Exhibit 10.1

 

SEPARATION AGREEMENT

 

This Separation Agreement (the “Agreement”) is entered into by and between
urban-gro, Inc. (the “Company”) and Larry Dodson (“Employee”).

 

1.                Employee’s last day of employment with the Company is March
20, 2020 (the “Termination Date”). As of the Termination Date, Employee no
longer is an employee, agent, or other representative of the Company or any of
the Releasees (as defined below). By the first regular Company payroll date
following the Termination Date, the Company will pay Employee for Employee’s
accrued, unused vacation days in the amount of Thirteen Thousand, One Hundred
and Three Dollars and Eighty Nine Cents ($13,103.89) (minus applicable
deductions and withholdings).

 

2.                In consideration of Employee timely executing (and not timely
revoking) this Agreement, for complying with its terms and with the Surviving
Provisions (as defined below), and for surrendering any and all shares of
Company common stock held by the Employee and any and all rights and
entitlements related to any equity of the Company (including but not limited to
any rights under any restricted stock award agreement), the Company will provide
Employee with the following:

 

(a)    The Company will pay Employee a severance payment in the total gross
amount of Twenty Seven Thousand, Five Hundred Dollars and Zero Cents ($27,500)
(minus applicable deductions and withholdings) (the “Severance Payment”),
payable in four (4) co-equal installments commencing on the Company’s first
regularly scheduled payroll date that is at least thirty (30) days after the
Termination Date and continuing every four (4) weeks thereafter until paid in
full;

 

(b)   On the Effective Date (as defined below), the Company will grant the
Employee the right and option to purchase 330,000 shares of the Company’s common
stock, pursuant to the Company’s 2019 Equity Incentive Plan, on the terms and
conditions substantially in the form attached hereto as Exhibit A;

 

(c)    The Company will consider in good faith Employee’s suggestions in
connection with any press release regarding Employee’s resignation (except as
otherwise required by law or business necessity); and

 

(d)   The Company and Employee hereby amend and modify Employee’s
non-competition obligations set forth in Section 1(b) of the Non-Compete
Agreement (as defined below), by adding the following sentence to the end of
Section 1(b): “Further, the parties agree that, during the 12 months following
the termination of Employee’s employment, this covenant shall not restrict
Employee from working for any entity that is not a direct competitor of the
Company; provided that, for avoidance of doubt, Edyza Inc. shall not be
considered a direct competitor of the Company.” For avoidance of doubt, all of
Employee’s other obligations under the Surviving Provisions will remain in full
force and effect and will continue to bind Employee in accordance with their
terms.

 

3.                The benefits received by Employee and Employee’s eligible
dependents under the Company’s medical plan(s) will cease as of March 31, 2020.
Thereafter, pursuant to governing law and independent of this Agreement,
Employee will be entitled to elect benefit continuation coverage at Employee’s
own expense under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), for Employee and any eligible dependents, if Employee timely
applies for such coverage. Information regarding Employee’s eligibility for
COBRA coverage, and the terms and conditions of such coverage, will be provided
to Employee in separate correspondence.

 

 

 

