Strategic
Environmental & Energy Resources, Inc 10-K


Exhibit
10.7


 


Strategic
Environmental & Energy Resources, Inc.


Stock
Option Grant Notice


(2013
Equity Incentive Plan)


 


Strategic Environmental
& Energy Resources, Inc. (the “Company”), pursuant to its 2013 Equity Incentive Plan (the “Plan”),
hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below.  This
option is subject to all of the terms and conditions as set forth in this notice, in the Option Agreement, the Plan and the Notice
of Exercise, all of which are attached hereto and incorporated herein in their entirety.  Capitalized terms not explicitly
defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement.
If there is any conflict between the terms in this notice and the Plan, the terms of the Plan will control.


 


	Optionholder:	 
	Date of Grant:	 
	Vesting Commencement Date:	 
	Number of Shares Subject to Option:	 
	Exercise Price (Per Share):	 
	Total Exercise Price:	 
	Expiration Date:	 


 


	Type of Grant:	£ Incentive
    Stock Option1	 	£ Nonstatutory
    Stock Option
	 	 	 	 
	Exercise Schedule: 	£ Same
    as Vesting Schedule 	 	£ Early
    Exercise Permitted


 


	Vesting Schedule:	One-fourth of the shares vest one year after the Vesting Commencement Date; the balance of the shares vest in a series of 36 successive equal monthly installments measured from the first anniversary of the Vesting Commencement Date, subject to Optionholder’s Continuous Service as of each such date.


 


	Payment:	By one or a combination of the following items (described in the Option Agreement):
	 	 ̈	 By cash,
    check, bank draft or money order payable to the Company
	 	 ̈	Pursuant to a Regulation T Program if the shares are publicly traded
	 	 ̈	By delivery of already-owned shares if the shares are publicly traded
	 	 ̈	If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement


 


 






	1	If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year.  Any excess over $100,000 is a Nonstatutory Stock Option.


 




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Cashless Exercise: surrender
of this Option at the principal office of the Company together with notice of cashless election, in which event the Company shall
issue Holder a number of shares of Common stock computed using the following formula:


 


X = Y (A-B)/A


 


where X = the number of
shares of Common Stock to be issued to Holder.


 


Y = the number of shares
of Common Stock for which this Option is being exercised.


 


A = the Market Price of
one (1) share of Common Stock (for purposes of this Section 4, the “Market Price” shall be defined as the average Closing Bid Price
of the Common Stock for the five (5) trading days prior to the Date of Exercise of this Option (the “Average Closing Price’’),
as reported by the O.T.C. Bulletin Board, National Association of Securities Dealers Automated Quotation System (“Nasdaq”) Small
Cap Market, or if the Common Stock is not traded on the Nasdaq Small Cap Market, the Average Closing Price in any other over-the-counter
market; provided, however, that if the Common Stock is listed on a stock exchange, the Market Price shall be the Average Closing
Price on such exchange for the five (5) trading days prior to the date of exercise of the Options. If the Common Stock is/was not
traded during the five (5) trading days prior to the Date of Exercise, then the closing price for the last publicly traded day
shall be deemed to be the closing price for any and all (if applicable) days during such five (5) trading day period.


 


B = the Exercise Price.


 


For purposes hereof, the
term “Closing Bid Price” shall mean the closing bid price, on the O.T.C. Bulletin Board, the National Market System (“NMS”), the
New York stock Exchange, the Nasdaq Small Cap Market, or if no longer traded on the O.T.C. Bulletin Board, the NMS the New York
Stock Exchange, the Nasdaq Small Cap Market, the “Closing Bid Price” shall equal the closing price on the principal national securities
exchange or the over-the-counter system on which the Common Stock is so traded and, if not available, the mean of the high and
low prices on the principal national securities exchange on which the Common Stock is so traded.  For purposes of Rule
144, and sub-section (d)(3)(ii) thereof, it is intended, understood and acknowledged that the Common Stock issuable upon exercise
of this Option in a cashless exercise transaction shall be deemed to have been acquired at the time is Option was issued. Moreover,
it is intended, understood and acknowledged that the holding period for the Common Stock issuable upon exercise of this Option
in a cashless exercise transaction shall be deemed to have commenced on the date this Option was issued.


 


Additional Terms/Acknowledgements:  By
accepting this option, Optionholder consents to receive such documents by electronic delivery and to participate in the Plan through
an on-line or electronic system established and maintained by the Company or another third party designated by the Company.  Optionholder
acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan.  Optionholder
acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except
as provided in a writing signed by Optionholder and a duly authorized officer of the Company or as otherwise provided in the Plan. 
Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan
set forth the entire understanding between Optionholder and the Company regarding this stock option award and supersede all prior
oral and written agreements, promises and/or representations on that subject with the exception of (i) options previously granted
and delivered to Optionholder, and (ii) the following agreements only: ______________________________________.


