Exhibit 10.3
 
SUPPLY AGREEMENT
 
This Supply Agreement ("Agreement") is entered into as of November 20th, 2019
(the "Effective Date") between Canntab Therapeutics USA (Florida), Inc., a
Florida corporation (to be incorporated), located at ____________ ("Buyer"), and
EXACTUS, INC., a Nevada corporation, located at 80 NE 4th Ave, Delray Beach, FL
33483 ("Supplier").
 
WHEREAS, Supplier is a producer of Hemp-derived cannabinoid ingredients ("Hemp
Extracts");
 
WHEREAS, Buyer is in the business of manufacturing tablets using Hemp Extracts;
and
 
WHEREAS, Buyer is desirous of purchasing Hemp Extracts from the Supplier and the
Supplier is desirous of selling the Hemp Extracts to the Buyer;
 
NOW THEREFORE, in consideration of the foregoing, the parties agree as follows:
 
1. Recitals. The Recitals are incorporated herein by reference.
 
2. Scope. This Agreement sets forth the terms and conditions under which
Supplier will supply Hemp Extracts to Buyer, in accordance with the
specifications delivered by Buyer to Suppliers. Purchases under this Agreement
shall be made with Purchase Orders (defined in Section 3F below) issued by Buyer
to Supplier. Supplier shall be liable under this Agreement to produce the
amounts set forth in all accepted Purchase Orders. All purchases made by Buyer
through Purchase Orders shall be subject to this Agreement.
 
3. Purchase Terms.
 
A.               Pricing. The initial price for Hemp Extracts shall, at all
times during the Term, be at Tier 1 pricing levels of Supplier with the initial
pricing as set forth in Exhibit 1 which must be competitive with market prices
for similar Hemp Extracts. Notwithstanding any other provision of this
Agreement, in the event for any reason the Supplier is unable to meet the
production requirements of Buyer, the Supplier agrees to source the required
supply of Hemp Extracts from third parties to be delivered to Buyer at fair
market prices. Alternatively, the Buyer will have the right to purchase oil from
alternate suppliers. In such event that Supplier needs to source Hemp Extracts
from third parties to meet the requirements of Buyer, such event shall not
modify the exclusive nature of this Agreement.
 
B.              Exclusivity. Buyer agrees that, for the Initial Term or any
Renewal Term(s) of this Agreement, Buyer will purchase the Hemp Extracts from
Supplier provided that Supplier’s pricing for Hemp Extracts is competitive with
other supplies of the same quality of Hemp Extracts and subject to the terms and
conditions set forth herein. Nothing contained in this Agreement shall prohibit
Supplier from selling any of its Hemp Extracts to any third parties.
 
C.                Forecasts. Buyer may provide Supplier with a non-binding,
rolling 12 month forecast or blanket purchase order for the estimated quantities
of Hemp Extracts that Buyer anticipates purchasing ("Forecast") in order to
ensure an uninterrupted supply to meet demand. Any forecast or blanket purchase
order provided by Buyer shall be clearly labeled with the word "forecast" or any
other similar terms that identify the document as a forecast instead of a firm
purchase commitment. Supplier agrees to work with Buyer to meet forecasted
amounts and to accommodate fluctuations in the Forecast. The Forecasts shall
represent reasonable estimates for planning purposes only and will not obligate
Buyer in any way. However, if at any time Buyer is aware of a change or a short
fall in the Forecast, it will immediately notify the Supplier in writing of such
deviation. The parties acknowledge that any such forecast or blanket purchase
order shall be considered as a non-binding purchase commitment unless otherwise
specified within the terms and conditions of said blanket purchase order. If
Buyer requests a quantity of a Hemp Extracts in excess of the forecasted
quantity, Supplier shall use commercially reasonable efforts to accommodate such
request. In the event Supplier's commercially reasonable efforts to accommodate
Buyer's request would require additional fees, Supplier shall promptly advise
the Buyer of any and all anticipated additional fees (including labor overtime,
material expedite fees and/or expedite shipping fees) for Buyer's consideration
and written approval. Upon written approval by Buyer, Supplier shall proceed to
accommodate Buyer's request, and the approved additional fees shall be itemized
as a separate line item on the Supplier's invoice.
 
