Document:

Fulfillment
and CUSTOMER SUPPORT Services AGREEMENT

OVERVIEW

 

Good for You (GFY) is a wholly owned
subsidiary of Buy DMI, Inc.; a well-established, full-service brand development, brand management, marketing and fulfillment company.
E-Commerce and online shoppers purchase goods online based on their emotions and online reviews; so, it’s critical to optimize
your fulfillment process to satisfy that end user – your customer. Buy DMI, Inc. will enhance your e-commerce fulfillment
with our best in class operations. We understand the processes and sales cycles associated with the industry.

For packaging and shipping products,
our fulfillment team is fully trained and committed to excellence in every facet of the package delivery process. Depending on
your specific requests, we can utilize customized boxes or packaging tape with your company’s logo. We apply cutting edge
seamless e-commerce fulfillment technology for instant order processing and inventory management. Both our warehouse inventory
management system, and our order processing technology, is continuously synchronized and updated, allowing your inventory data
to be precise and accurate. Our proprietary integrated shipping software provides benefits such as real-time package tracking and
various delivery options; allowing the option to select a delivery option that is either the most expeditious or the most cost
effective. Such benefits result in increased sales of your product. Increased sales translate into escalated gross revenue for
your company. A summary of the benefits gained through drawing upon our fulfillment, customer service, and customer support services
are outlined below:

1)Increased Positive Customer Feedback

2)       Reduced Chargeback
Claims

3)       Reduced Return
Rates

4)       Reduced Refund
Rates

5)       Handling
Reverse Logistics

6)       Enhanced
Product Authenticity

7)       Reduced Late
Shipment Rates

8)       Reduced Pre-Fulfillment
Cancellation Rates

9)       On
Time Delivery (Current 2018 rate for on-time delivery is over 99%)

10)       Response
Times - Under 24 hours

11)       Same Day
Validated Tracking

Our passion for what we do is tangible;
evident more so in what we deliver than any claims we make. Our aspirations drive our motivation to ensure all customers receive
exemplary service, expertise, and the best support in the business.

GFY can both deliver your
shipment to its destination, and we can handle a customer return. Reverse logistics management is important for you AND your customer.
Our expedited process helps your customers safely process their returns. We ensure YOUR customer has a positive experience that
leaves them feeling content, regardless of the transaction being a return.

    	 	1	 

    	 

    

 

Increased revenue for HEMPd
will occur through what we reasonably foresee as:

		1.	An increase in the number of customers

		2.	An increase in the average transaction amount

		3.	An increase in the frequency of transactions per customer

		4.	A reduction in general operating costs. 

 

One
cause for a reduction in your overhead is realized through the ability to take advantage of our reduced, contracted shipping rates.
Given our high volume of shipments, combined with our knowledge of the package delivery industry, we’ve negotiated highly
favorable rates with UPS. Assimilating GFY into your business means those reduced shipping rates are passed on to your business.
To further clarify our large volume shipping capabilities, we successfully handle the packaging and shipping of approximately
60,000 plus packages monthly.

 

OBJECTIVE

Package Delivery Solutions
that Help You Do More, Get More, and Spend Less.

We provide measured results with
our improved logistics process. We will reduce your shipping costs, minimize order errors, and lower warehousing expenditures.
Outsourcing fulfillment and customer support to Buy DMI, Inc. means the elimination of numerous time consuming and labor-intensive
concerns. Including, but not limited to, do you need to increase your payroll to account for the additional fulfillment staff?
Are your staff members trained in handling order processing? Are they trained in customer service? Do they know how to operate
the machinery and programs involved in large volume shipping? Are they certified to operate a forklift? Do I need to rent additional
space to store my products? How much capital do I need to allocate towards packaging materials? How is this going to impact my
various insurance rates? What’s my tax exposure and what deductions are available? How am I going to handle the tax ramifications?
All the above concerns, and more – gone. You can offer more competitive pricing while benefitting from our wide range of
professional services.

CONCLUSION

Buy DMI, Inc. would welcome working
with Rocky Mountain Hemp Company, a Colorado Corporation, hereafter referred to as “RMHC” in selling
its product, HEMPd, in the capacity of a full-service, fulfillment solution. Outsourcing your customer support and fulfillment
obligations to a company specializing in the area is a smart delegation of your business obligations. You can’t rise above
where your company currently is unless you delegate tasks that are currently fulfilling an overabundance of your time now; or
delegate what could otherwise be handled by a company specializing in the area. Delegation to us avoids the risk of your company
becoming overloaded, overburdened, and ineffective; inextricably intertwined in the minutiae of processing orders, providing customer
service, packaging, and shipping on time. Collaborating with us for your customer support and fulfillment services means your
attention can then be focused on more important goals; such as your company’s expansion, evolution, and gain over your competitors.
We offer a blended, multi-faceted, account management fulfilment service allowing us to serve. We handle both bulk and small individual
orders. To maintain your brand and help your business grow, all orders are shipped using “HEMPd” as the shipper
and fulfiller.

