CONSULTING AGREEMENT

 

CONSULTING AGREEMENT, dated as of August 12, 2016 between DSS Consulting
Corporation (the “Consultant”) and Surna, Inc. (the “Company”).

 

WHEREAS, the Company desires to retain the consulting services of the Consultant
and the Company wishes to acquire and be assured of Consultant’s consulting
services on the terms and conditions hereinafter set forth; and

 

WHEREAS, the Consultant desires to consult with the Company on the terms and
conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual terms, covenants, agreements and
conditions hereinafter set forth, the Company and the Consultant hereby agree as
follows:

 

1.Consulting Relationship.

  

(a) The Company hereby retains the Consultant to supply Dean Skupen as the
Company’s Director of External Reporting which includes fulfilling
responsibilities as the Company’s principal financial and accounting officer as
well as to consult with the Company from time to time and to perform the
consulting services provided in Section 3 hereof, and the Consultant hereby
agrees to perform such consulting services, for the period set forth in Section
2 hereof. During the Consulting Term (as hereinafter defined), neither Skupen
nor Consultant shall be deemed to be an employee of the Company but shall be an
independent contractor and all of the terms and conditions of this Agreement
shall be interpreted in light of that relationship. This Agreement does not
create any employer- employee, agency, or partnership relationship. As an
independent contractor, Consultant’s expenses shall be limited to those
expressly stated in this Agreement.

 

(b) To the best of the Consultant’s knowledge: (i) the Consultant is under no
obligation to any former employer or other party that is in any way inconsistent
with, or that imposes any restriction upon, the Consultant’s acceptance of its
engagement hereunder by the Company, the engagement of the Consultant by the
Company, or the Consultant’s undertakings under this Agreement and (ii) its
performance of all the terms of this Agreement and its engagement by the Company
as a consultant does not and will not breach any agreement to keep in confidence
proprietary information acquired by the Consultant, or any affiliate thereof, in
confidence or in trust prior to its engagement by the Company.

 

2.Term.

 

(a) This Agreement commences as of the date set forth above and shall continue
until either party hereto gives written notice of termination (the “Termination
Notice”) to the other party hereto. Notwithstanding the foregoing, the
Consulting Term shall terminate upon the death of the Consultant without any
Termination Notice required by or from either party.

 

(b) Notwithstanding Section 2(a) hereof, the Company may terminate this
Agreement at any time for “Cause”. For purposes of this Agreement, “Cause,”
shall mean:

 

(i) any fraud, misappropriation or embezzlement by the Consultant in connection
with the Company’s business;

 

(ii) any conviction of or guilty plea to a felony or a gross misdemeanor by the
Consultant that has or can be expected to have a detrimental effect on the
Company or on the Consultant’s ability to perform the Consultant’s duties;

 

 

 

 

(iii) any communication or disclosure by the Consultant that may result in
potential harm or damage to the reputation or business prospects of the Company,
as determined in the sole discretion of the Company; or

 

(iv) a breach by the Consultant of the provisions of Section 6 or 7 hereof.

 

(c) Notwithstanding Section 2(a) hereof, the Consultant may terminate this
Agreement at any time for “Cause”. For purposes of this Agreement, “Cause,”
shall mean:

 

(i) any fraud, misappropriation or embezzlement by any officer of the Company in
connection with the Company’s business;

 

(ii) any conviction of or guilty plea to a felony or a gross misdemeanor by the
any officer of the Company that has or can be expected to have an effect to the
Consultants reputation due to his association with the Company;

 

(iii) any communication or disclosure by the Company that may result in
potential harm or damage to the reputation or business prospects of the
Consultant, as determined in the sole discretion of the Consultant; or

 

(iv) a breach by the Consultant of the provisions of Section 4 hereof.

 

3.Duties.

 

(a) The Consultant and/or its affiliates shall consult with management of the
Company regarding the accounting aspect of the Company. Specifically, Consultant
shall provide advisory services related to United States Generally Accepted
Accounting Principles in connection with the preparation of the Company’s
financial statements and its annual and quarterly filings with the Securities
and Exchange Commission.

 

(b) During the Consulting Term, the Consultant and/or its affiliates shall not
be required to provide any specified number of hours of service to the Company.
The Consultant and its affiliates may, during the term of this Agreement, engage
in such other employment and activities as they may see fit, it being agreed
that the engagement of the Consultant is non-exclusive and that nothing herein
contained shall be deemed to prohibit or bar the Consultant or any of its
affiliates from engaging in such other activities as they may see fit so long as
such activities do not interfere with the performance of the Consultant’s duties
pursuant to the terms of this Agreement and do not violate the terms of
paragraphs 6 or 7 herein.

