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Document

CHANGE IN CONTROL AGREEMENT 

This Change in Control Agreement (this “Agreement”) by and between Highland Bankshares, Inc., a Virginia corporation (the “Company”), Highlands Union Bank, a Virginia state-chartered bank and wholly owned subsidiary of the Company (the “Bank” and, together with the Company, the “Employer”), and [________], a resident of [________] (the “Executive”), is made and entered into as of the [__] day of [___], 2019 (the “Effective Date”).  

W I T N E S S E T H :
WHEREAS, the Executive is a key employee of the Employer, and the Employer desires to provide the Executive with certain additional compensation and benefits in the event that a Change in Control (as defined herein) of the Employer occurs; and
WHEREAS, in accordance with the foregoing, the Employer will make a severance payment to the Executive if the Executive’s employment is terminated by the Executive for Good Reason or by the Employer other than for Cause (as such terms are defined herein) following a Change in Control, all as specifically set forth in this Agreement;
NOW, THEREFORE, in consideration of the above premises, the promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both parties, it is hereby agreed as follows:
1.    Certain Definitions.
(a)    “Affiliate” shall mean any business entity controlled by, controlling or under common control with the Employer.
(b)    “Business” shall mean the operation of an insured depository institution, including, without limitation, the solicitation and acceptance of deposits of money and commercial paper, the solicitation and funding of loans and the provision of other banking services.
(c)    “Cause” shall mean termination because of the Executive’s (i) commission of an act of fraud, embezzlement, theft or proven dishonesty, or any other illegal act or practice (whether or not resulting in criminal prosecution or conviction), or any act or practice which the Company’s or the Bank’s Board of Directors shall, in good faith, deem to have resulted in the Executive’s becoming unbondable under the Employer’s or any Affiliate’s fidelity bond; (ii) willful engagement in misconduct which is deemed by the Board of Directors, in good faith, to be materially injurious to the Employer or any of its Affiliates, monetarily or otherwise, including, but not limited to, improperly disclosing trade secrets or other confidential or sensitive business information and data about the Employer or any of its Affiliates and competing with the Employer or any of its Affiliates, or soliciting employees, consultants or customers of the Employer or any of its Affiliates in violation of law or any employment or other agreement to which the Executive is a party; or (iii) willful and continued failure or habitual neglect to perform his duties with the Employer or any of its Affiliates substantially in accordance with the operating and personnel policies and procedures of the Employer or its Affiliate generally applicable to all their employees.  For purposes of this Agreement, no act or failure to act by the Executive shall be deemed be “willful” unless done or omitted to be done by Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Employer and/or any Affiliate.  “Cause” under either (i), (ii) or (iii) shall be determined by the Board 

of Directors.  The determination of “Cause” may be made by the Company’s or Bank’s Board of Directors solely for purposes of this Agreement and without regard to any other purpose of the Company.

(d)    “Change in Control” shall mean as defined in the Company’s 2018 Restricted Stock Plan as set forth in the Company’s definitive proxy statement on Schedule 14A, filed with the Securities and Exchange Commission on April 30, 2018, and the award agreements entered into under such plan.

(e)    “Code” shall mean the Internal Revenue Code of 1986, as amended.
(f)    “Competing Business” shall mean any business that, in whole or in part, is the same or substantially the same as the Business.
(g)    “Good Reason” shall mean good reason as defined by Treasury Regulation § 1.409A-1(n)(2)(ii); provided Treasury Regulation § 1.409A-1(n)(2)(ii)(A)(2)-(4) shall be excluded in the event [(i) the Executive is offered a position as [_____], or equivalent or higher position, by the acquiring entity immediately following a Change in Control, or (ii)] The bracketed language is not included in Gray’s change in control agreement. if the Executive does not provide a Notice of Termination within one business day following a Change in Control, then, effective upon a Change in Control, the definition of “Good Reason” shall exclude Treas. Reg. § 1.409A-1(n)(2)(ii)(A)(2)-(4).

(h)    “Customer” shall mean any person or entity that has an account with, loan from, an investment or deposit with the Employer or any of its Affiliates, or that has received or used other financial or investment products or services from the Employer or any of its Affiliates at any time within the twelve (12) months immediately prior to the date of termination of the Executive’s employment.
(i)    “Notice of Termination” shall mean a written notice of termination from the Executive to the Employer which specifies an effective date of termination, indicates the specific reason for termination, and sets forth the Good Reason event which, except as required in Section 1(g) to be provided more promptly, shall have occurred no more than 90 days prior to the date of the notice and provides the Employer not less than 30 days to remedy the condition.