 

    	 	2	 

    	 

    

Our Fulfillment Services Include:

Lower Domestic and International
Shipping RatesAutomated Shipping Carrier Selection

Same Day Processing Times
- Monday-FridayAutomated Shipping and Delivery Notifications

Custom Reporting Available
DailyControlled Inventory

Custom Branded HEMPd Shipping
LabelCustom Branded HEMPd Packing Slips

Secure Storage in Ambient
Temperature WarehouseSecurity Cameras 24/7.

Returns Management / Reverse
LogisticsE-Commerce Fulfillment

Clean Team Fulfillment CenterFlexible,
Scalable, Custom Tailored Outsourcing Fulfillment Plans

 

A
few Additional benefits of our fulfillment software:

	Easily create new orders,
	Search and edit orders by a variety of variables,
	View inventory levels,
	Receive low inventory alerts, and manage industry triggers,
	Check return statuses,
	View invoices and inventory reports.

	
         

        PROPOSAL:

         

        Your company must grow to remain competitive, gain market
        share, and meet the demands of your customers. Fail to change with the times and prepare to fail. Delegating fulfillment and customer
        support to Buy DMI, Inc. allows your company to adapt to the ever-changing business environment. E-commerce is an ultra-competitive
        industry that presents numerous challenges associated with distribution systems, logistics, staff, marketing, and customer service.
         Comprehensive order management and fulfillment technology is equally as important as reliable, secure storage. With the right
        fulfillment software solutions, you can maximize your selling opportunities and easily integrate with a wide range of e-commerce
        opportunities.

         

        We have developed solutions to help your business stay ahead.
        We can take your order management process and automate many of the manual steps in your delivery process. Our solution easily integrates
        with yours and will enable HEMPd to fully realize the benefits. Most importantly, our
        solutions will ensure HEMPd can increase growth and realize improvements in your profitability,
        sales closure, customer satisfaction, and sales metrics.

        

 

    	 	3	 

    	 

    

 

	SERVICE:	COST:	SERVICE DESCRIPTION:
	Integrations	$X-$X/month	This
        process will create an inventory and shipping management system customized for each individual company. The inventory
        and shipping management system collects all orders from customers made through your website(s), or any of our website(s).
        We assume responsibility for creating the necessary protocols for accurate order collection, inventory reporting, automated
        real time order tracking, shipped order reporting.

	SERVICE:	COST:	SERVICE DESCRIPTION:
	Inventory Storage

	$XX per pallet/month

	This
        is a monthly charge per pallet of stored goods. Inventory will be organized, labeled, binned, and stored on one of our
        industrial strength steel warehouse shelves. All inventory on every shelf is entered into our inventory management system.

	SERVICE:	COST:	SERVICE DESCRIPTION:
	Receiving

	$XX per pallet

	This
        is a flat charge per pallet of product received. Inventory will be organized, labeled, binned, and stored on one of our
        industrial strength steel warehouse shelves. All inventory on every shelf is entered into our inventory management system.

	SERVICE:	COST:	SERVICE DESCRIPTION:
	Pick Pack & Ship

	$XX plus XX

	Each
        order will have a flat charge of $XX plus XX cents for each additional unit. An order of three units would be $XX. Standard
        packaging included.

	SERVICE:	COST:	SERVICE DESCRIPTION: 
	Order Fulfillment Shipping

	Cost plus XX%

	As
        mentioned, we have preferred rates with UPS. Our preferred and negotiated rates, plus X% added to our carrier fee, is
        the amount payable by (name of company). All shipment costs will be available at the time the time of shipment of the
        order.

         

	SERVICE:	COST:	SERVICE DESCRIPTION:
	Return Shipping	Cost plus XX%	All
        returns will require customer service support and an electronic return shipping label. This is a X% charge plus the cost
        of the return carrier fee.

         

	SERVICE:	COST:	SERVICE DESCRIPTION:
	Customer Service Monthly

	$XX	We
        do not believe in phone trees or using customer service representatives that are anything less than 100% fluent in English.
        Using our company for fulfillment and customer support, means you gain access to our entire customer service department.
        Your customers will speak to a human being in 45 seconds or less. Our staff is well trained to sell, courteous, and provide
        every caller with an excellent experience. We assign your company a new phone number, or your email to our customer service
        team.