 




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	Strategic Environmental & Energy Resources, Inc.	 	Optionholder:
	 	 	 	 
	By: 	 	 	 
	 	Signature	 	Signature
	Title: 	 	 	Date:	
	Date:	 	 	 	 


 


Attachments:  Option Agreement, 2013 Equity Incentive Plan and Notice of Exercise


  




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Attachment
I


 


Strategic
Environmental & Energy Resources, Inc.


2013
Equity Incentive Plan


 


Option
Agreement


(Incentive
Stock Option or Nonstatutory Stock Option)


 


Pursuant to your Stock
Option Grant Notice (“Grant Notice”) and this Option Agreement, Strategic Environmental & Energy
Resources, Inc. (the “Company”) has granted you an option under its 2013 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice.  The option is granted to you effective as of the date of
grant set forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the terms
in this Option Agreement and the Plan, the terms of the Plan will control.  Capitalized terms not explicitly defined
in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.


 


The details of your
option, in addition to those set forth in the Grant Notice and the Plan, are as follows:


 


1.           Vesting.  Your
option will vest as provided in your Grant Notice.  Vesting will cease upon the termination of your Continuous Service.


 


2.           Number
of Shares and Exercise Price.  The number of shares of Common Stock subject to your option and your exercise
price per share in your Grant Notice will be adjusted for Capitalization Adjustments.


 


3.           Exercise
Restriction for Non-Exempt Employees.  If you are an Employee eligible for overtime compensation under the
Fair Labor Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise
provided in the Plan, you may not exercise your option until you have completed at least six months of Continuous Service
measured from the Date of Grant, even if you have already been an employee for more than six months. Consistent with the provisions
of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six month anniversary
in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued
or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement”
(as defined in the Company’s benefit plans).


 


4.           Exercise
prior to Vesting (“Early Exercise”).  If permitted in your Grant Notice (i.e., the “Exercise
Schedule” indicates “Early Exercise Permitted”) and subject to the provisions of your option, you may elect at
any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all
or part of your option, including the unvested portion of your option; provided, however, that:


 


(a)           a
partial exercise of your option will be deemed to cover first vested shares of Common Stock and then the earliest vesting installment
of unvested shares of Common Stock;


 


(b)           any
shares of Common Stock so purchased from installments that have not vested as of the date of exercise will be subject to the purchase
option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement;


 




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(c)           you
will enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in
the same vesting as if no early exercise had occurred; and


 


(d)           if
your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the Date of Grant)
of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable
for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, your option(s)
or portions thereof that exceed such limit (according to the order in which they were granted) will be treated as Nonstatutory
Stock Options.


 


5.           Method
of Payment.  You must pay the full amount of the exercise price for the shares you wish to exercise.  You
may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted
by your Grant Notice, which may include one or more of the following:


 


(a)           Provided
that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the
Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.  This
manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”.


 


(b)           Provided
that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation)
of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests,
and that are valued at Fair Market Value on the date of exercise.  “Delivery” for these purposes, in the
sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of
ownership of such shares of Common Stock in a form approved by the Company.  You may not exercise your option by delivery
to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption
of the Company’s stock.


 


(c)           If
this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option
by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.  You
must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other
permitted form of payment.  Shares of Common Stock will no longer be outstanding under your option and will not be exercisable
thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered
to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.


 


(d)           Pursuant
to the following deferred payment alternative:


 


(i)           Not
less than 100% of the aggregate exercise price, plus accrued interest, will be due four years from date of exercise or, at the
Company’s election, upon termination of your Continuous Service.


 


(ii)          Interest
will be compounded at least annually and will be charged at the minimum rate of interest necessary to avoid (1) the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred
payment arrangement and (2) the classification of your option as a liability for financial accounting purposes.


 


(iii)         In
order to elect the deferred payment alternative, you must, as a part of your written notice of exercise, give notice of the election
of this payment alternative and, in order to secure the payment of the deferred exercise price to the Company hereunder, if the
Company so requests, you must tender to the Company a promissory note and a pledge agreement covering the purchased shares of Common
Stock, both in form and substance satisfactory to the Company, or such other or additional documentation as the Company may request.


 




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6.           Whole
Shares.  You may exercise your option only for whole shares of Common Stock.


 


7.           Securities
Law Compliance.  In no event may you exercise your option unless the shares of Common Stock issuable upon
exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and
the issuance of the shares would be exempt from the registration requirements of the Securities Act.  The exercise of
your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including
any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).