 

4.Fees and Expenses.

 

(a) Fee.

 

  (i) Flat Fee (monthly). During the Consulting Term, the charge will be a
flat-fee retainer of $4,000 per month (the “Flat Fee”). The retainer is due and
payable at the beginning of each month. The initial payment by the Company of
$4645 shall include compensation for all services heretofore rendered and all
Flat Fee services remaining in the month of August.         (ii) Additional Fee.
If the Consultant is required to provide significant time to transactions that
are outside the normal operations (e.g. acquisition of a company or operational
assets, debt & equity transaction, or cashflow projections) of the Company, the
fee for such service shall be billed at a rate of $150.00 per hour (discounted
from Consultant’s standard $250.00 rate). Consultant shall obtain written
approval from Company prior to beginning work on any matters that are not
covered by the Flat Fee.

 

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(b) Expenses. The Consultant shall be entitled to reimbursement for all
reasonable and necessary out-of-pocket business expenses incurred by the
Consultant and/or its affiliates in the performance of the Consultant’s duties
hereunder in accordance with the Company’s policies applicable (on and after the
date hereof) thereto. All amounts accrued and unpaid pursuant to section 4(b),
shall be due and payable upon the termination of this Agreement pursuant to
Section 2(a).

 

(c) Withholding, Etc. In conformity with the Consultant’s independent contractor
status and without limiting any of the foregoing, the Company shall make no
deduction or withholding for taxes or contributions of any kind. The Consultant
agrees to accept exclusive liability for the payment of all self employment
taxes or contributions for unemployment insurance or pensions or annuities or
social security payments which are measured by the remuneration paid to the
Consultant or the Consultant’s agents, if any, as independent contractors and to
reimburse and indemnify the Company for any such taxes or contributions or
penalties which the Company may be compelled to pay as a result of the
Consultant’s non payment of the same as a self employed individual. The
Consultant also agrees to take all action and comply with all applicable
administrative regulations necessary for the payment by the Consultant of such.

 

5. Inventions and Confidential Information. The Consultant hereby covenants,
agrees and acknowledges as follows:

 

(a) The Company is engaged in a continuous program of research, design,
development, production, marketing, and servicing with respect to its
businesses.

 

(b) The Consultant’s engagement hereunder creates a relationship of confidence
and trust between the Consultant and the Company with respect to certain
information pertaining to the business of the Company and its Affiliates (as
hereinafter defined) or pertaining to the business of any client or customer of
the Company or its Affiliates which may be made known to the Consultant by the
Company or any of its Affiliates or by any client or customer of the Company or
any of its Affiliates or learned by the Consultant during the period of
Consultant’s engagement by the Company.

 

(c) The Company possesses and will continue to possess information that has been
created, discovered or developed by, or otherwise become known to it (including,
without limitation, information created, discovered or developed by, or made
known to, the Consultant during the period of Consultant’s engagement or arising
out of Consultant’s engagement) or in which property rights have been or may be
assigned or otherwise conveyed to the Company, which information has commercial
value in the business in which the Company is engaged and is treated by the
Company as confidential.

 

(d) Consultant (including for purposes of this subsection (d), all of
Consultant’s affiliates, officers, directors, employees, and legal
representatives) acknowledges that the confidential information to which it will
have access may include material, non-public information (“Insider Information”)
regarding Company and/or its affiliates. The United States securities laws
prohibit any persons who have material, non-public information concerning
Company and/or its affiliates from purchasing or selling securities of Company
or from communicating such information to any person under circumstances in
which it is reasonably foreseeable that such person is likely to purchase or
sell such securities in reliance upon such information. Accordingly, Consultant
agrees to maintain and preserve all confidential information and material
non-public information regarding Company, to abide by all laws, rules, and
regulations relating to the handling of and acting upon Insider Information
(including, without limitation, trading in Company’s securities—either directly
or indirectly—while in possession of Insider Information or disclosing or
otherwise utilizing Insider Information in connection with the purchase or sale
of securities), and to use such confidential information and material non-public
information only for the purposes set forth in this Agreement or to otherwise
achieve the aims of this Agreement, in Consultant’s reasonable estimation

 

