Exhibit 10.2


 





THE SECURITIES WHICH ARE THE SUBJECT
OF THIS STOCK OPTION AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.


 


STOCK OPTION AGREEMENT


UNDER THE 


URBAN-GRO, INC. 2019 EQUITY INCENTIVE
PLAN


 


This Stock Option Agreement
(“Option Agreement”) is made and entered into by and between urban-gro, Inc. (“urban-gro”
or the “Company”) and Larry Dodson (the “Optionee”), as of [●], 2020
(the “Grant Date”). The Options granted to the Optionee pursuant to this Option Agreement shall be granted
under the urban-gro, Inc. 2019 Equity Incentive Plan, as amended from time to time (the “Plan”), and
shall be subject to the terms and conditions of the Plan.


 


WHEREAS, the
Company has entered into that certain Separation Agreement with the Optionee as of March 20, 2020, which sets forth the terms of
the Optionee’s separation from service with the Company (the “Separation Agreement”);


 


WHEREAS, part
of the consideration to be provided to the Optionee under the Separation Agreement is the right and option to purchase 330,000
shares of the Company’s Common Stock, subject to the Optionee executing (and not timely revoking) the Separation Agreement
and complying with the terms of the Separation Agreement;


 


WHEREAS, the
Optionee has executed (and not timely revoked) the Separation Agreement;


 


WHEREAS, the
Company desires to grant the right and option to purchase 330,000 shares of the Company’s Common Stock to the Optionee, subject
to the terms and conditions of this Option Agreement and the Plan; and


 


WHEREAS, the
Optionee desires to receive such right and be the holder of such options, subject to the terms and conditions of this Option Agreement
and the Plan.


 


NOW, THEREFORE,
in consideration of the premises, mutual covenants and agreements contained herein, and such other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:


 


1.    
Grant of Stock Options; Option Terms. Subject to the terms and conditions of this Option Agreement and the Plan,
the Company hereby grants to the Optionee as of the Grant Date, subject to the terms hereof and the Plan, the right and option
to purchase all or a portion of 330,000 shares of Common Stock of the Company (the “Shares”), on or before
the Expiration Date (as defined below) (the “Options”). No exercise as to a portion of the Shares shall
preclude a later exercise or exercises as to additional portions. The Options are Nonqualified Stock Options (not intended to be
within the meaning of Section 422 of the Code). The Options granted hereunder shall expire at 12:01 a.m. mountain time on the day
immediately following the date on which the Exercise Period (as defined below) expires.


 


2.    
Terms and Conditions of the Option. The Options shall be subject to the following terms and conditions:


 


2.1       Exercise
Price. The price to be paid for each Shares with respect to which an Option is exercised, shall be $1.00 (the “Exercise
Price”).


 


2.2.       Vesting
and Exercisability. The Options granted to the Optionee pursuant to this Option Agreement shall become vested and fully exercisable
on the Grant Date. The Options shall remain exercisable for the period commencing on the Grant Date and expiring on the five (5)
year anniversary of the Grant Date (the “Exercise Period”).


 


 






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2.3       Method
of Exercise. This Option may be exercised by the Optionee in whole or in part from time to time, subject to the conditions
contained in the Plan and in this Option Agreement by delivery, in person, by facsimile or electronic commission (if confirmed)
or through the mail, to the Company at its principal executive office in Colorado (Attention: Chief Financial Officer), of a written
notice of exercise. Such notice must be in a form satisfactory to the Committee, must identity this Option, must specify the number
of Shares in respect of which the Option is being exercised (the “Exercised Shares”), must be signed
by the person or persons so exercising the Option, and must include such other representations and agreements as may be required
by the Company. If this Option is being exercised, as provided by the Plan and/or this Option Agreement, by any person or persons
other than the Optionee, the notice must be accompanied by appropriate proof of right of such person or persons to exercise this
Option. Payment of the full aggregate Exercise Price as to all Exercised Shares must accompany the exercise notice. This Option
shall be deemed exercised upon receipt by the Company of such fully executed exercise notice accompanied by such aggregate Exercise
Price and any other documentation required by the Company. The Optionee or person exercising the Option is responsible for filing
any reports of remittance or other foreign exchange filings required in order to pay the Exercise Price. The Option shall not be
exercisable with respect to fractions of a Share.


 


2.4       Stock
Adjustments. In the event of any stock split, reverse stock split, stock dividend, reorganization, reclassification, combination,
recapitalization or other like change with respect to the Company shares, the shares and number of shares of any class or series
affected thereby, and all calculations provided for that are based upon numbers of shares of any class or series (or prices therefor)
affected thereby, shall be equitably adjusted as determined by the Committee to the extent necessary to provide Optionee the same
economic effect as contemplated by this Option Agreement prior to such stock split, reverse stock split, stock dividend, reorganization,
reclassification, combination, recapitalization or other like change.