 


8.           Term.  You
may not exercise your option before the Date of Grant or after the expiration of the option’s term.  The term of
your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:


 


(a)           immediately
upon the termination of your Continuous Service for Cause;


 


(b)           three
months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death
(except as otherwise provided in Section 8(d) below); provided, however, that if during any part of such three month
period your option is not exercisable solely because of the condition set forth in the section above relating to “Securities
Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for
an aggregate period of three months after the termination of your Continuous Service; provided further, that if (i) you
are a Non-Exempt Employee, (ii) your Continuous Service terminates within six months after the Date of Grant, and (iii) you
have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until
the earlier of (x) the later of (A) the date that is seven months after the Date of Grant, and (B) the date that is three months
after the termination of your Continuous Service, and (y) the Expiration Date;


 


(c)           12
months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(d)) below;


 


(d)           18
months after your death if you die either during your Continuous Service or within three months after your Continuous Service terminates
for any reason other than Cause;


 


(e)           the
Expiration Date indicated in your Grant Notice; or


 


(f)           the
day before the 10th anniversary
of the Date of Grant.


 


If your option is an
Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the Date of Grant and ending on the day three months before the date of your option’s
exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability.  The
Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee
that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or
an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three
months after the date your employment with the Company or an Affiliate terminates.


 




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9.           Exercise.


 


(a)           You
may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during
its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or
procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable withholding taxes to the
Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional
documents as the Company may then require.


 


(b)           By
exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into
an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason
of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are
subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.


 


(c)           If
your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within
15 days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs
within two years after the Date of Grant or within one year after such shares of Common Stock are transferred upon exercise of
your option.


 


(d)           By
exercising your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock
or other securities of the Company held by you, for a period of 180 days following the effective date of a registration statement
of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate
compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rules or
regulation (the “Lock-Up Period”); provided, however, that nothing
contained in this section will prevent the exercise of a reacquisition or repurchase option, if any, in favor of the Company during
the Lock-Up Period.  You further agree to execute and deliver such other agreements as may be reasonably requested by
the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto.  In
order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common
Stock until the end of such period.  You also agree that any transferee of any shares of Common Stock (or other securities)
of the Company held by you will be bound by this Section 9(d).  The underwriters of the Company’s stock are intended
third party beneficiaries of this Section 9(d) and will have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.


 


10.         Transferability.  Except
as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent and distribution,
and is exercisable during your life only by you.


 


(a)           Certain
Trusts.  Upon receiving written permission from the Board or its duly authorized designee, you may transfer your
option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable
state law) while the option is held in the trust.  You and the trustee must enter into transfer and other agreements
required by the Company.


 




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(b)           Domestic
Relations Orders.  Upon receiving written permission from the Board or its duly authorized designee, and provided
that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your
option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation
instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate
the transfer.  You are encouraged to discuss the proposed terms of any division of this option with the Company prior
to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained
within the domestic relations order or marital settlement agreement.  If this option is an Incentive Stock Option, this
option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.


 


(c)           Beneficiary
Designation.  Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering
written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option
exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common
Stock or other consideration resulting from such exercise.  In the absence of such a designation, your executor or administrator
of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration
resulting from such exercise.


 


11.         Right
of First Refusal.  Shares of Common Stock that you acquire upon exercise of your option are subject to any
right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise
its right; provided, however, that if your option is an Incentive Stock Option and the right of first refusal described
in the Company’s bylaws in effect at the time the Company elects to exercise its right is more beneficial to you than the
right of first refusal described in the Company’s bylaws on the Date of Grant, then the right of first refusal described
in the Company’s bylaws on the Date of Grant will apply.  The Company’s right of first refusal will expire
on the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on a national
securities exchange or quotation system.


 


12.         Right
of Repurchase.  To the extent provided in the Company’s bylaws in effect at such time the Company elects
to exercise its right, the Company will have the right to repurchase all or any part of the shares of Common Stock you acquire
pursuant to the exercise of your option.


 


13.         Option
not a Service Contract.  Your option is not an employment or service contract, and nothing in your option
will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate,
or of the Company or an Affiliate to continue your employment.  In addition, nothing in your option will obligate the
Company or an Affiliate, their respective stockholders, boards of directors, officers or Employees to continue any relationship
that you might have as a Director or Consultant for the Company or an Affiliate.


 


14.         Withholding
Obligations.


 


(a)           At
the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by
means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.


 




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(b)           If
this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with
any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable
to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount
as may be necessary to avoid classification of your option as a liability for financial accounting purposes).  If the
date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share
withholding pursuant to the preceding sentence will not be permitted unless you make a proper and timely election under Section
83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such
determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise
of your option.  Notwithstanding the filing of such election, shares of Common Stock will be withheld solely from fully
vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such
exercise.  Any adverse consequences to you arising in connection with such share withholding procedure will be your sole
responsibility.


 


(c)           You
may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied.  Accordingly,
you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation
to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein,
if applicable, unless such obligations are satisfied.