         

	SERVICE:	COST:	 SERVICE DESCRIPTION:
	Hourly Rates	$XX/Man Hour

	Container
        shipments are charged $X per man hour to unload & receive Any special request or custom services are billed $X per
        man per hour.

    	 	4	 

    	 

    

Reservation of Rights to Content:

 

If any company utilizing fulfillment
services provided by Buy DMI, Inc. wishes to utilize content created, altered, or enhanced by Buy DMI, Inc. a written request must
be submitted via U.S. Mail to: Buy DMI, Inc. Attn: Vendor / Manufacturer Products Matters, Eliot Toscano, 9942 State Road 52, Hudson
FL 34669. The request for approval must be submitted no later than 30 calendar days prior to the date upon which the intended
use is contemplated. A request shall not be considered approved unless an express response is received from Buy DMI, Inc.

 

Defective Merchandise:

 

If merchandise sold under this
agreement is determined to be defective and returned by the customer, all associated return costs such as packaging, shipping,
and restocking, will be granted to HEMPd in the form of credit from Buy DMI, Inc. These credit issuances will be submitted
in the form of a Flat, XLS, CSV, Text, or Word file; whenever Buy DMI, Inc. requests similar credits for their package delivery
company.

 

Items Not in Compliance:

 

Buy DMI, Inc. is fully absolved
from any responsibility, obligation, or duty, with respect to any item that does not comply with what Buy DMI, Inc. reasonably
expected to receive. The company utilizing Buy DMI, Inc.’s services noted under this contractual agreement shall be solely
responsible for all costs involved in removing any non – conforming goods from Buy DMI, Inc.’s facility.

 

Integration Clause:

 

This Agreement, along with any
exhibits, appendices, addenda, schedules, and amendments hereto, encompasses the entire agreement of the parties, and supersedes
all previous understandings and agreements between the parties, whether oral or written. The parties hereby acknowledge and represent,
by affixing their signatures hereto, that said parties have not relied on any representation, assertion, guarantee, warranty, collateral
contract or other assurance, except those set out in this Agreement, made by or on behalf of any other party or any other person
or entity whatsoever, prior to the execution of this Agreement. The parties hereby waive all rights and remedies, at law or in
equity, arising or which may arise as the result of a party’s reliance on such representation, assertion, guarantee, warranty,
collateral contract or other assurance, provided that nothing herein contained shall be construed as a restriction or limitation
of said party’s right to remedies associated with the gross negligence, willful misconduct or fraud of any person or party
taking place prior to, or contemporaneously with, the execution of this Agreement.

 

No Alterations or Amendments:

 

No changes are permitted as any
alteration or amendment unless such alteration or amendment is made in writing and signed by all necessary parties. If any portion
of this agreement should be deemed invalid, the remaining provisions shall continue in full force and effect as if the invalid
portion was never included.

 

Forum Selection Clause and
Governing Law:

 

Jurisdiction regarding any disputes
that arise under this agreement shall be heard in Pasco County, Florida. Florida Law applies to all provisions of this agreement.
If Buy DMI, Inc. must incur legal fees and costs in order to enforce the terms of the agreement, they are entitled to be reimbursed
entirely by the party against whom enforcement is sought.

 

Insurance Coverage:

 

Buy DMI, Inc. reserve the
right to request copies of all insurance coverage policies and declaration sheets applicable to the goods relevant to this
agreement. Buy DMI, Inc. does not have any title, interest, or ownership of RMHC goods in their possession. Buy DMI, Inc does
have the responsibility, or obligation with respect to the safety and security of the items stored in their warehouse until
the items are placed in transit. After one or more items leave Buy DMI, Inc.’s premises for shipment, Buy DMI, Inc. is
responsible to investigate any problems occurring in shipment to customers and file any claims with the appropriate carriers
and make sure that the end customer is satisfied. Thereafter, any party in a position to exercise care, custody, or control
over the goods in question, or whoever is the intended recipient, is the financially responsible party. Buy DMI, Inc. agrees
to follow packaging guidelines in the packaging of items to provide a delivery package as safe as is reasonably possible.
These packaging guidelines include, but are not limited to, packaging each item with no less than 2” (two inches) of
packaging material surrounding the item on all sides. Furthermore, under no circumstances will Buy DMI, Inc.be liable for any
damaging or loss producing event, transaction, or occurrence, that another party could have purchased insurance coverage for,
or should have purchased coverage for; regardless of whether the loss or damage was foreseeable or not. Buy DMI, Inc. has a
strict quality control process that protects all sellers and both low and high value goods. All storage, packing, and
shipping areas are video-tracked to prevent theft, packing errors, shipping damage, and even fraud prevention practice losses
due to customer credit card fraud.