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(e) Any and all inventions, products, discoveries, improvements, processes,
manufacturing, marketing and services methods or techniques, formulae, designs,
styles, specifications, data bases, computer programs (whether in source code or
object code), know-how, strategies and data, whether or not patentable or
registrable under copyright or similar statutes, made, developed or created by
the Consultant (whether at the request or suggestion of the Company, any of its
Affiliates, or otherwise, whether alone or in conjunction with others, and
whether during regular hours of work or otherwise) during the period of
Consultant’s engagement by the Company which may pertain to the business,
products or processes of the Company or any of its Affiliates (collectively
hereinafter referred to as “Inventions”), will be promptly and fully disclosed
by the Consultant to an appropriate executive officer of the Company (other than
Consultant) without any additional compensation therefor, all papers, drawings,
models, data, documents and other material pertaining to or in any way relating
to any Inventions made, developed or created by Consultant as aforesaid. For the
purposes of this Agreement, the term “Affiliate” or “Affiliates” shall mean any
person, corporation or other entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
the purposes of this definition, “control” when used with respect to any person,
corporation or other entity means the power to direct the management and
policies of such person or entity, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

(f) The Consultant will keep confidential and will hold for the Company’s sole
benefit any Invention which is to be the exclusive property of the Company under
this Section 6 for which no patent, copyright, trademark or other right or
protection is issued.

 

(g) The Consultant also agrees that the Consultant will not without the prior
written consent of the Board of Directors of the Company (i) use for
Consultant’s benefit or disclose at any time during Consultant’s engagement by
the Company, or thereafter, except to the extent required by the performance by
the Consultant of the Consultant’s duties as a consultant of the Company, any
information obtained or developed by the Consultant while engaged by the Company
with respect to any Inventions or with respect to any customers, clients,
suppliers, products, employees, financial affairs, or methods of design,
distribution, marketing, service, procurement or manufacture of the Company or
any of its Affiliates, or any confidential matter, except information which at
the time is generally known to the public other than as a result of disclosure
by the Consultant not permitted hereunder, or (ii) take with the Consultant upon
termination of its engagement by the Company any document or paper relating to
any of the foregoing or any physical property of the Company or any of its
Affiliates.

 

(h) The Consultant acknowledges and agrees that a remedy at law for any breach
or threatened breach of the provisions of this Section 6 would be inadequate
and, therefore, agrees that the Company and its Affiliates shall be entitled to
injunctive relief in addition to any other available rights and remedies in case
of any such breach or threatened breach; provided, however, that nothing
contained herein shall be construed as prohibiting the Company or any of its
Affiliates from pursuing any other rights and remedies available for any such
breach or threatened breach.

 

(i) The Consultant agrees that upon termination of Consultant’s engagement by
the Company for any reason, the Consultant shall immediately return to the
Company all documents and other property in Consultant’s possession belonging to
the Company or any of its Affiliates.

 

(j) Without limiting the generality of Section 8 hereof, the Consultant hereby
expressly agrees that the foregoing provisions of this Section 6 shall be
binding upon the Consultant’s partners, employees, successors and legal
representatives.

 

6.Non-Competition.

 

(a) The term “Non-Compete Term” shall mean the period during which Consultant is
engaged hereunder and the one-year period thereafter.

 

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During the Non-Compete Term:

 

(i) the Consultant will not make any statement or perform any act intended to
advance an interest of any direct competitor of the Company or any of its
Affiliates in any way that will or may injure an interest of the Company or any
of its Affiliates in its relationship and dealings with existing customers or
clients, or knowingly solicit or encourage any employee of the Company or any of
its Affiliates to do any act that is disloyal to the Company or any of its
Affiliates or inconsistent with the interest of the Company or any of its
Affiliate’s interests or in violation of any provision of this Agreement;

 

(ii) the Consultant will not discuss with any customers or clients of the
Company or any of its Affiliates the present or future availability of services
or products of a business, if the Consultant has or expects to acquire a
proprietary interest in such business or is or expects to be a consultant,
employee, officer or director of such business, where such services or products
are directly competitive with services or products which the Company or any of
its Affiliates provides;

 

(iii) the Consultant will not make any statement or do any act intended to cause
any customers or clients of the Company or any of its Affiliates to make use of
the services or purchase the products of any directly competitive business in
which the Consultant has or expects to acquire a proprietary interest or in
which the Consultant is or expects to be made an employee, officer or director,
if such services or products directly compete with the services or products sold
or provided or expected to be sold or provided by the Company or any of its
Affiliates to any customer or client; and

 

