Document:

NEITHER
THE ISSUANCE
AND SALE OF
THE SECURITIES
REPRESENTED
BY THIS NOTE NOR THE SECURITIES
INTO WHICH THESE
SECURITIES
ARE CONVERTIBLE
HAVE BEEN
REGISTERED
UNDER THE SECURITIES
ACT OF 1933, AS AMENDED,
OR APPLICABLE
STATE
SECURITIES
LAWS. THE
SECURITIES
MAY NOT BE OFFERED
FOR SALE,
SOLD, TRANSFERRED
OR ASSIGNED
(I) IN THE ABSENCE
OF (A) AN EFFECTIVE
REGISTRATION
STATEMENT
FOR THE SECURITIES
UNDER THE SECURITIES
ACT OF 1933, AS AMENDED,
OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL
SHALL BE
SELECTED
BY THE HOLDER),
IN A GENERALLY
ACCEPTABLE
FORM, THAT
REGISTRATION
IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS
SOLD PURSUANTTO
RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING
THE FOREGOING,
THE SECURITIES
MAY BE PLEDGED
IN CONNECTION WITH
A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT
SECURED BY
THE SECURITIES.

 

 

 

Amount:
$1,107,606

Date:
October 6, 2017

 

 

SECURED
PROMISSORY NOTE

 

Rocky Mountain High Brands, Inc., .(F/K/A
Republic of Texas Brands, Inc., and Totally Hemp Crazy, Inc.), (hereinafter
called the “Company”),
hereby promises
to pay to the order
of GHS Investments, LLC, a Nevada Limited
Liability Company, or its registered
assigns (the
“Holder”)
the sum of $1,107,606 on  July 6, 2018, (the "Maturity Date") together
with any interest
as set forth
herein, and to pay
interest
on the unpaid principal
balance
hereof
at the rate
of ten percent
(10%) (the
“Interest Rate”)
per annum from
the date hereof
(the “Issue Date”)
until the same becomes
due and payable,
whether at
maturity or upon acceleration
or by prepayment
or otherwise.

 

This Note shall serve in lieu of and tack back to, $1,107,606
of outstanding principal owing pursuant to that certain $1,500,000 "Amended & Restated Demand Convertible Promissory Note"
dated March 25, 2015 and originally issued to Roy Meadows.

 

This Note may
not be prepaid
in whole or in part except
as otherwise explicitly
set forth
herein. Following any Event of Default, all amounts owing pursuant to this Note shall
bear interest
at the rate of
twenty percent
(20%)
per annum from
the due date thereof
until the same is paid (“Default
Interest”).
Interest shall
be computed on the basis
of a 365-day year
and the actual
number of days elapsed.
All payments due
hereunder
(to the extent
not converted
into common stock)
shall be made in lawful
money of the United States
of America.

    	 	1	 

    	 

    

 

All payments
shall be made
at such address
as the Holder shall
hereafter
give to the Company by
written
notice made
in accordance
with the provisions of this Note. Whenever
any amount expressed
to be due by the terms of this Note is
due on any day which
is not a business day, the
same shall instead
be due on the next
succeeding
day which
is a business day and,
in the case of any interest
payment
date which
is not the date on which
this Note is paid in full, the extension
of the due date thereof
shall not be taken
into account for
purposes
of determining the
amount of interest due on such
date. As used
in this Note, the term
“business day”
shall mean
any day
other than
a Saturday,
Sunday or a day on which
commercial
banks in the city
of New York,
New York
are authorized
or required
by law or executive
order to remain
closed.Each
capitalized
term used herein,
and not otherwise defined,
shall have
the meaning ascribed
thereto in the supporting documents of same date (attached hereto).

 

This Note is free
from all taxes,
liens, claims
and encumbrances
with respect
to the issue thereof and
shall not be subject
to preemptive
rights
or other similar rights
of shareholders
of the Company and
will not impose personal liability
upon the holder thereof.

 

The following
terms shall
apply to this Note:

 

ARTICLE
I. CONVERSION
RIGHTS

 

1.1       Conversion
Right. Upon At any time following the
execution of this Note, the Holder shall
have the right to convert
all or any
part of the
outstanding and unpaid
principal
amount of this Note into fully
paid and non- assessable
shares
of Common Stock,
as such Common
Stock exists
on the Issue Date, or any
shares of
capital
stock or other securities
of the Company into which such
Common Stock
shall hereafter
be changed
or reclassified
at the conversion
price (the “Conversion
Price”)
determined
as provided
herein (a “Conversion”);
provided, however,
that in no event
shall the Holder be entitled
to convert
any portion
of this Note in excess
of that portion of this Note upon
conversion
of which the sum of (1)
the number of shares
of Common Stock
beneficially
owned by
the Holder and its affiliates
(other than
shares of Common
Stock which
may be deemed
beneficially
owned through
the ownership of the unconverted
portion of the Notes
or the unexercised
or unconverted
portion of any
other security
of the Company subject to a limitation
on conversion
or exercise
analogous
to the limitations contained
herein) and (2)
the number of
shares of
Common Stock
issuable upon the conversion
of the portion of this Note with respect
to which the determination
of this proviso is being made,
would result in beneficial
ownership by
the Holder and its affiliates
of more than 4.99%
of the outstanding shares of Common
Stock. For
purposes
of the proviso to the immediately
preceding
sentence,
beneficial
ownership shall
be determined
in accordance
with Section 13(d)
of the Securities
Exchange
Act of 1934, as amended
(the “Exchange
Act”),
and Regulations
13D-G thereunder.
The number of shares
of Common Stock
to be issued upon each conversion
of this Note shall be determined
by dividing the Conversion
Amount (as defined
below) by the applicable
Conversion Price
then in effect on the date
specified
in the notice of conversion,
(the “Notice
of Conversion”),
delivered to the Company
by the Holder in accordance
with the

    	 	2	 

    	 

    

Sections
below; provided
that the Notice
of Conversion
is submitted by
 facsimile or e-mail
(or by
other means
resulting in, or reasonably
expected
to result in, notice)
to the Company before
6:00 p.m., New York,
New York
time on such conversion
date (the
“Conversion
Date”).
Notwithstanding the foregoing, the term "4.99%" above shall be replaced with "9.99%" following any Event of
Default if the Holder, in its sole discretion and in writing, elects to demand the replacement. If the term "4.99%" is
replaced with "9.99%" pursuant to the preceding sentence, such increase to "9.99%" shall remain at 9.99% until
decreased by the Holder in writing.

 

The number
of shares of
Common Stock
to be issued upon each conversion
of this Note shall be determined
by dividing the Conversion
Amount (as defined
below) by the applicable
Conversion Price
then in effect on the date
specified
in the notice of conversion,
(the “Notice
of Conversion”),
delivered to the Company by
the Holder in accordance
with the Sections below.

The term
“Conversion
Amount” means, with respect
to any conversion
of this Note, the sum of (1)
the principal
amount of this Note to be converted
in such conversion
plus (2) at the Company’s
option, accrued
and unpaid interest,
if any, on such
principal
amount at the interest
rates provided
in this Note to the Conversion
Date,
plus (3) at the Company’s
option, Default Interest,
if any, on the amounts
referred
to in the immediately
preceding
clauses
(1) and/or
(2) plus (4) at
the Holder’s option,
any amounts
owed to the Holder.

 

1.2       Conversion
Price.

 

At any time following the execution of this Note, the
Holder shall have the right to convert this note in its in entirety or in part(s) into Common Stock of the Company valued at a
thirty seven and a half percent (37.5%) discount off of the lowest trading price for the Common Stock during the twenty (20) trading
days immediately preceding a conversion date.

 

 

1.3       Authorized
Shares. The Company
covenants
that during
the period the conversion
right
exists the Company
will reserve
from its authorized
and unissued Common
Stock a sufficient
number of shares, free
from preemptive
rights, to provide
for the issuance
of Common Stock
upon the full conversion
of this Note. The Company
is required
at all times
to have authorized
and reserved
three times the number
of shares that
is actually issuable
upon full conversion
of the Note (based
on the Conversion Price
of the Notes in effect
from time to time)(the
“Reserved
Amount”). The Reserved
Amount shall be increased
from time to time in accordance
with the Company’s obligations.

