Beverage Manufacture and Supply Agreement

BEVERAGE MANUFACTURE AND SUPPLY AGREEMENT

THIS BEVERAGE MANUFACTURE AND SUPPLY AGREEMENT (this “Agreement”) is made and entered into this 21^st day of February 2019 (the “Effective Date”), between Rocky Mountain High Brands, Inc., located at 9101 LBJ Freeway, Suite 200, Dallas, TX 75243 (“Supplier”) and Texas Wellness Center, Inc. (“Company”), in connection with the supply of hemp-infused beverages (the "Beverages"), as described in detail in Exhibit B.

W I T N E S S E T H:

WHEREAS, the Supplier is the sole owner of certain property rights, including, but not limited to, rights to trade names, trademarks, service marks, logos, formulas, patents and copyrights, and is in the business of producing, supplying, marketing and/or selling the hemp and CBD infused and non-hemp infused beverages under its own trademarks and logos, and

WHEREAS, the Company is the sole owner of all rights, title and interest in and to certain proprietary intellectual property known as “Green Lotus” including text and stylized design, and all registrations and applications for registration thereof and all other rights corresponding thereto throughout the world, together with the goodwill and consisting of common law rights, copyrights and all trademarks, service marks and trade dress, collectively referred to hereafter as the “Green Lotus Trademarks;” and

WHEREAS, the Company and Supplier desire to enter into an agreement for the manufacture, supply and purchase of certain hemp-based cannabinoid infused beverages for Company to sell in the market worldwide.

NOW THEREFORE, for and in consideration of the mutual agreements, covenants and obligations contained herein, and the performance thereof, the parties, intending to be legally bound, agree as follows:

1.        BEVERAGES:

1.1       Exclusivity. Supplier agrees to be the exclusive manufacturer of the hemp-infused beverage Beverages (“Beverages”) to the Company under the Green Lotus brand in accordance with the terms and conditions of the Agreement. Company agrees to purchase Beverages from Supplier. The Parties acknowledge that the Supplier is the owner of the recipes and formulas for the Beverages. This Agreement does not give Supplier the right or responsibility to manufacture any products for Company besides hemp-infused Beverages. Supplier will not duplicate any formulas that it manufactures for Company for any other party, including Supplier. The parties may add additional Beverages to this agreement by attaching an additional Exhibit.

1.2       Raw Materials. Company will provide hemp-derived ingredients. Supplier will provide other raw materials necessary for the production, processing, batching, labeling, and packaging of the Beverages. All materials to be provided by Company for Beverages must be received by Supplier at least five (5) days prior to the scheduled production run for such Beverages. Supplier will store the raw materials provided by Company for a period of up to three (3) weeks prior to the scheduled production run.

1.3       Manufacturing Loss. Company acknowledges that in the normal course of beverage manufacturing the number of finished shipping units of packaged beverages will be less than the sum of the ingredients and the packing materials supplied to the copacker, which is defined as Manufacturing Loss. The Manufacturing Loss can range from 2% to 5% of the total production run. Supplier shall have no liability to Company for Manufacturing Loss in the normal course of the manufacturing process. Supplier will make good faith efforts to obtain credit or monetary refund from parties responsible for Manufacturing Loss and Supplier will pass said credit or refund on to Company. This will include, but may not be limited to, redress from the copacker, can and lid manufacturer, or other responsible party.

2.       TRADEMARKS:

2.1       Ownership of Trademarks and Use by Supplier. Supplier acknowledges the Company’s exclusive right, title and interest in the Green Lotus Trademarks. The Company grants to Supplier a non-exclusive right and license to use the Green Lotus Trademarks on labels and packaging materials approved by the Company in the manufacture and supply of the Beverages for the Company during the term of this Agreement, and for no other purpose. The Company understands and agrees that all Beverages produced under this Agreement will conform with the labeling requirements of the Texas Department of State Health Services.