    	 	5	 

    	 

    

 

Buy DMI, Inc. shall be solely
responsible for taking out and maintaining in full force and effect at its expense (throughout the term of this Agreement) all
insurance coverage, with financially safe and reputable insurers, the following insurance coverage and RMHC as the loss
Payee (except for third-party liability insurance) for each of such insurance coverage:

 

Buy DMI, Inc. shall arrange insurance
coverage, at its own expense, for the storage related risks (fire, theft, water, war, and robberies, etc.) for entire Goods for
the full period from the arrival of the Goods at, to departure of the Goods from the Warehouse.

 

Buy DMI, Inc shall furnish RMHC
with a copy of a certificate of insurance evidencing the aforesaid coverage.

 

Buy DMI, Inc shall comply with
all relevant federal, state and local laws and regulations regarding the safeguarding and handling of Goods

 

Timeline and Payment

 

Integration, customer service staff
training, and the initial setup process can take 10-20 business days to complete. Once complete, (HEMPd) will send their
first shipment of product to: Buy DMI, Inc.9942 SR 52 Hudson FL 34669. An advanced retainer Payment of $XX per month will be due
on the 15th of every month.

 

Reporting will be supplied to HEMPd
in an excel format on or about the 10th of every month with the itemization of all shipments and all above listed services.
The itemization of all services will determine whether there’s a credit or incremental charge against the advanced retainer
for the month prior.

 

Non – Assignment:

 

Neither this Agreement, nor any
of the rights, interests or obligations of the Parties under this Agreement, shall be assigned by any Party (whether by operation
of law or otherwise) without the prior written consent of Buy DMI, Inc. The rights shall not be mortgaged, liened, or otherwise
encumbered. Notwithstanding the foregoing, Buy DMI, Inc. may assign its rights hereunder. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the respective successors and assigns of Buy DMI, Inc. the Parties.

 

Terms & Conditions

 

This agreement can be cancelled
at any time with written notice sent via email to ian@buydmi.com and matt@buydmi.com If notice of cancellation is sent via e-mail,
please include CANCELLATION NOTICE in the subject line of your email. Notice of cancellation can also be sent via regular mail
to: Buy DMI, Inc.9942 State Road 52, Hudson, FL 34669. Buy DMI, Inc. reserves the right to cancel this agreement at any time, with
30 days written notice. We reserve the right to send notice of cancellation via e-mail or regular mail. Please provide one or more
designated e-mail addresses and a confirmed mailing address in the spaces provided below:

michael@rockymountainhighbrands.com

john@rockymountainhighbrands.com

Please see our limitation and exclusion of liability
with respect to your products included below.

    	 	6	 

    	 

    

 

Limitation and Exclusion of
Liability for Buy DMI, Inc.:

TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW, IN NO EVENT SHALL BUY DMI, INC.BE LIABLE FOR PERSONAL INJURY, OR ANY INCIDENTAL, SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES,
WHATSOEVER; INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS PROFITS, INTERFERENCE WITH A PROSPECTIVE ECONOMIC ADVANTAGE, TORTIOUS
INTERFERENCE, CORRUPTION OF, OR LOSS OF DATA, FAILURE TO TRANSMIT OR RECEIVE ANY DATA OR INFORMATION, BUSINESS INTERRUPTION, OR
ANY OTHER PHYSICAL, FINANCIA,OR COMMERCIAL DAMAGES OR LOSSES, ARISING OUT OF, OR RELATED TO, THE SALE OF YOUR PRODUCT TO CUSTOMERS.
THIS LIMITATION AND EXCLUSION OF LIABILITY APPLIES IN FULL FORCE AND EFFECT REGARDING ANYTHING THAT MAY OCCUR WHEN ANY CUSTOMER,
OR THIRD PARTY, REGARDLESS OF WHETHER THAT PERSON IS THE ORIGINAL CONSUMER / PURCHASER, AND REGARDLESS OF CAUSATION, THEORY OF
LIABILITY (CONTRACT, TORT, OR OTHERWISE) AND EVEN IF BUY DMI, INC.HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. REGARDING
JURISDICTIONS THAT DO NOT ALLOW FOR THE EXCLUSION OR LIMITATION OF LIABILITY FOR PERSONAL INJURY, OR FOR THE EXCLUSION OR LIMITATION
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, THIS LIMITATION WILL NOT APPLY, BUT OTHERWISE REMAIN IN FULL FORCE AND EFFECT. UNDER NO
CIRCUMSTANCES, AND IN NO EVENT SHALL BUY DMI, INC.’S TOTAL LIABILITY TO ANY INDIVIDUAL OR GROUP FOR ANY AND ALL DAMAGES EXCEED
THE AMOUNT OF $50.00. THE FOREGOING EXCLUSIONS AND LIMITATIONS WILL APPLY EVEN IF THE ABOVE REMEDY FAILS IN ITS ESSENTIAL PURPOSE.

