Exhibit 10.2
 
INFINITE GROUP, INC.
 
Stock Option Agreement
(This “Agreement”)
Dated: May 14, 2019
(“Grant Date”)
 
 
WHEREAS, Infinite Group, Inc., a Delaware corporation (the “Company”) hereby
desires to compensate Harry A. Hoyen, III (the “Optionee”) with a fee pursuant
to the Company’s and the Optionee’s $500,000 Note Payable Agreement dated May 7,
2019 (“Financing”); and
 
WHEREAS, the Optionee desires to provide the Financing to the Company; and
 
WHEREAS, the Company and the Optionee desire that the Optionee be compensated
for the Financing by the vesting of the options granted hereby.
 
NOW THEREFORE, the Company and the Optionee hereby agree as follows:
 
1. 
Grant of Option.
 
The Company hereby grants to the Optionee a stock option to purchase a total of
2,500,000 shares of the Company's Common Stock, par value $.001 per share (the
“Common Stock”), at $.02 (two cents) per share (the “Exercise Price”). Such
option shall become fully vested fully vested and exercisable on the date of
receipt by the Company of the first advance under the terms of the Financing.
 
If Optionee fails, refuses or is unable to make any principal advance to the
Company according to the terms of the Financing, Optionee agrees to accept a
reduction in the Fee as stated in the Financing. The Fee shall be reduced by the
total amount of principal advances that are not made divided by $500,000
multiplied by 2,500,000 Common shares. The Company and Optionee agree that this
Stock Option Agreement shall be cancelled, and the Company shall issue a new
stock option agreement to the Optionee with the number of shares of the
Company’s Common Stock as adjusted herein.
 
2. 
Term.
 
This option shall expire on the date stated in the Financing, August 31, 2026,
or such earlier date as otherwise provided for herein (the “Termination Date”).
 
3. 
Characterization of Options.
 
The option granted pursuant to this Agreement is intended to constitute a
non-qualified option, subject to §83 of the Internal Revenue Code of 1986, as
amended (the “Code”).
 
4.           
Exercise of Options.
 
(a)            Subject to earlier termination or cancellation as provided in
this Agreement, this Option may be exercised at any time on or after the date
hereof, in whole or in part.
 
 
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(b)          To the extent vested prior to the Termination Date, this option
shall be exercisable by written notice of such exercise, in the form prescribed
by the Board of Directors of the Company (the “Board”), to the Secretary or
Treasurer of the Company at its principal office. The notice shall specify the
number of shares of Common Stock for which the option is being exercised (which
number, if less than all the shares then subject to exercise, shall be 500,000
or a multiple thereof) and shall be accompanied by payment (i) in cash or by
check in the amount equal to the Exercise Price multiplied by the number of
shares to be purchased upon exercise, or (ii) in such other manner as the Board
shall deem acceptable. No shares shall be delivered upon exercise of any option
until all laws, rules and regulations which the Board may deem applicable have
been complied with.
 
(c)          The Optionee shall not be considered a record holder of the Common
Stock issuable pursuant to this Agreement for any purpose until the date on
which the Optionee is recorded as the holder of such Common Stock in the records
of the Company.
 
(d)         In the event of death of the Optionee, this option may be exercised,
to the extent vested on the date of death, at any time within twelve months
following such date of death by the Optionee's estate or by a person who
acquired the right to exercise this option by bequest or inheritance.
 
(e)         In no event shall this option be exercisable after the Termination
Date.
 
5.           
Anti-Dilution Provisions.
 
(a)         If there is any stock dividend, stock split, or combination of
shares of Common Stock, the number and amount of shares then subject to this
option shall be proportionately and appropriately adjusted; no change shall be
made in the aggregate purchase price to be paid for all shares subject to this
option, but the aggregate purchase price shall be allocated among all shares
subject to this option after giving effect to the adjustment.
 
(b)         If there is any other change in the Common Stock, including
recapitalization, reorganization, sale or exchange of assets, exchange of
shares, offering of subscription rights, or a merger or consolidation in which
the Company is the surviving corporation, an adjustment, if any, shall be made
in the shares then subject to this option as the Board may deem equitable.
Failure of the Board to provide for an adjustment pursuant to this subparagraph
prior to the effective date of any Company action referred to herein shall be
conclusive evidence that no adjustment is required in consequence of such
action.
 
