Document:

Exhibit

EXHIBIT 10.21

May 21, 2019

Re:  Transition Letter Agreement (the “Letter Agreement”)

Dear [  ],

In connection with the restructuring of certain business operations of Legg Mason, Inc. (together with Legg Mason & Co., LLC (“Legg Mason” ) and its other subsidiaries and affiliates (the “Company”), your services will be an important part of the transition through your separation from Legg Mason, which is currently scheduled for January 1, 2020 (the “Separation Date”).  

Accordingly, Legg Mason wishes to offer you the transitional employment terms set forth in this Letter Agreement for the period beginning on July 1, 2019 and ending on the Separation Date.  As part of these terms, Legg Mason wishes to provide you with an incentive to remain employed by Legg Mason through the Separation Date (the period from July 1, 2019 through the Separation Date shall be the “Transition Period”).  This, however, is not a contract or guarantee of employment through the Transition Period.  Your employment remains at-will.  However, if you accept this Letter Agreement you may also become eligible for a Severance Package, as discussed below.    

Therefore, effective as of the date of this letter, Legg Mason offers you the following employment terms:  

1.    Position and Compensation.

You will be employed by Legg Mason in your current position at your existing base salary through the Separation Date, subject to the terms and conditions of this letter.

2.    Transition Incentive Payment.

a.Legg Mason wishes to offer a cash incentive bonus to encourage you to remain actively employed with Legg Mason through the Separation Date and to devote your best efforts to ensuring that the transition is successful.  During the Transition Period, you agree to reasonably cooperate in the transition including (i) continuing to satisfactorily perform your assigned job duties consistent with your position and all applicable workplace policies, and (ii) reasonably cooperating with Legg Mason to ensure the orderly transition of your job duties, responsibilities and knowledge.

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b.If you do not voluntarily resign from Legg Mason and are not dismissed for Cause (as defined below) on or before the Separation Date, and subject to the provisions below, you will be eligible for a total gross cash incentive payment of [  ] (“Transition Incentive Payment”).  In order to receive the Transition Incentive Payment, you must sign, prior to payment, a Severance Agreement & Release of Claims in the form attached hereto as Exhibit A.  Payment of the Transition Incentive Payment will be made on the date that is sixty (60) days following the Separation Date. You may also be eligible for a Severance Package, as described in section 3.  

c.In the event Legg Mason terminates your employment before the Separation Date without Cause, Legg Mason will (i) pay you an amount equal to the amount of regular base pay you would have received from the date of your dismissal through the Separation Date, and (ii) accelerate and pay to you the full Transition Incentive Payment.  The benefits described in this paragraph will be provided in one lump sum payment, payable on the date that is sixty (60) days following the Separation Date. You must sign a Severance Agreement & Release of Claims in the form attached as Exhibit A in order to receive the benefits and payments described in this paragraph.  For the avoidance of doubt, these payments are in addition to, and not in lieu of, your potential Severance Package.

d.In the event you are offered a comparable job from the Company and you accept that offer before the Separation Date, you will receive a pro-rated transition incentive payment calculated from July 1, 2019 through the day you accept that offer.  In the event you are offered a comparable job from the Company and you decline that offer, you will continue to maintain your eligibility for the Transition Incentive Payment according to the provisions discussed above (including the requirement to sign a Waiver and Release Agreement); however, you will not be eligible for the Severance Package outlined in section 3 below.  For the avoidance of doubt, the Transition Incentive Payment is in addition to, and not in lieu of, your potential Severance Package.  A comparable job must be comparable in terms of locations worked from, level of seniority, compensation and job responsibilities.  

e.If you take an authorized leave of absence of any kind during the Transition Period, you will be eligible to receive only a prorated Transition Incentive Payment, based on the number of full weeks that you were actively at work during the Transition Period.  The term “leave of absence” does not include approved PTO, which encompasses vacation, personal time, sick days, and any other short-term paid time off.  Legg Mason will compensate employees for accrued, unused PTO through their termination date, in accordance with the applicable PTO policy.  

f.For purposes of this Letter Agreement, “Cause” shall mean any one or more of the following: (i) your material violation of the Restrictive Covenants set forth in Section 4 of this Agreement, (ii)your  material breach of any material obligation to the Company or your duty of loyalty to the Company, (ii) willful misconduct that is materially injurious to Legg Mason, or 

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to any other entity within the Company, monetarily or otherwise; (iv) material violation of, or willful act or failure to act which causes the Company to be in violation of, any government statute or regulation, or of the constitution, by-laws, rules or regulations of any securities or commodities exchange or a self-regulatory organization, or of the policies of the Company; (v) the entering of an order or decree or the taking of any similar action with respect to which you are substantially impaired from performing your duties or makes you ineligible from being associated with the Company pursuant to Section 9 of the Investment Company Act of 1940, as amended, or Section 203(f) of the Investment Advisers Act of 1940, as amended; (vi) your conviction of a felony; (vii) your willful failure to devote substantially all professional time to assigned duties and to the business of the Company other than when on approved PTO or an approved leave of absence; (vii) your gross misconduct or gross negligence in the performance of duties; (ix) your failure to remain licensed to perform duties or other act, conduct or circumstance which renders you ineligible for employment with Legg Mason; or; (x) your material misconduct or material dishonesty in connection with your employment, including any material breach or violation of the company’s policies and procedures as set forth in the Employee Handbook and Code of Conduct, including all provisions related to discrimination, harassment, and retaliation.  In order for any termination to be for “Cause” hereunder other than pursuant to clause (v) or (vi), Legg Mason must provide you written notice of the grounds for a Cause termination and you must fail to materially cure such grounds within 15 days following your receipt of such notice.

g.It is possible that Legg Mason may desire to extend temporarily your employment, in the same or similar position, beyond the Separation Date.  You will be given reasonable notice prior to the Separation Date should Legg Mason wish to extend your service.  If you are asked to extend your service, whether you accept or decline, you will still be entitled to the Transition Incentive Payment payable following the original Separation Date as described above, as well as the other benefits sets forth in this Letter Agreement provided you work through the Separation Date and meet all other conditions described in this Letter Agreement.   

