EXCHANGE AGREEMENT

  

THIS EXCHANGE AGREEMENT (the “Agreement”) is dated this 13th day of March 2020,
by and among Rocky Mountain High Brands, Inc., a Nevada corporation (the
"Company"), all of the subsidiaries of the Company that are party to the
Agreement (collectively, "Subsidiaries") and OHS INVESTMENTS, LLC (the
"Holder").

 

WHEREAS, the Holder beneficially owns and holds certain $55,000.00 Promissory
Note dated September 28, 2018 as set forth on Exhibit A hereto (the "Note");

 

WHEREAS the total outstanding principal and interest on the Note as of February
19, 2020 equals $62,669.86; and

 

WHEREAS, the Holder desires to exchange (the "Exchange") the Note for a new
Convertible Promissory Note (the "Exchange Security") of the Company as set
forth and memorialized on Exhibit B hereto, and the Company desires to issue the
Exchange Security in exchange for the Note, all on the terms and conditions set
forth in this Agreement in reliance on the exemption from registration provided
by Section 3(a)(9) of the Securities Act of 1933, as amended (the "Securities
Act").

 

NOW, THEREFORE, in consideration of the terms and conditions contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

Section 1. Exchange. Subject to and upon the terms and conditions set forth in
this Agreement, the Holder agrees to surrender to the Company the Note and, m
exchange therefore, the Company shall issue to the Holder the Exchange Security.

 

1.1    Closing. On the Closing Date (as defined below), the Company will issue
and deliver (or cause to be issued and delivered) the Exchange Security to the
Holder, or in the name of a custodian or nominee of the Holder, or as otherwise
requested by the Holder in writing, and the Holder will surrender to the Company
the Note. The closing of the Exchange shall occur on February 20, 2020, or as
soon thereafter as the parties may mutually agree in writing (the "Closing
Date"), subject to the provisions of Section 4 and Section 5 herein.

 

1.2    Section 3(a)(9). Assuming the accuracy of the representations and
warranties of each of the Company and the Holder set forth in Sections 2 and 3
of this Agreement, the parties acknowledge and agree that the purpose of such
representations and warranties is, among other things, to ensure that the
Exchange qualifies as an exchange of securities under Section 3(a)(9) of the
Securities Act.

 

Section 2. Representations and Warranties of the Company. The Company represents
and warrants to the Holder that:

 

  

 

 

2.1     Organization and Qualification. The Company and each of the subsidiaries
of the Company (the "Subsidiaries") is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company, nor any Subsidiary is in violation
or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of
this Agreement or any documents executed in connection herewith (the
"Transaction Documents"), (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company's ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a "Material Adverse Effect") and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

2.2     Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and each of the other Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company's stockholders in connection herewith or therewith other than in
connection with the Required Approvals (as defined below). This Agreement and
each other Transaction Document to which it is a party has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally; (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

2.3     Issuance of Exchange Security. The issuance of the Exchange Security is
duly authorized and, upon issuance in accordance with the terms

 

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hereof, the Exchange Security shall be validly issued, fully paid and non
assessable. The shares of common stock, par value $0.001 per share (the "Common
Stock") issued upon conversion of the Exchange Security, when issued and
delivered in accordance with the terms of the Exchange Security, will be duly
and validly issued, fully paid and non-assessable, free and clear of all Liens
(as defined below) imposed by the Company, other than restrictions on transfer
under applicable state and federal securities laws. Upon issuance in accordance
herewith, the issuance by the Company of the Exchange Security shall be exempt
from the registration requirements of the Securities Act by virtue of Section
3(a)(9) thereunder and all of the shares of Common Stock issuable upon
conversion of the Exchange Security will be freely transferable and freely
tradable by the Holder without restriction pursuant to Rule 144 of the
Securities Act, assuming the Holder is not an Affiliate (as defined herein) and
the holding period requirements of Rule 144 have been satis fied. The shares of
Common Stock issuable upon conversion of the Exchange Security shall not bear
any restrictive or other lege nds or notations if the requirements of Rule 144
have been satisfied. The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the shares underlying
the Exchange Security at least equal to the greater of 9,410,000 shares of
Common Stock and 300% of the Required Minimum on the date hereof. " Required
Minimum" means, as of any date, the maximum aggregate number of shares of Common
Stock then issued or potentially issuable in the future pursuant to the
Transaction Documents, including any shares of Common Stock issuable upon
conversion in full of all Exchange Security (including shares of Common Stock
issuable as payment of interest on the Exchange Security), ignoring any
conversion limits set forth there in, and assuming that the Conversion Price is
at all times on and after the date of determination 75% of the then Conversion
Price on the trading day immediately prior to the date of determination.

