**ROCKYMOUNTAIN HIGH****BRANDS, INC.**

**6 MONTH 6% CONVERTIBLEPROMISSORY NOTE**

 

**$100,000.00**

**("Principal")**

** **

****July 11, 2017

**("Effective Date")**

** **

****

ThisConvertible Promissory Note, dated **July 11, 2017,**(the "Note"),is by and between **ROCKY MOUNTAIN HIGH BRANDS, INC.,**a Nevada corporation(the "Company''), its successors and assigns, and **LSW Holdings, LLC,**towhich the Company is issuing this Note as ("Holder''). This Note is being issued pursuant to exemptions from registrationunder the Securities Act of 1933 of the United States, as amended.

 

***1.******                   ******PRINCIPAL, INTEREST, MATURITY DATE.***In considerationof complete and total satisfaction of a prior unsecured, undocumented loan to the Company in the same amount and effective thesame date as this convertible promissory note and without further recourse for that loan other than the terms of this note, satisfyingand superseding all obligations of the prior debt, The Company, its successors and assigns, hereby promises to pay to the Holder,or its successors or assigns, in immediately available funds, the total principal sum of ONE **HUNDREDTHOUSAND DOLLARS ($100,000.00 U.S.)**under the terms and conditions of this Note. The principal hereof and any unpaidand continuing to accrue interest thereon shall be due and payable to the Holder (unless such payment date is accelerated as providedin Section 8 hereof) not later than six months from the Effective Date, or **JANUARY11, 2018 (the "Maturity Date").**Payment of all amounts due hereunder shall be made at the address of the Holderprovided for in Section 10 hereof. Interest on the unpaid principal balance of this Note shall accrue from the above date firstwritten and shall continue to accrue until all unpaid principal and interest is paid in full. Interest shall be calculated at thesimple interest rate of six percent **(6%)**per annum. Unless Holderof the Note elects to convert the note to stock, the Company shall have effectively received a CALL notice, requiring the Companyto pay Holder all unpaid principal and interest upon the maturity of this note.

 

***2.******                   ******PREPAYMENT.***The Company may, at its option,at any time and from time to time, prepay all or any part of the principal balance of this Note (the "Prepayment" or"Prepayments") without penalty or premium, provided that concurrently with each such Prepayment the Company shall payaccrued interest on the principal, if any.

 

***3.******                   ******RENEWAL.***The Company may renew this Note uponnot less than thirty {30) days advance written notice to the Holder, wherein the granting of such renewal shall be at the soleoption and discretion of the Holder.

 

***4.******                  ******TRANSFERABILITY.***This Note shall not be transferred,pledged, hypothecated, or assigned by the Company without the express written consent of the Holder. In the event any third partyacquires a controlling interest in the Company or acquires substantially all of the assets of the Company (a "ReorganizationEvent"), this Note will survive and become an obligation of the party that a quires such controlling interest or assets. Inthe event of a Reorganization Event the Company agrees to make the party that acquires such controlling

** **

****interest or assets, aware of the terms of this Section and this Note. This Note, in whole or in part, may betransferred, pledged, hypothecated, or assigned by the Holder in its sole option and discretion, the "Transfer'', and allrights to the Conversion of this Note (as hereinafter defined), shall likewise be transferred, pledged, hypothecated, or assigned,in whole or in part, by the Holder in its sole option and discretion upon such Transfer.

 

*** ***

(a)                Conversion Rights; Conversion Dates; Conversion Price. The Holder shall provide the Company with written noticeof any Conversion (the "Conversion Notice") within five (5) business days of the date of Holder's verbal or written adviceto the Company that the Holder is executing said Conversion (the "Conversion Date"), in a form similar or identical tothe attached Exhibit A. The Company agrees to execute any Conversion requested by the Holder within the terms and conditionsof the following Section 5 (b), "Method of Conversion". The Holder may continue to request conversion of the outstandingprincipal and interest of the Note until all outstanding principal and interest of this Note is paid in full, including any additionalamounts due under Default or an Event of Default. Any amount so converted will be converted into common stock at a conversion priceper share of **50% of the average of the 3 lowest closing bid prices of the Common Stock of the Company during the 10 tradingdays prior to the conversion.**USD (the "Conversion Price").

 

(i)           Notwithstanding anything to the contrary set forth herein, upon Conversion of this Note in accordance with the termshereof, the Holder shall not be required to physically surrender this Note to the Company unless the entire unpaid principal andinterest of this Note is so converted.