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4.                In exchange for the consideration provided to Employee
pursuant to this Agreement, Employee, on behalf of Employee and all of
Employee’s heirs, executors, administrators, and assigns (collectively,
“Releasors”), hereby releases and forever waives and discharges any and all
claims, liabilities, causes of action, demands, suits, rights, costs, expenses,
or damages of any kind or nature (collectively, “Claims”) that Employee or any
of the other Releasors ever had, now have, or might have against the Company
and/or any of the Company’s respective current, former, and/or future
affiliates, subsidiaries, parents, related companies, controlling shareholders,
divisions, directors, members, trustees, officers, general partners, limited
partners, employees, agents, attorneys, successors, and/or assigns
(collectively, with the Company, the “Company Group” and each a “Company Group
Member”); and each Company Group Member’s respective current, former, and future
directors, members, trustees, controlling shareholders, subsidiaries, general
partners, limited partners, affiliates, related companies, divisions, officers,
employees, agents, and attorneys (collectively, with the Company Group, the
“Releasees” and each a “Releasee”), arising at any time prior to and including
the date Employee executes this Agreement, whether such Claims are known to
Employee or unknown to Employee, whether such Claims are accrued or contingent,
including, but not limited to, any and all (a) Claims arising out of, or that
might be considered to arise out of or to be connected in any way with,
Employee’s employment or other relationship with any of the Releasees, or the
termination of such employment or other relationship; (b)  Claims under any
contract, agreement, or understanding that Employee may have with any of the
Releasees, whether written or oral, whether express or implied, at any time
prior to the date Employee executes this Agreement (including, but not limited
to, under Employee’s employment agreement with the Company dated August 18, 2018
(the “Employment Agreement”); Employee’s confidentiality agreement with the
Company dated September 20, 2018 (the “Confidentiality Agreement”); Employee’s
Nondisclosure of Information and Assignments Agreement with the Company dated
September 20, 2018 (the “Nondisclosure of Information and Assignments
Agreement”); and Employee’s Non-Compete Agreement with the Company dated
September 20, 2018 (the “Non-Compete Agreement”); (c) Claims arising under any
federal, state, foreign, or local law, rule, ordinance, or public policy,
including, without limitation, (i) Claims for discrimination, harassment, or
retaliation under any such law, including but not limited to Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, 42 U.S.C. § 1981,
the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., the
Older Workers Benefit Protection Act, the Colorado Anti-Discrimination Act, the
Colorado Lawful Off-Duty Activities Statute, and the Colorado Genetic
Information Non-Disclosure Act, (ii) Claims arising in tort, and (iii) Claims
for compensation, wages, commissions, bonuses (including, without limitation,
any claim to deferred compensation), vacation pay, personal pay, sick or safe
time pay, any other fringe benefits, attorneys’ or experts’ fees or costs, forum
fees or costs, or any tangible or intangible property of Employee’s that remains
with any of the Releasees; and (d) Claims arising under any other applicable
law, regulation, rule, policy, practice, promise, understanding, or legal or
equitable theory whatsoever; provided, however, that Employee does not release
(A) any claims that arise after the date Employee executes this Agreement; (B)
any claims for breach of this Agreement or to enforce the terms of this
Agreement; (C) any right to indemnification to which Employee otherwise may be
entitled (if any) under the Company’s directors and officers (D&O) insurance
policies with respect to the period of Employee’s employment; (D) any vested
benefits under any employee benefit pension plan; and (E) any claims that cannot
be waived or released as a matter of law. Employee specifically intends the
release of Claims in this Section 4 to be the broadest possible release
permitted by law.

 

5.                                    Employee acknowledges and agrees that the
consideration provided in Section 2 of this Agreement is in full discharge of
any and all obligations owed to Employee, monetarily or otherwise, with respect
to Employee’s employment or the termination thereof, and exceeds any payment,
benefit, or other thing of value to which Employee might otherwise be entitled.
Employee understands that Employee will not receive any other or different
compensation or benefits, including any bonus, pro-rata bonus, or other amounts
or interests, for 2019, 2020, or any other year, except as explicitly set forth
herein.

 

6.                                         Employee represents that Employee has
never commenced or filed, or caused to be commenced or filed, any lawsuit or
arbitration against any of the Releasees. Except as otherwise provided in
Section 4 of this Agreement, Employee further agrees not to directly or
indirectly commence, file, or in any way pursue, or cause or assist any person
or entity to commence, file, or pursue, any lawsuit or arbitration against any
of the Releasees in the future. For avoidance of doubt, nothing in this
Agreement, any other agreement between Employee and the Company, or any Company
policy shall prevent Employee from filing a charge with the Equal Employment
Opportunity Commission (the “EEOC”) or any other government agency or
participating in any EEOC or other agency investigation; provided that Employee
cannot receive monetary relief in connection with an EEOC charge or any charge
filed with a state or local administrative agency.