The parties recognize that Buy DMI,
Inc. has an effective, fully operational, successful fulfillment business model that is well structured, resulting in a thriving,
popular, online presence. Buy DMI, Inc. agrees to leverage their talents, competencies, skill sets, reputation, and to utilize
good faith and fair dealing, in fulfilling the terms of this agreement.

Buy DMI, Inc.is under no obligation,
express or implied, to make any such changes to any product description or appearance subject to this agreement. Despite the lack
of any obligation, Buy DMI, Inc. retains the right to make any changes they wish. Changes may include, but would not be limited
to, customized product name and description content, images, and keywords. Any and all such changes, of any kind, in any form,
are the sole property of Buy DMI, Inc. and are at all times fully protected by copyright law, trademark law, and trade secret
protection.

 

Agreed and Accepted:

Rocky Mountain Hemp Company

 

 

By: /s/ Michael R. Welch

Michael R. Welch

Chief Executive Officer

 

Date:

 

Buy DMI, Inc.

 

 

By: /s/ Matthew Sabia

Matthew Sabia

Chief Executive Officer

 

Date: 

    	 	7ex_108103.htm

Exhibit 10.5

 

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (this “Agreement”) is entered into and effective as of [                 ] (the “Grant Date”) by and between Diffusion Pharmaceuticals Inc., a Delaware corporation (the “Company”), and [                   ] (“Optionee”).

 

A.     The Company has adopted the Diffusion Pharmaceuticals Inc. 2015 Equity Incentive Plan (as such plan may be amended from time to time, the “Plan”) authorizing the Board of Directors (the “Board”) of the Company, or a committee as provided for in the Plan (the Board or such a committee to be referred to as the “Committee”), to grant stock options, among other incentive awards, to certain individuals.

 

B.     The Company desires to grant an option to purchase shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) to Optionee pursuant to the Plan.

 

C.     All of the capitalized terms used in this Agreement not otherwise defined in this Agreement have the same respective meanings as defined in the Plan.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the Company and Optionee agree as follows:

 

1.     Grant of Option; Exercise Price. The Company hereby grants to Optionee, upon the terms and subject to the conditions set forth in this Agreement and the Plan, and effective as of the Grant Date, an option (the “Option”) to purchase all or any portion of [              ] shares (the “Option Shares”) of the Company’s Common Stock, at an exercise price of $[        ] per share, which represents 100% of the Fair Market Value of a share of Common Stock on the Grant Date, as determined in accordance with the Plan (such exercise price, as adjusted from time to time pursuant to Section 5 of this Agreement and Section 4.3 of the Plan, the “Exercise Price”). The Option is not intended to be an “incentive stock option,” as that term is used in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.     Vesting. The Option shall vest and become exercisable in [12 quarterly/                   ] equal (or as nearly equal as possible) installments on [the last calendar day of each calendar quarter/           ] over a [threeyear/      ] period, beginning on [              ]. [Optionee shall receive a full quarter of vesting for the [           ] calendar quarter of [       ].]

 

[OR, IN THE CASE OF PERFORMANCE-BASED VESTING]

 

[The Option shall vest and become exercisable [              ]].

 

3.     Exercise of Option.

 

3.1.     Notice; Payment. Subject to the terms and conditions set forth in this Agreement, including vesting of the Option in Section 2 of this Agreement and termination of the Option in Section 4 of this Agreement, and the Plan, the Option may be exercised, in whole or in part, at any time and from time to time, by delivery to the Company of written notice of the exercise of the Option, in substantially the form as provided by the Company, stating the number of Option Shares being purchased (the “Purchased Shares”), and accompanied by payment in full of the total aggregate Exercise Price of the Purchased Shares. The Exercise Price shall be payable in full in any one of the following alternative forms:

 

	
			(a)

				
			Full payment in cash, personal check or certified bank or cashier’s check;

			

 

	
			(b)

				
			Any broker assisted cashless exercise procedure which is acceptable to the Company; or 

			

 

	
			(c)

				
			Cashless net exercise.