2.4      No Conflicts. The execution, delivery and performance by the Company of
this Agreement and the other Transaction Documents to which it is a party, the
issuance of the Exchange Security and the consummation by it of the transactions
contemplated hereby and thereby do not and will not: (i) conflict with or
violate any provis ion of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizationa l or charter documents;
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the creation of
any options, contracts, agreements, liens, security interests, or other
encumbrances (" Liens") upon any of the properties or assets of the Company or
any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected; or (iii) subject to the Required Approvals
(as defined herein), conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a

 

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Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.

2.5     Acknowledgment Regarding the Exchange. The Company acknowledges and
agrees that the Holder is acting solely in the capacity of an arm's length third
party with respect to this Agreement and the transactions contemplated hereby.
The Company further acknowledges the Holder is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby, and any advice given by the
Holder or any of their representatives or agents in connection with this
Agreement is merely incidental to the Exchange.

2.6     No Commission; No Other Consideration. The Company has not paid or
given, and has not agreed to pay or give, directly or indirectly, any commission
or other remuneration for soliciting the Exchange. The Exchange Security is
being issued exclusively for the exchange of the Note and no other consideration
has or will be paid for the Exchange Security.

 

2.7     3(a)(9) Representation. The Company has not, nor has any person acting
on its behalf, directly or indirectly made any offers or sales of any security
or solicited any offers to buy any security under circumstances that would cause
the Exchange and the issuance of the Exchange Security pursuant to this
Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act which would prevent the Company from delivering the Exchange
Security to the Holder pursuant to Section 3(a)(9) of the Securities Act, nor
will the Company take any action or steps that would cause the Exchange,
issuance and delivery of the Exchange Security to be integrated with other
offerings to the effect that the delivery of the Exchange Security to the Holder
would be seen not to be exempt pursuant to Section 3(a)(9) of the Securities
Act.

2.8     No Third-party Advisors. Other than legal counsel, the Company has not
engaged any third parties to assist in the solicitation with respect to the
Exchange.

2.9     SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act of 1934, as amended (the
"Exchange Act"), including pursuant to Section 13(a) or 15(d) of the Exchange
Act, for the two years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the "SEC Reports")
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects
with the

 

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requirements of the Securities Act and the Exchange Act, as applicable, and none
of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year end audit adjustments.

2.10      Subsidiaries. All of the direct and indirect subsidiaries of the
Company are set forth on Schedule 2.10. The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities.

 

2.11      Filings, Consents and Approvals. Other than as set forth on Schedule
2.11, the Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental authority or any
natural person, firm, partnership, association, corporation, company, trust,
business trust or other entity (each, a "Person") in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the notice and/or application(s) to each applicable Trading
Market (as defined herein) for the issuance and the listing of the shares of
Common Stock issuable upon conversion of the Exchange S for trading thereon in
the time and manner required thereby, and (ii) the filing of Form D with the SEC
and such filings as are required to be made under applicable state securities
laws (collectively, the "Required Approvals").

2.12      Capitalization. The capitalization of the Company is as set forth on
Schedule 2.12. No Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Other than as set forth on Schedule
2.12, there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire any shares of Common
Stock, or

 

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contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or any securities of the Company which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt,
preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock. All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Board of Directors
or others is required for the issuance of the Exchange Security. There are no
stockholder agreements or other similar agreements with respect to the Company's
capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company's stockholders.