(c)         If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities which the
Optionee would have been entitled to receive in such merger or consolidation by
virtue of such sale if the Optionee had been the holder of record of a number of
shares of Common Stock equal to the number of shares covered by the unexercised
portion of this option, or (ii) the Company shall give to the Optionee written
notice of its election not to cause such provision to be made and this option
shall become exercisable in full (or, at the election of the Optionee, in part)
at any time during a period of 20 days, to be designated by the Company, ending
not more than 10 days prior to the effective date of the merger, consolidation
or sale, in which case this option shall not be exercisable to any extent after
the expiration of such 20-day period.
 
 
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6. 
Investment Representation; Legend on Certificates.
 
The Optionee agrees that until such time as a registration statement under the
Securities Act of 1933, as amended (the “1933 Act”), becomes effective with
respect to the option and/or the stock, the Optionee is taking this option and
will take the stock underlying this option, for his own account, for investment
and not with a view to the resale or distribution thereof. The Company shall
have the right to place upon the face of any stock certificate or certificates
evidencing shares issuable upon the exercise of this option such legend as the
Board may prescribe for the purpose of preventing disposition of such shares in
violation of the 1933 Act, as now or hereafter provided.
 
7. 
Non-Transferability.
 
This option shall not be transferable by the Optionee other than by will or by
the laws of descent or distribution and is exercisable during the lifetime of
the Optionee only by the Optionee.
 
8. 
Certain Rights Not Conferred by Option.
 
The Optionee shall not, by virtue of holding this option, be entitled to any
rights of a stockholder in the Company.
 
9. 
Expenses.
 
The Company shall pay all original issue and transfer taxes with respect to the
issuance and transfer of shares of Common Stock pursuant hereto and all other
direct fees and expenses necessarily incurred by the Company in connection
therewith.
 
10. 
Optionee’s Representation and Warranties.
 
Other Agreements. Optionee represents and warrants that he has the full right
and authority to enter into this Agreement. Optionee further represents and
warrants that he is not obligated under any contract (including, but not limited
to, licenses, covenants or commitments of any nature) or other agreement or
subject to any judgment, decree or order of any court or administrative agency
which would conflict with his obligation to use his best efforts to perform
hereunder or which would conflict with the Company’s business and operations as
presently conducted or proposed to be conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of the Company’s business will
conflict with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract, covenant or instrument to which
Optionee is currently a party or by which Optionee is currently bound.
 
11. 
Miscellaneous.
 
(a)           No Implied Rights. In no event shall this option be exercisable
after the Termination Date. Nothing herein shall be deemed to create any
employment.
 
(b)           Notice. All notices and other communications under this Agreement
shall (a) be in writing (which shall include communications by telecopy), (b) be
(i) sent by registered or certified mail, postage prepaid, return receipt
requested, by facsimile, or (ii) delivered by hand, (c) be given at the
following respective addresses and facsimile numbers and to the attention of the
following persons:
 
 
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(i)           
if to the Company at:

Infinite Group, Inc.
175 Sully’s Trail, Suite 202
Pittsford, NY 14534
Telephone: (585) 385-0610
Facsimile: (585) 385-0614
 

 

 
(ii) 
if to Optionee, to it at the address set forth below Investor’s signature on the
signature page hereof;
 
or at such other address or facsimile number or to the attention of such other
person as the party to whom such information pertains may hereafter specify for
the purpose in a notice to the other specifically captioned “Notice of Change of
Address”, and (d) be effective or deemed delivered or furnished (i) if given by
mail, on the fifth Business Day after such communication is deposited in the
mail, addressed as above provided, (ii) if given by facsimile, when such
communication is transmitted to the appropriate number determined as above
provided in this Section and the appropriate answer back is received or receipt
is otherwise acknowledged, and (iii) if given by hand delivery, when left at the
address of the addressee addressed as above provided, except that notices of a
change of address, facsimile or telephone number, shall not be deemed furnished,
until received.
 
(c)           Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without reference to
conflicts of law principles. With respect to any matters that may be heard
before a court of competent jurisdiction, the parties consent to the
jurisdiction and venue of the courts of Monroe County, New York or of any
federal court located in the Western District of New York.
 
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized representatives.
 
 
INFINITE GROUP, INC.
 
 
By: __/s/ James Villa___________________________
                         James Villa, President

                         Date: May 14, 2019
 
 
Regarding: Option agreement dated May 14, 2019 for 2,500,000 shares of the
Company’s Common Stock, par value $.001 per share, at the Exercise Price of $.02
per share, I accept the terms of this agreement.
 
 
__/s/ Harry A. Hoyen, III_____________________________
Harry A. Hoyen, Optionee
Date: May 14, 2019
 
Optionee’s Address:
Marblehead, OH 43440
 
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