			

 

 

 

 

	
			X

				
			=

				
			Y – [(A)(YB )]

			
	
			Where  X

				
			=

				
			the number of shares of Common Stock to be issued to Optionee.

			
	
			Y

				
			=

				
			the number of Purchased Shares.

			
	
			A

				
			=

				
			the Exercise Price.

			
	
			B

				
			=

				
			the Fair Market Value of one share of Common Stock on the date of exercise.

			

 

3.2.    Issuance of Purchased Shares; No Fractional Shares. Following receipt of the exercise notice Upon a cashless net exercise, Optionee shall receive the number of shares of Common Stock equal to a number (as determined below) of shares of Common Stock computed using the following formula: and the payment referred to above, the Company shall, as soon as reasonably practicable thereafter, cause certificates (or book-entry notations) representing the Purchased Shares (or such fewer number of Purchased Shares if a cashless net exercise is used) to be delivered to Optionee either at Optionee’s address set forth in the records of the Company or at such other address as Optionee may designate in writing to the Company or issue and deposit the Purchased Shares for Optionee’s benefit with any broker with which Optionee has an account relationship or the Company has engaged to provide such services under the Plan; provided, however, that the Company shall not be obligated to issue a fraction or fractions of a share otherwise issuable upon exercise of the Option, and may pay to Optionee, in cash or cash equivalent, the Fair Market Value of any such fraction or fractions of a share as of the date of exercise. If requested by the Company in connection with any exercise of the Option, Optionee shall also deliver this Agreement to the Company, which shall endorse hereon a notation of the exercise and, and if the Option is exercised in part, shall return this Agreement to Optionee. The date of exercise of an Option that is validly exercised shall be deemed to be the date on which there shall have been delivered to the Company the notice referred to in Section 3.1 of this Agreement and full payment of the Exercise Price of the Purchased Shares. Optionee shall not be deemed to be a holder of any Purchased Shares pursuant to exercise of the Option until the date of issuance of a stock certificate or book-entry notation to Optionee for such shares following payment in full for the Purchased Shares.

 

3.3.     Tax Withholding. The Company is entitled to (a) withhold and deduct from future wages of Optionee (or from other amounts that may be due and owing to Optionee from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company reasonably determines are necessary to satisfy any and all federal, foreign, state and local withholding and employment related tax requirements attributable to the Option, including, without limitation, the grant, exercise or vesting of, the Option; (b) withhold cash paid or payable or shares of Common Stock from the shares issued or otherwise issuable to Optionee in connection with the Option; or (c) require Optionee promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to the Option. Shares of Common Stock issued or otherwise issuable to Optionee in connection with the Option that gives rise to the tax withholding obligation that are withheld for purposes of satisfying Optionee’s withholding or employment-related tax obligation will be valued at their Fair Market Value on the Tax Date.

 

3.4.     Remaining Option Shares. Option Shares will no longer be outstanding under the Option (and will therefore not thereafter be exercisable) following the exercise of the Option to the extent of (a) shares used to pay the Exercise Price of an Option under the “cashless net exercise” method (b) shares actually delivered to Optionee as a result of such exercise and (c) any shares withheld for purposes of tax withholding.

 

4.     Termination of Option.

 

4.1.     Time of Termination. Except as provided in this Section 4 and Section 5 of this Agreement, the Option shall terminate, no longer be exercisable and expire at 5:00 p.m., Eastern Time, on [              ] (the “Time of Termination”).

 

 

 

 

4.2.     Termination for Cause. In the event Optionee’s employment (in the event that Optionee is an Employee) or other service (in the event that Optionee is a Consultant) with the Company and all Subsidiaries is terminated by the Company for Cause, the Option will immediately terminate without notice of any kind, and the Option will no longer be exercisable.

 

4.3.     Termination Due to Death, Disability or Retirement . In the event Optionee’s employment (in the event that Optionee is an Employee) or other service (in the event that Optionee is a Consultant) with the Company and all Subsidiaries is terminated by reason of Optionee’s death, Disability or Retirement, the Option will remain exercisable, to the extent exercisable as of the date of such termination, for a period of one (1) year after such termination (but in no event after the Time of Termination).

 

4.4.     Termination for Other Reasons. In the event Optionee’s employment (in the event that Optionee is an Employee) or other service (in the event that Optionee is a Consultant) with the Company and all Subsidiaries is terminated for any other reason, the Option will, to the extent exercisable as of such termination, remain exercisable for a period of three (3) months after such termination (but in no event after the Time of Termination).