3.       PRICING AND DELIVERY OF THE BEVERAGES:

3.1       Supply of Beverages; Pricing. The Supplier will supply Company with, and Company agrees to purchase, the Beverages at the prices and on the payment terms described in Exhibit B. Supplier will use its commercially reasonably good faith efforts to supply the Beverages in the quantities requested by Company and as promptly as commercially and reasonably practicable after a purchase order is received from Company.

3.2              Ordering Procedures. Company shall submit to the Supplier purchase orders in advance of the delivery dates specified. A purchase order may be submitted and accepted in writing by e-mail. All purchase orders shall specify the quantity and type of Beverage flavor, and any other special instructions. All purchase orders shall be subject to the terms of this Agreement. All purchase orders shall be paid in accordance with the payment terms set forth in Exhibit B.

3.3              Inspection of Beverages. Subject to the inspection conditions of this Section 3.4, Company will only be required to pay for the Beverages that are provided to Company free of defects at the time of inspection. Company shall promptly inspect all pallets and shall not accept any pallets that do not pass that inspection. At Company’s direction, the Supplier will either not charge Company for, or will provide a credit to Company for, any damaged pallets Company receives from the Supplier.

3.4              Transfer of Title and Risk of Loss. Title to and risk of loss for finished Beverages passes to Company upon Company’s inspection and approval of finished Beverages by Company’s designated agent at Supplier’s facility.

4.       INSURANCE AND INDEMNIFICATION:

4.1       Duty to Defend, Indemnify and Hold Harmless. Company agrees to indemnify, defend and hold harmless the Supplier, its officers, employees, agents and representatives from and against any and all claims, causes of action, damages, claims for damages, liability, loss, cost or expense (“Claims”), including reasonable attorneys' fees and expenses of litigation, arising out of or related to Supplier’s manufacture of the Beverages, except Claims arising from the negligence or intentional misconduct of Supplier or Supplier’s breach of this Agreement.

The foregoing indemnity, defense and hold harmless obligations shall apply to all such Claims, whether such Claims arise from Beverages acquired by Company from the Supplier prior to the execution of this Agreement or subsequent thereto.

Supplier agrees to indemnify, defend and hold harmless the Company, its officers, employees, agents and representatives from and against any and all Claims, including reasonable attorneys' fees and expenses of litigation, arising out of or related to the negligence or intentional misconduct of Supplier.

5.       DEFAULT:

5.1       Events of Default. A party shall be deemed to be in default of the terms of this Agreement if any one of the following events ("Events of Default") occurs:

5.2       Remedies. Upon the occurrence of an Event of Default, the non-defaulting party may give written notice to the defaulting party demanding that the condition of default be cured within fifteen (15) calendar days and, if not so cured, the non-defaulting party, in addition to any other rights or remedies it may have, may do any one or more of the following:

If Supplier files for bankruptcy or otherwise goes out of business, then the Company will be entitled to the formulas for the drinks of Supplier produced by Supplier under this Agreement, all at no cost or charge to the Company.

5.3       Effect of Termination. Upon the termination of this Agreement as provided herein, the obligations of the parties will terminate, except as may be provided in this Section 5.3 or elsewhere in this Agreement.

5.4       Remedies Cumulative. All rights and remedies granted under this Agreement shall be cumulative, and resort by a party to any one remedy provided for hereunder shall not exclude or prevent such party from pursuing any other rights and remedies provided under this Agreement or by law.

5.5       Attorneys' Fees. If the Company or Supplier brings an action to enforce or assert any right granted pursuant to this Agreement and is successful in such action, the unsuccessful party shall pay all reasonable costs and expenses, including reasonable attorneys’ fees, incurred by the successful party in exercising its rights and remedies hereunder.

6.       TERM:

6.1       Term. This Agreement shall commence on the date of its execution and shall continue in full force and effect for a period of three (3) years thereafter, (the "Primary Term"), unless sooner canceled or terminated as provided in this Agreement. At the end of the Primary Term, and at the end of each year thereafter (each such year being a "Renewal Term"), this Agreement shall be automatically renewed for successive one-year periods.