3.    Severance Package.  

You may be eligible for severance pay and related benefits (collectively, the “Severance Package”), in accordance with the Severance Agreement and Release of Claims, which is attached hereto as Exhibit A and sets forth the Severance Package and the terms and conditions thereof.  You will receive the Severance Package if you (i) complete the full Transition Period through the Separation Date or are involuntarily terminated other than for “Cause” (as defined in section 2(e) above) ; and (ii) sign, at the conclusion of your employment, the Severance Agreement and Release of Claims attached as Exhibit A.

4.    Restrictive Covenants.  As an inducement to Legg Mason to enter into this Agreement, and as a condition of your eligibility for the benefits described in this Agreement and to preserve 

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the goodwill associated with the business of Legg Mason, you agree that, during the Restricted Period, you will not, directly or indirectly, for yourself or on behalf of a third party, solicit or induce any employee of Legg Mason to terminate his/her employment or to become employed elsewhere.  Restricted Period” shall mean the period beginning on the date of this Letter Agreement and continuing until the 12-month anniversary of your termination of employment with Legg Mason (regardless of the reason for such termination).  This paragraph applies in lieu of any other noncompetition or non-solicitation covenants in any other agreement between you and Legg Mason, and any other such covenants are hereby cancelled, other than the Severance Agreement and Release of Claims.

You further agree that you will not disparage, defame, or otherwise represent in a negative light Legg Mason or its related entities and any of their officers or employees, services, products, or processes, provided that this restriction does not apply to normal competitive-type statements.  Legg Mason agrees that it will instruct its executive officers not to disparage, defame, or otherwise represent you in a negative light.  This agreement does not bar you or Legg Mason officers from communicating truthfully with a government agency or testifying, assisting or participating in any governmental investigation, proceeding or hearing conducted by a government agency, including by providing documents or other information.

By entering into this Letter Agreement, you acknowledge that the covenants set forth in this section 4 are reasonable and properly required for the adequate protection of the interests of the Company, including the Company’s goodwill, confidential information, and intellectual property, and such covenants represent only a limited restraint and allow you to pursue your livelihood and occupation without unreasonable or unfair restrictions. However, if any restriction set forth in this section 4 is found by any adjudicator of competent jurisdiction to be unenforceable (for example, because it extends for too long a period of time), this Letter Agreement shall be deemed amended solely to the extent necessary to render the otherwise unenforceable restriction, and the rest of the Letter Agreement, valid and enforceable.  

5. Employment-At-Will.
  
Nothing contained in this Letter Agreement shall be construed as a promise of continuous employment for any definite term, including, without limitation, for the Transition Period.  The employment relationship remains “at-will,” which affords either you or Legg Mason the right to terminate the employment relationship at any time for any or no reason not expressly prohibited by law.

6.    Principles of Employment.

Your employment is subject to all provisions outlined in the Employee Handbook applicable to you, including the Code of Conduct.  All employees have been provided an Employee Handbook and the Code of Conduct.

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7.    Taxes.

All compensation and benefits described in this Letter Agreement will be subject to applicable tax and other withholdings and deductions. The provisions of this Letter Agreement are intended to be exempt from, or to comply with, Section 409A of the Internal Revenue Code (“Section 409A”). However, nothing in this Letter Agreement shall be interpreted to transfer liability for any tax from you to Legg Mason, the Company or any other individual or entity.  If, upon your separation from service, you are a “specified employee” within the meaning of Section 409A, any payment under this Agreement that is subject to Section 409A, payable as a result of your separation from service, and would otherwise be paid within six months after your separation from service will instead be paid, without interest, in the seventh month following your separation from service (to the extent required by Section 409A(a)(2)(B)(i)).  Notwithstanding anything to the contrary in this Agreement, if the period of time during which you have discretion to sign or revoke this Agreement bridges two calendar years, any compensation or benefits subject to Section 409A and contingent on your signing and not revoking this Agreement will be paid in the second year regardless of when you sign this Agreement and,  you will have no right or ability to dictate the year of payment for any compensation or benefits under this Agreement.  By signing this Letter Agreement you acknowledge and agree that Legg Mason does not make any representation as to the tax consequences of any compensation or benefits and that you are solely responsible for any income, employment or other taxes imposed on you with respect to any and all compensation or other benefits provided to you.  

8.    Governing Law and Dispute Resolution.

a.This Letter Agreement will be interpreted and enforced in accordance with the laws of the State of Maryland. 

b.    In the event that you bring a legal action, or any dispute, claim or controversy relating to this Letter Agreement, your employment or the termination thereof, against the Company or any party connected to the Company, you agree that, at the option of Legg Mason, you will submit to arbitration.  If you are associated in any capacity with a registered broker-dealer, you agree to arbitrate under the Constitution and Rules of the Financial Industry Regulatory Authority, Inc.  If you are not associated with a registered broker-dealer, or the FINRA Arbitration forum is not otherwise available to you, you agree to arbitrate under the auspices of the American Arbitration Association (“AAA”) in the location of Legg Mason’s choosing pursuant to the AAA’s employment arbitration rules, including, but not limited to, the rules and procedures applicable to the selection of arbitrators. 

c.    You agree that any breach or threatened breach of your obligations in section 4 of this Letter Agreement will cause the Company substantial and irrevocable damage for which it would have no adequate remedy and thus agree that, in addition to all other remedies that may be 

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available, Legg Mason shall be entitled to a temporary or permanent injunction or other equitable relief against any such breach or threatened breach, without the necessity of showing any actual damages or that monetary damages would not afford an adequate remedy, and without the necessity of posting any bond or other security.

9.    Acknowledgements.  

By your signature below, you acknowledge that you have read this Letter Agreement, understand the terms and conditions for your continued employment during the Transition Period, and agree to be bound by those terms and conditions.  You further understand that, unless you are terminated for Cause, resign or receive another job offer from Legg Mason, you will receive a separate Severance Agreement at a later date, which will outline the separate terms describing your eligibility for the Severance Package and that, in order to receive a Transition Incentive Payment, and/or the Severance Package, you must sign a Waiver and Release Agreement.  The terms and conditions of this Letter Agreement may be amended only in writing signed by you and a duly authorized representative of Legg Mason.

Please sign and return this letter to me within seven (7) days of receipt .  Please note that if you do not return the signed letter within seven (7) days, the offer described here shall be null and void unless Legg Mason determines otherwise. 