 

(ii)          The Company shall not be required to pay any tax which may be payable in respect of any transfer involved in theissuance and delivery of shares of common stock or other securities or property on conversion of this Note in a name other thanthat of the Holder (or its street address), and the Company shall not be required to issue or deliver any such shares or othersecurities or property unless and until the person or persons (other than the Holder or the custodian in whose street name suchshares are to be held for the Holder's account) requesting the issuance thereof, shall have paid to the Company the amount of anysuch tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

 

(ii) TheConversion Shares are to be issued by the Company's transfer agent via express courier to the Holder within seven(7) business days from the Company's receipt of the Conversion Notice (the "Delivery Date"). Upon receipt of theConversion Notice, the Company will immediately issue an instruction letter with all supporting documentation, as required bylaw, to facilitate the issuance of the Conversion Shares by the Delivery Date. The Company will bear all costs related to theissuance of the Conversion Shares, including all costs of obtaining an attorney's opinion letter regarding the Conversion,and the****overnight delivery of the ConversionShares, and shall maintain adequate authorized capital stock, in type and quantity, at all times until this Note is paid infull to, or fully converted by, the Holder, in order to facilitate the terms and conditions of this Section. Any failure ofthe Company to comply with the provisions of this paragraph shall be deemed by the Holder an Event of Default under thisNote.

 

(iv) All Conversion Sharesto be issued are to be fully-paid, non-assessable, and lawfully issued by the Company. The Conversion Shares are to be freely transferrableon the books and records of the Company as and to the extent provided in this Note and applicable law.

 

***6.******                  ******CONVERSION LIMITATION.***Notwithstanding Section5 above, neither the Holder nor the Company may convert any outstanding amounts due under this Note if at the time of such conversionthe amount of common stock issued for the conversion, when added to other shares of Company common stock owned by the Holder orwhich can be acquired by Holder upon exercise or conversion of any other instrument, would cause the Holder to own more than fourand nine-tenths percent {4.99%) of the Company's outstanding common stock. The restriction described in this paragraph may be revokedupon sixty-one (61) days prior notice from Holder to the Company.

 

***7.******                 ******DEFAULT.***The occurrence of any one of thefollowing events shall constitute a Default or an Event of Default:

 

(a)                The non-payment, when due or not later than the Maturity Date, of any principal or interest pursuant to this Note;

 

(b)                The material breach of any representation or warranty in this Note, or the terms and conditions of any Section ofthis Note, including, but not limited to, Section 4, Section 6 or Section 10. In the event the Holder becomes aware of a breachof this Section ll{b), the absolute determination of the existence of such breach being in the sole judgment of the Holder, theHolder shall notify the Company in writing of such breach and the Company shall have five business days after notice to cure suchbreach;

 

 

 

(c)               The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization,arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute of any jurisdiction, whethernow or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Defaultunless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remainundismissed for 20 days; or the issuance of any order, judgment or decree for the appointment of a receiver or trustee for theCompany or for all or a substantial part of the property of the Company, which order, judgment or decree remains undismissed for20 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the propertyof the Company.

 

Upon the occurrence of any Defaultor Event of Default, the Holder, may, by written notice to the Company, declare all or any portionof the unpaid principal amount due to Holder, together with all accrued interest thereon, immediately due and payable (the thirty(30) day notice period in Section 1, above, will not be applicable in the case of an Event of Default), in which event it shallimmediately be and become due and payable; provided that upon the occurrence of an Event of Default as set forth in paragraph (d)or paragraph (e) hereof, all or any portion of the unpaid principal amount due to Holder, together with all accrued interest thereon,shall immediately become due and payable without any such notice.

 

Uponthe occurrence of any Default or Event of Default, the Holder at its sole discretion may elect to immediately, or at any time,convert the outstanding principal amount of this Note, or any portion of the principal amount hereof, and any accrued interest,in whole or in part, into shares of the common stock of the Company.

 

***8.******                  NOTICES.*** Notices to be given hereunder shallbe in writing and shall be deemed to have been sufficiently given if delivered personally or sent by overnight courier, or by facsimileor other electronic transmission (e.g., email), return receipt/or confirmation of receipt requested. Notice shall be deemed tohave been received on the date and time of personal or overnight delivery or electronic transmission, if received during normalbusiness hours of the recipient; if not, then on the next business day.

 

*Notices*to *the Companyshall be sent to:*

* *

**

ROCKY MOUNTAINHIGH BRANDS, INC.

9101LBJ Freeway, Suite 200

Dallas, TX 75243	..

ATTN: Michael R. Welch

 

*Notices*tothe Holder shall be sent to:
 

LSW HOLDINGS, LLC

c/oLily Li 4858 Route 32

Catskill, NY 12414

 
 4  ***9.**********REPRESENTATIONS                                                                                                                                                                AND WARRANTIES.	***The Company hereby makes the following representations and warranties to the Holder:
 

(a)               Organization. Good Standing and Power. The Company is a corporation duly incorporated, validly existing andin good standing under the laws of the State of Nevada and has the requisite corporate power to own, lease and operate its propertiesand assets and to conduct its business as it is now being conducted.

 

(b)                Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into andperform this Note and to issue and sell this Note. The execution, delivery and performance of this Note by the Company, and theconsummation by it of the Transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action.This Note, when executed and delivered, will constitute a valid and binding obligation of the Company enforceable against the Companyin accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of,creditor's rights and remedies or by other equitable principles of general application.