The
Company represents
that upon issuance,
such shares
will be duly and validly
issued, fully
paid and non-assessable.
In addition, if the Company
shall issue any
securities
or make any
change
to its capital structure
which would change
the number of
shares of Common Stock
into which the Notes shall
be convertible at
the then current

    	 	3	 

    	 

    

Conversion
Price,
the Company shall at
the same time make proper
provision so that
thereafter there
shall be a sufficient
number of shares
of Common Stock
authorized
and reserved,
free from
preemptive rights,
for conversion
of the outstanding Notes.

 

The Company
(i) acknowledges
that it will irrevocably
instruct
its transfer
agent to issue
certificates
for the Common
Stock issuable
upon conversion of this Note,
and (ii) agrees
that its issuance
of this Note shall constitute
full authority
to its officers
and agents
who are charged
with the duty of executing
stock certificates
to execute
and issue the necessary
certificates
for shares
of Common Stock
in accordance
with the terms and conditions
of this Note.

 

If,
at any
time the Company does not maintain
the Reserved
Amount it will be considered an
Event of Default
as defined in this Note.

 

1.4       Method
of Conversion.

 

(a)Mechanics
of Conversion.
 This Note may be converted
by the Holder,
in whole or in part, at
any time following
execution by submitting to the Company
a Notice of Conversion
(by facsimile,
e-mail or other
reasonable
means of communication
dispatched
on the Conversion
Date prior
to 6:00 p.m., New York, New
York time).

 

(b)       Surrender
of Note Upon Conversion.
Notwithstanding anything
to the contrary
set forth
herein,
upon conversion of this
Note in accordance
with the terms hereof,
the Holder shall not be required
to physically
surrender this Note to the
Company unless the entire
unpaid principal
amount of this Note is so converted.
The Holder and the Company
shall maintain
records
showing the principal
amount so converted
and the dates
of such conversions
or shall use such other
method, reasonably
satisfactory
to the Holder and the Company,
so as not to require
physical
surrender
of this Note upon each
such conversion.
In the event of any
dispute or discrepancy,
such records
of the Holder shall, prima facie,
be controlling and
determinative
in the absence
of manifest error.
The Holder and any
assignee,
by acceptance
of this Note, acknowledge
and agree
that, by reason
of the provisions of this paragraph,
following conversion
of a portion of this Note,
the unpaid and
unconverted
principal
amount of this Note represented
by this Note may be
less than the amount
stated on the face
hereof.

 

(c)Payment
of Taxes.
The Company shall not be
required
to pay any
tax which may
be payable
in respect of any
transfer
involved in the issue and delivery
of shares of Common
Stock or other
securities
or property
on conversion of this Note
in a name other than that
of the Holder (or
in street name),
and the Company shall
not be required
to issue or deliver any
such shares
or other securities
or property
unless and
until the person or persons
(other than
the Holder or the custodian
in whose street name such
shares are
to be held for the Holder’s
account) requesting
the issuance
thereof shall
have paid to the Company
the amount of any
such tax
or shall have established
to the satisfaction of the Company
that such
tax has been
paid.

 

(d)       Delivery
of Common Stock
Upon Conversion. Upon receipt

    	 	4	 

    	 

    

by
the Company from
the Holder of a facsimile
transmission
or e-mail
(or other
reasonable
means of  communication)
of a Notice of  Conversion
meeting the  requirements
 for  conversion
 as provided
in this Section,
the Company shall
issue and deliver
or cause
to be issued and
delivered
to or upon the order
of the Holder certificates
for the Common
Stock
issuable upon such
conversion
within three (3)
business days
after
such receipt
(the “Deadline”)
(and, solely
in the case
of conversion
of the entire
unpaid principal
amount hereof,
surrender
of this Note)
in accordance
with the terms
hereof and
the Purchase
Agreement.
The Company will pay any and all legal, deposit and transfer agent fees that may be incurred or charged in connection with the
issuance of shares of the Company's Common Stock to the Holder arising out of or relating to the conversions of this Note.

 

Within Five (5) business
days of having received common stock pursuant to a Notice of Conversion and prior to having traded any shares from that specific
conversion, Holder may elect to rescind the Notice of Conversion and return the shares, at Holder's expense, to the Company's Transfer
Agent. In the event of such rescission, the principal amount outstanding under this Note shall be adjusted to include the Conversion
Amount which was deducted from the Note as part of the rescinded Notice of Conversion.

 

(e)       Obligation
of Company to Deliver
Common Stock.
Upon receipt
by the Company
of a Notice of Conversion,
the Holder shall be deemed
to be the holder of record
of the Common Stock
issuable upon such
conversion,
the outstanding principal
amount and the amount
of accrued
and unpaid interest
on this Note shall be reduced
to reflect
such conversion,
and, unless the Company
defaults on its obligations
under this Article
I, all rights
with respect
to the portion of this Note being
so converted
shall forthwith
terminate except
the right to receive
the Common Stock
or other securities,
cash or other assets,
as herein provided,
on such conversion.
If the Holder shall have
given
a Notice of Conversion
as provided
herein, the Company’s
obligation to issue and
deliver the certificates
for Common
Stock shall
be absolute and unconditional,
irrespective of
the absence
of any action by the
Holder to enforce
the same, any
waiver or consent
with respect to any
provision thereof,
the recovery
of any judgment
against any
person or
any action
to enforce
the same,
any failure
or delay in the enforcement
of any other
obligation of the Company
to the holder of record,
or any setoff,
counterclaim,
recoupment, limitation
or termination,
or any breach
or alleged
breach
by the Holder of any
obligation to the Company,
and irrespective
of any other
circumstance
which might
otherwise limit such
obligation of the Company
to the Holder in connection
with such conversion.
The Conversion
Date specified
in the Notice of Conversion
shall be the Conversion
Date so long as the Notice
of Conversion
is received by the
Company before
6:00 p.m., New York, New
York time, on such
date.

 

(f)Delivery
of Common Stock
by Electronic
Transfer.In
lieu of delivering
physical
certificates
representing
the Common Stock
issuable upon conversion,
provided the Company is participating
in the Depository Trust
Company
(“DTC”)
Fast Automated
Securities
Transfer
(“FAST”)
program,
upon request
of the Holder and its compliance
with the provisions contained
in Section
1.1 and in this Section
1.4, the Company shall use its best efforts
to cause its transfer
agent
to electronically

    	 	5	 

    	 

    

transmit
the Common Stock
issuable upon conversion
to the Holder by crediting
the account
of Holder’s Broker
with DTC through its Deposit
Withdrawal
Agent Commission (“DWAC”)
system.

 

(g)Failure
to Deliver
Common Stock
Prior to Deadline.
Without in any
way limiting the Holder’s
right
to pursue other remedies,
including actual
damages
and/or equitable
relief, the parties
agree that
if delivery
of the Common Stock
issuable upon conversion
of this Note is not delivered
by the Deadline the Company
shall pay to the Holder
$2,000 per day
in cash, for
each day
beyond the Deadline
that the Company fails
to deliver such
Common Stock.
Such cash
amount shall be paid
to Holder by the fifth
day of the month following
the month in which it has accrued
or, at the
option of the Holder (by
written notice
to the Company by the first
day of the month following
the month in which it has accrued),
shall be added
to the principal
amount of this Note,
in which event
interest shall
accrue thereon
in accordance
with the terms of this Note and such
additional
principal
amount shall be convertible
into Common Stock
in accordance
with the terms of this Note. The Company
agrees
that the right
to convert
is a valuable
right to the Holder.
The damages
resulting from a failure,
attempt to frustrate,
interference
with such conversion
right are
difficult
if not impossible to qualify.Accordingly
the parties
acknowledge
that the liquidated
damages
provision contained
in this Section are
justified.
Any delay or failure of performance by the Company hereunder shall be excused if and to the extent caused by Force Majeure. For
purposes of this agreement, Force Majeure shall mean a cause or event that is not reasonably foreseeable and not caused by the
Company, including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.