Sincerely,
 

Joseph A. Sullivan
Chairman & CEO
LEGG MASON & CO., LLC

So acknowledged and agreed:

Name:  ____________________________________        Date: _______________

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EXHIBIT A

Re:    Severance Agreement and Release of Claims
Dear [   ],
This letter sets forth the terms pertaining to the termination of your employment by Legg Mason & Co., LLC, a subsidiary of Legg Mason, Inc. (collectively, along with all Legg Mason, Inc. subsidiaries and affiliates, “Legg Mason”) in connection with a reduction in force and the elimination of your position, which termination is effective as of [January 1, 2020] (the “Separation Date”). We hope that your separation from Legg Mason can occur as smoothly as possible for you and for Legg Mason.  
As outlined in your Transition Agreement Letter , you will be paid through the Separation Date and you will receive your final paycheck on the next regular payroll date following the Separation Date.  You will also receive any accrued but unused paid time off to which you may be entitled at that time.  If you are enrolled in Legg Mason’s medical, dental and/or vision plan as of the Separation Date, your active coverage will end on the last day of the month in which the Separation Date occurs and you will be eligible for COBRA continuation coverage, as described below.
I am authorized to offer you the following severance package, contingent upon your agreeing to all terms and release provisions below.  This offer does not become effective until the Separation Date.  Accordingly, you may not sign this Severance Agreement and Release of Claims (the “Agreement”) prior to the Separation Date.
As described in your Transition Letter Agreement, dated May 21, 2019, you are also eligible for a “Transition Incentive Payment” in the amount of [$  ], if you sign and do not revoke this Agreement.
1.In consideration of your agreement to and compliance with the terms provided in this Agreement, Legg Mason will provide you with the following Severance Package, provided that you sign and do not revoke this Agreement and that you have remained employed through the Separation Date:

		
	a.
	Legg Mason will pay you severance pay in the amount of [$  ] (“the Severance Payment”).  This payment will be less any applicable taxes and other deductions required by law and will be paid in a lump sum on the date that is sixty (60) days following the Separation Date. 

		
	b.
	You will be eligible for career transition outplacement services (the “Outplacement Benefit”).  Information regarding the Outplacement Benefit will be mailed to your home address within two (2) weeks after you have signed and returned this Agreement.  Please contact us if you do not receive this information.  You will have three (3) months to make initial contact with the outplacement services vendor to take advantage of the Outplacement Benefit. 

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	c.
	You will receive a COBRA subsidy equal to 100% of the applicable COBRA premium for you and any of your dependents who were enrolled in the applicable plans as of your Separation Date, for six months (the “COBRA Subsidy”), provided that: (1) you are enrolled in Legg Mason’s medical, dental, and/or vision coverage at time of termination, (2) you affirmatively elect continuation coverage under COBRA and return the required forms to the COBRA administrator, and (3) you remain eligible for COBRA coverage. Notwithstanding the foregoing, if at any time the Legg Mason determines that its partial subsidy of your premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) or any other Code section, law or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the subsidized premiums described above, Legg Mason shall instead pay a fully taxable monthly cash payment in an amount such that, after payment by you of all taxes on such payment, you retain an amount equal to Legg Mason’s portion of the applicable premiums for such month, with such monthly payment being made on the last day of each month.

		
	d.
	All of your options to purchase shares of Legg Mason Common Stock, pursuant to the 1996 Equity Incentive Plan Non-Qualified Stock Option Agreements (each a “Stock Option Agreement”) shall continue to vest under the terms and conditions set forth in the Stock Option Agreement(s) as if your employment continued through the expiration  date under the applicable Stock Option Agreement. Provided that all terms and conditions of this Agreement are satisfied, this Section 1(d) amends Sections 3(c) and 4(c) of each Stock Option Agreement.

		
	e.
	All of your Performance Share Units (as defined under each of the Legg Mason, Inc. 1996 Equity Incentive Plan Performance Share Unit Award Agreement and the2017 Equity Incentive Plan - Performance Share Unit Award Agreement (each, a “PSU Plan”) shall continue to vest on the schedule (and subject to the same performance goals) set forth in the applicable PSU Plan and will pay out as if your employment continued until the end of the applicable performance period.  Provided that all terms and conditions of this Agreement are satisfied, this Section 1(e) amends Section 2(f) of your PSU Plan.

		
	f.
	 All of your Restricted Share Units in Legg Mason shall fully vest as of the Separation Date and be fully settled on the date that is sixty (60) days following the Separation Date. 

You understand and agree that if, before the Severance Payment is remitted to you, you accept a position with Legg Mason or any subsidiary of Legg Mason, Inc., you will no longer be entitled to the Severance Package in paragraph 1 but the other provisions of this Agreement will remain in place and be enforceable. You further understand and agree that if you accept a position with Legg Mason or any subsidiary of Legg Mason, Inc. within 30 days following receipt of the Severance Payment, Legg Mason shall be entitled, at its discretion, to repayment of all or a portion of the Severance Payment.  Acceptance of a position with Legg Mason within 30 days following receipt of the Severance Payment will also result in forfeiture of the Outplacement 

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Benefit and COBRA Subsidy.  However, as long as you sign and do not revoke this Agreement, you will remain eligible for the Transition Incentive Payment. 
2.Except as expressly set forth in this Agreement, you will be entitled to no other benefits or further compensation from Legg Mason.  Except as described in Sections 1.d.,1.e., and 1.f., nothing in this Agreement will be deemed to affect the distribution, vesting or forfeiture of (i) your account, if any, under the Legg Mason & Co., LLC Profit Sharing and 401(k) Plan and Trust; (ii) equity awards, including vested but deferred awards,  received by you, if any, under the Legg Mason, Inc. 1996 Equity Incentive Plan; (iii) equity awards, including vested but deferred awards, received by you, if any, under the Legg Mason, Inc. 2017 Equity Incentive Plan; or (iv) amounts owed to you, if any, in the Legg Mason & Co., LLC Deferred Compensation/Phantom Stock Plan and Phantom Fund Plan, all of which shall be governed by the terms of the applicable plans and related documents thereunder.  In addition, nothing herein affects your rights to indemnification with respect to your period of service with Legg Mason or directors’ and officers’ liability insurance coverage. 