2.13      DTC Eligibility. The Company, through the Transfer Agent, currently
participates in the DTC Fast Automated Securities Transfer (FAST) Program and
the Common Stock can be transferred electronically to third parties via the DTC
Fast Automated Securities Transfer (FAST) Program.

2.14      Material Changes; Undisclosed Events, Liabilities or Developments.
Except as set forth in Schedule 2.14 or in a subsequent SEC Report filed prior
to the date hereof, since the date of the latest audited financial statements
included within the SEC Reports: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect; (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or disclosed in filings made with the SEC; (iii) the
Company has not altered its method of accounting; (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
stockholder or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate (as defined below), except
pursuant to existing Company stock option plans. The Company does not have
pending any request for confidential treatment of information before the SEC.
Except for the issuance of the Exchange Security contemplated by this Agreement,
no event, liability, fact, circumstance, occurrence or development has occurred
or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, properties,
operations, assets or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least one (1) trading day prior to the date that this representation is made.

 

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2.15     Litigation. Other than as set forth on Schedule 2.15, there is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an "Action") which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Exchange Security or (ii) could, if there
were an unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to the knowledge of
the Company, there is not pending or contemplated, any investigation by the SEC
involving the Company or any current or former director or officer of the
Company. The SEC has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

2.16     Labor Relations. No labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company, which
could reasonably be expected to result in a Material Adverse Effect. None of the
Company's or its Subsidiaries' employees is a member of a union that relates to
such employee's relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive
officer of the Company or any Subsidiary, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant in favor of any
third party, and the continued employment of each such executive officer does
not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters. The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

2.17      Compliance. Other than as set forth on Schedule 2.17, neither the
Company nor any Subsidiary: (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its

 

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properties is bound (whether or not such default or violation has been waived);
(ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any
statute, rule, ordinance or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

2.18      Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.

2.19     Title to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries, (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties and (iii) Liens held by the Holder. Any real
property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in compliance.

 

2.20     Intellectual Property. Other than as set forth on Schedule 2.20, the
Company and the Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights as described in the SEC Reports as necessary or
required for use in connection with their respective businesses and which the
failure to so have could have a Material Adverse Effect (collectively, the
"Intellectual Property Rights"). Except as set forth on Schedule 2.20 neither
the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement. Neither the Company nor any Subsidiary
has received, since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise has any
knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could

 

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not have or reasonably be expected to not have a Material Adverse Effect. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

2.21Intentionally Omitted.

2.22      Transactions With Affiliates and Employees. Other than as set forth on
Schedule 2.22, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from providing for the borrowing of money from or lending of
money to, or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.

 

2.23Intentionally Omitted.

2.24      Certain Fees. Other than as set forth on Schedule 2.24, no brokerage
or finder's fees or commissions are or will be payable by the Company or any
Subsidiaries to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents.

 

2.25      Investment Company. The Company is not, and is not an Affiliate of,
and immediately after receipt of payment for the Exchange Security, will not be
or be an Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. The Company shall conduct its
business in a manner so that it will not become an "investment company" subject
to registration under the Investment Company Act of 1940, as amended.

2.26      Registration Rights. Other than as set forth on Schedule 2.26 and the
Transaction Documents, no Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the Company or
any Subsidiaries.

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2.27      Listing and Maintenance Requirements. Other than as set forth in
Schedule 2.27, the Company has not, in the 12 months preceding the date hereof,
received notice from the OTC Markets or any other exchange or quotation service
on which the Common Stock is or has been listed or quoted (the "Trading Market")
to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. Other than as set forth in
Schedule 2.27, the Company is, and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.

2.28      Application of Takeover Protections. The Company and the Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company's articles of incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Holder as a result of the Holder and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the Company's issuance of
the Exchange Security pursuant to the Exchange.

2.29      Disclosure. Except with respect to the material terms and conditions
of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided
the Holder or its agents or counsel with any information that it believes
constitutes or might constitute material, non-public information. The Company
understands and confirms that the Holder will rely on the foregoing
representation in effecting transactions in securities of the Company. All of
the disclosure furnished by or on behalf of the Company to the Holder regarding
the Company and its Subsidiaries, their respective businesses and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading. The Company acknowledges and agrees that the Holder makes no nor
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3 hereof.