 

1.5       Concerning
the Shares. The shares
of Common Stock
issuable upon conversion
of this Note may not be sold or transferred
unless (i) such
shares are
sold pursuant
to an effective
registration
statement
under the Act or (ii)
the Company or its transfer
agent shall
have been
furnished
with an opinion of counsel
(which opinion shall
be in form, substance
and scope customary
for opinions of counsel
in comparable
transactions)
to the effect
that the shares to be sold or transferred
may be sold or transferred
pursuant to an
exemption
from such registration
or (iii) such shares
are sold or transferred
pursuant to Rule
144 under the Act
(or a successor rule)
(“Rule 144”)
or (iv) such shares
are transferred
to an “affiliate”
(as defined
in Rule 144) of the Company who agrees
to sell or otherwise
transfer
the shares
only in accordance
with this Section 1.5 and
who is an Accredited
Investor. Except
as otherwise provided
herein (and subject to the removal
provisions set forth
below),
until such time as
the shares
of Common Stock
issuable upon conversion
of this Note have been
registered
under the Act or
otherwise may
be sold pursuant to Rule
144 without any restriction
as to the number of securities
as of a particular
date that can
then be immediately
sold, each certificate
for shares of
Common Stock
issuable upon conversion
of this Note that has
not been so included
in an effective
registration
statement
or that has not been
sold pursuant to an
effective
registration
statement
or an exemption
that permits removal
of the legend,
shall bear
a legend
substantially
in the following form,
as appropriate:

 

    	 	6	 

    	 

    

“NEITHERTHEISSUANCEANDSALEOFTHESECURITIES
REPRESENTED
BY THIS
CERTIFICATE
NOR THE
SECURITIES
INTO WHICHTHESE
SECURITIES
AREEXERCISABLE
HAVE BEEN
REGISTERED UNDER
THE SECURITIES
ACT OF 1933,
AS AMENDED,
OR APPLICABLE
STATE SECURITIES
LAWS. THE
SECURITIES
MAY NOT
BE OFFERED
FOR SALE, SOLD,
TRANSFERRED
OR ASSIGNED
(I) IN
THE ABSENCE
OF (A)
AN EFFECTIVE
REGISTRATION
STATEMENT FOR
THE SECURITIES
UNDER THE
SECURITIES
ACT OF 1933, AS
AMENDED, OR
(B) AN
OPINION
OF COUNSEL
(WHICH
COUNSEL
SHALL BE
SELECTED
BY THEHOLDER),
IN A GENERALLY ACCEPTABLE
FORM,THAT
REGISTRATION
IS NOT REQUIRED
UNDER SAID
ACT OR (II)
UNLESS SOLD
PURSUANT
TO RULE 144 OR
RULE 144A UNDER SAID
ACT. NOTWITHSTANDING
THE FOREGOING,
THE SECURITIES
MAY BE PLEDGED
IN CONNECTION
WITH A BONA
FIDE MARGIN
ACCOUNT
OR OTHER
LOAN
OR FINANCING
ARRANGEMENT
SECURED BY THE
SECURITIES.”

 

The legend
set forth
above shall
be removed
and the Company shall
issue to the Holder a new certificate
therefore
free
of any transfer
legend
if (i) the Company
or its transfer
agent shall
have received
an opinion of counsel,
in form, substance
and scope customary
for opinions of counsel
in comparable
transactions,
to the effect
that a public sale
or transfer
of such Common
Stock may
be made without registration
under the Act, which
opinion shall be accepted
by the Company
so that the sale or transfer
is effected
or (ii) in the case
of the Common Stock
issuable upon conversion
of this Note, such
security
is registered
for sale by
the Holder under
an effective
registration
statement
filed under
the Act or otherwise
may be sold pursuant
to Rule 144 without any
restriction
as to the number of securities
as of a particular
date that can
then be immediately
sold.In the event
that the Company
does not accept
the opinion of counsel provided
by the Buyer
with respect
to the transfer
of Securities
pursuant to an
exemption
from registration,
such as Rule
144 or Regulation
S, at the
Deadline,
it will be considered
an Event of
Default pursuant
to this note.

 

1.6       Effect
of Certain
Events.

 

(a)Effect
of Merger,
Consolidation, Etc.
At the option of the Holder,
the sale, conveyance
or disposition of all or substantially
all of the assets
of the Company, the effectuation
by the Company of a transaction
or series
of related
transactions
in which more than
50% of the voting power
of the Company is disposed
of, or the consolidation,
merger
or other business combination
of the Company with or into any
other Person
(as defined
below) or Persons
when the Company
is not the survivor shall
either: (i)
be deemed to be an
Event of Default
(as defined
in Article III)
pursuant
to which the Company shall
be required to pay
to the Holder upon the consummation
of and as a condition
to such transaction
an amount equal
to the Default Amount (as defined
in Article III)
or (ii) be treated
pursuant to Section
1.6(b) hereof.
“Person”
shall mean any
individual, corporation,
limited liability
company,
partnership,
association,
trust or other entity
or organization.

    	 	7	 

    	 

    

(b)
Adjustment Due to Merger,
Consolidation, Etc.If,
at any
time when this Note is issued and
outstanding and prior
to conversion of all
of the Notes, there shall
be any merger,
consolidation, exchange
of shares, recapitalization,
reorganization,
or other similar event,
as a result of which
shares
of Common Stock
of the Company shall
be changed
into the same or a different
number of shares
of another
class or classes
of stock or securities
of the Company or another
entity, or in case of any
sale or conveyance
of all or substantially
all of the assets
of the Company other
than in connection
with a plan of complete
liquidation of the Company, then
the Holder of this Note shall
thereafter
have the right
to receive
upon conversion
of this Note, upon the basis
and upon the terms and
conditions specified
herein and
in lieu of the shares
of Common Stock
immediately
theretofore
issuable upon conversion,
such stock, securities
or assets which
the Holder would have
been entitled
to receive
in such transaction
had this Note been converted
in full immediately
prior to such transaction
(without regard
to any limitations
on conversion set
forth herein),
and in any
such case appropriate
provisions shall be made
with respect
to the rights
and interests
of the Holder of this Note to the end
that the provisions hereof
(including,
without limitation, provisions for
adjustment of the Conversion
Price
and of the number
of shares
issuable upon conversion
of the Note) shall thereafter
be applicable,
as nearly
as may be
practicable
in relation to any
securities
or assets thereafter
deliverable upon the
conversion
hereof.
The Company shall
not affect
any transaction
described
in this Section 1.6(b)
unless (a)
it first gives,
to the extent
practicable,
thirty (30) days prior
written notice
(but in any event
at least fifteen
(15) days prior
written notice)
of the record
date of the special
meeting of shareholders
to approve,
or if there is no such
record
date, the consummation
of, such merger,
consolidation, exchange
of shares,
recapitalization,
reorganization
or other similar event
or sale of assets
(during which
time the Holder shall be entitled
to convert this Note)
and (b) the resulting
successor
or acquiring entity
(if not the Company) assumes
by written
instrument the obligations
of this Section 1.6(b).
The above provisions
shall similarly apply
to successive
consolidations,
mergers,
sales, transfers
or share exchanges.

 

 

 

(c)
Adjustment Due to Distribution.
If the Company shall
declare or make
any distribution
of its assets (or
rights to acquire
its assets) to holders
of Common Stock
as a dividend, stock
repurchase,
by way of return
of capital or otherwise
(including
any dividend
or distribution to the Company’s
shareholders
in cash or shares
(or rights
to acquire shares)
of capital stock
of a subsidiary
(i.e., a spin-off))
(a “Distribution”),
then the Holder
of this Note shall be entitled,
upon any conversion
of this Note after the date
of record
for determining
shareholders entitled
to such Distribution,
to receive
the amount of such
assets
which would have
been payable
to the Holder with respect
to the shares of Common Stock
issuable upon such conversion
had such Holder
been the holder of such
shares of Common Stock
on the record
date for the determination
of shareholders
entitled to such
Distribution.

 

(d)       Adjustment
Due to Dilutive Issuance.
If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d)
hereof is deemed to have issued or sold, any shares of Common Stock in connection with a financing transaction executed and made
effective subsequent to the date of this Note based on a variable

    	 	8	 

    	 

    

price formula (the “Alternative Variable
Price Formula”) that is more favorable to the investor in such financing transaction than the formula for calculating the
Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive
Issuance”), then immediately upon the Dilutive Issuance, the formula for the Conversion Price will be adjusted to match the
Alternative Variable Price Formula. If it is unclear whether the Alternative Variable Price Formula is better or worse, then Holder,
in its sole discretion, may elect at the time of such issuance whether to switch to the Alternative Variable Price Formula or not.

(e)Purchase
Rights.
If, at
any time when
any Notes
are issued and
outstanding, the Company
issues any
convertible securities
or rights to purchase
stock, warrants,
securities
or other property
(the “Purchase
Rights”)
pro rata to the record
holders of any
class of Common
Stock, then
the Holder of this Note will be entitled
to acquire, upon the terms
applicable to such
Purchase
Rights, the aggregate
Purchase
Rights which
such Holder could
have acquired
if such Holder had
held the number of shares
of Common Stock
acquirable upon complete
conversion of this Note (without
regard
to any limitations
on conversion contained
herein) immediately
before
the date on which a record
is taken
for the grant,
issuance or
sale of such Purchase
Rights or,
if no such record
is taken,
the date as of which
the record holders
of Common Stock
are to be determined
for the grant,
issue or sale of such Purchase
Rights.