 
 
-1-

 
 
 
E.              Purchase Orders. Supplier shall deliver Hemp Extracts in
accordance with the quantities, delivery dates, and delivery location specified
in written and signed purchase orders delivered by Buyer or its affiliates
("Purchase Orders"). Supplier shall use commercially reasonable efforts to
deliver Hemp Extracts to Buyer based upon the delivery dates set forth in any
Purchase Order. Buyer shall have the right to cancel any unshipped portion of a
Purchase Order, in whole or in part, at any time until shipment, in which event
Buyer shall be liable to Supplier for the actual amount of Supplier's reasonable
costs incurred in contemplation of performance of the canceled portion, less any
amount saved by Supplier as a result of such cancellation.
 
F.              Packing and Shipping: All Hemp Extracts shall be packaged,
marked and otherwise prepared in accordance with good commercial practices and
all applicable state and federal laws of the United States and Buyer's written
instructions that are included on any Purchase Orders, if any. Upon Buyer's
written request which shall be included in the Purchase Order, the Supplier will
include a material safety data sheet (MSDS) and/or certificate of analysis with
each shipment. In the event the Buyer’s manufacturing of its CBD tablets is not
occurring at Supplier’s premises, then Supplier shall ship the Hemp Extracts by
shipping agents designated by Buyer, FOB Buyer's designated location. Buyer
shall pay all shipping costs in such event.
 
G.              Risk of loss: Risk of loss and damage to the Hemp Extracts shall
remain with the Supplier until delivery to Buyer, FOB Buyer’s designated
location. The risk of loss shall pass to Buyer upon delivery of the Hemp
Extracts to Buyer at Buyer’s designated location.
 
4.          
Supplier's Obligations and Representations.
 
A.              Performance & Savings Reviews. The parties shall conduct regular
meetings in person at a mutually convenient location or via video conferencing
means to discuss and review the following: (i) delivery, service and quality
performance evaluation; (ii) continuous improvement goals and objectives; (iii)
market conditions and forecasts; (iv) future budgeting; and (v) business growth
opportunities. Buyer reserves the right to audit Supplier, at its sole expense,
to ensure compliance to pricing and other provisions of this Agreement with at
least 3 business days prior notice, at the Supplier's facility. During such
audit, the Buyer shall at all times comply with the Suppliers' policies in
relation to entrance and access to the manufacturing facility, including but not
limited to health &safety and security requirements and policies of the
Supplier.
 
B.              Notification Requirement. If, for any reason, with the exception
of an event of force majeure, at any time, Supplier shall refuse or be unable,
or should reasonably anticipate being unable to deliver any part or all of the
Hemp Extracts in accordance with the terms hereof, Supplier shall verbally
notify Buyer of such refusal or inability at the earliest possible time and
immediately confirm such notification in writing. Such notification shall not be
deemed to operate as a release of Supplier from its obligations under a Purchase
Order, Buyer shall have the right to replace, modify and/or cancel any delayed
open Purchase Orders free from liability to Supplier.
 
C.               Records. Supplier shall provide Buyer with complete and
accurate copies of any quality control documents maintained by Supplier for Hemp
Extracts, including any raw material procurement and/or testing documents, upon
Buyer's written request.
 
