Document:

SETTLEMENT AGREEMENT AND RELEASE

This Settlement
Agreement and Release (the “Agreement”) is executed this 14th day of May 2020, by and between Texas Wellness Center,
Inc. a subsidiary of GL Brands, Inc. (“TWC”) and Rocky Mountain High Brands, Inc. (“RMHB”), which collectively
are referred to as the “Parties” hereto, and as to which Agreement each individually is a “Party.”

PURPOSE AND RECITALS

1.       This
Agreement is made to resolve a dispute between the Parties in which the following allegations have been asserted:

a.)       On
February 21, 2019 RMHB and TWC entered into a Beverage Manufacturing and Supply Agreement (“the Manufacturing Agreement”)
whereby RMHB would sell TWC approximately 200,000 cans of Green Lotus Sparkling Water for the purchase price of $322,000.00.

b.).       On
or about April 1, 2019, Rocky Mountain High Brands, Inc. ("RMHB") purchased approximately 200,000 can bodies and lids
from Berlin Packaging ("Berlin") and used them to produce and deliver 200,000 cans of Green Lotus Sparkling Water for
TWC.

c.)        TWC
made partial payment in the amount of $246,779.52 on the contract amount of $322,000.00 to RMHB for the cans. TWC had also provided,
at its own expense, approximately $150,000.00 worth of ingredients that RMHB used in manufacturing the subject cans of beverages.
After delivery of the cans of Green Lotus Sparkling Water to TWC, the cans were found to be leaking contents and TWC was unable
to use or sell any of the product to their customers.

d.)        TWC
made a demand for the return of all funds paid to RMHB due to the canned product being unfit for usage or sale to the public, and
further alleged that such actions constituted breach of contract, causing damages, created a major customer relations problems
for TWC and its parent company, GL Brands Inc., as well as damage to critical customer relationships.

 

2.       RMHB
has denied, and continues to deny, all allegations made by TWC against RMHB. RMHB and TWC acknowledge that there is a bona fide
dispute and difference between them concerning the alleged liability of RMHB for the damages allegedly sustained by TWC as a result
of this dispute.

3.       The
Parties desire to avoid the substantial
cost, expense, inconvenience, time
and uncertainty of litigation. The Parties hereby agree to fully and finally settle, compromise,
and resolve all issues, claims, and causes
of actions between them arising out of or in
connection with the Dispute without admitting
the claims and defenses of the other Party or Parties. This Agreement is intended as
a mutual and reciprocal compromise and general release between TWC, on the one hand, and RMBH on the other, for the complete and
final settlement and release of all claims between them as set forth fully below.

 

    	 		 

     

    

 

DEFINITIONS

4.       As
used in this Compromise Settlement Agreement and Release:

 

a.)       “TWC”
means and includes TWC and its assigns, successors, parent corporations, and subsidiary corporations.

b.)       “RMHB”
means and includes RMHB, and its assigns, successors, parent corporations, and subsidiary corporations.

c.)       “Occurrence”
means and includes any and all of the following: 1. The purchase of 200,000 cans of Green Lotus Sparkling Water (“the product”)
by TWC for payment in the amount of $322,000.00 and the allegations that the product was defective and unsuitable for its intended
use because of defects and leaking of the product from the cans in which the product was contained, 2. Any act or omission by RMHB
and/or the Released Parties or any of their agents, servants, or employees prior to the date of this Agreement, which caused or
allegedly caused any injury or damages to the Releasors, including claims of deceptive trade practices, breach of warranty, vicarious
liability, gross negligence, and/or res ipsa loquitur, regardless of whether or not the claims have been alleged as liability claims;
3. Any and all conduct of any of RMHB or the RMHB released parties that allegedly resulted in the defective product or cans delivered
to TWC and/or TWC’s affiliates or customers.

d.)       “Dispute
” means the allegations and claims asserted that that RMHB provided TWC with 200,000 cans of Green Lotus Sparkling Water
(“the product”) for payment in the amount of $322,000.00 and the product was defective and unsuitable for its intended
use because of defects and leaking of the product from the cans in which the product was contained.

e.)       “Claims
and Causes of Action” means any and all claims alleged or which could have been alleged by TWC against RMHB, or by RMHB against
TWC, of whatsoever nature, known or unknown, past, present or future, accrued or which may ever accrue, whether based in contract,
common law, tort or statute, including, but not limited to, claims for economic and actual damages, lost profits, attorneys' fees.