 

(f)Notice
of Adjustments. Upon the occurrence
of each adjustment
or readjustment of the Conversion
Price
as a result
of the events described
in this Section 1.6, the Company,
at its expense,
shall promptly
compute such
adjustment or readjustment
and prepare
and furnish
to the Holder of a certificate
setting forth
such adjustment
or readjustment and
showing in detail the facts
upon which such
adjustment
or readjustment
is based. The Company
shall, upon the written
request at
any time of the Holder,
furnish to such
Holder a like certificate
setting forth
(i) such
adjustment
or readjustment, (ii)
the Conversion Price
at the time in effect
and (iii) the number
of shares of Common Stock
and the amount, if any,
of other securities
or property
which at the time would be received
upon conversion
of the Note.

 

1.7       Security
As Security for the Company's obligations contained herein and in all Notes issued by the Company to the Holder, the Holder shall
be granted an unconditional first priority interest in and to, any and all property of the Company and its subsidiaries, of any
kind or description, tangible or intangible, whether now existing or hereafter arising or acquired until the balance of all Notes
has been reduced to $0. "Any and all property," as described herein shall be inclusive of, but not limited to, assets
reported by the Company on its SEC filings, cash, inventory, accounts receivable, intellectual property rights, equipment and property.
The Investor is authorized to make all filings the Investor, in its discretion, deems necessary to evidence its security interests.

 

1.8       Status
as Shareholder.
Upon submission of a Notice of Conversion
by a Holder, (i)
the shares covered
thereby
(other than
the shares, if any,
which cannot
be issued because their
issuance would
exceed
such Holder’s
allocated
portion of the Reserved
Amount or Maximum Share
Amount) shall be deemed
converted
into shares of Common Stock
and (ii) the Holder’s
rights as a Holder
of such converted
portion of this Note shall
cease and terminate,
excepting
only the right to receive
certificates
for such shares
of

    	 	9	 

    	 

    

Common
Stock and
to any remedies
provided herein
or otherwise available
at law or in equity
to such Holder because
of a failure by
the Company to
comply with the terms
of this Note. Notwithstanding the
foregoing,
if a Holder has not received
certificates
for all shares
of Common Stock
prior to the tenth (10th)
business day after
the expiration
of the Deadline with respect
to a conversion
of any portion
of this Note for any
reason, then
(unless the
Holder otherwise elects
to retain
its status as a holder
of Common Stock
by so notifying
the Company) the Holder
shall regain
the rights
of a Holder of this Note with respect
to such unconverted
portions of this Note and
the Company shall, as
soon as practicable,
return such
unconverted
Note to the Holder or,
if the Note has
not been surrendered,
adjust its records
to reflect
that such
portion of this Note has not been
converted.
In all cases,
the Holder shall retain
all of its rights
and remedies
(including,
without limitation, (i) the right
to receive
Conversion Default
Payments
pursuant to Section
1.3 to the extent
required thereby
for such Conversion
Default and any
subsequent
Conversion Default
and (ii) the right
to have the Conversion
Price
with respect to subsequent
conversions determined
in accordance
with Section 1.3) for
the Company’s failure
to convert
this Note.

 

1.9       Prepayment.
Maker may prepay this Note, in accordance with the following schedule: If within 60 calendar days from the execution of this Note,
125% of all outstanding principal and interest due on each outstanding Note in one payment; After 60 calendar days from the execution
of the note and within 120 days from execution, 130% of all outstanding principal and interest due on each outstanding Note in
one payment. Between 121 and 180 days from the date of execution, the Note may be prepaid for 135% of all outstanding amounts
due on each outstanding Note in one payment. 

 

1.10
       No Short Sales. No short sales shall be permitted by the Holder or its
affiliates at any time while this Note is issued and outstanding in any amount.

 

 

 

ARTICLE
II. CERTAIN
COVENANTS

 

2.1       Distributions
on Capital
Stock. So
long as the Company shall
have any
obligation under
this Note, the Company
shall not without the Holder’s
written consent
(a) pay, declare
or set apart
for such payment,
any dividend
or other distribution
(whether
in cash, property
or other securities)
on shares of
capital
stock other than
dividends on shares of
Common Stock
solely in the form
of additional shares
of Common Stock
or (b) directly
or indirectly
or through any
subsidiary make any
other payment
or distribution in respect
of its capital stock
except
for distributions pursuant
to any shareholders’
rights
plan which is approved
by a majority
of the Company’s disinterested
directors.

 

2.2       Restriction
on Stock Repurchases.
So long as the Company
shall have any
obligation under
this Note, the Company
shall not without the Holder’s
written consent
redeem,
repurchase
or otherwise acquire
(whether
for cash
or in exchange
for property
or other securities
or otherwise)
in any one
transaction or series
of related
transactions
any shares
of capital
stock of the Company or
any warrants,
rights or options to purchase
or acquire
any such
shares.

    	 	10	 

    	 

    

 

2.3       Borrowings.
So long as the Issuer
shall have any
obligation
under this Note, the Issuer
shall not, without written notice to the
holder, create,
incur, assume
guarantee,
endorse,
contingently
agree
to purchase
or otherwise become
liable upon the obligation
of any person,
firm, partnership,
joint venture
or corporation,
except
by the endorsement
of negotiable
instruments for
deposit or collection,
or suffer to exist
any liability
for borrowed
money, except
(a) borrowings
in existence
or committed on the date
hereof and
of which the Issuer has
informed
Holder in writing
prior to the date
hereof,
(b) indebtedness
to trade creditors
or financial
institutions incurred in the ordinary
course of business
or (c) borrowings,
the proceeds
of which shall be used
to repay this Note.

 

 

2.4       Sale
of Assets. So long
as the Company shall
have any
obligation under
this Note, the Company shall
not, without the Holder’s written
consent,
sell, lease or otherwise
dispose of any significant
portion of its assets
outside the ordinary course
of business. Any consent
to the disposition of any
assets may be
conditioned on a specified
use of the proceeds
of disposition.

 

2.5       Advances
and Loans.
So long as the Company
shall have
any obligation
under this Note, the Company
shall not, without the Holder’s
written consent,
lend money, give
credit or make
advances
to any person,
firm, joint venture
or corporation,
including, without limitation,
officers, directors,
employees,
subsidiaries and
affiliates
of the Company, except
loans, credits or advances
(a) in existence
or committed on the date
hereof and which
the Company has
informed
Holder in writing prior
to the date hereof,
(b) made in the ordinary
course of business
or (c)
not in excess
of $50,000.

 

 

ARTICLE
III. EVENTS OF DEFAULT

 

If
any of the following
events of default
(each,
an “Event
of Default”)
shall occur:

 

3.1Failure
to Pay Principal
or Interest.The
Company fails to pay
the principal
hereof or interest
thereon when
due on this Note, whether
at maturity,
upon acceleration
or otherwise.

 

3.2Conversion
and the Shares.The
Company fails
to issue shares of Common Stock
to the Holder (or announces
or threatens in writing
that it will not honor its obligation
to do so) upon exercise
by the Holder of the conversion
rights of the Holder
in accordance
with the terms of this Note,
fails to transfer
or cause its transfer
agent to transfer
(issue) (electronically
or in certificated
form)
any certificate
for shares
of Common Stock
issued to the Holder upon conversion
of or otherwise pursuant
to this Note as and when
required
by this Note, the Company directs
its transfer agent
not to transfer or delays,
impairs, and/or
hinders its transfer
agent
in transferring
(or issuing)
(electronically
or in certificated
form) any
certificate
for shares of Common
Stock to be issued
to the Holder upon conversion
of or otherwise pursuant
to this Note as and when
required by this Note,
or fails to remove
(or

    	 	11	 

    	 

    

directs
its transfer agent not to remove
or impairs, delays,
and/or hinders its transfer agent
from removing)
any restrictive
legend (or to withdraw
any
stop transfer instructions
in respect thereof)
on any certificate
for any shares of Common
Stock issued to the Holder upon conversion of
or otherwise pursuant
to this Note as and when required
by this Note (or makes
any written announcement,
statement or threat that it does not intend to honor the obligations
described in this paragraph)
and any such failure shall continue uncured
(or any written announcement,
statement  or threat
not to honor its obligations shall not
be rescinded in writing) for
three (3) business days after the Holder
shall have delivered a Notice
of Conversion. It is an obligation
of the Company to remain current
in its obligations to its transfer
agent. It shall be an event
of default of this Note, if a conversion
of this Note is delayed, hindered or frustrated
due to a balance owed by the Company
to its transfer agent. If at the option of the Holder, the Holder advances
any funds to the Company’s
transfer agent in order
to process a conversion,
such advanced funds shall be paid
by the
Company to the Holder within forty
eight
(48) hours of a demand from the Holder.