 


2.5           
Limitation on Exercise. The grant of this Option and the issuance of Shares upon exercise of this Option are subject
to compliance with all applicable laws. This Option may not be exercised if the issuance of Shares upon exercise would constitute
a violation of any applicable laws. In addition, this Option may not be exercised unless (i) a registration statement under the
Securities Act of 1933, as amended (the “Securities Act”) is in effect at the time of exercise of this
Option with respect to the Shares; or (ii) in the opinion of legal counsel to the Company, the Shares issuable upon exercise of
this Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities
Act. The Optionee is cautioned that unless the foregoing conditions are satisfied, the Optionee may not be able to exercise
the Option when desired even though the Option is vested. As a further condition to the exercise of this Option, the Company
may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. Any Shares
that are issued will be “restricted securities” as that term is defined in Rule 144 under the Securities Act, and will
bear an appropriate restrictive legend, unless they are registered under the Securities Act. The Company is under no obligation
to register the Shares issuable upon exercise of this Option.


 


2.6       Method
of Payment. The total Exercise Price of the Shares to be purchased upon exercise of this Option must be paid entirely in cash
or cash equivalent (including check, bank draft or money order); provided, however, that the Committee, in its sole
discretion, may allow such payments to be made, in whole or in part, by:


 


(A)   subject
to any conditions or limitations established by the Company, other Shares that have a Fair Market Value on the date of surrender
or attestation equal to the aggregate Exercise Price;


 


(B)   consideration
received by the Company under a broker-assisted sale and remittance program acceptable to the Company (Officers and Directors shall
not be permitted to use this procedure if this procedure would violate Section 402 of the Sarbanes-Oxley Act of 2002, as amended);


 


(C)   subject
to any conditions or limitations established by the Company, retention by the Company of so many of the Shares that would otherwise
have been delivered upon exercise of the Option as have a Fair Market Value on the exercise date equal to the aggregate exercise
price of all Shares as to which the Option is being exercised, provided that the Option is surrendered and cancelled as to such
Shares; or


 


(D)   any
combination of the foregoing methods of payment.


 


 


 






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2.7    Non-Transferability
of Option. This Option may not be transferred in any manner other than by will or by the laws of descent and distribution,
and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of this Option Agreement shall be binding
upon the executors, Company’s, heirs, successors, and assigns of the Optionee. This Option may not be assigned, pledged,
or hypothecated by the Optionee whether by operation of law or otherwise, and is not subject to execution, attachment, or similar
process. Notwithstanding the foregoing, if this Option is designated as a Nonqualified Stock Option, the Company may, in its sole
discretion, allow the Optionee to transfer this Option as a gift to one or more family members. For purposes of this Option Agreement,
“family member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships), any individual sharing the Optionee's household (other than a tenant or employee), a trust in which one or more
of these individuals have more than 50% of the beneficial interest, a foundation in which the Optionee or one or more of these
persons control the management of assets, and any entity in which the Optionee or one or more of these persons own more than 50%
of the voting interest.


 


2.8    Tax
Obligations. The Optionee shall make appropriate arrangements with the Company for the satisfaction of all applicable Federal,
state, local, and foreign income taxes, employment tax, and any other taxes that are due as a result of the Option exercise. The
Committee, in its sole discretion, may permit the Optionee to satisfy such obligations by any of the following means or a combination
of such means: (i) tendering cash or cash equivalent (including check, bank draft or money order) or (ii) authorizing the Company
to withhold Shares that otherwise would be issued to the Optionee pursuant to the exercise of this Option. The Company may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.


 


3.       Restrictions
on Resale. The Optionee shall not sell any Shares at a time when applicable law, Company policies or an agreement between the
Company and its underwriters prohibit a sale.


 


4.    
 Lock-Up Agreement. In connection with any underwritten public offering of Shares made by the Company pursuant to
a registration statement filed under the Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate,
grant any option to purchase or make any short sale of, or otherwise dispose of any Shares (including but not limited to Shares
subject to this Option) or any rights to acquire Shares of the Company for such period beginning on the date of filing of such
registration statement with the Securities and Exchange Commission and ending at the time as may be established by the underwriters
for such public offering; provided, however, that such period shall end not later than 180 days from the effective date of such
registration statement. The foregoing limitation shall not apply to shares registered for sale in such public offering.


 


5.    
Independent Legal and Tax Advice. The Optionee acknowledges that (a) the Company is not providing any legal or tax
advice to the Optionee and (b) the Company has advised the Optionee to obtain independent legal and tax advice regarding this Option
Agreement and any payment hereunder.


 


6.    
No Rights in Shares. The Optionee shall have no rights as a stockholder in respect of any Shares, unless and until
the Optionee becomes the record holder of such Shares on the Company’s records.