3.In connection with your employment with Legg Mason or its related entities, you have had access to information of a nature not generally disclosed to the public.  You agree to maintain the confidentiality of, and not use for any purpose, any proprietary and confidential client information obtained during your employment with Legg Mason or its related entities, as well as to keep confidential, and not use for any purpose, any business, personnel, proprietary or trade secret information in your possession pertaining to Legg Mason or its related entities or the employees, services, products or processes of any of these entities.  By signing below, you certify that you have (i) returned to Legg Mason any and all such confidential and/or proprietary information, information containing trade secrets, and all other materials, documents or property belonging to the Legg Mason, including without limitation: files, records, manuals, books, notes, reports, software and hardware, laptops, printers, computers, tablets, cell phones, keys, equipment, identification cards, access cards, credit cards, mailing lists, computer print-outs, computer data, passwords, computer disks and tapes, and remote computer access key fobs, in the same condition the property was in at the time it was issued to you;  (ii) not retained any copies of any confidential and/or proprietary information, information containing trade secrets, and/or any other materials, documents or property belonging to Legg Mason, and (iii) deleted all confidential and/or proprietary information, information containing trade secrets, and/or any other materials, documents or property belonging to Legg Mason from your home and/or personal computer drives and from any other personal electronic, digital or magnetic storage devices.  Notwithstanding the foregoing, you will not delete or destroy any information or data subject to an outstanding litigation hold on your Separation Date without the express permission of the General Counsel of Legg Mason or his designee.  In addition, nothing herein restricts your right to retain a copy of your rolodex or electronic contacts list.

Nothing herein shall be construed to limit or prohibit you from reporting possible violations of federal or state law or regulations to, or filing a charge or complaint with, any governmental agency or entity, including the U.S. Department of Justice, the U.S. Securities and Exchange Commission,   or the Equal Employment Opportunity Commission (each, a “Government Agency”), or making other disclosures that are protected under federal or state “whistleblower” laws or regulations. Nothing herein limits your right to receive an award for information provided to a Government Agency.

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You are hereby notified in accordance with the Defend Trade Secrets Act of 2016 that you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
You are further notified that if you file a lawsuit for retaliation by an employer for reporting a suspected violation of law, you may disclose the employer's trade secrets to your attorney and use the trade secret information in the court proceeding if you: (a) file any document containing the trade secret under seal; and (b) do not disclose the trade secret, except pursuant to court order.
4.To the extent that this Agreement has not been filed with, or publicly disclosed in a filing to, the Securities and Exchange Commission, you agree not to disclose any information concerning the existence or terms of this Agreement to anyone other than your attorney, tax advisor or immediate family members, whom you must direct to maintain the confidentiality of this information as well.  This clause does not bar you from disclosing the terms of this Agreement in any governmental investigation, proceeding or hearing conducted pursuant to law.  

5.In exchange for the consideration in the form of the Severance Package and Transition Incentive Payment provided by Legg Mason in this Agreement, you agree to release and forever discharge Legg Mason as well as its stockholders, parents, subsidiaries, and other related enterprises, and all of those entities’ stockholders, directors, officers, employees, agents, insurers, employee benefit plans, fiduciaries, administrators, and successors (past, present and future) (hereinafter “Legg Mason Releasees”) from any and all rights, demands, causes of action, complaints, contracts and other claims whatsoever, in law or in equity, which you, your heirs, successors, assigns and any personal or legal representatives have or may have against the Legg Mason Releasees, including all known, unknown, undisclosed and unanticipated claims occurring before and including the effective date of this Agreement.  This includes, but is not limited to, rights and claims which may arise out of or are in any way related to your employment by Legg Mason and the termination of your employment and further includes, without limitation, rights and claims under Title VII of the Civil Rights Act of 1964 (“Title VII”), Section 1981 of the Civil Rights Act of 1866, the Age Discrimination in Employment Act (“ADEA”) as amended by the Older Worker Benefits Protection Act (“OWBPA”), the Equal Pay Act, the National Labor Relations Act (“NLRA”), the Employee Retirement Income Security Act (“ERISA”) and any employee benefit plan sponsored by Legg Mason which is not subject to ERISA, the Americans with Disabilities Act (“ADA”) as amended by the Americans with Disabilities Act Amendments Act (“ADAAA”), the Family and Medical Leave Act (“FMLA”), the Fair Labor Standards Act (“FLSA”), the False Claims Act, The Labor Management Relations Act, the Sarbanes Oxley Act of 2002, the Genetic Information Nondiscrimination Act (“GINA”), the Worker Adjustment and Retraining Notification Act (“WARN”), and any other federal, state and local laws, regulations and ordinances prohibiting bias and/or employment discrimination.  This also includes, but is not limited to, claims for violation of Legg Mason’s policies; wrongful, constructive, or retaliatory discharge; breach of contract or covenant, oral and written, express and implied; common law, and alleged torts; furthermore, this includes a release for any costs or attorneys’ fees you may have incurred.  
 

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Notwithstanding the general release above, you do not waive any rights or claims that may arise after your and Legg Mason’s execution of this Agreement, claims that may arise as a result of this Agreement, or claims that may not be waived as a matter of law.  You do not waive or release any rights and claims that you may have under the Age Discrimination in Employment Act, as amended, which arise after the effective date of this Agreement.   You do not waive rights to unemployment or workers compensation benefits or your right to any payments or benefits provided by or preserved by this Agreement.
This release does not prohibit you from filing a charge with any government administrative agency (such as the Equal Employment Opportunity Commission), or testifying, assisting or participating in an investigation, hearing or proceeding conducted by such agency; however, other than an award for information provided to a Government Agency, you waive the right to receive any individualized relief, such as reinstatement, backpay, or other damages, in a lawsuit or administrative action brought by any government agency or individual on your behalf.  You agree that if there is any complaint currently pending in any court, arbitral forum, or other adjudicative body in which you personally seek reinstatement, damages or other remedies relating to any claim that is covered by this General Release, you will immediately file a dismissal with prejudice of such claim or remedy. 
6.Except as otherwise stated herein, you agree and covenant not to file any suit, complaint, charge, claim, grievance or demand for arbitration against any of the Releasees in any court, administrative agency, commission or other forum with regard to any claim, demand, liability or obligation arising out of your employment with Legg Mason or separation from employment You further represent that no claims, complaints, charges or other proceedings are pending in any court, administrative agency, commission or other forum relating directly or indirectly to your employment with Legg Mason or separation from employment. You further understand that you are not giving up your right to challenge: (a) Legg Mason’s failure to comply with its promises to make payment and provide benefits under this Agreement; or (b) your right to any vested benefits to which you are entitled.