(j)    “Prospect” shall mean any person or entity who has not previously done business with the Employer or its Affiliates, but who had one or more communications with Executive within the six (6) months immediately before the Executive’s end of employment with the Employer where such person or entity applied for a loan, inquired about establishing an account or making an investment, or otherwise had discussions with Executive about utilizing or obtaining service(s) and/or product(s) offered by the Employer or its Affiliates.

(j)    “Terminate,” “terminated,” “termination,” or “termination of employment” shall mean separation from service as defined by Treasury Regulation § 1.409A-1(h).

(k)    “Territory” shall mean a radius of 30 miles from the main office or any branch office of the Employer; provided, however, if the Executive does not provide a Notice of Termination within one business day following a Change in Control, then, effective upon a Change in Control, the “Territory” shall include the main office or any branch office immediately following a Change in Control. 
2.    Term.  The initial term of this Agreement shall be for a one (1) year period beginning on the execution date of this Agreement and ending on the one (1) year anniversary thereof. This Agreement will automatically renew for subsequent one (1) year periods (each a “Renewal Period”) unless, at least 30 days prior to the beginning of a Renewal Period, the Employer shall give notice to the Executive that this Agreement shall not be so renewed. Upon proper notice that the Agreement in place will not be renewed, the Employer 

may, at its own discretion, elect to offer the Executive a revised Change in Control Agreement. Notwithstanding anything herein the contrary, this Agreement shall terminate one (1) year after a Change in Control.
3.    Terms of At-Will Employment.
(a)    Executive and the Employer acknowledge that the employment of the Executive by the Employer is “at will” and Executive shall have no rights to continued employment under this Agreement.
(b)    Notwithstanding the at-will nature of Executive’s employment, during the term of the Executive’s employment by the Employer the Executive agrees to devote the Executive’s full business time and attention to the business and affairs of the Employer and, to the extent necessary to discharge the responsibilities assigned to the Executive by the Board of Directors, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.
4.    Change in Control Payment; Release of Claims.
(a)    Upon the termination of the Executive’s employment by (i) the Executive for Good Reason upon delivery of a Notice of Termination to the Employer, or (ii) the Employer other than for Cause, in each case simultaneously with or within one year after the occurrence of a Change in Control, the Employer shall pay the Executive (or in the event of his death during the term of this Agreement, his estate) in cash within 60 days of the date of termination, severance compensation in an amount equal to $[current annual salary times 1.0]; provided, however, that such amount shall be reduced by the aggregate amount of any salary and bonus paid by the Employer to the Executive for any services provided by the Executive that were performed during the time period that begins at the date of a Change in Control and ends on the day of the termination of the Executive’s employment.  In addition, the foregoing shall be in addition to any other rights that the Executive may be entitled to under any other agreements with, or benefit plans (health, welfare, PTO retirement, etc.) of, the Employer.
(b)    Within 60 days of termination of the Executive’s employment, and as a condition to the Employer’s obligation to make any payment hereunder, the Employer and the Executive shall enter into a mutually satisfactory form of release which shall acknowledge such remaining obligations and discharge both parties, as well as the Employer’s officers, directors and employees with respect to their actions for or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Executive’s employment by the Employer, including the circumstances of such termination. As a further condition to the Employer’s obligation to make any payment hereunder, the Executive may not revoke such release within the revocation period stated in such release and, if the Executive revokes such release, the Executive hereby agrees to pay over, retransfer and redeliver to the Employer any sums paid by the Employer to the Executive pursuant to this Agreement.  Further provided that, if such severance payment is made by the Employer, and if the 60 day period spans two calendar years, regardless of when such release is executed by the Executive, such severance payment must be made in the subsequent taxable year. 

5.    Restrictive Covenants.  In exchange for the promises contained herein, and the consideration described in this Agreement, including the payments under Section 4, the Executive agrees as follows, assuming payment is made to the Executive under Section 4 hereof:
(a)    No Solicitation of Customers.  If the Executive's employment with the Employer is terminated within 12 months following a Change in Control, then for a number of months equal to the quotient of the change in control payment under Section 4 of this Agreement divided by the Executive’s monthly base pay (the “Restricted Period”), the Executive shall not (except on behalf of or with the prior written consent 