D.               Supplier’s Representations and Warranties. Supplier represents
and warrants to Buyer as follows:
 
(a) 
Supplier shall deliver to Buyer good and merchantable title to the Product.
(b) 
Supplier represents and warrants to the Buyer that the execution and delivery of
this Agreement by and the performance by the obligations hereunder, will not
conflict with or result in any breach or violation of any of the provisions of
or constitute a default under any indenture, mortgage, charter instrument, bylaw
or other agreement or instrument to which it is a party or by which it may be
bound, nor will any consents or authorizations of any party other than those
hereto be required.
(c) 
Supplier represents that it has obtained all necessary licenses necessary to
make the deliveries required hereunder. It is Supplier’s sole responsibility to
obtain all necessary permits required to effectuate the terms and conditions of
this agreement.
(d) 
The representations, warranties and indemnities contained herein will survive
the termination of this Agreement.
 
 
-2-

 
 
 
5.          
Term; Termination.
 
The term of the contract is for two (2) years (the “Initial Term”). Without
prejudice to the above, this Agreement can at any time be terminated (i) by
either party in case of a material breach of this Agreement, upon written notice
by the non-defaulting party to the breaching party providing specific
description of any such breach and then providing the breaching party with a 30
period to cure; (ii) upon mutual agreement of the parties; (iii) automatically
at the end of the Term, which Term will be renewed automatically for additional
two year periods unless either party provides written notice to the other party
of its intent to terminate this Agreement at least 60 days prior to the end of
the Term.
 
6.          
Quality Assurance.
 
A.           Specifications. "Specification(s)" means written specifications or
designs provided by Buyer. Collectively, the Buyer's Specifications and
Supplier's Specifications may be referred to as the "Specifications". The Hemp
Extracts shall comply with all applicable laws and regulations and conform to
the Specifications. No change in the Specifications shall be made by the other
party except with prior written approval of the party providing the
Specification. Any changes that affect form, fit or function of the Hemp
Extracts will be reflected in updated Purchase Orders. Supplier shall not ship
any Hemp Extracts that have had such changes made until new Purchase Orders have
been issued.
 
B.          Raw Materials. Supplier agrees to maintain all documentation/records
regarding its procurement of all raw materials ("Materials") for a period of 5
years. Supplier shall not amend, change or supplement any of the following
without Buyer's prior written consent: (i) the Specifications; (ii) the
Materials; or (iii) the process for manufacturing the Hemp Extracts. Any change
in any of the foregoing shall, in each case, comply with all applicable laws,
regulations and agency requirements. In the event that Supplier desires to
change any of the foregoing, Supplier agrees to immediately notify Buyer of such
change in writing, and if Buyer agrees to such change, Supplier shall be
responsible, at its sole expense, for ensuring that all Hemp Extracts
manufactured following such change strictly conform to the change in
Specifications, Materials or the manufacturing process.
 
C.         Inspection. All Hemp Extracts shall be received subject to Buyer's
right of inspection and rejection. Defective Hemp Extracts or Hemp Extracts not
in strict conformance with a Purchase Order or Supplier's and Buyer’s
specifications, will be held for receipt of instructions, at Supplier's risk,
and if Supplier so directs, will be returned, at Supplier's expense. If Buyer
does not receive such written instructions within 45 days of Buyer's request
therefore, Buyer may, without liability or any financial obligation to Supplier,
sell, transfer or otherwise legally dispose of the Hemp Extracts, in any way
that Buyer deems appropriate. Buyer may, by written notice to Supplier, and
without limiting any other remedies available to Buyer under applicable law,
demand replacement or correction of rejected Hemp Extracts. Payment for Hemp
Extracts on a Purchase Order prior to inspection shall not constitute acceptance
thereof or a waiver of a breach of warranty and is without prejudice to any
claim(s) of Buyer. Supplier shall inspect all Hemp Extracts prior to shipment to
ensure conformance with all Specifications and requirements of a Purchase Order.
 