 


7.    
Miscellaneous.


 


7.1    Entire
Agreement; Governing Law; Venue. The Plan and this Option Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee
with respect to the subject matter hereof, including, but not limited to, the Separation Agreement. This Option Agreement shall
interpreted under the Colorado Corporation Law excluding (to the greatest extent permissible by law) any rule of law that would
cause the application of the laws of any jurisdiction other than the Colorado Corporation Law. Any legal proceeding related to
the Plan and this Option Agreement will be brought in an appropriate Colorado court, and the parties to this Option Agreement consent
to the exclusive jurisdiction of such court for this purpose.


 


7.2   Amendment
and Waiver. Other than as provided in the Plan, this Option Agreement may be amended, waived, modified or canceled only by
a written instrument executed by the parties to this Option Agreement or, in the case of a waiver, by the party waiving compliance.
The Optionee acknowledges that a waiver by the Company of breach of any provision of this Option Agreement shall not operate or
be construed as a waiver of any other provision of this Option Agreement, or of any subsequent breach by the Optionee or any other
participant in the Plan.


 


 


 






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7.3       No
Guarantee of Continued Service. This Option Agreement is not an employment or service agreement, and no provision of this Option
Agreement shall be construed or interpreted to create any employment or service relationship between the Optionee and the Company
for any time period.


 


7.4        No
Fractional Shares. All provisions of this Option Agreement concern whole Shares. If the application of any provision hereunder
would yield a fractional Share, such fractional Share shall settled in cash.


 


7.5       Plan.
The terms and provisions of the Plan are incorporated herein by reference, and the Optionee hereby acknowledges receiving a copy
of the Plan. In the event of a conflict or inconsistency between the terms and provision of the Plan and the provisions of this
Option Agreement, the terms of this Option Agreement shall govern and control. All capitalized terms not defined herein shall have
the meaning ascribed to them as set forth in the Plan.


 


7.6       No
Guarantee of Tax or Other Consequences. The Company makes no commitment or guarantee that any tax treatment will apply or be
available to the Optionee or any other person. The Optionee has been advised, and provided with ample opportunity, to obtain independent
legal and tax advice regarding this Option Agreement.


 


7.7        Representation
and Warranties of the Optionee. By the Optionee’s signature and the signature of the Company’s representative below,
the Optionee and the Company agree that this Option is granted under this Option Agreement and governed by the terms and conditions
of this Option Agreement and the Plan. The Optionee has reviewed this Option Agreement and the Plan in their entirety, has had
an opportunity to obtain the advice of counsel before executing this Option Agreement and fully understands all provisions of this
Option Agreement and the Plan. The Optionee hereby agrees to accept as binding, conclusive, and final all decisions or interpretations
of the Company upon any questions relating to this Option Agreement and/or the Plan.


 


7.8       Electronic
Delivery. The Optionee agrees that the Company may deliver all documents relating to the Plan or this Option (including prospectuses
required by the Securities and Exchange Commission), and all other documents that the Company is required to deliver to its security
holders or the Optionee (including annual reports, proxy statements and financial statements), either by e-mail or by e-mail notice
of a Web site location where those documents have been posted. The Optionee may at any time (i) revoke this consent to e-mail
delivery of those documents; (ii) update the e-mail address for delivery of those documents; (iii) obtain at no charge
a paper copy of those documents, in each case by writing the Company. The Optionee may request an electronic copy of any
of those documents by requesting a copy in writing from the Company. The Optionee understands that an e-mail account and appropriate
hardware and software, including a computer or compatible cell phone and an Internet connection, will be required to access documents
delivered by e-mail.


 


7.9       Notices.
Any notice necessary under this Option Agreement shall be addressed to the Company at its principal executive office in Colorado
(Attention: Chief Financial Officer) and to the Optionee at the address appearing in the personnel records of the Company for such
Optionee or to either party at such other address as either party hereto may hereafter designate in writing to the other. Either
party may designate another address in writing (or by such other method approved by the Company) from time to time.


 


7.8Severability.Every
provision of this Option Agreement is intended to be severable and any illegal or invalid term shall not affect the validity or
legality of the remaining terms.


 


7.9       Headings
and Sections. The headings and sections contained herein are provided for convenience only and are not to serve as a basis
for interpretation of construction, and shall not constitute a part of this Option Agreement.


 


7.10       Counterparts.
This Option Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will
constitute one and the same instrument. Counterpart signature pages to this Option Agreement transmitted by facsimile transmission,
by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic
and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original
signature.


 


[Signature page follows]


 


 


 






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        urban-gro, Inc.

         

         

	 	By:___________________________________
	 	Name:
	 	
        Title:

         

	 	 
	 	
        OPTIONEE

         

	 	By:___________________________________
	 	Name: Larry Dodson
	 	
        Residence Address:______________________

         

        ______________________________________

         

        ______________________________________



 




 


 


 


 


 





Signature Page to Stock Option Agreement











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