 

 

 

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7.                                         Employee acknowledges and agrees that
except as otherwise provided herein, nothing in this Agreement modifies,
supersedes, or changes: (a) the following Sections of the Confidentiality
Agreement, which remain in full force and effect and continue to bind Employee
following the Termination Date in accordance with their terms: Section 1
(Confidentiality), Section 2(a) (Disclosure of Obligations), Section 2(b)
(Conflict of Obligations), Section 2(c) (Remedies), Section 2(d) (Liquidated
Damages), Section 2(e) (Attorney’s Fees), Section 2(f) (Entire Agreement),
Section 2(g) (Survival), Section 2(h) (Governing Law and Forum), Section 2(i)
(Severability), Section 2(j) (Modification and Waiver), Section 2(k) (Heirs and
Assigns), and Section 2(l) (Headings); (b) the following Sections of the
Non-Compete Agreement, which remain in full force and effect and continue to
bind Employee following the Termination Date in accordance with their terms:
Section 1 (Non-Competition) (as modified herein), Section 2 (Confidentiality),
Section 3 (Non-Solicitation), Section 4(a) (Disclosure of Obligations), Section
4(b) (Conflict of Obligations), Section 4(c) (Remedies), Section 4(d)
(Liquidated Damages), Section 4(e) (Attorney’s Fees), Section 4(f) (Entire
Agreement), Section 4(g) (Survival), Section 4(h) (Governing Law and Forum),
Section 4(i) (Severability), Section 4(j) (Modification and Waiver), Section
4(k) (Heirs and Assigns), and Section 4(l) (Headings); or (c) the Nondisclosure
of Information and Assignments Agreement, which remains in full force and effect
and continues to bind Employee following the Termination Date in accordance with
its terms (collectively, all of the foregoing in (a), (b), and (c), the
“Surviving Provisions”). Employee also shall treat this Agreement as
Confidential Information (as defined in the Confidentiality Agreement and the
Non-Compete Agreement), and shall not disclose any information concerning this
Agreement to any person or entity without the prior written consent of the
Company, except as otherwise provided herein and/or in the Surviving Provisions.
Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act,
18 U.S.C. § 1833(b), and other applicable law, nothing in this Section 7, this
Agreement, the Surviving Provisions, or any other agreement or Company policy
shall prevent Employee from, or expose Employee to criminal or civil liability
under federal or state trade secret law for, (A) directly or indirectly sharing
any trade secrets of the Company or other Confidential Information (except
information protected by the Company’s attorney-client or work product
privilege) with law enforcement, an attorney, or any federal, state, or local
government officials, regulators, or agencies (including the EEOC or the
Securities and Exchange Commission) for the purpose of investigating, reporting,
or complaining of a suspected violation of law, whether in response to a
subpoena or otherwise, without notice to the Company, or (B) disclosing the
Company’s trade secrets in a filing in connection with a legal claim, provided
that the filing is made under seal. Further, nothing in this Agreement or
otherwise shall prevent Employee from discussing or disclosing information
related to Employee’s general job duties or responsibilities and/or employee
compensation. Any disputes arising under this Agreement shall be resolved in
accordance with the dispute resolution terms provided in Sections 2(c) and 2(h)
of the Confidentiality Agreement and Sections 4(c) and 4(h) of the Non-Compete
Agreement.

 

8.                                         Except as provided in Section 7
above, Employee shall not, whether in private or in public, directly or
indirectly, (a) make, publish, encourage, ratify, or authorize, or aid, assist,
or direct any other person or entity in making or publishing, any remarks,
statements, postings, or other communications, whether in written, oral,
digital, or any other form, that in any way defame, criticize, malign, impugn,
reflect negatively on, or disparage any Releasee, or place any Releasee in a
negative light, in any manner whatsoever; or (b) make or publish any public
comments regarding any of the Releasees to, through, or on any media source or
outlet, including, but not limited to, any reporters, news outlets, television
stations, bloggers, weblogs, websites, magazines, periodicals, journals, “apps,”
or the like, or in any movie, book, or theatrical production, nor will Employee
assist any other person or entity to do any of the foregoing.

 

9.                                         Employee agrees that on or prior to
the Termination Date, Employee shall have complied with Section 1(d) of the
Confidentiality Agreement and Section 2(d) of the Non-Compete Agreement,
including returning to the Company Group (without retaining copies) all of the
property of the Releasees in Employee’s possession, custody or control,
including, but not limited to, all Confidential Information, proprietary
materials, passwords, usernames, access codes, documents, records, and computer
media in any form (and all copies thereof), computer hardware, cellular phones,
laptops, software, disks, keys, tablets, blackberries and other electronic
devices, security or access cards, and other equipment (including the
password(s) to use such property), and Employee represents that no other
materials that Employee has received, generated, or maintained during Employee’s
time at the Company will be retained by Employee after the Termination Date. In
addition, Employee acknowledges and agrees that the Company has returned all of
Employee’s personal property to Employee.