 

TERMS

5.       In
consideration of the promises made between the Parties hereto, the sufficiency of which consideration is hereby acknowledged,
TWC and RMBH agree as follows:

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Releases.

5.1 General
Release by TWC. Effective upon the execution of this Agreement by all the Parties hereto, TWC, for itself, and for its parents,
subsidiaries (whether or not wholly owned), and affiliate entities, predecessors, successors, heirs and assigns, and employees,
officers, directors, shareholders, owners, attorneys, agents, and sales agents hereby remise, release and forever discharge RMHB
and its respective successors, executors, administrators, heirs and assigns, shareholders, owners, officers, directors, trustees,
agents, attorneys, employees, owners, parents, subsidiaries and affiliate entities from any and all claims, actions, suits,
judgments or liabilities of any kind or nature, whether under statute or common law or in equity, and any liens, debts, contracts,
indebtedness, losses, rights, interests and demands of whatsoever kind, that TWC may have against RMHB.

5.2       General
Release by RMBH. Effective upon the execution of this Agreement by all the Parties hereto, RMBH, for itself, and for its parents,
subsidiaries (whether or not wholly owned), and affiliate entities, predecessors, successors, heirs and assigns, and employees,
officers, directors, shareholders, owners, attorneys, agents, and sales agents hereby remise, release and forever discharge TWC
and its respective successors, executors, administrators, heirs and assigns, shareholders, owners, officers, directors, trustees,
agents, attorneys, employees, owners, parents, subsidiaries and affiliate entities from any and all claims, actions, suits,
judgments or liabilities of any kind or nature, whether under statute or common law or in equity, and any liens, debts, contracts,
indebtedness, losses, rights, interests and demands of whatsoever kind, that RMHB may have against TWC.

5.3       Payment
and consideration.

In consideration
of the parties’ release and compromise set forth herein, and in full and final settlement of the any and all claims and causes
of action that have been asserted or could have been asserted against either Party, the Parties agree to the following:

A.       Simultaneous
with the execution of this Agreement, RMHB shall issue Seventeen Million, Five Hundred thousand (17,500,000) shares of RMHB Common
Stock (“the Common Stock”) to TWC or TWC’s affiliate assignee(s), as directed by TWC. The Common Stock;

i.       RMHB represents
and warrants that, as of the date of this Agreement, RMHB is not insolvent, RMHB is not considering declaring bankruptcy, and
no creditor of RMHB or other party has threatened to institute involuntary bankruptcy or to ask a court to place RMHB into receivership
or institute any similar proceedings against RMHB. RMHB further represents and warrants that it is not aware of any liabilities,
claims or proceedings against RMHB or any of its parent or subsidiary entities (apart from the Dispute) that RMHB has not disclosed
in its publicly-available SEC filings. RMHB further represents and warrants that its publicly-available SEC filings are true,
accurate and complete, and do not omit any material adverse facts or liabilities to the best of RMHB’s knowledge. RMHB also
represents and warrants that issuance of 17,500,000 shares of common stock to TWC will not result in TWC owning more than 9.9%
of the total issued and outstanding shares of RMHB.