of the Employer), either directly or indirectly, on the Executive's own behalf or in the service or on behalf of others, (A) solicit, divert, or appropriate to or for a Competing Business, or (B) attempt to solicit, divert, or appropriate to or for a Competing Business, any Customer or Prospect. For purposes of this Section 5, “indirectly” means that the Executive cannot accomplish something through another that he or she would be prohibited from doing under this Agreement. 
(b)    No Recruitment of Personnel.  If the Executive's employment with the Employer is terminated within 12 months following a Change in Control, then during the Restricted Period, the Executive shall not, either directly or indirectly, on the Executive's own behalf or in the service or on behalf of others, (A) solicit, divert, or hire away, or (B) attempt to solicit, divert, or hire away, to any Competing Business located in the Territory, any employee of or consultant to the Employer or any of its Affiliates, regardless of whether the employee or consultant is full-time or temporary, the employment or engagement is pursuant to written agreement, or the employment is for a determined period or is at will. For purposes of this Section 5, “indirectly” means that the Executive cannot accomplish something through another that he or she would be prohibited from doing under this Agreement.
(c)    Non-Competition Agreement. If the Executive's employment with the Employer is terminated within 12 months following a Change in Control, then during the Restricted Period, the Executive shall not (without the prior written consent of the Employer) compete with the Employer or any of its Affiliates by, directly or indirectly, forming, serving as an organizer, director or officer of, or consultant to, or acquiring or maintaining more than a 1% passive investment in, an institution entity engaging in the same “Business” of Employer as defined herein, or holding company therefor if such entity or its holding company has one or more offices or branches located in the Territory.  Notwithstanding the foregoing, the Executive may serve as an officer of or consultant to a depository institution or holding company therefor even though such institution operates one or more offices or branches in the Territory, if the Executive's employment does not directly involve, in whole or in part, the depository financial institution's or holding company's operations in the Territory. For purposes of this Section 5, “indirectly” means that the Executive cannot accomplish something through another that he or she would be prohibited from doing under this Agreement.
(d)    Reasonable Restraint.  It is agreed by the parties that the foregoing covenants in this Agreement are necessary for the legitimate business interests of Employer and impose a reasonable restraint on Executive in light of the activities and business of Employer on the date of the execution of this Agreement.
(e)    Consideration; Remedies for Breach; Non-Waiver. Executive acknowledges and agrees that valid consideration has been given to Executive by Employer in return for the promises of Executive set forth herein.  Executive recognizes and agrees that a breach by Executive of any covenant contained in this Agreement would cause immeasurable and irreparable harm to Employer.  In the event of a breach or threatened breach of any covenant contained herein, Employer shall be entitled to temporary and permanent injunctive relief, restraining Executive from violating or threatening to violate any covenant contained herein, as well as all costs and fees incurred by Employer, including attorneys’ fees, as a result of Executive’s breach or threatened breach of the covenant.  Employer and Executive agree that the relief described herein is in addition to such other and further relief as may be available to Employer at equity or by law.  Nothing herein shall be construed as prohibiting Employer from pursuing any other remedies available to it for such breach of threatened breach, including the recovery of damages from Executive.  Failure of the Employer to enforce any of the provisions of this Agreement or any rights with respect thereto shall in no way be considered a waiver of such provisions or rights or in any way otherwise affect the validity of this Agreement.
6.    Compliance with Section 280G.  The parties intend that the severance payments provided for herein are reasonable compensation for the Executive’s services to the Employer and shall not constitute 

“excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If tax counsel appointed by the Employer determines that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Executive (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise) (a “Payment”) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code; (B) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (C) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (D) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code.
7.     Compliance with Section 409A.  All payments that may be made pursuant to this Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code.  Any payments made under Section 4 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion.  Any remaining payments under Section 4 are intended to qualify for the exclusion for separation pay plans under Treasury Regulation § 1.409A-1(b)(9), if applicable.  Each payment made under Section 4 shall be treated as a “separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for purposes of Code Section 409A.  Further, notwithstanding anything to the contrary, all separation payments payable under the provisions of Section 4 shall be paid to the Executive no later than the last day of the second calendar year following the calendar year in which occurs the date of Executive’s termination of employment.  None of the payments under this Agreement are intended to result in the inclusion in Executive’s federal gross income on account of a failure under Section 409A(a)(1) of the Code.  The parties intend to administer and interpret this Agreement to carry out such intentions.  However, the Employer does not represent, warrant or guarantee that any payments that may be made pursuant to this Agreement will not result in inclusion in the Executive’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any similar state statute or regulation.  Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, if the Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Executive’s termination (the “Separation Date”), and if an exemption from the six month delay requirement of Code Section 409A(a)(2)(B)(i) is not available, then no such payment shall be made or commence during the period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier, on the date of the Executive’s death.  The amount of any payment that would otherwise be paid to the Executive during this period shall instead be paid to the Executive on the first day of the first calendar month following the end of the period.    
8.    Compliance with Regulatory Restrictions.  Notwithstanding anything to the contrary herein, any compensation or other benefits paid to the Executive shall be limited to the extent required by any federal 