 

4.5.     Effect of Actions Constituting Cause or Adverse Action. Notwithstanding anything in this Agreement to the contrary and in addition to the rights of the Committee under Sections 13.5 and 13.6 of the Plan, if Optionee is determined by the Committee, acting in its sole discretion, to have taken any action that would constitute Cause or an Adverse Action during or after the termination of employment or other service with the Company or a Subsidiary, irrespective of whether such action or the Committee’s determination occurs before or after termination of Optionee’s employment or other service with the Company or any Subsidiary and irrespective of whether or not Optionee was terminated as a result of such Cause or Adverse Action, (a) all rights of Optionee under the Option and this Agreement will terminate and be forfeited without notice of any kind, and (b) the Committee in its sole discretion will have the authority to rescind the exercise, vesting, settlement or issuance of, or payment in respect of, the Option that was exercised, vested, settled or issued, or as to which such payment was made, and to require Optionee to pay to the Company, within ten (10) days of receipt from the Company of notice of such rescission, any amount received or the amount of any gain realized as a result of such rescinded exercise, vesting, settlement, issuance or payment (including any dividends paid or other distributions made with respect to any shares of Common Stock subject to the Option). The Company may defer the exercise of the Option for a period of up to six (6) months after receipt of Optionee’s written notice of exercise or the issuance of Purchased Shares upon the vesting of the Option for a period of up to six (6) months after the date of such vesting in order for the Committee to make any determination as to the existence of Cause or an Adverse Action. The Company will be entitled to withhold and deduct from future wages of Optionee (or from other amounts that may be due and owing to Optionee from the Company or a Subsidiary) or make other arrangements for the collection of all amounts necessary to satisfy such payment obligations. This Section 4.5 will not apply to the Option following a Change in Control.

 

4.6.     Clawback/Forfeiture. The Option and Option Shares issued or issuable pursuant to the Option are subject to forfeiture or clawback by the Company to the extent required and allowed by law, including the DoddFrank Wall Street Reform and Consumer Protection Act of 2010 and the Sarbanes Oxley Act of 2002 and any implementing rules and regulations promulgated thereunder, and pursuant to any forfeiture, clawback or similar policy of the Company, as such laws, rules, regulations and policy may be in effect from time to time.

 

5.     Adjustments. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off), or any other similar change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation), will make appropriate adjustment (which determination will be conclusive) as to the number and kind of securities or other property (including cash) subject to, and the Exercise Price of, the Option in order to prevent dilution or enlargement of the rights of Optionee.

 

 

 

 

6.     Change in Control. The Option shall become immediately vested and exercisable upon completion of a Change in Control and remain exercisable through the Time of Termination regardless of whether Optionee remains in the employment or service of the Company. Notwithstanding any of the foregoing, in connection with a Change in Control, the Committee, in its sole discretion, at any time after the grant of the Option, may take whatever action it deems appropriate pursuant to Section 15.3 of the Plan.

 

7.     Rights as a Stockholder. Optionee will have no rights as a stockholder of the Company unless and until all conditions to the effective exercise of the Option (including, without limitation, the conditions set forth in Section 3 of this Agreement) have been satisfied and Optionee has become the holder of record of such shares. No adjustment will be made for dividends or distributions with respect to the Option as to which there is a record date preceding the date Optionee becomes the holder of record of such shares, except as may otherwise be provided in the Plan or determined by the Committee in its sole discretion.

 

8.     Restrictions on Transfer. Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by the Plan, no right or interest of Optionee in the Option prior to exercise may be assigned or transferred, or subjected to any lien, during the lifetime of Optionee, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. Optionee, however, will be entitled to designate a beneficiary to receive the Option upon Optionee’s death, and, in the event of Optionee’s death, exercise of the Option (to the extent permitted pursuant to Sections 2 and 4 of this Agreement) may be made by Optionee’s legal representatives, heirs and legatees.

 

9.     Market Stand-off. Optionee, if so requested by the Company or any representative of the underwriters in connection with a firmly underwritten public offering of securities by the Company pursuant to a registration statement under the Securities Act following the date of this Agreement, shall not sell or otherwise transfer any Option Shares during the 180-day period following the effective date of such registration statement. The Company may impose stoptransfer instructions with respect to securities subject to the foregoing restriction until the end of such 180-day period. This Section 9 will not apply to the sale of any Option Shares to an underwriter pursuant to an underwriting agreement and shall only be applicable to Optionee if all then current executive officers and directors of the Company enter into similar agreements.

