Exhibit 10.1


 


Note Purchase
Agreement


 


This
Note Purchase Agreement (this “Agreement”), dated as of November 23, 2021, is entered into by and between
Aridis Pharmaceuticals, Inc., a Delaware corporation (“Company”),
and Streeterville Capital, LLC, a Utah limited liability company, 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, that certain Secured
Promissory Note #1, in the form attached hereto as Exhibit A, in the original principal amount of $5,250,000.00 (“Note
#1”), and (b) subject to the satisfaction of the Note #2 Purchase Condition (as defined below), that certain Secured Promissory
Note #2 in the form attached hereto as Exhibit B, in the original principal amount of $5,250,000.00 (“Note #2,”
and together with Note #1, the “Notes”)


 


C.            This
Agreement, the Notes, the Security Agreement (as defined below) 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”.


 


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 Notes.


 


1.1.            Purchase
of Notes. Company shall issue and sell to Investor and Investor shall purchase from Company the Notes. In consideration thereof, Investor
shall pay the Purchase Price (as defined below) to Company; provided, however, that Investor’s obligation to deliver the
Note #2 Purchase Price (as defined below) is subject to the satisfaction of the following condition (the “Note #2 Purchase Condition”):
no material breach of this Agreement or Event of Default (as defined in Note #1) under Note #1 shall have occurred. Subject to satisfaction
of the applicable conditions, Investor shall deliver the Note #2 Purchase Price to Company on the Second Closing Date (as defined
below).


 


1.2.            Form of
Payment. On the First Closing Date (as defined below), Investor shall pay the Note #1 Purchase Price to Company via wire transfer
of immediately available funds against delivery of Note #1. On the Second Closing Date, Investor shall pay the Note #2 Purchase
Price to company via wire transfer of immediately available funds against delivery of Note #2.


 


1.3.            Closing
Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 (as applicable)
below, the date of the issuance and sale of Note #1 pursuant to this Agreement (the “First Closing Date”) shall be
November 22, 2021, or another mutually agreed upon date. The closing of Note #1 (the “First Closing”) shall occur
on the First 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. Subject to the satisfaction of the Note #2 Purchase Condition and
the conditions set forth in Section 5 and Section 6 (as applicable) below, the date of the issuance and sale of Note #2 pursuant
to this Agreement (the “Second Closing Date”, together with the First Closing Date, the “Closing Dates”,
and individually, each a “Closing Date”) shall be February 20, 2022. The closing of Note #2 (the “Second
Closing”, together with the First Closing, the “Closings”, and individually, each a “Closing”)
shall occur on the Second 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.


 






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1.4.            Collateral.
The Notes shall be secured by the collateral set forth in that certain Security Agreement attached hereto as Exhibit C listing
certain of Company’s assets as security for Company’s obligations under the Transaction Documents (the “Security
Agreement”).


 


1.5.            Original
Issue Discount. The Notes carry an aggregate original issue discount of $500,000.00 (the “OID”), which OID is
allocated equally between each of the Notes. The “Note #1 Purchase Price”, therefore, shall be $5,000,000.00, computed
as follows: $5,250,000.00 initial principal balance, less $250,000.00 of the OID. The “Note #2 Purchase Price” (and
together with the Note #1 Purchase Price, the “Purchase Price”) shall also be $5,000,000.00, computed as follows:
$5,250,000.00 initial principal balance, less the OID.


 


2.            Investor’s
Representations and Warranties. Investor represents and warrants to Company that as of each 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; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D of the 1933 Act.


 






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3.            Company’s
Representations and Warranties. Company represents and warrants to Investor that as of each 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; (iii) Company has registered its shares of common stock, $0.0001 par value per share (the “Common
Stock”), under Section 12(g) 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) the 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 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 Common Stock, 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 Notes 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) 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
attorneys’ fees) and expenses suffered in respect of any such claimed or existing 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 7.2 below, shall be applicable to the Transaction Documents
and the transactions contemplated therein; and (xvii) Company has performed due diligence and background research on Investor
and its affiliates including, without limitation, John M. Fife, and, to its satisfaction, has made inquiries with respect to all matters
Company may consider relevant to the undertakings and relationships contemplated by the Transaction Documents including, among other
things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;SEC Civil
Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. In addition, certain
affiliates of Investor are involved in ongoing litigation with the SEC regarding broker-dealer registration (see SEC Civil Case
No. 1:20-cv-05227 (N.D. Ill.)). Company, being aware of the matters described in subsection (xvii) 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 as a defense to performance of its obligations under the Transaction Documents or in
any attempt to avoid, modify or reduce such obligations.


 






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4.            Company
Covenants. Until all of Company’s obligations under the Notes are paid and performed in full, or within the timeframes otherwise
specifically set forth below, 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
Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ, (c) OTCQX, or (d) OTCQB; and (iii) Company
will use its reasonable best efforts for trading in Company’s Common Stock not to be suspended, halted, chilled, frozen, reach
zero bid or otherwise cease trading on Company’s principal trading market.


 


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


 


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


 


5.2.            Investor
shall have delivered the Note #1 Purchase Price or the Note #2 Purchase Price, as applicable, 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 Notes at the Closings is subject
to the satisfaction, on or before the Closing Date, of each of the following applicable 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 Security Agreement and delivered the same to Investor.


