Rocky Mountain High Brands Inc (RMHB)

[bradenhead]

According to the Master Manufacturer Agreement, CBD Alimentos SA de CV ("Distributor") "shall take delivery of Goods shipped F.O.B. to Laredo, Texas at a location submitted by Distributor". I expect the location will be a Freight Forwarding Company contracted by the "Distributor", as an agent, to handle the import process into Mexico. However, the goods will already belong to "Distributor" by virtue of having paid for them through deposits to the segregated conduit account RMHB is required to establish. The goods are NOT RMHB products, as "Distributor" retains "taste, smell and visual" control, along with "specifications or expectations regarding formulation or taste profile or other pertinent attributes". Further, "It is specifically understood and agreed that all labels utilized in connection with the Products, including but not limited to the design, content, wording, drawings and artwork, and label features (the "Labeling Elements") shall be determined by Distributor". My understanding of this passage leads me to believe "Distributor" came up with the names for "their" goods.

RMHB, will receive 5 cents per can for their efforts in facilitating the engagement of a co-packer facility to manufacture the goods and cause them to be shipped to Laredo, TX. RMHB is not a manufacturer, will not have control of product formulation, has NO input on labeling of the goods and will receive none of the profits derived from the pricing of the products to consumers.

This is all spelled out in the Agreement. Clear enough?