 

10.                                      Employee agrees that following the
Termination Date, Employee shall, without receiving any additional consideration
beyond what is provided herein, cooperate in a fulsome and timely manner with
the Company Group Members in connection with answering questions they may have
and ensuring the smooth transition of Employee’s knowledge, role, and
responsibilities to other employees at the Company and its affiliates. The
Company will endeavor to schedule any such cooperation for times convenient for
Employee, and to not unduly disrupt Employee’s other personal or professional
pursuits.

 

 

 

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11.                                      Employee represents and warrants that
Employee is not aware of any facts or circumstances that Employees knows or
believes to be either (a) a past or current violation of the Company’s or any of
its affiliates’ rules and/or policies, or (b) a past or current violation of any
laws, rules, and/or regulations applicable to the Company or any of its
affiliates. This Agreement, and all statements or negotiations relating hereto,
does not represent an admission of liability or finding of wrongdoing by the
Company, or any of Releasees.

 

12.                                      Should Employee materially breach this
Agreement or any of the Surviving Provisions, then: (a) the Company shall have
no further obligations to Employee under this Agreement (including but not
limited to any obligation to make any further payments to Employee); (b) the
Company shall be entitled to recoup the amount of the Severance Payment Employee
received pursuant to this Agreement, plus the reasonable attorneys’ fees and
costs the Company incurs in recouping such amounts from Employee, except for the
amount of $500; (c) the Company’s modification of Employee’s non-competition
obligations pursuant to Paragraph 2 above shall be deemed revoked, such
non-competition obligations shall be considered part of the Surviving
Provisions, and the Company shall be entitled to enforce Employee’s
non-competition obligations to the full extent permitted by law; (d) the Company
shall have all rights and remedies available to it under this Agreement and any
applicable law or equitable theory; and (e) all of Employee’s promises,
covenants, representations, and warranties under this Agreement and the
Surviving Provisions shall remain in full force and effect.

 

13.                                      If any term or provision of this
Agreement (or any portion thereof) or the Surviving Provisions is determined by
an arbitrator or a court of competent jurisdiction to be invalid, illegal, or
incapable of being enforced, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon a determination that
any term or provision (or any portion thereof) is invalid, illegal, or incapable
of being enforced, the Company and Employee agree that an arbitrator or
reviewing court shall have the authority to “blue pencil” or modify this
Agreement so as to render it enforceable and effect the original intent of the
parties to the fullest extent permitted by applicable law.

 

14.                                      This Agreement (i) may be executed in
identical counterparts, which together shall constitute a single agreement, and
facsimile, PDF, and other true and accurate copies of this Agreement will have
the same force and effect as originals hereof; (ii) shall be fairly interpreted
in accordance with its terms and without any strict construction in favor of or
against either party, notwithstanding which party may have drafted it; (iii)
shall be deemed to have been made in the State of Colorado, and shall be
governed by and construed in accordance with the laws of the State of Colorado,
excluding any choice of law principles; (iv) along with the Surviving Provisions
constitutes the Parties’ entire agreement, arrangement, and understanding
regarding the subject matter herein, superseding any prior or contemporaneous
agreements, arrangements, or understandings, whether written or oral, between
Employee on the one hand and the Company on the other hand regarding the same
subject matter, and Employee specifically acknowledges and agrees that
notwithstanding any discussions or negotiations Employee may have had with any
of the Releasees prior to the execution of this Agreement, Employee is not
replying on any promises or assurances other than those explicitly contained in
this Agreement; and (v) may not be modified, amended, discharged, or terminated,
nor may any of its provisions be varied or waived, except by a further signed
written agreement between the parties.

 

15.                                      For purposes of this Agreement, the
connectives “and” and “or” shall be construed either disjunctively or
conjunctively as necessary to bring within the scope of a sentence all facts or
information that might otherwise be construed to be outside of its scope.