 

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B.       In
any lawsuit filed by RMHB against Berlin Packaging or any supplier of Berlin Packaging for claims relating to Berlin Packaging’s
failure to provide the agreed upon 202,400 twelve (12) ounce can bodies and lids suitable on the can failure, RMHB agrees to pay
TWC thirty percent (30%) of the net recovery, if any. RMHB also agrees to pay TWC 30% of any settlement with Berlin Packaging or
any supplier of Berlin Packaging related to the Occurrence. RMHB is not obligated to file a suit against Berlin Packaging unless
RMHB is able to agree to terms with a competent law firm that will agree to accept the case on a contingent fee basis, exclusive
of litigation costs and expenses which RMHB will agree to pay. If RMHB is unable to secure representation under these terms, RMHB,
at its sole option, work on a fee-based suit, and agrees to cooperate and work with TWC on joint participation on a fee-based lawsuit.
TWC will have no obligation to pay for any attorney fees or costs of suit unless it agrees to do so in a separate writing signed
by TWC.

C.        RMHB
will defend, indemnify and hold TWC harmless for any third-party claim or claims related to or arising out of the Occurrence that
exceed the aggregate amount of $10,000.00. Provided, however, that RMHB will have the right to either settle such claims or defend
against such claims at RMHB’s expense in the exercise of its reasonable discretion. If one or more third-party claims are
made against TWC that TWC believes are subject to this indemnification provision, TWC will promptly provide written notice of
such claim to RMHB and will cooperate in RMHB’s investigation of such claim. TWC will have the right to approve any settlement
of any third-party claims proposed by RMHB in writing in the exercise of TWC’s reasonable discretion.

6.       Acknowledgement
of Sufficiency: The parties acknowledge the sufficiency of the total consideration set forth above and that said consideration
constitutes a full satisfaction of all damages alleged to have been caused, directly or indirectly, by RMHB to TWC, or by TWC to
RMHB, including any and all claims which could have been asserted by either party against the other as a result of the Occurrence;
or which could have been asserted in connection with, or related to, the business relationship between the parties.

7.       Ownership
and Non-Assignment of Claims. Each Party represents and warrants that it owns each of the Claims released by it under this
Agreement and that it neither has assigned nor transferred nor purported to assign or transfer any portion of the claims released
under this Agreement to any other person, firm, corporation or other entity, and that no other person, firm, corporation or other
entity has any lien, claim or interest in any claim or interest arising out of, related to or connected with this Agreement.

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8.       No
Representations. Each Party warrants that no promise of inducement has been offered or made except as herein set forth, and
that this Agreement is executed without reliance on any statement or representation by any Party or by any agent of a Party concerning
the nature and extent of the injuries and damages, or either of them, or the legal liability therefore.

9.       Entire
Agreement. The Parties agree and understand that this Agreement contains the entire agreement between TWC, on the one hand,
and RMBH on the other, and the terms of this Agreement are contractual and not a mere recital. For the avoidance of doubt, the
parties agree that the February 1, 2019 Beverage Manufacturing and Supply Agreement (the “Manufacturing Agreement”)
between RMHB and TWC terminated on April 1, 2020, and that this Agreement supersedes the Manufacturing Agreement in its entirety.

10.       Factual
Investigation. Each Party has read the Agreement carefully, knows and understands the Agreement’s contents, and has made
such investigation of the facts pertaining to the settlement, this Agreement, and of all matters pertaining to this Agreement,
as it deems necessary or desirable. Each Party enters into this Agreement without duress and of its own free will.

11.       Independent
Legal Advice. Each Party has received prior independent legal advice from legal counsel of such Party’s choice with respect
to the advisability of making the settlement provided for in this Agreement and with respect to the advisability of executing this
Agreement.

12.       Successors
and Assigns. This Agreement shall be binding on and inure to the benefit of the Parties and their respective heirs, successors,
assigns and legal representatives.

13.       Disputed
Rights. The Parties explicitly acknowledge and covenant that this Agreement represents a settlement and compromise of disputed
rights, claims and defenses, and that except as specifically set forth in this Agreement, by entering into this Agreement, no
Party admits or acknowledges any liability, wrongdoing, or negligence, all such liability, wrongdoing or negligence being expressly
denied.

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14.       Non-Disparagement.
TWC agrees that its agents will not say, write, post, or cause to be said or written any statement that, directly or indirectly
(by implication or otherwise) disparages, libels, slanders, defames, criticizes or otherwise reflects adversely upon or encourages
any adverse action against RMBH; likewise, RMBH agrees not to disparage TWC or any of its parent or subsidiary companies.