6.2       Termination. Either party may terminate this Agreement for convenience by providing written notice to the other party at least one hundred and eighty (180) days prior to the date of termination for convenience. Upon termination of the Agreement the Company will have the right to use Supplier’s formulas for the Beverages for as long as the Company pays Supplier a royalty fee equal to five cents ($.05) per bottle and/or can of Product produced by the Company or its contractor.

7.       ASSIGNMENT: This Agreement is personal as to the Company and Supplier. The rights, duties and obligations pursuant to this Agreement cannot be transferred, assigned, pledged, made subject to a security interest, or otherwise disposed of by either the Company or Supplier in whole or in part without the express written consent of both parties. Provided, however, that either party may assign its rights under this Agreement to a purchaser of substantially all the party’s assets or voting interests, or to a corporate affiliate so long as the assigning party and the corporate affiliate have at least fifty percent (50%) common ownership.

8.       MISCELLANEOUS:

8.1       Notice. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given (a) when delivered by hand (with written confirmation of receipt), (b) three (3) days after being deposited in the mails, if sent by certified mail, with return receipt requested, (c) upon confirmed receipt, if sent by facsimile transmission during normal business hours of the receiving party on a business day, or (d) one (1) day after sending, if sent by a nationally recognized overnight delivery service (receipt requested) specifying next day delivery, in each case to the appropriate addresses or telecopy numbers set forth on the signature page hereto (or to such other addresses or telecopy number as a party may designate by notice to the other parties).

8.2       No Partnership, Joint Venture, Franchise, Employer / Employee Relationship. It is understood and agreed that this Agreement and the relationship created hereby shall not be considered to be a partnership, joint venture, franchise, or an employer/employee relationship, and neither the Company nor Supplier shall have the right or authority to represent the other in any capacity or to transact any business or incur any obligations, contractual or otherwise for, in the name of, or on behalf of the other, unless otherwise authorized to do so in writing. The relationship between the Company and Supplier shall be that of purchaser and supplier.

8.3       Authority to Enter into Agreement. The Company and Supplier affirm that they are validly constituted corporate entities with full right, power and authority to enter into this Agreement and to perform their respective obligations hereunder.

8.4       Waivers. No failure or delay on the part of the Company or Purchaser to exercise any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy under this Agreement. No amendment, modification or waiver of any provision of this Agreement shall be effective unless the same shall be in writing signed by the Company and Purchaser.

8.5       Governing Law, Jurisdiction and Dispute Resolution. This Agreement, and all controversies, claims and disputes arising out of or relating to this Agreement or either party’s performance under this Agreement, including claims for breach of contract and related causes of action, shall be governed by the laws of the State of Colorado. Sole and exclusive jurisdiction and venue shall be in the State District Courts or Federal Courts in Denver, Colorado. In the event of any controversy or claim arising out of or relating to this Agreement, or the breach thereof, the parties hereto agree first to try and settle the dispute by mediation, administered by the American Arbitration Association (“AAA”) under its Mediation Rules. If settlement is not reached within 45 days after service of a written demand for mediation, either party may file suit in accordance with the above.

The parties hereby irrevocably waive any defense that this Agreement or any provision thereof is void or voidable because it pertains to Beverages derived from industrial hemp and/or Beverages that contain CBD and/or other cannabinoids.

8.6       Confidentiality. During the Primary and any Renewal Term hereunder, and for the two (2) year period thereafter, the parties hereto shall keep the terms and conditions of this Agreement, and any prior Confidentiality and/or Non-Disclosure Agreements signed by the parties, the transactions contemplated hereby, and either party's records, books, data and other confidential information concerning the Beverages, either party's accounts, employees, client development (including customer and prospect lists), sales activities and procedures, promotional and marketing techniques, pricing, marketing or business plans and strategies, financing, development and expansion plans and credit and financial data concerning customers and suppliers and all other business information involving either party (all collectively, the "Confidential Information") strictly confidential, and neither the Company nor Supplier will make, or cause or permit to be made, any disclosure of any such Confidential Information to any person (it being understood, however, that in any event such Confidential Information may be disclosed on a confidential basis to the parties' respective employees and professional advisers who have a need to know such information). If a party receives a duly-issued subpoena or request from a government agency of competent jurisdiction seeking Confidential Information of the disclosing party, the party receiving the subpoena or request shall promptly notify the disclosing party and take reasonable steps to comply with the disclosing party’s efforts to preserve the confidentiality of the Confidential Information. As a publicly traded company and SEC registrant, Company must comply with SEC disclosure requirements.