 

16.                                      This Agreement is intended to be
interpreted and applied so that the payments and benefits set forth herein shall
either be exempt from the requirements of Section 409A of the Internal Revenue
Code, as amended, and the regulations and guidance promulgated thereunder
(collectively “Code Section 409A”), or shall comply with the requirements of
such provisions, and accordingly, to the maximum extent permitted, this
Agreement shall be interpreted to be in compliance therewith. Notwithstanding
the foregoing or anything in this Agreement to the contrary, neither the Company
or any affiliate of the Company, nor any of their respective officers,
directors, employees, or agents make any guarantee that the terms of this
Agreement as written or the payments or benefits hereunder comply with, or are
exempt from, Code Section 409A, and none of the foregoing shall have any
liability, including, without limitation, for any tax, interest, penalty, or
damages, for the failure of the terms of this Agreement to comply with, or be
exempt from, Code Section 409A. Each payment made under this Agreement will be
treated as a separate payment for purposes of Code Section 409A and the right to
a series of installment payments under this Agreement is to be treated as a
right to a series of separate payments.

 

 

 

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17.                                      (a) Employee understands that this
Agreement includes a release covering all Claims arising or accruing on or prior
to the date this Agreement is executed, including Claims under the Age
Discrimination in Employment Act (“ADEA”), whether those Claims are presently
known to Employee or hereafter discovered. Employee understands that Employee
will have twenty-one (21) days from the date of Employee’s receipt of this
Agreement to consider this Agreement’s terms, execute this Agreement, and return
the signed Agreement via email, facsimile, or overnight courier (via FedEX or
UPS) to Brad Nattrass, urban-gro, Inc., 1751 Panorama Point, Suite G, Lafayette,
CO, 80026, 720-390-3880, brad@urban-gro.com. To the extent that Employee
executes this Agreement prior to the end of this twenty-one (21) day period,
Employee hereby knowingly and voluntarily waives the remainder of this period.
If Employee fails to execute and return this Agreement within the twenty-one
(21) day period, then this Agreement (including but not limited to the Company’s
obligations under Section 2 above) will be null and void and of no force or
effect.

 

(b) Employee acknowledges that if Employee timely executes this Agreement,
Employee will have seven (7) days from the date Employee executes this Agreement
(the “Revocation Period”) to revoke this Agreement, by providing written notice
of such revocation via email, facsimile, or overnight courier (via FedEX or UPS)
to Brad Nattrass, urban-gro, Inc., 1751 Panorama Point, Suite G, Lafayette, CO,
80026, 720-390-3880, brad@urban-gro.com. If Employee revokes this Agreement
within the Revocation Period as provided herein, then this Agreement will be
null and void and of no force or effect (including but not limited to the
Company’s obligations under Section 2 above). If Employee does not revoke this
Agreement within the Revocation Period as provided herein, this Agreement will
become fully binding, effective, irrevocable, and enforceable on the eighth
(8th) calendar day after Employee executes it (the “Effective Date”).

 

(c) By signing below, Employee expressly acknowledges, represents, and warrants
that Employee has carefully read this Agreement; that Employee fully understands
the terms, conditions, and significance of this Agreement and its final and
binding effect; that no other promises or representations were made to Employee
other than those set forth in this Agreement; that Employee is fully competent
to manage Employee’s business affairs and understands that Employee may be
waiving legal rights by signing this Agreement; that the Company has advised
Employee to consult with an attorney concerning this Agreement; that Employee
has executed this Agreement voluntarily, knowingly, and with an intent to be
bound by this Agreement; and that Employee has full power and authority to
release Employee’s Claims as set forth herein and has not assigned any such
Claims to any other individual or entity.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

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urban-gro, Inc.           By:/s/ Bradley Nattrass 3/20/2020        Name: Bradley
Nattrass Date        Title:   CEO               EMPLOYEE           /s/ Larry
Dodson 3/20/2020 Larry Dodson Date

 

 

 

 

 

 

 

Signature Page to Separation Agreement

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EXHIBIT A TO SEPARATION AGREEMENT

 

 

STOCK OPTION AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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