 

3.3       Breach
of Covenants.
The Company breaches
any covenant
or other term
or condition contained
in this Note and any
collateral
documents including
but not limited to the Equity
Financing Agreement and the Registration Rights Agreement.

 

3.4Breach
of Representations
and Warranties.Any
representation
or warranty
of the Company made herein
or in any agreement,
statement
or certificate
given
in writing pursuant
hereto or in connection
herewith
(including,
without limitation, the Purchase
Agreement),
shall be false
or misleading in any material
respect
when made and
the breach
of which has (or
with the passage
of time will have) a material
adverse
effect
on the rights
of the Holder with respect
to this Note or the Equity Financing Agreement and the Registration Rights Agreement.

 

3.5       Receiver
or Trustee.
The Company or any
subsidiary
of the Company shall make
an assignment
for the benefit
of creditors,
or apply for
or consent
to the appointment of a receiver
or trustee
for it or for
a substantial part
of its property
or business, or such
a receiver
or trustee shall
otherwise be appointed.

 

3.6       Judgments.
Any money judgment,
writ or similar
process shall
be entered
or filed against
the Company or any
subsidiary of the Company
or any of its property
or other assets
for more than
$50,000, and shall
remain unvacated,
unbonded or unstayed
for a period
of twenty (20)
days unless
otherwise consented
to by the Holder,
which consent
will not be unreasonably
withheld.

 

3.7       Bankruptcy.
Bankruptcy,
insolvency,
reorganization
or liquidation proceedings
or other proceedings,
voluntary or
involuntary,
for relief
under any
bankruptcy
law or any
law for the relief
of debtors shall
be instituted by or against
the Company or any
subsidiary of the
Company.

 

3.8       Delisting
of Common Stock.
If the Company shall
fail to maintain
in good standing the listing of the Common Stock
on the over-the-counter market operated by OTC Markets Group, Inc. or an
equivalent
replacement
exchange,
the Nasdaq
National

    	 	12	 

    	 

    

Market,
the Nasdaq
SmallCap
Market
or the New York
Stock
Exchange
or if the Company's shall lose the "bid" price for its common stock on any given
trading day. 

 

3.9       Failure
to Comply with the Exchange
Act. If the Company
shall fail to comply,
in a timely manner, with the reporting
requirements
of the Exchange
Act; and/or the Company
shall cease
to be subject to the reporting
requirements
of the Exchange
Act.

 

3.10       Liquidation.
Any dissolution, liquidation,
or winding up of Company or any
substantial portion
of its business.

 

3.11       Cessation
of Operations.
Any cessation
of operations
by Company or Company
admits it is otherwise
generally
unable to pay
its debts as such
debts become due,
provided, however,
that any
disclosure of the Company’s
ability to continue
as a “going
concern”
shall not be an admission
that the Company cannot
pay its debts as
they become
due.

 

3.12       Maintenance
of Assets. The failure
by Company to maintain
any material
intellectual
property
rights,
personal,
real property
or other assets
which are
necessary
to conduct its business
(whether
now or in the future).

 

3.13Financial
Statement
Restatement.The
restatement
of any financial
statements
filed by
the Company with the SEC for
any date
or period from
two years
prior to the Issue
Date of this Note and until this Note
is no longer outstanding,
if the result of such restatement
would, by comparison
to the original financial
statement,
have constituted
a material
adverse
effect
on the rights
of the Holder with respect
to this Note or supporting documents.

 

3.14       Reverse
Splits. The Company effectuates
a reverse
split of its

Common
Stock without at least twenty
(20) days
prior written
notice to the Holder.

 

 

3.15       Replacement
of Transfer
Agent. In the event
that the Company
proposes to replace
its transfer
agent,
the Company fails to provide,
prior to the effective
date of such
replacement,
a fully executed
Irrevocable
Transfer
Agent Instructions
in a form as
initially delivered
pursuant
to the Purchase
Agreement
(including but not limited
to the provision to irrevocably
reserve
shares of Common
Stock in the
Reserved
Amount) signed by
the successor transfer
agent
to Company and the Company.

 

3.16       Cross-Default.
Notwithstanding anything
to the contrary
contained
in this Note or the other related
or companion documents,
a breach or default
by the Company of any
covenant
or other term
or condition contained
in any of the Other
Agreements,
after the passage
of all applicable
notice and cure
or grace periods,
shall, at the option of the Holder, be
considered a default
under this Note and
the Other Agreements,
in which event
the Holder shall be entitled
(but in no event
required)
to apply all
rights and remedies
of the Holder under
the terms of this Note and the
Other Agreements
by reason
of a default under
said Other Agreement
or hereunder.“Other
Agreements”
means, collectively,
all agreements
and instruments
between, among
or by: (1)
the Company, and, or for
the

    	 	13	 

    	 

    

benefit
of, (2)
the Holder and any
affiliate of the Holder,
including,
without limitation, promissory
notes; provided,
however,
the term “Other
Agreements”
shall not include the related
or companion documents
to this Note. Each of the loan
transactions
between the Holder and the Company will be cross-defaulted
with each other loan
transaction and
with all other existing
and future
debt of Company.

 

Upon the occurrence
and during
the continuation of any
Event of Default
specified
in Section 3.1 (solely
with respect
to failure to pay
the principal
hereof or interest
thereon when due at
the Maturity
Date),
the Note shall become immediately
due and payable
and the Company shall
pay to the Holder,
in full satisfaction
of its obligations
hereunder,
an amount equal
to the Default Sum (as
defined
herein).UPON
THE OCCURRENCE
AND DURING THE CONTINUATION
OF ANY EVENT OF DEFAULT
SPECIFIED
IN SECTION
3.2, THE NOTE SHALL BECOME
IMMEDIATELY
DUE AND PAYABLE
AND THE COMPANY SHALL
PAY TO THE
HOLDER, IN FULL
SATISFACTION
OF ITS OBLIGATIONS
HEREUNDER, AN AMOUNT
EQUAL TO: (Y) THE
DEFAULT
SUM (AS DEFINED
HEREIN);
MULTIPLIED
BY (Z) TWO
(2).
Upon the occurrence
and during
the continuation
of any
Event of Default
specified
in Sections 3.1 (solely
with respect
to failure
to pay the principal
hereof or interest
thereon
when due on this Note
upon a Trading Market
Prepayment
Event pursuant
to Section 1.7 or
upon acceleration),
3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or

3. 15 exercisable
through the delivery
of written notice
to the Company by such
Holders (the “Default
Notice”),
and upon the occurrence
of an Event of Default
specified
the remaining
sections of Articles
III (other
than failure
to pay the principal
hereof
or interest thereon at
the Maturity Date
specified
in Section 3,1 hereof),
the Note shall become immediately
due and payable
and the Company shall
pay to the Holder, in full
satisfaction of its
obligations hereunder,
an amount equal
to the greater
of (i) 150% times the sum
of (w) the then outstanding
principal
amount of this Note plus (x)
accrued and
unpaid interest on the unpaid
principal
amount of this Note to the date of payment
(the “Mandatory
Prepayment
Date”)
plus (y) Default Interest,
if any, on the amounts referred
to in clauses
(w) and/or (x)
plus (z) any
amounts owed to the Holder
pursuant to Sections
1.3 and 1.4(g)
hereof
(the then outstanding
principal
amount of this Note to the date of
payment plus the amounts referred
to in clauses
(x),
(y) and (z)
shall collectively
be known as the “Default
Sum”) or (ii)
the “parity value”
of the Default
Sum to be prepaid,
where parity value
means (a)
the highest number
of shares
of Common Stock
issuable upon conversion
of or otherwise pursuant
to such Default
Sum in accordance
with Article
I, treating
the Trading
Day immediately
preceding
the Mandatory Prepayment
Date as the “Conversion
Date” for
purposes of determining
the lowest applicable
Conversion
Price,
unless the Default
Event arises
as a result of a breach
in respect
of a specific Conversion
Date in which case
such Conversion
Date shall be the Conversion
Date), multiplied
by (b) the highest
Closing Price
for the Common Stock
during the period
beginning
on the date of first
occurrence
of the Event of Default
and ending one day prior
to the Mandatory Prepayment
Date (the “Default
Amount”) and all
other amounts payable
hereunder
shall immediately
become due and
payable, all
without demand, presentment
or notice, all of which
hereby
are expressly
waived,
together
with all costs, including,
without limitation, legal
fees
and expenses,
of collection, and
the Holder shall be entitled
to exercise
all other rights
and remedies
available

    	 	14	 

    	 

    

at
law or in equity.