15.       Waiver,
Modification or Amendment. No modification, amendment, or waiver of any of the provisions contained in this Agreement, or any
future representations, promise, or condition in connection with the subject matter of this Agreement, shall be binding upon any
Party unless made in writing and signed by such Party or its duly authorized officer or agent.

16.       Negotiated
Agreement. This Agreement is the result of negotiation and no Party shall have the Agreement interpreted against it because
it was the drafting Party.

17.       Headings.
The use of headings in this Agreement is only for ease of reference and the headings have no effect and are not to be considered
part or terms of this Agreement.

18.       Execution
in Counterparts. This Agreement may be executed and delivered in any number of counterparts or copies (“counterpart”)
by the Parties. When each Party has signed and delivered at least one counterpart to the other Parties to this Agreement, each
counterpart shall be deemed an original and, taken together, shall constitute one and the same Agreement, which shall be binding
and effective as to the Parties. Facsimile or electronic signatures shall have the same force and effect as original signatures.

19.       Governing
Law. This Agreement, and all acts and transactions pursuant hereto, as well as the rights and obligations of the Parties pursuant
hereto, shall be governed, construed, and interpreted in accordance with the laws of the State of Texas.

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20.       Venue.
Any action or proceeding seeking to enforce any provision of this Agreement or based on any claimed right arising out of this Agreement
must be brought against any Party in the United States District Court for the Northern District of Texas, Dallas Division, subject
to the relevant jurisdictional requirements. Each of the Parties consents to the jurisdiction of the Northern District of Texas
(and any appropriate federal appellate court) for the purpose of enforcing this Agreement, and waives any objection to such venue.
If any Party initiating an action or proceeding seeking to enforce any provision of this Agreement or based on any claimed right
arising out of this Agreement does not or cannot allege an amount in controversy exceeding $75,000, exclusive of interest and costs,
the filing Party must stipulate in the Party’s initial filing that the amount in controversy is less than $75,000. Any action
hereunder seeking less than $75,000, or any action that the United States District Court for the Northern District of Texas determines
that it lacks jurisdiction to resolve (exclusive of appeals), must be brought in the District Court for Dallas County.

21.       Authority.
Each of the persons executing this Agreement represents and warrants that he or she is legally competent and qualified to execute
the Agreement, and has the authority to bind his, her or its respective principals to this Agreement.

22.       Effective
Date. This Agreement shall become effective upon the last party signing this Agreement.

23.       Attorneys’
fees. The parties will pay their own attorneys’ fees and bear any other expenses, including court costs, incurred by
them in connection with their disputes, including without limitation, the negotiation and execution of this Agreement. If a dispute
arises over the enforcement and/or interpretation of this Agreement, the prevailing party shall recover its reasonable and necessary
fees, costs and litigation expenses from the other party.

IN WITNESS
WHEREOF, the Parties have executed this Agreement on the date set forth above.

	 	
        TEXAS WELLNESS CENTER LLC

        (“TWC”) 
	ROCKY MOUNTAIN HIGH BRANDS, INC.  (“RMHB”)
	 	By:	/s/
    Carlos Frias	By:	/s/
    David Seeberger
	 	Its:	CEO	Its:	CEO
	 	Dated:	5/14/2020	Dated:	5/14/2020

 

    	 	7abmd-ex42_13.htm

Exhibit 4.2

 

DESCRIPTION OF COMMON STOCK

 

The following is a description of the common stock of ABIOMED, Inc. (“ABIOMED” or the “Company”). This description is qualified in its entirety by reference to the Company’s Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), and Amended and Restated By-Laws (the “By-Laws”).