7.In accordance with the requirements of the ADEA, as amended by the OWBPA, the following information is provided:
		
	a.
	Time to consider this Agreement.  You acknowledge that you have been provided with a copy of this Agreement and have been given forty-five (45) days in which to review and consider the Agreement.  You may sign and return the Agreement sooner if you prefer. Any changes, whether material or immaterial, that might be made to this Agreement after it is provided to you shall not extend or restart the forty-five (45) day consideration period.

		
	b.
	Attorney counsel.  You are advised to consult with an attorney prior to signing this Agreement.

		
	c.
	Revocation.  You acknowledge that you have a period of seven (7) calendar days following the signing of this Agreement to revoke this Agreement. Any such revocation of the Agreement must be made by you and delivered to Patricia 

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Lattin, Legg Mason, 100 International Drive, Baltimore, MD, 21202, and received prior to the end of the revocation period.  Any revocation hereunder shall not affect the termination of your employment from Legg Mason. However, if you revoke this Agreement, you will not receive the Severance Package or Transition Incentive Payment. 

		
	d.
	When the terms become effective.  The terms of the Agreement shall become final and binding only upon expiration of the revocation period provided in subparagraph 7(c) above.  In other words, the effective date of this Agreement will be the 8th calendar day after you sign the Agreement, provided that you have not revoked the Agreement during the revocation period.  No payments shall be made under this Agreement until the Agreement becomes final and binding upon the parties.

		
	e.
	Information concerning Severance Program.  You acknowledge receipt of the following information (attached as Exhibits A and B and made a part of this Agreement): 

		
	(i)
	a description of the class, unit or group of individuals that is covered by the Severance Program, and eligibility factors and time limits if any (Exhibit A); and

		
	(ii)
	the job classifications and ages of all individuals selected for the Program, and the ages of all individuals in the same job classification not selected for the Program (Exhibit B).

8.Both parties agree that neither this Agreement nor the payment of the Severance Package or Transition Incentive Payment is an admission by the Legg Mason Releasees of any liability, wrongdoing or unlawful conduct of any kind.

9.You acknowledge that during your employment, you have been paid and/or have received all compensation, wages, bonuses, commissions, and/or benefits (including insurance benefits) to which you may be entitled, and that no other compensation, wages, bonuses, commissions and/or other benefits are due to you, except as provided for or acknowledged in this Agreement.  You further represent that you have abided by Legg Mason’s policies and procedures during the course of your employment.  You understand and agree that if Legg Mason learns that these representations are not accurate, Legg Mason has the right to immediately cease its payment of the Severance Package and Transition Incentive Payment and recoup any payments made pursuant to this Agreement. 

10.You agree that you will not disparage, defame, or otherwise represent in a negative light Legg Mason or its related entities and any of their officers or employees, services, products, or processes, provided that this restriction does not apply to normal competitive-type statements.  Legg Mason agrees that it will instruct its executive officers not to disparage, defame, or otherwise represent you in a negative light.  This agreement does not bar you or Legg Mason executive officers from communicating truthfully with a Government Agency or testifying, assisting or participating in any governmental investigation, proceeding or hearing conducted by a Government Agency, including by providing documents or other information.

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11.In the event that you bring a legal action, or any dispute, claim or controversy relating to this Agreement, your employment or the termination thereof, against any Legg Mason Releasees you agree that, at the option of Legg Mason, you will submit to arbitration.  If you are associated in any capacity with a registered broker-dealer, you agree to arbitrate under the Constitution and Rules of the Financial Industry Regulatory Authority, Inc.  If you are not associated with a registered broker-dealer, or the FINRA Arbitration forum is not otherwise available to you, you agree to arbitrate under the auspices of the American Arbitration Association (“AAA”) in the location of Legg Mason’s choosing pursuant to the AAA’s employment arbitration rules, including, but not limited to, the rules and procedures applicable to the selection of arbitrators.

12.You acknowledge that you have been involved in several projects or tasks which may not have been completed as of the effective date of this Agreement, and, if requested by Legg Mason, you will reasonably cooperate with Legg Mason in accomplishing an orderly transition of your responsibilities, and, in exchange for the Severance Package, will provide reasonable assistance to Legg Mason in connection with matters that may arise out of your performance of your duties and responsibilities during your employment for a period of six months following the Separation Date.  Such assistance shall be limited to responding to questions either via telephone or electronic means and shall not unreasonably interfere with your post-separation endeavors.  In addition, to the extent such assistance is related to a litigation, governmental investigation or similar matter, Legg Mason will provide you an attorney at its sole cost or reimburse your reasonable legal fees.  

13.As an inducement to Legg Mason to enter into this Agreement, and as a condition of your eligibility for the benefits described in this Agreement and to preserve the goodwill associated with the business of Legg Mason, you agree that, during the Restricted Period, you will not, directly or indirectly, for yourself or on behalf of a third party, solicit or induce any employee of Legg Mason to terminate his/her employment or to become employed elsewhere.  “Restricted Period” shall mean the period beginning on the date of this Letter Agreement and continuing until the 12-month anniversary of your termination of employment with Legg Mason (regardless of the reason for such termination).  This paragraph applies in lieu of any other noncompetition or non-solicitation covenants in any other agreement between you and Legg Mason, and any other such covenants are hereby cancelled.

By entering into this Agreement, you acknowledge that the covenants set forth herein are reasonable and properly required for the adequate protection of the interests of Legg Mason, including Legg Mason’s goodwill, confidential information, and intellectual property, and such covenants represent only a limited restraint and allow you to pursue your livelihood and occupation without unreasonable or unfair restrictions. However, if any restriction set forth in this Agreement is found by any adjudicator of competent jurisdiction to be unenforceable (for example, because it extends for too long a period of time), this Agreement shall be deemed amended solely to the extent necessary to render the otherwise unenforceable restriction, and the rest of the Agreement, valid and enforceable.  