2.30      No Integrated Offering. Assuming the accuracy of the Holder's
representations and warranties set forth in Section 3, neither the Company, nor
any of its Affiliates, nor any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy

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any security, under circumstances that would cause the Exchange to be integrated
with prior offerings by the Company for purposes of (i) the Securities Act which
would require the registration of any such securities under the Securities Act,
or (ii) any applicable shareholder approval provisions of any Trading Market on
which any of the securities of the Company are listed or designated.

2.31      Solvency. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). Except as set forth
in Schedule 2.31,the SEC Reports set forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments. For the purposes of this
Agreement, "Indebtedness" means (x) any liabilities for borrowed money or
amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others, whether or not the
same, are, or should be, reflected in the Company's consolidated balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments in excess of
$50,000 due under leases required to be capitalized in accordance with GAAP.
Other than as set forth in Schedule 2.31, neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.

2.32      Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.

2.33     Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor
to the knowledge of the Company or any Subsidiary, any agent or other person
acting on behalf of the Company or any Subsidiary, has: (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity; (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds; (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its behalf of which
the Company is aware)

 11 

 

 

which is in violation of law or (iv) violated in any material respect any
provision ofFCPA.

2.34      No Disagreements with Accountants and Lawyers. There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company and the Company is current with respect to
any fees owed to its accountants and lawyers which could affect the Company's
ability to perform any of its obligations under any of the Transaction
Documents.

2.35      Acknowledgment Regarding Holder's Exchange of the Note. The Company
acknowledges and agrees that the Holder is acting solely in the capacity of an
arm's length party with respect to the Transaction Documents and the
transactions contemplated thereby.

2.36        Regulation M Compliance. The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the issuance or resale of any of
the Exchange Security or the shares of Common Stock into which the Exchange
Security is convertible or exercisable, as applicable, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Exchange Security or the shares of Common Stock into which the Exchange Security
is convertible or exercisable, as applicable, or (iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other
securities of the Company.

 

2.37      Office of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department ("OFAC").

2.38      Bank Holding Company Act. Neither the Company nor any of its
Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the "BHCA") and to regulation by the Board of Governors of the
Federal Reserve System (the "Federal Reserve"). Neither the Company nor any of
its Subsidiaries or Affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five percent (25%) or more of the total equity of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

 

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2.39      Money Laundering. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
"Money Laundering Laws"), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.

 

Section 3. Representations and Warranties of the Holder. The Holder represents
and warrants to the Company that:

3.1     Ownership of the Note. The Holder is the legal and beneficial owner of
the Note. The Holder paid for the Note, and has continuously held the Note since
its issuance or purchase. The Holder, individually or through an affiliate, owns
the Note outright and free and clear of any options, contracts, agreements,
liens, security interests, or other encumbrances.

3.2    No Public Sale or Distribution. The Holder is acquiring the Exchange
Security in the ordinary course of business for its own account and not with a
view toward, or for resale in connection with, the public sale or distribution
thereof; provided, however, that by making the representations herein, the
Holder does not agree to hold any of the Exchange Security or the shares of
Common Stock into which such security is convertible, for any minimum or other
specific term and reserves the right to dispose of the Exchange Security and the
shares of Common Stock into which such security is convertible at any time in
accordance with an exemption from the registration requirements of the
Securities Act and applicable state securities laws. The Holder does not
presently have any agreement or understanding, directly or indirectly, with any
person to distribute, or transfer any interest or grant participation rights in,
the Note or the Exchange Security.

3.3    Accredited Investor and Affiliate Status. The Holder is an "accredited
investor" as that term is defined in Rule 501 of Regulation D under the
Securities Act. The Holder is not, and has not been, for a period of at least
three months prior to the date of this Agreement (a) an officer or director of
the Company, (b) an "affiliate" of the Company (as defined in Rule 144) (an
"Affiliate") or (c) a "beneficial owner" of more than 10% of the Company's
Common Stock (as defined for purposes of Rule 13d-3 of the Exchange Act).

