this Agreement.


 


13.
          ASSIGNMENT OF CONTRACT. PJ may not assign its rights under this Agreement without the
written consent of the Company.


 


14.          GOVERNING
LAW. This Agreement, and the rights and obligations of the parties hereto, shall be governed by and construed in accordance with the
laws of the State of California without regard to principles of conflict of laws. Each of the parties waives any right to object to the
jurisdiction or venue of such courts or to claim that such courts are an inconvenient forum.


 


15.          AMENDMENT.
No amendment to this Agreement will be effective unless it is in writing and signed by a party.


 


16.         
COUNTERPARTS; ELECTRONIC SIGNATURES.


 


16.1.        Counterparts.
The parties may execute this Agreement in any number of counterparts, each of which is an original but all of which constitute one and
the same instrument.


 


16.2.        Electronic
Signatures. This Agreement, agreements ancillary to this Agreement, and related documents entered into in connection with this Agreement
are signed when a party’s signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated
in all respects as having the same force and effect as original signatures.


 


17.          NOTICES.
Each party giving or making any notice, request, demand, or other communication required or permitted by this Agreement shall give that
notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this Agreement: personal
delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees
prepaid), or email. No notice or other required or permitted communication shall be effective unless and until received. A notice is effective
only if the party giving notice complies with the terms stated herein. A party shall address notices under this section to a party at
the following addresses:


 






    	 	 	 



     


    

 


If to the Company:


 


Karat Packaging Inc.


6185 Kimball Ave.


Chino, CA 91708


 


If to PJ:


 


PJ LLP


800 South Figueroa Street,


Suite 780


Los Angeles, CA 90017


 


18.          MODIFICATION
AND WAIVER. No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this
Agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of
any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar,
and no waiver will constitute a continuing waiver, unless the writing so specifies.


 


19.           REMEDIES
FOR BREACH. PJ recognizes and acknowledges that the remedy at law for a breach by PJ of any of the covenants contained in this Agreement
shall be inadequate. PJ agrees that the Company, in addition to all other legal and equitable remedies it may have, shall have the right
to injunctive relief to enforce the provisions of this Agreement if there is such a breach or threatened breach. The Company hereby expressly
reserves the right to offset any costs it incurs as a result of any breach of this Agreement by PJ against any amounts payable to PJ hereunder
and the right to terminate this Agreement upon written notice for a breach of this Agreement by PJ. Both parties shall have all other
rights and remedies available at law or in equity for a breach or threatened breach of this Agreement. PJ agrees that all sums payable
to it under this Agreement shall be available to the Company to satisfy PJ’s breach of this Agreement and to satisfy PJ’s
indemnity agreement set forth herein. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to recover its reasonable costs and attorneys’ fees from the other party.


 


20.          SEVERABILITY.
If any provision of this Agreement is held to be illegal, invalid or unenforceable, such provision may be removed. Thereafter, the Agreement
shall be considered to be legal, valid or enforceable provision as though the removed provision had never comprised a part of the Agreement.
The remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by their removal from this Agreement.


 


21.   
       NO PARTNERSHIP OR JOINT VENTURE. Nothing in this Agreement is either intended and should not in any way
be construed to create any form of joint venture, partnership or agency relationship of any kind between the Company and PJ. The
parties expressly disclaim any intention of any kind to create any such relationship between themselves.


 


22.     
     ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement, representation and understanding of the parties
hereto with respect to the subject matter hereof, and no amendment or modification shall be valid or binding unless made in writing
and signed by the parties to this Agreement. This Agreement supersedes any and all other agreements, either oral or written, between
the Company and PJ with respect to the subject matter hereof, and contains all of the covenants and agreements between the parties
relating in any way to PJ’s services for the Company. Neither party was induced to enter this Agreement by, and neither party
is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this
Agreement. Except as set forth expressly in this Agreement, there are no conditions precedent to this Agreement’s
effectiveness.


 






    	 	 	 



     


    

 


23. HEADINGS. The descriptive
headings of the sections and subsections of this Agreement are for convenience only, and do not affect this Agreement’s construction
or interpretation.


 


 


IN WITNESS WHEREOF, the parties have executed
this Agreement or caused this Agreement to be executed on the date first set forth above.


 


	
     

    Karat Packaging Inc.
	 
	(“The Company”)	 
	 	 
	/s/  Alan Yu	 
	By: Alan Yu	 
	Title: Chief Executive Officer	 
	 	 
	 	 
	Date:	10/1/2021	 
	 	 
	
     

    PJ LLP
	 
	(“PJ”)	 
	 	 
	/s/  Peter Lee	 
	By: Peter Lee	 
	Title: Partner & Co-Founder	 
	 	 
	
     

    Date:
	
     

    10/1/2021
	 


 


 






    	 	 	 



     


    




 


Exhibit A


 


During the Term of our engagement, PJ will provide
finance and accounting advisory services to the Company. We will assist with preparing the following documents to be filed with the Securities
Exchange Commission (“SEC”):


  


	 	1.	Assistance with preparation of the required financial data to be included in the Company’s Form 10-Q Filing with the quarter ending September 30, 2021 and drafting the required documents to be included in the Company’s Form 10-Q Filing. 


 


	 	1.	Assistance with preparation of the required financial data to be included in the Company’s Form 10-K Filing for the fiscal year ended December 31, 2021 and drafting the required documents to be included in the Company’s Form 10-K Filing. 


 


In addition, PJ will also assist with the following
projects during the term of our engagement:


 


	 	1.	
    Supervise and direct the Company’s finance
    and accounting personnel, including reviewing accounting transactions for proper accounting treatment.

     



 


	 	2.	
    Assist with the Company’s month-end and
    quarter-end closing procedures.

     



 


	 	3.	
    Assist the Company with implementing and streamlining
    its month-end and quarter-end closing process.

     



 


	 	4.	
    Provide training and support to the Company’s
    finance and accounting personnel as needed.

     



 


	 	5.	Provide general finance and accounting consulting.