14.You acknowledge that, at some point in the future, litigation may arise either directly or tangentially relating to your employment at Legg Mason. You agree to appear without 

13

the need for a subpoena to provide deposition testimony and testify at trial and/or arbitration in connection with any such litigation.  You also agree to cooperate in providing documents and information necessary to assist in the defense or prosecution of any such case, including telephone calls and meetings with Legg Mason counsel.  If applicable, reasonable travel expenses will be paid by Legg Mason. 

15.You agree that the provisions of paragraphs 3, 4, 5, 6, 8, 9, 10, 11, 12, 13 and 14  constitute material inducements to Legg Mason for the additional consideration being paid hereunder and that any material breach of these provisions that is not cured by you within a reasonable period of time following written notice from Legg Mason shall constitute a material breach of this Agreement entitling Legg Mason to a return of the consideration paid by Legg Mason to the extent permitted by applicable law, as well as to any claim for any further damages caused by such breach.  In addition, Legg Mason may seek injunctive relief to prevent further breaches of these provisions.

16.If any portion of this Agreement is deemed to be invalid by an administrative agency, court, arbitrator, or other person or body deciding a dispute between the parties hereto, the parties intend and agree that the portion of the Agreement that is deemed invalid shall be severed from the Agreement, and that the remainder of the Agreement shall be valid and binding and interpreted in such a manner as respects the wishes of the Parties as much as possible; provided, however, that if such decision is made invalidating all or any part of Paragraph 5 of this Agreement (other than the release and waiver under the Age Discrimination in Employment Act) due to a challenge, claim or request submitted by you, then this entire Agreement shall be deemed null and void and you will be obligated to return to Legg Mason the Severance Package and Transition Incentive Payment to the extent permitted by applicable law.

17.This Agreement sets forth the entire agreement and understanding between the parties and supersedes any and all prior agreements or understandings pertaining to your employment or the termination thereof with the exception of any confidentiality agreements between you and Legg Mason or its related entities, as well as post termination obligations as set forth in the Employee Handbook, which shall remain binding.  This Agreement may be modified only in writing and shall be binding upon and inure to the benefit of you, Legg Mason and the respective heirs, executors, successors and assigns of each.  Your signature to this Agreement will confirm that you are not relying upon any representations or statements made by Legg Mason or any of its agents, except as set forth herein.

18.All compensation and benefits described in this Agreement will be subject to applicable tax and other withholdings and deductions. The provisions of this Agreement are intended to be exempt from, or to comply with, Section 409A of the Internal Revenue Code (“Section 409A”), and this Agreement will be interpreted consistent with that intent.  Notwithstanding anything to the contrary in this Agreement, if the period of time during which you have discretion to sign or revoke this Agreement bridges two calendar years, any compensation or benefits subject to Section 409A and contingent on your signing and not revoking this Agreement will be paid in the second year regardless of when you sign this Agreement and, you will have no right or ability to dictate the year of payment for any compensation or benefits under this Agreement.  By signing this Agreement you acknowledge and agree that Legg Mason does not make any representation as to the tax consequences of any compensation or benefits and that you are solely responsible for any income, employment or 

14

other taxes imposed on you with respect to any and all compensation or other benefits provided to you. Nothing contained herein shall be deemed to alter the time or manner of any payment, benefit or amount that is deemed to be deferred compensation that is subject to Section 409A, if applicable.  By signing this Agreement you acknowledge and agree that Legg Mason does not make any representations as to the tax consequences of any compensation or benefits provided hereunder (including, without limitation, under Section 409A of the Internal Revenue Code, if applicable), and that you are solely responsible for any and all income, employment or other taxes imposed on you with respect to any and all compensation or other benefits provided to you.  If, upon your separation from service, you are a “specified employee” within the meaning of Section 409A, any payment under this Agreement that is subject to Section 409A, payable as a result of your separation from service, and would otherwise be paid within six months after your separation from service will instead be paid, without interest, in the seventh month following your separation from service (to the extent required by Section 409A(a)(2)(B)(i)).

19.Legg Mason shall maintain, for your benefit, director and officer liability insurance in a form at least as comprehensive as, and in an amount that is at least equal to, that maintained by Legg Mason for any other officer or director.  In addition, you shall be indemnified by Legg Mason against liability for claims against you as an officer of the Company and shall be entitled to prompt advancement of expenses (including without limitation attorney’s fees), in each case to the fullest extent permitted by applicable law and Legg Mason’s governing documents.  Your rights under this paragraph shall continue so long as you may be subject to such liability.

20.This Agreement will be interpreted and enforced in accordance with the laws of the State of Maryland.

21. In the event that you bring a legal action, or any dispute, claim or controversy relating to this Letter Agreement, your employment or the termination thereof, against Legg Mason or any party connected to Legg Mason, you agree that, at the option of Legg Mason, you will submit to arbitration.  If you are associated in any capacity with a registered broker-dealer, you agree to arbitrate under the Constitution and Rules of the Financial Industry Regulatory Authority, Inc.  If you are not associated with a registered broker-dealer, or the FINRA Arbitration forum is not otherwise available to you, you agree to arbitrate under the auspices of the American Arbitration Association (“AAA”) in the location of Legg Mason’s choosing pursuant to the AAA’s employment arbitration rules, including, but not limited to, the rules and procedures applicable to the selection of arbitrators. 

22.You agree that any breach or threatened breach of your obligations in section 4 of this Letter Agreement will cause Legg Mason substantial and irrevocable damage for which it would have no adequate remedy and thus agree that, in addition to all other remedies that may be available, Legg Mason shall be entitled to a temporary or permanent injunction or other equitable relief against any such breach or threatened breach, without the necessity of showing any actual damages or that monetary damages would not afford an adequate remedy, and without the necessity of posting any bond or other security.

15

23.You are advised to consult with an attorney prior to signing this Agreement.  If you wish to accept this offer, please sign and return the enclosed copy of this letter in the enclosed postage paid envelope.  You must not execute this Agreement prior to the Separation Date (i.e., January 1, 2020).  While I hope that you will accept this offer promptly, it will remain open for 45 days after your receipt of this letter.  On the 46th day following your receipt, the offer shall be deemed withdrawn if it was not accepted during the 45-day period.