 

If
the Company fails to pay
the Default
Amount within five (5) business
days of
written notice
that such amount
is due and payable,
then the Holder
shall have
the right
at any
time, so long as the Company
remains
in default (and so long and
to the extent
that there are
sufficient
authorized
shares),
to require
the Company, upon written
notice, to immediately
issue, in lieu of the Default
Amount, the number of shares
of Common Stock
of the Company equal
to the Default Amount divided by
the Conversion
Price
then in effect.

 

 

ARTICLE
IV. MISCELLANEOUS

 

4.1Failure
or Indulgence
Not Waiver.
No failure
or delay
on the part of the Holder
in the exercise
of any power,
right
or privilege
hereunder
shall operate
as a waiver
thereof, nor shall
any single
or partial exercise
of any such power,
right
or privilege preclude
other or further
exercise
thereof or of any other
right, power
or privileges.All
rights and
remedies
existing hereunder
are cumulative
to, and not exclusive
of, any
rights
or remedies
otherwise available.

 

4.2       Notices.
All notices, demands,
requests, consents,
approvals,
and other communications
required
or permitted hereunder
shall be in writing and,
unless otherwise specified
herein,
shall be (i) personally
served,
(ii) deposited
in the mail, registered
or certified,
return receipt
requested,
postage prepaid,
(iii) delivered
by reputable
air courier
service
with charges
prepaid,
or (iv) transmitted
by hand delivery,
telegram,
email or facsimile,
addressed
as set
forth below or
to such other
address
as such party
shall have
specified
most recently
by written
notice. Any notice
or other communication
required
or permitted
to be given hereunder
shall be deemed
effective
(a) upon
hand delivery
or delivery
by facsimile,
with accurate
confirmation
generated
by the transmitting
facsimile machine,
at the address
or number designated
below (if
delivered on a business
day during
normal business
hours where
such notice is to be received),
or the first
business day following
such delivery
(if delivered
other than
on a business day during

normal
business hours where
such notice is to be received)
or (b) on the second business
day following the date
of mailing by express
courier
service,
fully prepaid,
addressed
to such address,
or upon actual
receipt of such
mailing,
whichever
shall first
occur.
The addresses
for such communications
shall be:

 

If
to the Company, to:

Rocky Mountain High Brands, Inc.

9101 LBJ Freeway, Suite 200

Dallas, TX 75243

Attn: Michael Welch, CEO

email: michael@rockymountainhighbrands.com

 

 

If
to the Holder:

    	 	15	 

    	 

    

 

GHS Investments, LLC. 

420 Jericho Tpke,

Suite 207

Jericho, NY 11753

 

4.3       Amendments.
This Note and any
provision hereof
may only be amended
by an instrument
in writing signed
by the Company and
the Holder. The
term “Note”
and all reference
thereto,
as used throughout
this instrument, shall
mean this instrument
(and the other Notes
issued pursuant
to the Purchase
Agreement) as
originally
executed,
or if later amended
or supplemented,
then as so amended
or supplemented.

 

4.4Assignability.This
Note shall be binding upon the Company
and its successors
and assigns,
and shall inure
to be the benefit of the Holder
and its successors
and assigns.
Notwithstanding anything
in this Note to the contrary,
this Note may be pledged as
collateral
in connection with a bona fide
margin
account or other
lending arrangement.

4.5       Cost
of Collection. If
default is made
in the payment
of this Note, the

Company
shall pay
the Holder hereof
costs of collection,
including reasonable
attorneys’
fees.

 

4.6Governing
Law.This Note shall
be governed
by and construed
in accordance
with the laws of the State
of Nevada without regard
to principles
of conflicts
of laws.Any action
brought
by either
party against
the other concerning
the transactions
contemplated
by this Note shall be brought
only in the state or federal
courts located
in New York City, New York. The parties
to this Note hereby
irrevocably
waive any
objection to jurisdiction
and venue
of any action
instituted hereunder
and shall not assert
any defense
based
on lack of jurisdiction
or venue or based
upon forum non conveniens.
The Company and Holder
waive trial
by jury. The prevailing
party shall
be entitled to recover
from the other party
its reasonable
attorney's
fees
and costs. In the event
that any
provision of this Note or any
other agreement
delivered
in connection herewith
is invalid or unenforceable
under any
applicable
statute or rule of law,
then such provision
shall be deemed
inoperative
to the extent
that it may conflict
therewith and shall
be deemed modified
to conform
with such statute or rule
of law. Any such
provision which may
prove invalid or unenforceable
under any
law shall not affect
the validity
or enforceability
of any other
provision of any
agreement.
Each party
hereby
irrevocably
waives personal
service
of process and
consents
to process being
served in any
suit, action or proceeding
in connection
with this Agreement
or any other
Transaction
Document by
mailing a copy
thereof
via registered
or certified
mail or overnight
delivery (with
evidence
of delivery) to such
party at
the address in effect
for notices to it under
this Agreement
and agrees
that such service
shall constitute good
and sufficient
service of process
and notice thereof.
Nothing contained
herein shall be deemed
to limit in any
way any right
to serve process
in any other
manner permitted
by law. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by, unenforceable or invalid under any jurisdiction, such

    	 	16	 

    	 

    

provision shall as to such jurisdiction,
be severable and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions
of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

4.7Certain
Amounts.Whenever
pursuant
to this Note the Company is required
to pay an amount
in excess
of the outstanding principal
amount (or the portion
thereof required
to be paid at that
time) plus accrued
and unpaid
interest
plus Default Interest
on such interest, the Company
and the Holder agree
that the actual
damages
to the Holder from the
receipt of cash
payment on this Note may be
difficult to determine
and the amount to be so paid
by the Company represents
stipulated damages
and not a penalty
and is intended
to compensate
the Holder in part
for loss
of the opportunity to convert
this Note and to earn a return
from the sale
of shares of Common Stock
acquired upon conversion
of this Note at a price
in excess
of the price paid
for such shares
pursuant to this Note.
The Company and the Holder
hereby agree
that such amount
of stipulated
damages
is not plainly disproportionate
to the possible loss to the Holder from
the receipt
of a cash payment
without the opportunity to convert
this Note into shares of Common Stock.

 

4.8       Equity
Financing Agreement.
By its acceptance
of this Note, each
party
agrees to be bound by
the applicable
terms of the Equity Financing Agreement and supporting documents of same date.

 

4.9Notice
of Corporate
Events.Except
as otherwise provided
below, the Holder of this Note
shall have
no rights as
a Holder of Common
Stock unless
and only to the extent
that it converts
this Note into Common Stock.
The Company shall
provide the Holder
with prior notification
of any meeting
of the Company’s shareholders
(and copies
of proxy materials
and other information
sent to shareholders).
In the event
of any taking
by the Company of a record
of its shareholders
for the purpose of determining
shareholders
who are entitled
to receive payment
of any dividend
or other distribution, any
right
to subscribe for,
purchase or
otherwise acquire
(including
by way of
merger,
consolidation,
reclassification
or recapitalization)
any share
of any class
or any other
securities
or property,
or to receive any
other right,
or for the purpose of determining
shareholders
who are entitled
to vote in connection
with any proposed
sale,
lease or
conveyance
of all or substantially
all of the assets
of the Company or any
proposed liquidation,
dissolution or winding up of the Company, the Company
shall mail a notice
to the Holder, at least
twenty (20)
days prior to the record
date specified
therein (or
thirty (30)
days prior to the consummation
of the transaction
or event, whichever
is earlier),
of the date on which
any such
record is to be taken
for the purpose of
such dividend,
distribution, right
or other event,
and a brief
statement
regarding
the amount and character
of such dividend, distribution,
right or other
event to the extent
known at such time.
The Company shall make
a public announcement
of any
event requiring
notification
to the Holder hereunder
substantially
simultaneously
with the notification to the Holder
in accordance
with the terms of this Section
4.9.