or state regulatory agency having authority over the Employer.  The Executive agrees that compliance by the Employer with such regulatory restrictions, even to the extent that compensation or other benefits paid to the Executive are limited, shall not be a breach of this Agreement by the Employer.  In the event that the Employer is subject to Part 359 of the FDIC Rules and Regulations (12 C.F.R. § 359, et seq.), any payment to be paid pursuant to Section 4 will be made only as permitted by applicable federal regulations.
9.    Miscellaneous.
(a)    Governing Law. This Agreement and all rights hereunder shall be governed by the laws of the Commonwealth of Virginia, except to the extent governed by the laws of the United States of America in which case federal laws shall govern.  Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in Commonwealth of Virginia.
(b)    Successors.
(i)This Agreement is personal to the Executive and without the prior written consent of the Employer shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.
(ii)This Agreement shall inure to the benefit of and be binding upon the Employer and its successors and assigns. This Agreement shall not be terminated by any merger or consolidation whether or not the Employer is the consolidated or surviving depository institution or corporation or by transfer of all or substantially all of the assets of the Employer to another such institution or corporation if there is a surviving or resulting institution or corporation in such transfer.
(c)    Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(d)    Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery (which shall include delivery via Federal Express or UPS) to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
    
[___________]
                
                
 
If to the Employer:
    
Highlands Bankshares, Inc.
Highlands Union Bank
340 West Main Street 
Abingdon, Virginia 24210        
Attn: Robert W. Moser, Jr., Chairman of the Board of Directors

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(e)    Captions.  The captions of this Agreement are not part of the provisions hereof and shall have no force and effect

(f)    Severability.  If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstance shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it valid, enforceable and legal; provided, however, if the provision so held to be invalid, unenforceable or otherwise illegal cannot be reformed so as to be valid and enforceable, then it shall be severed from, and shall not affect the enforceability of, the remaining provisions of the Agreement. 
(g)    Withholding. The Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
(h)    Entire Agreement. This Agreement embodies the entire agreement between the parties with respect to the subject matter addressed herein.  This Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.
(i)    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.
(j)    Confidentiality.  Without the prior written consent of the Employer, Executive shall not disclose the contents of this Agreement, including the amount of the monetary payments, except to Executive's (a) spouse, (b) attorney(s), (c) accountant(s) and/or tax preparer(s), (d) as may be required by law, or (e) as necessary to enforce the terms of this Agreement.  Executive shall notify anyone to whom the terms of this Agreement are disclosed of the confidentiality provision of this Agreement.    
[Signatures appear on the following page.]

IN WITNESS WHEREOF, the parties hereto have executed this Change in Control Agreement as of the date first above written.

                    	
					
	 
	 
	 
	HIGHLANDS BANKSHARES, INC.

	ATTEST:
	 
	 
	 

	By: ____________________________
	 
	 
	By: ____________________________
	 

	 
	 
	 
	 
	 

	Name:
	 
	 
	Name:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	Title:
	 

	 
	 
	 
	 
	 

                    
	
					
	 
	 
	 
	HIGHLANDS UNION BANK

	ATTEST:
	 
	 
	 

	By: ____________________________
	 
	 
	By: ____________________________
	 

	 
	 
	 
	 
	 

	Name:
	 
	 
	Name:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	Title:
	 

	 
	 
	 
	 
	 

	
					
	 
	 
	 
	EXECUTIVEExhibit
10.12

 

THIS
CONVERTIBLE PROMISSORY NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

 

CONVERTIBLE
PROMISSORY NOTE

 

	$207,332	July
    22, 2019

 

For
value received ONE WORLD PHARMA, INC., a Nevada corporation (the “Company”)
promises to pay to the order of CSW VENTURES, LP (“Holder”) ON DEMAND the principal sum of TWO
HUNDRED SEVEN THOUSAND THREE HUNDRED THIRTY TWO DOLLARS ($207,332.00), with interest on the outstanding principal amount at the
rate of six percent (6%) per annum. Interest shall commence with the date hereof and shall accrue on the outstanding principal
amount until paid in full or this Note has been converted as provided below. Interest shall be computed on the basis of a year
of 365 days for the actual number of days elapsed.