If you do not accept this proposal, Legg Mason will nevertheless proceed with the termination of your employment on the Separation Date.  You will not, however, be provided with the Severance Package or the Transition Incentive Payment.
I wish you the best of success and personal and professional fulfillment in the future.

Sincerely,
Joseph A. Sullivan
Chairman and CEO

Date Agreement was given to employee:
_________________________________
    
I ACKNOWLEDGE THAT I HAVE READ THIS AGREEMENT, UNDERSTAND IT AND VOLUNTARILY SIGN AND ENTER INTO IT.

_________________________________    
Signature
    
_________________________________    
Printed Name

_________________________________        
Date

16Exhibit 4.1

 

THIS NOTE AND THE COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT”)

 

US $100,000.00

 

MYDX, INC

12% CONVERTIBLE REDEEMABLE NOTE

DUE MAY 7, 2020

 

FOR VALUE RECEIVED,
MyDx, Inc. (the “Company”) promises to pay to the order of ODYSSEY CAPITAL FUNDING, LLC and its authorized successors
and Permitted Assigns, defined below, (“Holder”), the aggregate principal face amount of One Hundred Thousand
Dollars exactly (U.S. $100,000.00) on May 7, 2020 (“Maturity Date”) and to pay interest on the principal amount
outstanding hereunder at the rate of 12% per annum commencing on May 7, 2019. The interest will be paid to the Holder in whose
name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of,
and interest on, this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY 11225, initially, and if changed, last appearing
on the records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest
payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be
deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing
on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal
hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such
check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein. Permitted
Assigns means any Holder assignment, transfer or sale of all or a portion of this Note accompanied by an Opinion of Counsel as
provided for in Section 2(f) of the Securities Purchase Agreement.

 

    	 
_MyDx_
Initials
	 	 

     

    

 

This Note is subject to the following additional provisions:

 

1. This Note is exchangeable for an
equal aggregate principal amount of Notes of different authorized denominations, as requested by
the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith. To the extent that Holder subsequently transfers,
assigns, sells or exchanges any of the multiple lesser denomination notes, Holder acknowledges that it will provide the Company
with Opinions of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.

 

2. The Company shall be entitled to withhold
from all payments any amounts required to be withheld under applicable laws.

 

3. This Note may be transferred or exchanged
on or after the Conversion Date only in compliance with the Securities Act of 1933, as amended (“Act”) and applicable
state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment
for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered
on the Company’s records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the
Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the
right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prequalified
prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted
(“Notice of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt
by telecopy) of such Notice of Conversion shall be the Conversion Date. All notices of conversion will be accompanied by an Opinion
of Counsel.

 

4. (a) The Holder of
this Note is entitled, at its option, at any time after the 6 month anniversary of this Note (the “Conversion Date”),
to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company’s common
stock (the “Common Stock”) at a price (“Conversion Price”) for each share of Common Stock
equal to 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau
OTC Marketplace exchange upon which the Company’s shares are traded or any exchange upon which the Common Stock may be traded
in the future (“Exchange”) for the twenty prior trading days including the day upon which
a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax
or other electronic method of communication to the Company or its transfer agent after 4 P.M. Eastern Standard or Daylight Savings
Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business days,
the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common
Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Accrued but unpaid interest
shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but
the number of shares issuable shall be rounded to the nearest whole share. In the event the Company experiences a DTC “Chill”
on its shares, the Conversion Price shall be decreased to 50% instead of 60% while that “Chill” is in effect. In
no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common
Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of
the Company.

 

    	_MyDx_ 
 Initials

	2

	

     

    

 

If there has been no payment or conversion
of this Note as of the Maturity Date or if an Event of Default has occurred and is continuing pursuant to Sections 8(a), 8(j) or
8(l), the principal face amount of this Note, along with any accrued interest, shall be converted into shares of the Company’s
Common Stock at the Conversion Price.

 

(b) Interest on any unpaid principal balance
of this Note shall be paid at the rate of 12% per annum. Except in connection with a prepayment pursuant to Section 4(c) below,
interest shall be paid by the Company in Common Stock (“Interest Shares”). Holder may, on or after the Conversion Date,
send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a) above. The dollar
amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance
of this Note to the date of such notice.

 

(c) The then outstanding principal balance
of this Note may be prepaid at the following prices:

 

	PREPAY DATE	 	PREPAY AMOUNT
	≤ 60 days	 	125% of principal plus accrued interest
	61-120 days	 	135 of principal plus accrued interest
	121-180 days	 	145% of principal plus accrued interest

 

This Note may not be prepaid after the
180th day. Such redemption must be closed and funded within 3 days of giving notice of redemption of the right to redeem
shall be null and void.

 

(d) Upon (i) a transfer of all or substantially
all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification,
capital reorganization (excluding an increase in authorized capital) or other change or exchange of outstanding shares of the Common
Stock, other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with
or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely
to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale
Event”), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal
amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert
the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock
immediately prior to such Sale Event at the Conversion Price.

 

(e) In case of any
Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which this
Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares
of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or
other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon
exercise of the Note and at the same Conversion Price, as defined in this Note, immediately
prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration
received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the
Company or successor person or entity acting in good faith.

 

    	_MyDx_ 
 Initials

	3

	

     

    

 

5. No provision of this Note shall alter
or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note
at the time, place, and rate, and in the form, herein prescribed.

 

6. The Company hereby expressly waives
demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration
or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereto.

 

7. The Company agrees to pay all costs
and expenses, including reasonable attorneys’ fees and expenses, which may be incurred by the Holder in collecting any amount
due under this Note.