 

4.10Remedies.The
Company acknowledges
that a breach
by it of its obligations
hereunder
will cause irreparable
harm
to the Holder, by vitiating
the intent and purpose
of the transaction
contemplated
hereby.
Accordingly,
the Company

    	 	17	 

    	 

    

acknowledges
that the remedy
at law for
a breach of its obligations
under this Note will be inadequate
and agrees,
in the event of
a breach
or threatened
breach by
the Company of the provisions
of this Note, that the
Holder shall be entitled,
in addition to all other
available
remedies
at law or in equity,
and in addition to the penalties
assessable
herein,
to an injunction or injunctions
restraining,
preventing
or curing
any breach
of this Note and to enforce
specifically
the terms and
provisions thereof,
without the necessity of
showing economic loss and
without any bond or other
security
being required.

 

 

IN
WITNESS
WHEREOF,
Company has
caused
this Note to be signed
in its name by
its duly authorized
officer:

 

 

Rocky Mountain
High Brands, Inc.

 

By:
/s/ Michael Welch

 

Michael Welch

Title: President &
CEO

Date: October 6, 2017EX-10.39

 Exhibit 10.39 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT 

This Amended and Restated Employment Agreement (this “Agreement”) is entered into as of October 10, 2017, by and between
Stephen Kennedy (the “Employee”) and Histogenics Corporation, a Delaware corporation (the “Company”). 
 RECITALS:

 WHEREAS, the Company is engaged in the business of developing, marketing and selling regenerative medicine products in the
United States and throughout the world; 
 WHEREAS, Company and Employee desire that Employee continue to provide the Company
employment services upon the terms and conditions set forth below; 
 WHEREAS, the Company and Employee previously entered into that
certain Amended and Restated Employment Agreement, dated as of July 29, 2015 (the “Prior Agreement”, and the date of such Prior Agreement, the “Prior Amendment Date”); and 

WHEREAS, pursuant to the terms of the Prior Agreement, the Company and Employee desire to amend and restate the Prior Agreement,
effective as of the date hereof, to appoint the Employee as Executive Vice President and Chief Operating Officer and implement a more competitive compensation and benefit package for Employee. 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties, intending to be legally
bound, agree as follows: 
 AGREEMENT: 

1.    Duties and Scope of Employment. 

(a)    Position. For the term of the Employee’s employment under this Agreement (the “Employment”),
the Company agrees to employ the Employee in the position of Executive Vice President and Chief Operating Officer. The Employee shall report to the Company’s Chief Executive Officer. 

(b)    Obligations to the Company. During the Employee’s Employment, the Employee (i) shall devote his
full business efforts and time to the Company, (ii) shall not engage in any other employment, consulting or other business activity that would create a conflict of interest with the Company, (iii) shall not assist any person or entity in
competing with the Company or in preparing to compete with the Company and (iv) shall comply with the Company’s policies and rules, as they may be in effect from time to time. Notwithstanding the foregoing, the Employee may, subject to
prior approval of the Board or Chief Executive Officer, participate in professional and charitable activities and serve on boards of directors and boards of advisors of businesses and non-profit organizations
that do not compete with the Company, provided that such activities do not, individually or in the aggregate, interfere materially with the performance of the Employee’s duties to the Company. 

 (c)    No Conflicting Obligations. The Employee represents and
warrants to the Company that the Employee is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with the Employee’s obligations under this Agreement. The Employee represents and warrants that the
Employee will not use or disclose, in connection with his Employment, any trade secrets or other proprietary information or intellectual property in which the Employee or any other person has any right, title or interest and that his Employment will
not infringe or violate the rights of any other person. The Employee represents and warrants to the Company that the Employee has returned all property and confidential information belonging to any prior employer. 

(d)    Effective Date. The Employee shall assume the role of Executive Vice President and Chief Operating Officer
on October 12, 2017. 
 (e)    Definitions. Certain capitalized terms are defined in Section 9. 

2.    Cash and Incentive Compensation. 

(a)    Salary. The Company shall pay the Employee as compensation a base salary at a gross annual rate of not less
than $375,000. Such salary shall be payable in accordance with the Company’s standard payroll procedures. 

(b)    Incentive Bonuses. The Employee shall be eligible for an annual incentive bonus with a target amount equal
to 40% of the Employee’s Base Salary. Such bonus (if any) shall be awarded based on objective or subjective criteria established in advance by the Board or the Compensation Committee of the Board. The determinations of the Board or its
Compensation Committee with respect to such bonus shall be final and binding. Any incentive bonus for a fiscal year shall in no event be paid later than 90 days after the close of such fiscal year. The Employee shall not be entitled to an incentive
bonus if he is not employed by the Company on the date when such bonus is payable. The amount of any incentive bonus for the fiscal year in which the Employee’s Employment begins shall be prorated, based on the number of days of Employment
during such fiscal year. 
 (c)    Stock Options. 

Subject to the approval of the Board or the Compensation Committee of the Board, the Company shall grant the Employee an option to purchase an
additional 50,000 shares of the Company’s Common Stock (the “Option”). The Option shall be granted upon the effective date of the Employee’s appointment at the closing stock price on the date of the Agreement. The per-share exercise price of the Option shall be equal to the fair market value per share of the Company’s Common Stock on the date the Option is granted, as determined by the Board or its Compensation
Committee. The term of the Option shall be 10 years, subject to earlier expiration in the event of the termination of the Employee’s Employment. The grant of the Option shall be subject to the terms and conditions set forth in the Plan and in
the Company’s standard form of Stock Option Agreement. The Employee shall vest in 25% of the Option shares after the first 12 months of continuous service and shall vest in the remaining Option shares in equal monthly installments over the next
three years of continuous service. Vesting of the Option shall accelerate in full if (i) the Company is subject to a Change in Control before the Employee’s service with the Company terminates and (ii) the Employee is subject to an
Involuntary Termination within 12 months after such Change in Control. 

  
 2 

 3.    Vacation and Employee Benefits. During his Employment, the
Employee shall be eligible for paid vacations in accordance with the Company’s vacation policy, as it may be amended from time to time; provided, however, that in no event will the Employee be entitled to fewer than four weeks’ paid
vacation per year. During his Employment, the Employee shall also be eligible to participate in the employee benefit plans maintained by the Company, subject in each case to the generally applicable terms and conditions of the plan in question and
to the determinations of any person or committee administering such plan. 
 4.    Business Expenses. During his
Employment, the Employee shall be authorized to incur necessary and reasonable travel, entertainment and other business expenses in connection with the Employee’s duties hereunder. The Company shall reimburse the Employee for such expenses upon
presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies. Any reimbursement shall (a) be paid promptly but not later than the last day of the calendar
year following the year in which the expense was incurred, (b) not be affected by any other expenses that are eligible for reimbursement in any calendar year and (c) not be subject to liquidation or exchange for another benefit. 

5.    Term of Employment. 

(a)    Employment at Will. The Employee’s Employment with the Company shall be “at will,” meaning
that either the Employee or the Company shall be entitled to terminate the Employee’s Employment at any time and for any reason, with or without Cause. Any contrary representations that may have been made to the Employee shall be superseded by
this Agreement. This Agreement shall constitute the full and complete agreement between the Employee and the Company on the “at will” nature of the Employee’s Employment, which may only be changed in an express written agreement
signed by the Employee and a duly authorized officer of the Company. The termination of the Employee’s Employment shall not limit or otherwise affect his obligations under Section 7 below. 

(b)    Rights upon Termination. Except as expressly provided in Section 6 below, upon the termination of the
Employee’s Employment, the Employee shall be entitled only to the compensation, benefits and expense reimbursements that the Employee has earned under this Agreement before the effective date of the termination. The payments under this
Agreement shall fully discharge all responsibilities of the Company to the Employee. 
 6.    Termination
Benefits. 
 (a)    Preconditions. Any other provision of this Agreement notwithstanding, the remaining
Subsections of this Section 6 shall not apply unless each of the following requirements is satisfied: 

(i)    The Employee has executed a general release of all claims in a form prescribed by the Company. The
Employee shall execute and return the release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline shall in no event be later than 50 days after the Employee’s
Separation. If the Employee fails to return the release on or before the Release Deadline, or if the Employee revokes the release, then the Employee shall not be entitled to the benefits described in this Section 6. 