 
-3-

 
 
 
D.         Audit. Buyer reserves the right to audit Supplier's facilities, as
Buyer deems necessary, subject to the following conditions: (a) Buyer shall be
entitled to conduct only one audit per year unless: (i) otherwise agreed in
writing; (ii) there is a significant or recurrent quality control issues with
the Hemp Extracts as determined in Buyer’s sole discretion; (ii) and/or Buyer
can demonstrate that Supplier has materially breached this Agreement; (b) Buyer
audits shall be conducted only upon at least 3 business days' advance written
notice of the audit is provided by Buyer and conducted within working hours ;
(c) all information gathered and data reviewed or exposed to the
officers/employees of the Buyer during any such audit shall be "Confidential
Information" and shall be treated as such in accordance with the provisions of
this Agreement; and (d) the scope of each such audit shall include the systems
and processes related to the quality, production and delivery of the Hemp
Extracts under this Agreement and all documentation, data, and other records
relating thereto, including, without limitation, records and data relating to
raw materials used to manufacture the Hemp Extracts. Supplier shall cooperate
with Buyer in the performance of such audit. If Supplier does not cooperate with
the Buyer or is not prepared to host the audit arranged by the Buyer, then
Supplier shall reimburse Buyer for all costs incurred by Buyer associated with
the audit including travel, lodging and other expenses that the Buyer had
incurred at Supplier's facility. Observations and conclusions of an audit will
be issued to, and promptly discussed with Supplier and Supplier shall take into
consideration such representations, but shall not be obliged to implement them
unless such representation is in relation to a breach of the Specifications,
requirements, obligations or manufacturing qualities under this Agreement.
 
E.               Records Retention. Supplier agrees to maintain complete and
accurate books and records regarding all matters hereunder including Supplier's
specifications, raw material procurement and/or testing documents related to the
Hemp Extracts, as well as Supplier's production and other compliance with its
obligations under this Agreement. All such documents must be maintained for a
minimum of 5 years beyond the termination or expiration of this Agreement. (the
"Retention Period"); provided, however, that in the event of any dispute arising
with respect to this Agreement, or in the event of any claim, demand or lawsuit
by Buyer or any third party with respect to any Product produced by Supplier
under this Agreement, the Retention Period shall last until the resolution of
the dispute becomes final and non-appealable and all obligations of the Parties
are fully satisfied.
 
7.           Warranties. Except for warranties related to providing the Hemp
Extracts in conformance with the Specifications of the Buyer, the Supplier shall
provide no other warranties, express or implied to Buyer.
 
 
-4-

 
 
 
8.            Confidential Information. The terms of this Agreement and any
information or items marked confidential or identified as confidential by
written notice to the receiving Party under or relating to this Agreement,
including but not limited to information concerning the information related to
either party such the business, formulas, pricing, financial information,
research data, sales and marketing information, customer lists, supplier lists,
Buyer's Specifications, the Purchase Orders, the Forecast, the reports and any
financial or manufacturing and technical information provided by the Supplier to
the Buyer shall be treated as confidential information ("Confidential
Information"). The receiving Party hereby undertakes (i) to hold and keep in
confidence any and all such Confidential Information and not to disclose the
Confidential Information or any part thereof to any third party except to only
such of their directors, officers, employees and advisers (collectively,
"Representatives" and each a "Representative") whose duties require them to
possess or consider the Confidential Information and strictly on a "need to
know" basis; and who shall prior to such disclosure agree to keep such
information confidential and be bound by this Agreement; (ii) to use the same
degree of precaution as it would use to protect its own confidential information
of like importance but in no event less than reasonable care; (iii) not to use
the Confidential Information, in whole or in part, for any purpose other than to
complete the obligations under this Agreement; and (iv) not to use the
Confidential Information in a manner directly or indirectly causing damages to
the other party or use the Confidential Information to gain commercial benefit
to itself. Provided, however, that Confidential Information shall not include
information that (i) is already in, or subsequently comes into, the public
domain other than through a violation of this Agreement, (ii) is received by the
non-disclosing Party on a non-confidential basis from a source which is not
prohibited from disclosing such information pursuant to any legal, contractual
or fiduciary obligation to the disclosing Party, (iii) was already known by the
receiving Party, as established by written documentation only, at the time of
receipt from the disclosing Party, or (iv) is independently developed or (v)
ordered to be disclosed by a competent court or a regulatory or public body. In
such event, the receiving Party shall, where permitted under the relevant
jurisdiction, immediately inform the disclosing Party so that the disclosing
Party is given the opportunity to object to such disclosure in due time. Should
any such objection by the disclosing Party be unsuccessful or should the
disclosing Party decide not to object to any such disclosure, the receiving
Party or its Representative so obligated or requested to disclose the
Confidential Information may disclose only such Confidential Information to the
extent required by the relevant court order or governmental or regulatory
authority. Upon the expiration or early termination of this Agreement, each
party shall return or destroy, and certify to such destruction of, all
confidential information of the other Party. The covenants contained in this
Section shall survive the termination of this Agreement regardless of the cause
of the termination.
 