3.4     Reliance on Exemptions. The Holder understands that the Exchange is
being made in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and the Holder's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of the Holder set forth herein in order to determine the

 

 13 

 

 

availability of such exemptions and the eligibility of the Holder to complete
the Exchange and to acquire the Exchange Security.

3.5    Information. The Holder has been furnished with all materials relating to
the business, finances and operations of the Company and materials relating to
the Exchange which have been requested by the Holder. The Holder has been
afforded the opportunity to ask questions of the Company. Neither such inquiries
nor any other due diligence investigations conducted by the Holder or its
representatives shall modify, amend or affect the Holder's right to rely on the
Company's representations and warranties contained herein. The Holder
acknowledges that all of the documents filed by the Company with the SEC under
Sections 13(a), 14(a) or 15(d) of the Exchange Act that have been posted on the
SEC's EDGAR site are available to the Holder, and the Holder has not relied on
any statement of the Company not contained in such documents in connection with
the Holder's decision to enter into this Agreement and the Exchange.

3.6    Risk. The Holder understands that its investment in the Exchange Security
involves a high degree of risk. The Holder is able to bear the risk of an
investment in the Exchange Security including, without limitation, the risk of
total loss of its investment. The Holder has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision with respect to the Exchange. There is no assurance that the Exchange
Security or any securities into which the Exchange Security may convert will
continue to be quoted, traded or listed for trading or quotation on the OTC
Markets or on any other organized market or quotation system.

3.7     No Governmental Review. The Holder understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement in connection with the
Exchange or the fairness or suitability of the investment in the Exchange
Security nor have such authorities passed upon or endorsed the merits of the
Exchange Security.

3.8    Organization; Authorization. The Holder is duly organized, validly
existing and in good standing under the laws of its state of formation and has
the requisite organizational power and authority to enter into and perform its
obligations under this Agreement.

3.9    Validity; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Holder and shall constitute
the legal, valid and binding obligations of the Holder enforceable against the
Holder in accordance with its terms. The execution, delivery and performance of
this Agreement by the Holder and the consummation by the Holder of the
transactions contemplated hereby (including, without limitation, the irrevocable
surrender of the Note) will not result in a violation of the organizational
documents of the Holder.

 

 14 

 

 

3.10    Prior Investment Experience. The Holder acknowledges that it has prior
investment experience, including investment in securities of the type being
exchanged, including the Note and the Exchange Security, and has read all of the
documents furnished or made available by the Company to it and is able to
evaluate the merits and risks of such an investment on its behalf, and that it
recognizes the highly speculative nature of this investment.

3.11    Tax Consequences. The Holder acknowledges that the Company has made no
representation regarding the potential or actual tax consequences for the Holder
which will result from entering into the Agreement and from consummation of the
Exchange. The Holder acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and the Exchange.

3.12    No Registration, Review or Approval. The Holder acknowledges,
understands and agrees that the Exchange Security is being exchanged hereunder
pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities
Act.

 

Section 4. Conditions Precedent to Obligations of the Company. The obligation of
the Company to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Holder with prior
written notice thereof:

4.1Delivery. The Holder shall have delivered to the Company the Note.

4.2     No Prohibition. No order of any court, arbitrator, or governmental or
regulatory authority shall be in effect which purports to enjoin or restrain any
of the transactions contemplated by this Agreement; and

 

4.3     Representations. The accuracy in all material respects when made and on
the applicable Closing Date of the representations and warranties of the Holder
contained herein (unless as of a specific date therein);

 

Section 5. Conditions Precedent to Obligations of the Holder. The obligation of
the Holder to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of each of the following conditions, provided that
these conditions are for the Holder's sole benefit and may be waived by the
Holder at any time in its sole discretion by providing the Company with prior
written notice thereof:

 

5.1     No order of any court, arbitrator, or governmental or regulatory
authority shall be in effect which purports to enjoin or restrain any of the
transactions contemplated by this Agreement;

 

5.2     the representations and warranties of the Company (i) shall be true and
correct in all material respects when made and on the applicable Closing Date
(unless as of a specific date therein) for such representations and warranties