 

10.     Employment or Service. Nothing in this Agreement or the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of Optionee at any time, nor confer upon Optionee any right to continue in the employment or other service with the Company or any Subsidiary.

 

11.     Option Subject to Plan. The Option and the Option Shares granted and issued pursuant to this Agreement have been granted and issued under, and are subject to the terms of, the Plan. The terms of the Plan are incorporated by reference in this Agreement in their entirety, and Optionee, by execution of this Agreement, acknowledges having received a copy of the Plan. The provisions of this Agreement will be interpreted as to be consistent with the Plan, and any ambiguities in this Agreement will be interpreted by reference to the Plan. In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan will prevail. All of the capitalized terms used in this Agreement not otherwise defined in this Agreement have the same respective meanings as defined in the Plan.

 

12.     General Provisions.

 

12.1.     Governing Law; Venue. This Agreement and all rights and obligations under this Agreement will be governed by and construed exclusively in accordance with the laws of the State of Delaware, notwithstanding the conflicts of laws principles of any jurisdictions. By acceptance of the Option, Optionee is deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of the State of Illinois to resolve any and all issues that may arise out of or relate to the Option or this Agreement.

 

12.2.     Entire Agreement. This Agreement and the Plan set forth the entire agreement and understanding of the parties to this Agreement with respect to the grant and exercise of the Option and the administration of the Plan and supersede all prior agreements, arrangements, plans and understandings relating to the grant and exercise of the Option and the administration of the Plan.

 

12.3.     Failure to Enforce Not a Waiver. The failure of the Company or Optionee to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

 

 

 

 

12.4.     Notices. All notices, requests, demands and other communications (collectively, “Notices”) given pursuant to this Agreement shall be in writing, and shall be delivered by personal service, courier, facsimile transmission, email transmission of a pdf format data file or by United States first class, registered or certified mail, postage prepaid, addressed to the party at the address set forth on the signature page of this Agreement. Any Notice, other than a Notice sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section 12.5.

 

12.5.     Successors and Assigns. Except to the extent specifically limited by the terms and provision of this Agreement, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns, heirs and personal representatives.

 

12.6.     Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by email delivery of a “pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “pdf” signature page were an original thereof.

 

12.7.     Titles, Captions and Sections. Titles and captions contained in this Agreement are inserted for convenience of reference only and do not constitute a part of this Agreement for any other purpose. References to Sections in this Agreement refer to Sections of this Agreement unless otherwise stated.

 

12.8.     Nature of the Grant. In accepting the Option and by execution of this Agreement, Optionee acknowledges that:

 

(a)      The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company in its sole discretion at any time, unless otherwise provided in the Plan.

 

(b)      The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future Option grants, or benefits in lieu of Option grants, even if Option grants have been granted repeatedly in the past.

 

(c)      All decisions with respect to future Option grants, if any, will be at the sole discretion of the Company.

 

(d)      Optionee is voluntarily participating in the Plan.

 

(e)      The Option grant is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event shall be considered as compensation for, or relating in any way to, past services for the Company.

 

(f)      In the event that Optionee is not an employee of the Company, the Option will not be interpreted to form an employment contract or relationship with the Company.

 

(g)      The future value of the Common Stock is unknown and cannot be predicted with certainty and if the Option vests and Optionee exercises the Option in accordance with the terms of this Agreement and is issued Purchased Shares, the value of those shares may increase or decrease.

 

(h)      In consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or diminution in value of the Option or Purchased Shares acquired upon exercise of the Option resulting from termination of Optionee’s employment or service by the Company (for any reason whatsoever and whether or not in breach of local labor laws) and Optionee irrevocably releases the Company and its Subsidiaries, and their respective directors, officers, employees and agents, from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by acceptance of the Option and execution of this Agreement, Optionee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

 

(i)      The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Optionee’s participation in the Plan, or Optionee’s purchase or sale of the underlying Option Shares.

 

(j)      Optionee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan or the Option.

 

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

 

 

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement effective as of the Grant Date.

 

	
			OPTIONEE:

				 	 	
			DIFFUSION PHARMACEUTICALS INC.

			 

			 

			By:

			
	
			Name:

				 	 	
			 

				
			[Signature]

			Name:              

			Title:           

			
	 	 	 	 	 
	
			Address:

				 	 	
			Address:

				
			2020 Avon Court, Suite 4

			
	 	 	 	 	Charlottesville, Virginia 22902
	 	 	 	 	 
	 	 	 	 

By execution of this Agreement, Optionee acknowledges having received a copy of the Plan.

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