 


6.2.            Solely
with respect to the First Closing, Company shall have executed and delivered Note #1 to Investor.


 


6.3.            Solely
with respect to the Second Closing, Company shall have executed and delivered Note #2 to Investor.


 


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


 


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.            Miscellaneous.
The provisions set forth in this Section 7 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 7 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.


 






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7.1.            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 7.3 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.


 


7.2.            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, 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, and (iii) 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 7.12 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) that is related in any way to the Transaction Documents or any transaction contemplated
herein or therein, 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 7.2 are material terms to induce Investor to enter into the Transaction Documents
and that but for Company’s agreements set forth in this Section 7.2 Investor would not have entered into the Transaction Documents.


 


7.3.            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 following an Event of Default (as defined in the Notes) under either of the Notes, Investor shall have the right to seek and
receive injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its common or preferred stock to any
party unless all outstanding Notes are being paid in full simultaneously with such issuance. 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.


 






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7.4.            No
Shorting. During the period beginning on the Closing Date and ending on the date the Notes have been repaid in full or sold by Investor
to a third party that is not an affiliate of Investor, Investor will not directly or through an affiliate engage in any open market
Short Sales (as defined below) of the Common Stock; provided; however, that unless and until Company has affirmatively demonstrated
by the use of specific evidence that Investor is engaging in open market Short Sales, Investor shall be assumed to be in compliance
with the provisions of this Section 7.4 and Company shall remain fully obligated to fulfill all of its obligations under the Transaction
Documents; and provided, further, that (i) Company shall under no circumstances be entitled to request or demand that Investor either
(A) provide trading or other records of Investor or of any party or (B) affirmatively demonstrate that Investor or any other
party has not engaged in any such Short Sales in breach of these provisions as a condition to Company’s fulfillment of its obligations
under any of the Transaction Documents, (ii) Company shall not assert Investor’s or any other party’s failure to demonstrate
such absence of such Short Sales or provide any trading or other records of Investor or any other party as all or part of a defense to
any breach of Company’s obligations under any of the Transaction Documents, and (iii) Company shall have no setoff right with
respect to any such Short Sales. As used herein, “Short Sale” has the meaning provided in Rule 200 promulgated
under Regulation SHO under the 1934 Act.


 


7.5.          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.


 


7.6.            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.


 


7.7.            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.


 


7.8.            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.


 






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7.9.            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.


 


7.10.          No
Reliance. Company acknowledges and agrees that neither Investor nor any of its officers, directors, members, managers, representatives
or agents has made any representations or warranties to Company or any of its officers, directors, representatives, agents or employees
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, agents or representatives other than as set forth in the Transaction Documents.


 


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


 


7.12.            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, or by facsimile (with successful transmission confirmation), (ii) the earlier of the date delivered or
the third business 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 business 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:


 


Aridis Pharmaceuticals, Inc. 


Attn: Vu Truong 


983 University Avenue, Bldg.
B 


Los Gatos, California 95032


 


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 K. Hansen 


3051 West Maple Loop Drive, Suite 325 


Lehi, Utah 84043


 






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7.13.            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 without the prior
written consent of Investor.


 


7.14.            Survival.
The representations and warranties of Company 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 Investor. Company agrees to indemnify and hold
harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related
to any breach or alleged breach by Company 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.


 


7.15.            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.


 


7.16.            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.


 


7.17.            Attorneys’
Fees and Cost of Collection. In the event of any arbitration or action at law or in equity to enforce or interpret the terms of this
Agreement or any of the other Transaction Documents, the parties agree that the party who is awarded the most money (which, for the avoidance
of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) shall be
deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the attorneys’
fees, deposition costs, and expenses paid by such prevailing party in connection with arbitration or litigation without reduction or
apportionment based upon the individual claims or defenses giving rise to the fees and expenses. 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) any 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 either Note
or to enforce the provisions of such Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Company or other
proceedings affecting Company’s creditors’ rights and involving a claim under either 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, attorneys’ fees, expenses, deposition costs, and disbursements.


 


7.18.            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.


 






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7.19.            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.


 


7.20.            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.


 


7.21.            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.


 


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


 






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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:	/s/ John Fife                              
	 	 	John M. Fife, President
	 	 
	 	COMPANY:
	 	 
	 	Aridis Pharmaceuticals, Inc.
	 	 
	 	By:	/s/ Vu Truong 
	 	 	Vu Truong, CEO




 


ATTACHED EXHIBITS:


 


	Exhibit A	Note #1
	Exhibit B	Note #2
	Exhibit C	Security Agreement
	Exhibit D	Officer’s Certificate
	Exhibit E	Arbitration Provisions




 


[Signature
Page to Note Purchase Agreement]


 






     


     


    

 


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. 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 parties 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. These Arbitration Provisions shall also survive any termination
or expiration of the Agreement. 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 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 Notes, “Default Interest”)
(with respect to monetary awards) at the rate specified in the Notes 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 7.12
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 7.12 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 7.12 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.


 






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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.


 






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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.


 






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(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.


 






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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.


 






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(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.


 






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(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 Notes 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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