 

 15 

 

 

contained herein that are not qualified by "materiality" or "Material Adverse
Effect" and (ii) shall be true and correct when made and on the applicable
Closing Date (unless as of specific date therein) for such representations and
warranties contained herein that are qualified by "materiality" or "Material
Adverse Effect";

 

5.3     all obligations, covenants and agreements of the Company required to be
performed at or prior to the applicable Closing Date shall have been performed;
and

 

5.4     from the date hereof to the relevant Closing Date, trading in the
Company's common stock shall not have been suspended by the SEC or any Trading
Market and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any trading market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of the Holder makes it
impracticable or inadvisable to purchase the Exchange Security at the closing.

 

Section 6. Holding Period. For the purposes of Rule 144 of the Securities Act,
the Company acknowledges that the holding period of the Exchange Security may be
tacked on the holding period of the Note, and the Company agrees not to a
position contrary to this Section 6.

 

Section 7. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
shall be construed under the laws of the state of Nevada, without regard to
principles of conflicts of law or choice of law that would permit or require the
application of the laws of another jurisdiction. The Company and the Holder each
hereby agrees that all actions or proceedings arising directly or indirectly
from or in connection with this Agreement shall be litigated only in the Supreme
Court of the State of New York or the United States District Court for the
Southern District of New York located in New York County, New York. The Company
and the Holder each consents to the exclusive jurisdiction and venue of the
foregoing courts and consents that any process or notice of motion or other
application to either of said courts or a judge thereof may be served inside or
outside the State of New York or the Southern District of New York by generally
recognized overnight courier or certified or registered mail, return receipt
requested, directed to such party at its or his address set forth below (and
service so made shall be deemed "personal service") or by personal service or in
such other manner as may be permissible under the rules of said courts. THE
COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

 

Section 8. Countemarts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and

 16 

 

 

shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.

 

Section 9. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

Section 10. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

Section 11. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

 

Section 12. Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Holder, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Holder makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Holder. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought.

 

Section 13. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (a) upon receipt, when
delivered personally; (b) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (c) one calendar day (excluding
Saturdays, Sundays, and national banking holidays) after deposit with an
overnight courier service, in each case properly addressed to the party to
receive the same.

 

 17 

 

 

The addresses and facsimile numbers for such communications shall be:

If to the Company:

Rocky Mountain High Brands, Inc.

9101 LBJ Freeway #200

 

Dallas TX 75243

 

 

 

Attn: David M. Seeberger

 

If to the Holder:

 

GHS Investments, LLC

420 Jericho Turnpike, Suite 102

Jericho NY 11753

 

or to such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party five

(5) days prior to the effectiveness of such change.

 

Section 14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Exchange Security. The Holder may assign some or
all of its rights hereunder without the consent of the Company, in which event
such assignee shall be deemed to be the Holder hereunder with respect to such
assigned rights.

 

Section 15. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the·parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

Section 16. Survival of Representations. The representations and warranties of
the Company and the Holder contained in Sections 2 and 3, respectively, will
survive the closing of the transactions contemplated by this Agreement.

 

Section 17. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

 

[Signature Page Follows]

 

 18 

 

 

IN WITNESS WHEREOF, the parties have executed this Exchange Agreement as of the
date first written above.

 

Rocky Mountain High Brands, Inc.

 

By: Michael Welch

Name: Michael Welch

Title: Chief Executive Officer

 

 

 

GHS INVESTMENTS, LLC

 

By: /s/ Mark Grober

Name: Mark Grober

Title: Member

 19 

 

  

EXHIBIT A

 

e Promissory Notes

 

Principal Interest OID Date

 

 

Cumulative Total for Face Value and Interests: $

 

 20 

 

 

EXHIBIT B

 

Form of and Schedule of Security being Exchanged

 

Promissory Note $

 

 

 

 

 21 

 

 

SCHEDULES

 

Disclosure Schedules to Exchange Agreement between GHS Investments LLC and
________. dated ________, 2020

 

 

[Company to complete schedules]

 

 22