  
 3 

 (ii)    The Employee has returned all property of the
Company in the Employee’s possession. 
 (iii)    If requested by the Board, the Employee has
resigned as a member of the Board and as a member of the boards of directors of all subsidiaries of the Company, to the extent applicable. 

(b)    Severance Pay. If, during the term of this Agreement, the Employee is subject to an Involuntary Termination,
then the Company shall pay the Employee an amount equal to the Employee’s Base Salary for a period of nine months following the Separation (the “Continuation Period”). Such severance payments shall be paid at the Base Salary rate in
effect at the time of the Separation and in accordance with the Company’s standard payroll procedures. The severance payments shall commence within 60 days after the Employee’s Separation and, once they commence, shall include any unpaid
amounts accrued from the date of the Employee’s Separation. However, if the 60-day period described in the preceding sentence spans two calendar years, then the payments shall in any event begin in the
second calendar year. In addition, The Company shall pay the Employee any accrued benefits, including earned but unpaid salary, earned but unpaid incentive bonuses, accrued and unused vacation time, unreimbursed business expenses, and any vested
benefits under the Company’s benefit plans. 
 (c)    Health Insurance. If, during the period of Employment,
the Employee is subject to an Involuntary Termination, and if the Employee elects to continue health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for the Employee and, if applicable, his dependents
following the Separation, then the Company shall pay the employer portion of the monthly premium under COBRA for the Employee and, if applicable, such dependents until the earliest of (i) the close of the Continuation Period, (ii) the
expiration of the Employee’s continuation coverage under COBRA or (iii) the date when the Employee receives substantially equivalent health insurance coverage in connection with new employment or self-employment. 

7.    Confidential Information and Intellectual Property Assignment Agreement. The Confidential Information and
Intellectual Property Assignment Agreement entered into between Employee and the Company dated July 12, 2013 shall remain in full force and effect and is incorporated herein by this reference. 

8.    Successors. 

(a)    Company’s Successors. This Agreement shall be binding upon any successor (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which becomes bound by this Agreement. 

  
 4 

 (b)    Employee’s Successors. This Agreement and all rights of
the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 

9.    Definitions. The following terms shall have the meaning set forth below wherever they are used in this
Agreement: 
 (a)    Base Salary. The term “Base Salary” shall mean the annual compensation specified
in Section 2(a), together with any increases in such compensation that the Company may grant from time to time. 

(b)    Cause. The term “Cause” shall mean a good faith determination by the Board of any of the
following: 
 (i)    An unauthorized use or disclosure by the Employee of the Company’s
confidential information or trade secrets, which use or disclosure causes material harm to the Company; 

(ii)    A material breach by the Employee of any agreement between the Employee and the Company provided
that the Company provides 15 days written notice of the material breach, and the Employee fails to remedy the condition within 15 days after receiving the Company’s notice; 

(iii)    A material failure by the Employee to comply with the Company’s written policies or rules
after receiving written notification of such failure from the Board provided that the Company provides 15 days written notice of the material failure, and the Employee fails to remedy the condition within 15 days after receiving the Company’s
notice; 
 (iv)    The sale, possession or use of illegal drugs by the Employee or habitual intoxication
of the Employee on the premises of the Company or a customer or business partner of the Company or while conducting Company business; 

(v)    The Employee’s conviction of, or plea of “guilty” or “no contest” to, a
felony under the laws of the United States or any State thereof; 
 (vi)    The Employee’s gross
negligence or willful misconduct in the course of performing service to the Company; 
 (vii)    A
continuing failure by the Employee to perform reasonably assigned duties after receiving written notification of such failure from the Board; or 

(viii)    A failure by the Employee to cooperate in good faith with a governmental or internal
investigation of the Company or its directors, officers or employees, if the Company has requested the Employee’s cooperation. 

  
 5 

 (c)    Change in Control. The term “Change in Control” shall
have the meaning ascribed to it in the Plan. 
 (d)    Code. The term “Code” shall mean the Internal
Revenue Code of 1986, as amended. 
 (e)    Involuntary Termination. The term “Involuntary Termination”
shall mean either (a) the Employee’s Termination Without Cause or (b) the Employee’s Resignation for Good Reason. 

(f)    Plan. The term “Plan” shall mean the Histogenics Corporation 2012 Equity Incentive Plan or the
Histogenics Corporation 2013 Equity Incentive Plan. 
 (g)    Resignation for Good Reason. The term
“Resignation for Good Reason” shall mean a Separation as a result of the Employee’s resignation after one of the following conditions has come into existence without the Employee’s consent: 

(i)    A material reduction in the Employee’s Base Salary; 

(ii)    A change in the Employee’s title or position with the Company that materially reduces the
Employee’s level of authority or responsibility; 
 (iii)    A relocation of the Employee’s
principal workplace by more than 40 miles; or 
 (iv)    A material breach by the Company of its
obligations under this Agreement. 
 A Resignation for Good Reason shall not be deemed to have occurred unless the Employee gives the Company written notice
of the condition within 15 days after the condition comes into existence and the Company fails to remedy the condition within 15 days after receiving the Employee’s written notice. 

(h)    Separation. The term “Separation” shall mean a “separation from service,” as defined in
the regulations under Section 409A of the Code. 
 (i)    Termination Without Cause. The term
“Termination Without Cause” shall mean a Separation as a result of a termination of the Employee’s employment by the Company without Cause, provided the Employee is willing and able to continue performing services within the meaning
of Treasury Regulation 1.409A-1(n)(1). 

  
 6 

 10.    Indemnification and D&O Insurance. The Employee shall enter
into the Company’s standard Indemnification Agreement for its directors and officers. During the term of the Employee’s Employment, the Employee will be named as an insured on the directors’ and officers’ liability insurance
policy currently maintained, or as may be maintained by the Company from time to time, at the same level of coverage applicable to active directors and officers. 

11.    Miscellaneous Provisions. 

(a)    Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered, when delivered by FedEx with delivery charges prepaid, or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to the Employee at the home address that he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary. 
 (b)    Modifications and Waivers. No provision of this Agreement
shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer or director of the Company (other than the Employee). No waiver by either party of
any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

(c)    Whole Agreement. This Agreement supersedes all other agreements, representations or understandings (whether
oral or written and whether express or implied), including, without limitation, the Prior Agreement, that are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This
Agreement and the Confidential Information and Intellectual Property Assignment Agreement contain the entire understanding of the parties with respect to the subject matter hereof. 

(d)    Tax Matters. All payments made under this Agreement shall be subject to reduction to reflect taxes or other
charges required to be withheld by law. For purposes of Section 409A of the Code, each periodic salary continuation payment under Section 6(b) is hereby designated as a separate payment. If the Company determines that the Employee is a
“specified employee” under Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder at the time of his Separation, then (i) the salary continuation payments under Section 6(b), to the extent that they are subject
to Section 409A of the Code, shall commence on the first business day following (A) expiration of the six-month period measured from the Employee’s Separation or (B) the date of the
Employee’s death and (ii) the installments that otherwise would have been paid prior to such date shall be paid in a lump sum when such salary continuation payments commence. The Company shall not have a duty to design its compensation
policies in a manner that minimizes the Employee’s tax liabilities, and the Employee shall not make any claim against the Company or the Board related to tax liabilities arising from the Employee’s compensation. 

  
 7 

 (e)    Choice of Law and Severability. This Agreement shall be
interpreted in accordance with the laws of the Commonwealth of Massachusetts (except their provisions governing the choice of law). If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable
jurisdiction by reason of the scope, extent or duration of its coverage or any other reason, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such
provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect. If any provision of this Agreement is
rendered illegal by any present or future statute, law, ordinance or regulation (collectively the “Law”), then such provision shall be curtailed or limited only to the minimum extent necessary to bring such provision into compliance with
the Law. All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation. 

(f)    No Assignment. This Agreement and all rights and obligations of the Employee hereunder are personal to the
Employee and may not be transferred or assigned by the Employee at any time. The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer of all or
a substantial portion of the Company’s assets to such entity. 
 (g)    Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

[Remainder of page left blank intentionally.] 

  
 8 

 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company
by its duly authorized officer, as of the day and year first above written. 
  

	
	/s/ Stephen Kennedy
	Stephen Kennedy

  

			
	HISTOGENICS CORPORATION
		
	By:	 	 /s/ Adam Gridley

	Title:	 	President and Chief Executive Officer

  
 9

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