 

Authorized Capitalization

 

As of March 31, 2020, ABIOMED’s authorized capital stock consisted of 100,000,000 shares of common stock, $0.01 par value per share (the “common stock”), and 1,000,000 shares of Class B preferred stock, $0.01 par value per share (the “Class B Preferred Stock”). As of March 31, 2020, 45,008,687 shares of common stock were outstanding and no shares of preferred stock were outstanding. The common stock is listed on the NASDAQ Global Select Market under the ticker symbol “ABMD”.

 

Common Stock

 

Voting Rights. The holders of common stock have one vote per share on all matters on which stockholders may vote, subject to the restrictions described below under the caption “Anti-Takeover Effect of Certain Provisions of the Certificate of Incorporation, the By-Laws and Delaware Law.” They do not have cumulative voting rights in the election of directors.

 

Dividend Rights. The holders of common stock are entitled to receive any dividends legally declared by the Board of Directors.

 

Liquidation Rights. If ABIOMED is liquidated or dissolved, the holders of the common stock are entitled to receive all assets available for distribution to the stockholders, subject to any rights of the holders of preferred stock that the Company may issue in the future.

 

Other Rights and Preferences. The common stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares. All of the shares of common stock are fully paid and non-assessable. The rights, powers, preferences and privileges of holders of common stock will be subject to those of the holders of any shares of preferred stock that the Company may authorize and issue in the future.

Preferred Stock

The Company’s board of directors (the “Board of Directors”) may fix or alter the rights, preferences and privileges, along with any limitations or restrictions of one or more series of Class B Preferred Stock, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of such series. The Board of Directors may also do the same for any other classes or series of preferred stock that become authorized in the future.

 

The issuance of preferred stock, once authorized, may adversely affect the holders of common stock by restricting dividends on the common stock, diluting the voting power of the common stock, having certain conversion provisions or subordinating the liquidation rights of the common stock. If preferred stock were issued, including Class B Preferred Stock, it could also have the effect, under certain circumstances, of delaying, deferring or preventing a change of control of the Company. Thus, the issuance of preferred stock, while providing flexibility in connection with possible financings, could have an adverse impact on the market price of common stock.

 

Anti-Takeover Effect of Certain Provisions of the Certificate of Incorporation, the By-Laws and Delaware Law

 

Certificate of Incorporation and By-Laws.  The Certificate of Incorporation and By-Laws include several provisions, in addition to the preferred stock, that may discourage an unfriendly tender offer, proxy contest, merger, or other change in control. These provisions are intended to enhance the likelihood of continuity and stability in the 

composition of the Board of Directors and its policies, and discourage unsolicited acquisition proposals or proxy contests that may involve an actual or threatened change of control of ABIOMED. However, these provisions could discourage others from making tender offers a stockholder might consider favorable, including a proposal that might result in the payment of a premium over the market price for the shares held by stockholders. These provisions are summarized in the following paragraphs.

 

Board Composition.  The Certificate of Incorporation contains provisions that:

 

	
 
	
•
	
classify the Board of Directors into three classes, with each class consisting, as nearly as may be possible, of one third of the number of directors constituting the entire Board of Directors;

	
 
	
•
	
allow the Board of Directors to be enlarged (within a range of three to 12 members) only by vote of a majority of the directors then in office, thereby eliminating the ability of stockholders to enlarge the Board of Directors;

	
 
	
•
	
provide that Board vacancies shall first be filled by the remaining directors, and in the absence of any directors, by the stockholders;

	
 
	
•
	
provide that directors may only be removed “for cause” and only by the class or classes of stock entitled to elect them; and

	
 
	
•
	
require an 80% affirmative vote of all votes entitled to be cast by the stockholders to amend the preceding provisions.

 

The By-laws also provide that members of the Board of Directors need be elected only by a plurality of the votes cast.

 

The classification of the Board of Directors and the other provisions highlighted above may make it more difficult to change the composition of the Board of Directors. Since each class of directors consists of approximately one-third of the number of directors, at least two stockholder meetings, instead of one, would be required to effect a change in the control of the Board of Directors.