 

8. If one or more of the following described
“Events of Default” shall occur:

 

(a) The Company shall default in the payment
of principal or interest on this Note or any other note issued to the Holder by the Company on the applicable due date; or

 

(b) Any of the representations or warranties
made by the Company herein or in any agreement entered into by the Company in connection with the execution and delivery of this
Note, shall be false or misleading in any respect; or

 

(c) The Company shall fail to perform or
observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or any
other note issued to the Holder; or

 

(d) The Company shall (1) become insolvent
(which does not include a “going concern opinion); (2) admit in writing its inability to pay its debts generally as they
mature; (3) make an assignment for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; (5) file
a petition for bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy
relief, all under federal or state laws as applicable; or

 

(e) A trustee, liquidator or receiver shall
be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged
within sixty (60) days after such appointment; or

 

(f) Any governmental agency or any court
of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial
portion of the properties or assets of the Company; or

 

    	_MyDx_ 
 Initials

	4

	

     

    

 

(g) One or more money judgments, writs or warrants of attachment, or similar process,
in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later
than five (5) days prior to the date of any proposed sale thereunder; or

 

(h) Defaulted on or breached any term of
any other note of similar debt instrument in excess of $50,000 into which the Company has entered and failed to cure such default
within the appropriate grace period; or

 

(i) The Company shall have its Common Stock
delisted from an exchange (including the OTC Markets exchange) or, if the Common Stock trades on an exchange, then trading in the
Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934 act reports with the SEC;

 

(j) If a majority of the members of the
Board of Directors of the Company on the date hereof are no longer serving as members of the Board;

 

(k) The Company shall not deliver to the
Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of a Notice
of Conversion which includes an Opinion of Counsel expressing an opinion which supports the removal of a restrictive legend; or

 

(l) The Company shall not replenish the
reserve set forth in Section 12, within 3 business days of the request of the Holder.

 

(m) The Company shall be delinquent in
its periodic report filings with the Securities and Exchange Commission; or

 

(n) The Company shall cause to lose the
“bid” price for its stock in a market (including the OTC marketplace or other exchange).

 

Then, or at any
time thereafter, unless cured within 10 days (except for 8(k)), and in each and every such case, unless such Event of Default
shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default)
at the option of the Holder and in the Holder’s sole discretion, the Holder may consider this Note immediately due and
payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of
which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary
notwithstanding, and, subject to Section 4(a), the Holder may immediately, and without expiration of any period of grace,
enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by
law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious
or not permitted by current law, then at the highest rate of interest permitted by law. The penalty for a breach of Section
8(n) shall be an increase of the outstanding principal amounts by 20%. Further, if a breach of Section 8(m) occurs or is
continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use
the lowest closing bid price during the delinquency period as a base price for the conversion. For example, if the lowest
closing bid price during the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to
convert future conversions at $0.005 per share.

 

    	_MyDx_ 
 Initials

	5

	

     

    

 

If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.

 

Make-Whole for Failure to Deliver Loss.
At the Holder’s election, if the Company fails for any reason to deliver to the Holder the conversion shares by the by the
3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs a Failure to Deliver
Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to the Holder in respect
of the Failure to Deliver Loss and the Company must make the Holder whole as follows:

 

Failure to Deliver Loss = [(High trade
price within 20 trading days or after the day of exercise) x (Number of conversion shares)]

 

The Company must pay the Failure to Deliver
Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder’s written
notice to the Company.

 

All rights with respect to this Note shall
terminate upon the effective conversion of the entire principal amount of this Note as provided in Section 4(a). Notwithstanding
the foregoing, Holder agrees to surrender this Note to the Company as soon as practicable after conversion.

 

9. In case any provision of this Note is
held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10. Neither this Note nor any term hereof
may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.

 

11. The Company represents that it is not
a “shell” issuer and that if it previously has been a “shell” issuer that at least 12 months have passed
since the Company has reported Form 10 type information indicating it is no longer a “shell issuer.

 

    	_MyDx_ 
 Initials

	6

	

     

    

 

12. The Company
shall issue irrevocable transfer agent instructions reserving 416,667,000 shares of its Common Stock for conversions under
this Note (the “Share Reserve”), which amount
shall be adjusted accordingly in the event of a stock split or reverse stock split. Upon full conversion of this Note, any
shares remaining in the Share Reserve shall be cancelled. The Company shall pay all transfer agent costs associated with
issuing and delivering the share certificates to Holder. If such amounts are to be paid by the Holder, it may deduct such
amounts from the Conversion Price. The Company should at all times reserve a minimum of four times the amount of shares
required if the note would be fully converted. The Holder may reasonably request increases from time to time to reserve such
amounts. The Company will instruct its transfer agent to provide the outstanding share information to the Holder in
connection with its conversions.

 

13. The Company will give the Holder direct
notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations etc. This notice shall
be given to the Holder as soon as possible under law.

 

14. If it shall be found that any interest
or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable provision shall automatically
be revised to equal the maximum rate of interest or other amount deemed interest permitted under applicable law. The Company covenants
(to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive
the Company from paying all or a portion of the principal or interest on this Note.

 

15. This Note shall be governed by and
construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within the State of New
York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive
trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York or in the Federal courts sitting
in the county or city of New York. This Agreement may be executed in counterparts, and the facsimile transmission of an executed
counterpart to this Agreement shall be effective as an original.

 

    	_MyDx_ 
 Initials

	7

	

     

    

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an
officer thereunto duly authorized.

 

	Dated:	5-8-19	 

 

	 	MYDX, INC.
	 	 
	 	By:	/s/ Matthew Bucciero
	 	Title:	CEO

 

    	_MyDx_ 
 Initials

	8

	

     

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby irrevocably elects to convert
$____________ of the above Note into __________ Shares of Common Stock of MyDx, Inc. (“Shares”) according to the
condi-tions set forth in such Note, as of the date written below.

 

If Shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.

 

Date of Conversion: _____________________________________________________________

Applicable Conversion Price:  _____________________________________________________________

Signature:  _____________________________________________________________

                                                        [Print Name of Holder and Title of Signer]

Address:  _____________________________________________________________

 

_____________________________________________________________

 

SSN
or EIN:   ________________________________

Shares are to be registered in the following name:  ______________________________

 

Name:  _____________________________________________________________

Address:  _____________________________________________________________

Tel:  _____________________________

Fax:   _____________________________

SSN
or EIN:   _____________________________

 

Shares are to be sent or delivered to the following account:

 

Account Name: _____________________________________________________________

Address: _____________________________________________________________

  

    	_MyDx_ 
 Initials

	9

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