 

***10.******            ******REPRESENTATIONS AND WARRANTIES OF THE HOLDER.***TheHolder hereby represents and warrants to the Company that:

 

(a)                the Holder is an "accredited investor'' as such term is defined in Rule 501 of Regulation D promulgated underthe United States Securities Act of 1933, as amended, and the securities to be acquired by it upon Conversion of the Note (the"Securities") will be acquired for its own account and, as of the date hereof, not with a view toward, or for sale inconnection with, any distribution thereof except in compliance with applicable United States federal and state securities law;provided that the disposition of the Holder's property shall at all times be and remain within its control;

 

(b)                the Holder represents that (i) it is not in fact acting only as agent for another Holder (ii)that it is not a financial institution or other institutional investor, and (iii)it is acting for its own account or as a bona fide trustee for a trust organized and existing other than for the purposeof acquiring the Securities;

 

***11.******               GOVERNING LAW.***THIS NOTE SHALL BE GOVERNEDBY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF Texas APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMEDENTIRELY THEREIN, WITHOUT GIVING EFFECT TO THE RULES OR PRINCIPLES OF CONFLICTS OF LAW.

 
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***12.******                ******ATTORNEYS FEES.***In the event the Holderhereof shall refer this Note to an attorney to enforce the terms hereof, the Company agrees to pay all the costs and expenses incurredin attempting or effecting the enforcement of the Holder's rights, whether or not suit is instituted, including reasonable attorney'sand paralegals' fees and costs through and including all trialand appellate levels andpost-judgment proceedings and enforcements.

 

***13.******                ******CONFORMITY WITH LAW.***Itis the intentionof the Company and of the Holdertoconform strictlyto applicable usuryand similar laws. Accordingly, notwithstandinganything to the contrary in thisNote, it is agreed that theaggregate of all charges which constitute interest under applicable usury and similar lawsthat are contracted for, chargeable orreceivableunder or in respect of this Note, shall under no circumstancesexceed the maximum amount of interest permitted bysuchlaws,and any excess, whether occasioned byaccelerationormaturity of this Note or otherwise, shallbe canceled automatically, and if theretofore paid,shall be either refunded to the Company or credited on the principal amountof this Note.

 

***14.******                 ******WAIVERS.***Allwaivers must be inwriting by the Holder. Any waiver or failuretoenforce any provisionof this Note on one occasion will not be deemed a waiver ofany other provision or of such provisionon any other occasion.

 

***15.******                 ******HEADINGS.***Theheadings in this Note are for convenienceandarenot to be usedin interpreting this Note.

 

***16.******                ******COUNTERPARTS.***ThisNote may be executed inany number ofcounterparts, each of which sh allbe an original, but all of which together shall constitute one instrument.The parties hereto agree that this Note, agreements ancillary to it, and related documents to be entered into in connection withthis Note will be considered signedwhen the signature of a party isdelivered by facsimile transmission, or an electronic copy of this Noteisdelivered bearing electronic signaturesof the parties thereto. Such facsimile or electronicsignature shallbe treatedinallrespects ashaving thesameeffectas an originalsignature.

 

***17.******                ******FURTHER ASSURANCES.***TheCompany, its officers, directors and majorityshareholders hereto shallcooperate with oneanother at reasonabletimes and on reasonable conditions and shallpromptly execute anddeliver any andall instruments anddocuments requested by the Holder asmay be reasonably necessary in order to fully carry out theintent and purposes of this Note as contemplatedby the Holder at anytime prior to full repayment of the principal andinterest due under this Note.

 

***18.******             AUTHORITY TO BIND. A***responsibleofficer of the Company hasread andunderstands the contents ofthis Note and is empowered and duly authorized on behalf of the CompanyanditsBoardof Directors to executeit,and bind the Company toit.

 
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***19.******               *** 

 

**IN WITNESSWHEREOF,**the below parties have signed this Note as of the Effective Date.

 

**"Company"	****"Holder''**

** **

ROCKY MOUNTAIN HIGHBRANDS,INC.

a Nevada corporation

LSWHOLDINGS,LLC

a Limited Liability Corporation

 

****
By: /s/
MichaelR. Welch, President &CEO

 
 7  
EXHIBITA CONVERSION NOTICE

To:	[Company Name]

 

Theundersigned hereby irrevocably elects to exercise the right, represented by that certain Convertible Promissory Note dated	(the"Note"), a copy of which is attached hereto, to convert 	in outstanding principal amount, and

	 in accrued butunpaid interest on the Note into 	_ shares of common stock (the "Shares") of [Company Name] (the "Company''),or its successors and assigns.	The undersigned requests that certificates for such Shares be issued in the following names andquantities:

 

 

 

Dated:	20_:

 

 

**[Name]**

** **

****

By: 	_ __

 

Name:---------------
 8  
******ANNEX l**

** **

List of Conversions

 
Conversion DatePrice Per ShareNumber of SharesAmount ConvertedHolder                                                                      
 
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