 


15.         Tax
Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation
programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular,
you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the
Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there
is no other impermissible deferral of compensation associated with the option. Because the Common Stock is not traded on an established
securities market, the Fair Market Value is determined by the Board, perhaps in consultation with an independent valuation firm
retained by the Company. You acknowledge that there is no guarantee that the Internal Revenue Service will agree with the valuation
as determined by the Board, and you will not make any claim against the Company, or any of its Officers, Directors, Employees or
Affiliates in the event that the Internal Revenue Service asserts that the valuation determined by the Board is less than the “fair
market value” as subsequently determined by the Internal Revenue Service.


 


16.         Notices.  Any
notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively
given upon receipt or, in the case of notices delivered by mail by the Company to you, five days after deposit in the United States
mail, postage prepaid, addressed to you at the last address you provided to the Company.  The Company may, in its sole
discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request
your consent to participate in the Plan by electronic means.  By accepting this option, you consent to receive such documents
by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.


 


17.         Governing
Plan Document.  Your option is subject to all the provisions of the Plan, the provisions of which are hereby
made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time
to time be promulgated and adopted pursuant to the Plan.  If there is any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan will control.


 




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Attachment
II


 


2013
Equity Incentive Plan


 




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Attachment
III


 


Notice
of Exercise


 


Strategic Environmental
& Energy Resources, Inc.


7801 Brighton Road


Commerce City, CO 80022


 


Date of Exercise:
_______________


 


This constitutes notice
to Strategic Environmental & Energy Resources, Inc. (the “Company”) under my stock option that I
elect to purchase the below number of shares of Common Stock of the Company (the “Shares”) for the
price set forth below.


 


	Type of option (check one):	 	Incentive £	 	 	Nonstatutory £	 
	 	 	 	 	 	 	 	 	 
	Stock option dated:	 	 	 	 	 	 		 
	 	 	 	 	 	 	 	 	 
	Number of Shares as to which option is exercised:	 	 	 	 	 	 		 
	 	 	 	 	 	 	 	 	 
	Certificates to be issued in name of:	 	 	 	 	 	 		 
	 	 	 	 	 	 	 	 	 
	Total exercise price:	 	$		 	 	$		 
	 	 	 	 	 	 	 	 	 
	Cash payment delivered herewith:	 	$		 	 	$		 
	 	 	 	 	 	 	 	 	 
	Value of ________ Shares delivered herewith1:	 	$		 	 	$		 
	 	 	 	 	 	 	 	 	 
	Value of ________ Shares pursuant to net exercise2:	 	$		 	 	$		 
	 	 	 	 	 	 	 	 	 
	Regulation T Program (cashless exercise3):	 	$		 	 	$		 




 


By this exercise, I
agree (i) to provide such additional documents as you may require pursuant to the terms of the 2013 Equity Incentive Plan
(ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating
to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing
within 15 days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two
years after the date of grant of this option or within one year after such Shares are issued upon exercise of this option.


 





 






	1		Shares must meet the public trading requirements set forth
in the option.  Shares must be valued in accordance with the terms of the option being exercised, and must be owned
free and clear of any liens, claims, encumbrances or security interests.  Certificates must be endorsed or accompanied
by an executed assignment separate from certificate.
	 	 	 
	2		The option must be a Nonstatutory
Stock Option, and Strategic Environmental & Energy Resources, Inc. must have established net exercise procedures at the time
of exercise, in order to utilize this payment method.
	 	 	 
	3		Shares must meet the public
trading requirements set forth in the option.



 




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I hereby make the following
certifications and representations with respect to the number of Shares listed above, which are being acquired by me for my own
account upon exercise of the option as set forth above:


 


I acknowledge that the
Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”),
and are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act.  I
warrant and represent to the Company that I have no present intention of distributing or selling said Shares, except as permitted
under the Securities Act and any applicable state securities laws.


 


I further acknowledge
that I will not be able to resell the Shares for at least 90 days after the stock of the Company becomes publicly traded (i.e.,
subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.


 


I further acknowledge
that all certificates representing any of the Shares subject to the provisions of the Option will have endorsed thereon appropriate
legends reflecting the foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company’s Articles
of Incorporation, Bylaws and/or applicable securities laws.


 


I further agree that,
if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of
the offering of any securities of the Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale
of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale,
any shares of Common Stock or other securities of the Company for a period of 180 days following the effective date of a registration
statement of the Company filed under the Securities Act (or such longer period as the underwriters or the Company will request
to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation) (the “Lock-Up
Period”).  I further agree to execute and deliver such other agreements as may be reasonably requested
by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto.  In
order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to securities subject to
the foregoing restrictions until the end of such period.


 


		Very truly yours,
	 	 	 
	 	 	 



 


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