8.7       Entire Agreement. This Agreement, which incorporates herein by reference EXHIBITS "A" and “B”, constitutes the entire, complete and exclusive statement of the terms of the agreement between the parties with respect to the subject matter hereof and supersedes and cancels any prior agreements, term sheets, understandings, covenants, promises, assurances, course of dealing or performance, representations, warranties, or communications, whether oral or written, between the parties hereto. No covenant, term, provision, representation or agreement not expressly contained herein shall be implied as a matter of law, interpretation, course of performance or conduct of the parties. Neither this Agreement nor any provision hereof may be amended, waived or modified except by written instrument signed after the date hereof by all parties hereto and expressly stating therein that such instrument is intended as an amendment, modification or waiver hereof. This agreement supersedes all previous agreements, whether written or oral.

8.8       Severability. If any terms or provisions of this Agreement are deemed to be invalid or unenforceable, such determination shall not affect the validity or enforceability of the remaining terms and provisions hereof.

8.9       Benefited Parties. This Agreement shall be binding upon and inure to the benefit of any permitted purchasers, successors or assigns of the Company or Supplier.

IN WITNESS WHEREOF, this Agreement has been executed on this 21^st day of February 2019.

EXHIBIT A

Quality Agreement

THIS QUALITY AGREEMENT is made this 20th day of February, 2019, by and between Rocky Mountain High Brands, Inc., located at 9101 LBJ Freeway, Suite 200, Dallas, TX 75243 (“Supplier”) and Texas Wellness Center, Inc. (“Company”), in connection with the supply of hemp/CBD infused beverages, as more particularly described in Exhibit A hereto (the “Beverages”). This Quality Agreement incorporates the terms of the parties’ Exclusive Manufacturing and Supply Agreement by reference and provides additional detail regarding the parties’ rights and responsibilities under the Manufacturing Agreement.

Company shall have the right to inspect finished Beverages and designate the facility to test the Beverages. If Supplier performs some or all the inspection and testing, Supplier will provide to Company a CofA and any other associated inspection and testing documentation for each batch (lot) of Beverages manufactured. Company shall have fourteen (14) days from the date of receipt to inspect the finished Beverages and to provide written notice to Supplier in the event of a serious defect, which shall include the shipment of the wrong Beverages, rancidity, failure to comply with the Quality Agreement or a similar defect. Company shall not be obligated to pay Supplier for defective Beverages.

The manufacturing and bulk packaging of Beverages by Supplier must be in adherence to the specifications supplied by Company and in compliance with all standard operating procedures (“SOPs”), cGMP’s, and any applicable regulatory requirements. For each batch of Beverages manufactured for Company, Supplier will prepare complete manufacturing and bulk packaging batch documentation. This complete documentation will be retained by Supplier in accordance with appropriate document retention schedules provided by Company and readily accessible for review and inspection by Company or regulatory authorities. Any waste product or bulk labeling materials should be destroyed in a secure and legal manner, preventing unauthorized use or environmental problems.

The parties will work together to agree on a process qualification/process validation protocol document (“PQ/PV Protocol”). Supplier will thereafter insure compliance with the PQ/PV Protocol. Supplier will promptly communicate any problems during the execution of the PQ/PV Protocol to Company and bring its practices into compliance with the PQ/PV Protocol. All the related validation/qualification documents will be assembled in a Validation Summary Report and provided to Company for review and approval.

Quality Assurance Distribution of Responsibility Matrix

EXHIBIT B