 

Notice Procedures.  The By-Laws provide that advance written notice of any stockholder nomination for director to be brought before an annual meeting must be received at the Company’s principal executive offices not more than 120 days nor less than 90 days prior to the anniversary date of the immediately preceding annual meeting. Director nominations for a special meeting must be received at the Company’s principal executive offices not more than 120 days prior to the scheduled date of the special meeting nor less than (i) 90 days prior to the scheduled date of the special meeting or (ii) 10 days following the date on which the Company publicly announces the special meeting. The By-Laws also require, with any notice of director nomination, certain customary informational and other requirements regarding the proposing stockholder and any director nominee.

 

Special Meetings of Stockholders.  The By-Laws provide that special meetings of stockholders may only be called by the Chairman of the Board of Directors, the President or by the Board of Directors.

 

No Stockholder Action by Written Consent.  The Certificate of Incorporation and By-Laws provide that all stockholder action must be effected at a duly called meeting and not by written consent. This provision in the Certificate of Incorporation may be amended only by the affirmative vote of 80% of the votes entitled to be cast by stockholders.

 

Authorized but Unissued Common Stock.  The authority of the Board of Directors to issue authorized but unissued shares of common stock might be considered as having the effect of discouraging an attempt by another person or entity to effect a takeover or otherwise gain control of ABIOMED, since the issuance of additional shares of common stock would dilute the voting power of the common stock then outstanding.

 

Consideration of Relevant Factors in Business Combinations.  The Certificate of Incorporation explicitly directs the Board of Directors to take into account all relevant factors in exercising its business judgment in determining what is in the best interests of ABIOMED and its stockholders in evaluating certain tender offers and business combination proposals. Relevant factors include:

 

	
 
	
•
	
the Board of Directors’ estimate of the future value of ABIOMED;

	
 
	
•
	
the resources and future prospects of the other party; and

	
 
	
•
	
the possible social, legal, environmental and economic effects on ABIOMED, its employees, customers, suppliers and creditors and the communities in which its facilities are located.

 

Delaware Takeover Statute.  The Company is subject to the General Corporation Law of the State of Delaware (the “DGCL”), including Section 203. In general, Section 203 restricts the ability of a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder. An “interested stockholder” includes any person or entity who in the last three years obtained 15% or more of any class or series of stock entitled to vote generally in the election of directors.  Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder.  However, the restriction does not apply if:

 

	
 
	
•
	
the Board of Directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder, with approval taking place prior to such business combination or transaction;

	
 
	
•
	
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the Company’s voting stock outstanding at the time the transaction commenced, excluding certain shares;

	
 
	
•
	
the business combination is approved by the Board of Directors and by the affirmative vote of holders of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder, with approval taking place concurrently with or after the business combination.

 

Under certain circumstances, this provision may make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with the Company for a three-year period. This provision may encourage companies interested in acquiring the Company to negotiate in advance with the Board of Directors, because the stockholder approval requirement would be avoided if the Board of Directors were to approve either the business combination or the transaction that results in the stockholder becoming an interested stockholder. These provisions also may have the effect of preventing changes in the Board of Directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interest.

 

Limitations on Director Liability

 

The Certificate of Incorporation provides that no director shall be personally liable to the Company or the stockholders for monetary damages for any breach of fiduciary duty by such director as a director, notwithstanding any other provision of law to the contrary. However, a director shall be liable to the extent required by applicable law (i) for any breach of the director’s duty of loyalty to the Company or the stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, which relates to unlawful payments of dividends or unlawful stock repurchases or redemptions, or (iv) for any transaction from which the director derived an improper personal benefit.

 

Indemnification of Directors and Officers

The Certificate of Incorporation and By-Laws provide that the Company shall indemnify its directors and officers, whether former or present, and provide for the advancement to them of expenses in connection with actual or threatened proceedings and claims arising out of their status as such to the fullest extent permitted by the DGCL. These provisions may be held not to be enforceable for violations of the federal securities laws of the United States.

 

Transfer Agent and Registrar

 

The transfer agent for the common stock is American Stock Transfer & Trust Company, LLC.

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