 

1.
All payments of interest and principal shall be in lawful money of the United States of America. All payments shall be applied
first to accrued interest, and thereafter to principal.

 

2.           (a)
The outstanding principal balance of this Note, together with any accrued and unpaid interest thereon, or any portion thereof,
may, at the option of the Holder, be converted into the common stock of the Company (“Common Stock”)
at any time at a price per share of Common Stock of $0.50, as equitably adjusted for any stock split or stock dividends effected
after the date hereof (the “Conversion Price”).

 

(b)
In case of any reorganization, consolidation or merger involving the Company, in which the stockholders of the Company receive
securities of another entity (including any parent company of the company with which the Company merges or is merged into) (the
“Successor Issuer”) in exchange for their shares of Company Common Stock, the Successor Issuer shall
assume the obligations of the Company under this Note, and this Note shall thereafter be convertible into such securities of the
Successor Issuer as the Holder would have been entitled to receive upon consummation of such reorganization, consolidation or
merger, if the Holder had converted all of the principal and interest outstanding under this Note immediately prior thereto at
the Conversion Price.

 

(c)
Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert this Note if as a result
thereof the Holder and its affiliates would beneficially own in excess 4.99% or more of the outstanding shares of Common Stock
of the Company, at any time that such common stock is registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the “1934 Act”). For the purposes of the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(c) of the of the 1934 Act and Regulation 13d-3 thereunder. The Holder may void the limitation described
in this 2(d) upon 65 days prior notice to the Company.

 

    	 

    	 

    

 

(d)
Before the Holder shall be entitled to convert this Note pursuant to this Section 2, the Holder shall give written notice to the
Company in the form of Annex A hereto at the Company’s principal corporate office, by email, facsimile or otherwise of the
election to convert the same and shall state therein the name or names in which the shares of Common Stock are to be issued. The
Company shall, as soon as practicable thereafter, issue and deliver to Holder or to the nominee or nominees of Holder, a certificate
or certificates for the Common Stock to which the Holder shall be entitled as aforesaid. Conversion shall be deemed to have been
effected on the date when delivery of notice of an election to convert. All Common Stock which may be issued upon conversion of
the Note will, upon issuance, be duly issued, fully paid and non-assessable and free from all taxes, liens, and charges with respect
to the issuance thereof.

 

3.
This Note may be prepaid at any time without the consent of the Holder.

 

4.
The Company shall pay all reasonable attorneys’ fees and court costs incurred by the Holder in enforcing and collecting
this Note.

 

5.
The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

6.
This Note shall be governed by and construed under the laws of the State of Nevada, as applied to agreements among Nevada
residents, made and to be performed entirely within the State of Nevada, without giving effect to conflicts of laws principles.

 

7.
This Note may be transferred only upon its surrender to the Company for registration of transfer, duly endorsed, or accompanied
by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, this Note shall be reissued
to, and registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and
registered in the name of, the transferee. Interest and principal shall be paid solely to the registered holder of this Note.
Such payment shall constitute full discharge of the Company’s obligation to pay such interest and principal.

 

	 	ONE WORLD PHARMA, INC. 
	 	 	 
	 	By:	/s/
    Craig Ellins
	 	Name: 	Craig
    Ellins
	 	Title:	Chief
    Executive Officer

 

    	2

    	 

    

 

ANNEX
A

 

CONVERSION
NOTICE

 

The
undersigned hereby elects to convert principal and/or interest under the Convertible Promissory Note, issued as of July 22, 2019
(the “Note”) of One World Pharma, Inc., a Nevada corporation (the “Company”), into shares
of common stock (the “Common Stock”), of the Company according to the conditions hereof and the Note, as of
the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer
taxes, if any.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 2(c) of the Note, as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended.

 

Conversion
calculations:

 

	 	Date
to Effect Conversion: ____________________________________
	 	 
	 	Principal
Amount of Note to be Converted: _______________________
	 	 
	 	Amount
    of Interest of Note to be Converted: ______________________
	 	 
	 	Number
    of shares of Common Stock to be issued: 
	 	 
	 	_________________________________________________________
	 	 
	 	Signature: ________________________________________________
	 	 
	 	Name: ___________________________________________________
	 	 
	 	Address
    for Delivery of Common Stock Certificates: 
	 	 
	 	________________________________________________________
	 	 
	 	Or
	 	 
	 	DWAC
    Instructions:
	 	 
	 	Broker
No: ________________________________________________
	 	 
	 	Account
    No: _______________________________________________

 

    	3

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