9. Guaranty of Supply. In the event the Supplier is unable or otherwise fails or
will fail, for any reason (including an event of force majeure) to supply the
Hemp Extracts in accordance with the quantities and/or delivery dates specified
by Buyer in a Purchase Order, the Supplier shall promptly inform Buyer verbally
with a confirmation in writing. If Supplier is able to supply some but not all
of Buyer's orders for the Hemp Extracts, then Supplier shall supply such partial
quantities of the Hemp Extracts. Supplier will use commercially reasonable
efforts to source Hemp Extracts from third parties to be delivered to Buyer,
provided such Hemp Extracts conforms to the Buyer’s Specifications.
Alternatively, Buyer may elect and shall have the sole right to obtain Hemp
Extracts itself from another supplier. If Supplier is unable to provide any
replacement Hemp Extracts or if Buyer elects to obtain Hemp Extracts from a
different supplier but only to the extent of fulfilling the Purchase Order for
which Supplier was unable to meet the Purchase Order requirements. In such
event, this Agreement shall remain in full force and effect and the Supplier
shall not be liable to the Buyer for any additional costs, damages or fees of
any kind in connection with the Buyer seeking an alternative source of supply.
 
 
-5-

 
 
 
10. Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL THE PARTIES BE
OBLIGATED TO ONE ANOTHER FOR PUNITIVE DAMAGES.
 
11.       Miscellaneous.
 
A.           Assignment and Relationship of the Parties. The Parties may not
assign or subcontract this Agreement to a third party unless both parties have
agreed to such assignment or subcontracting in a writing signed by an authorized
representative. Supplier may not subcontract any of its obligations under this
Agreement without Buyer's prior written approval. The parties are acting in
performance of this Agreement as independent contractors. Neither Party shall
have the power or authority to bind or obligate the other Party.
 
B.           Entire Agreement; Severability. This Agreement and the Exhibits
attached hereto and made a part hereof constitute the entire understanding of
the Parties with respect to the subject matter hereof, superseding any and all
previous understandings, contracts and agreements, written and oral This
Agreement may only be waived, modified, or amended in a writing signed by the
Parties. The terms of this Agreement shall prevail over the terms of any other
documents or agreement between the parties, including without limitation, any
pre-printed terms in Supplier's invoices or the Purchase Orders or other Product
documentation. If any portion of this Agreement is held to be unenforceable, the
unenforceable portion must be construed as nearly as possible to reflect the
original intent of the Parties, the remaining portions remain in full force and
effect, and the unenforceable portion remains enforceable in all other contexts
and jurisdictions.
 
C.  Notices. Unless otherwise specified herein, all notices under this Agreement
shall be in writing, and shall be effective when sent by fax, electronic mail or
Certified Mail, postage prepaid via a reputable courier company, to the Parties'
address as first written above. Each Party may change its address which will be
notified in writing to the other Party.
 
D.  No Waiver. Any waiver by either Party of a breach of any provision of this
Agreement will not operate as or be construed to be a waiver of any other breach
of that or any other provision of this Agreement. Any waiver must be in writing.
Failure by either Party to insist upon strict adherence to any provision of this
Agreement on one or more occasions will not deprive such Party of the right to
insist upon strict adherence to that or any other provision of this Agreement.
No remedy herein provided shall be deemed exclusive of any other remedy allowed
by law or in equity.
 
12. Intellectual Property. During the Term, Supplier hereby grants a
non-exclusive, non-sublicensable, non-transferable perpetual, no royalty license
to use any and all trademarks, logos or other intellectual property in
connection with the Supplier’s Hemp Extracts.
 
13. Supplier's IP. All intellectual property rights arising from or in relation
to the Hemp Extracts, its manufacture or production, and any other property
furnished to the Buyer by the Supplier, shall be (i) the property of the
Supplier, and (ii) can only be used within the scope of the license provided by
the Supplier to the Buyer under the terms of this Agreement.
 
14. Force Majeure. Neither party shall be liable or deemed to be in default for
any delay, interruption, or failure in performance under this Agreement
resulting from the following events: acts of God, acts of civil or military
authority; acts of the public enemy; war; accidents, fires, explosions, power
surges, earthquakes, floods, or unusually severe weather; strikes or labor
disputes; delays in transportation or delivery outside the reasonable control of
the affected party; epidemics; and any similar event beyond the affected party's
reasonable control ("Force Majeure Event"), but only to the extent the work of
the party to be performed is affected by said Force Majeure Event.
 
 
-6-

 
 
 
15. Governing Law and Venue. This Agreement, the entire relationship between
Buyer and Supplier, and any litigation or other legal proceeding between the
parties shall be governed by and construed in accordance with the laws of the
State of Florida, without giving effect to its choice of law rules. Any lawsuits
or other proceedings arising out of this Agreement shall be brought in the state
or federal courts located in Palm Beach County, Florida.
 
16. Modification. Except as otherwise provided in this document, this Agreement
may be modified, superseded, or voided only upon the written and signed
agreement of the parties. Further, the physical destruction or loss of this
document shall not be construed as a modification or termination of this
Agreement.
 
17.              Rules of Construction. The parties acknowledge that each party
has read and negotiated the language used in this Agreement. The parties agree
that, because all parties participated in negotiating and drafting this
Agreement, no rule of construction shall apply to this Agreement which construes
ambiguous language in favor of or against any party by reason of that party's
role in drafting this Agreement. Headings. The headings in this Agreement are
included for ease of reference only and shall not control or affect the meaning
or construction of the provisions of this Agreement.
           18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original but
all of which when taken together shall constitute but one Agreement. This
Agreement shall become effective when it has been executed by both of the
Parties. Delivery of an executed signature page of this Agreement by facsimile
transmission or by electronic messaging system shall be effective as delivery of
a manually executed counterpart hereof.
 
 
-7-

 
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
duly authorized officers on the Effective Date.
 
SUPPLIER:
EXACTUS, INC.
 
By: /s/ Emiliano Aloi
                                                                 
Emiliano Aloi, CEO
 
 
BUYER:
Canntab Therapeutics USA, Inc.
 
By: /s/ Jeff Renwick
                                                                 
Jeff Renwick, CEO
 
 
 
 
 
 
-8-

 
 
EXHIBIT 1
 
Hemp Extracts Specifications and Pricing
 
 
Ingredient
CBD Content
THC Content
Form
Unit
$/Unit
CBD Isolate
>99.5%
n/a
Crystalline powder
1Kg
 $ 3,650.00
CBD FS Distillate
75%-85%
1%-2%
Oil
1L
 $ 4,400.00
CBD THC-Free Distillate
>80%
n/a
Oil
1L
 $ 5,500.00
CBD FS WS Emulsion
~10%
<0.3%
Emulsified powder
1Kg
 $ 1,100.00

 
 
 

 
-9-