(iv) the Consultant will not directly or indirectly (as a director, officer,
employee, manager, consultant, independent contractor, advisor or otherwise)
engage in direct competition with, or own any interest in, perform any services
for, participate in or be connected with (i) any business or organization which
engages in direct competition with the Company or any of its Affiliates in any
geographical area where any business is presently carried on by the Company or
any of its Affiliates, or (ii) any business or organization which engages in
direct competition with the Company or any of its Affiliates in any geographical
area where any business shall be hereafter, during the period of the
Consultant’s engagement by the Company, carried on by the Company or any of its
Affiliates, if such business is then being carried on by the Company or any of
its Affiliates in such geographical area; provided, however, that the provisions
of this Section 7(a) shall not be deemed to prohibit the Consultant’s ownership
of not more than one percent (1%) of the total shares of all classes of stock
outstanding of any publicly held company. At the end of the Consultant’s
engagement, the Company, in good faith, shall provide to the Consultant a list
of the Company’s then- existing direct competitors, Affiliates, customers,
businesses, organizations, and others to which this Section 7 refers.

 

(b) During the Non-Compete Term, the Consultant will not directly or indirectly
hire, engage, send any work to, place orders with, or in any manner be
associated with any supplier, contractor, subcontractor or other person or firm
which rendered manufacturing or other services, or sold any products, to the
Company or any of its Affiliates if such action by Consultant would have a
material adverse effect on the business, assets or financial condition of the
Company or any of its Affiliates.

 

(c) In connection with the foregoing provisions of this Section 7, the
Consultant represents that Consultant’s experience, capabilities, and
circumstances are such that such provisions will not prevent Consultant from
earning a livelihood. The Consultant further agrees that the limitations set
forth in this Section 7 (including, without limitation, any time or territorial
limitations) are reasonable and properly required for the adequate protection of
the businesses of the Company and its Affiliates. It is understood and agreed
that the covenants made by the Consultant in this Section 7 (and in Section 6
hereof) shall survive the expiration or termination of this Agreement.

 

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(d) For purposes of this Section 7, proprietary interest in a business is
ownership, whether through direct or indirect stock holdings or otherwise, of
one percent (1%) or more of such business.

 

(e) The Consultant acknowledges and agrees that a remedy at law for any breach
or threatened breach of the provisions of this Section 6 would be inadequate
and, therefore, agrees that the Company and any of its Affiliates shall be
entitled to injunctive relief in addition to any other available rights and
remedies in cases of any such breach or threatened breach; provided, however,
that nothing contained herein shall be construed as prohibiting the Company or
any of its Affiliates from pursuing any other rights and remedies available for
any such breach or threatened breach.

 

7. Non-Assignability.

 

(a) Neither this Agreement nor any right or interest hereunder shall be
assignable by the Consultant or its legal representatives without the Company’s
prior written consent.

 

(b) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation or to exclusion, attachment, levy
or similar process or assignment by operation of law, and any attempt, voluntary
or involuntary, to effect any such action shall be null, void and of no effect.

 

8. Binding Effect. Without limiting or diminishing the effect of Section 8
hereof, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors, legal representatives and
assigns.

 

9. Notice. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and either delivered in person or sent by
first class certified or registered mail, postage prepaid, if to the Company, at
the Company’s principal place of business, attention: Chief Executive Officer
and if to the Consultant, at Consultant’s office address set forth above, or to
such other address or addresses as either party shall have designated in writing
to the other party hereto.

 

10. Severability. The Consultant agrees that in the event that any court of
competent jurisdiction shall finally hold that any provision of Section 6 or 7
hereof is void or constitutes an unreasonable restriction against the
Consultant, such provision shall not be rendered void but shall apply with
respect to such extent as such court may judicially determine constitutes a
reasonable restriction under the circumstances. If any part of this Agreement
other than Section 6 or 7 is held by a court of competent jurisdiction to be
invalid, illegible or incapable of being enforced in whole or in part by reason
of any rule of law or public policy, such part shall be deemed to be severed
from the remainder of this Agreement for the purpose only of the particular
legal proceedings in question and all other covenants and provisions of this
Agreement shall in every other respect continue in full force and effect and no
covenant or provision shall be deemed dependent upon any other covenant or
provision.

 

11. Waiver. Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.

 

12. Entire Agreement; Modifications. This Agreement constitutes the entire and
final expression of the agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, oral and written, between the
parties hereto with respect to the subject matter hereof. This Agreement may be
modified or amended only by an instrument in writing signed by both parties
hereto

 

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13. Applicable Law and Venue. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to its
conflicts of law provisions. Any action to enforce the terms of this Agreement
shall be brought in a court of proper jurisdiction within the Los Angeles,
California.

 

14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

15. Survival. The termination of Consultant’s engagement hereunder shall not
affect the enforceability of Sections 6 or 7.

 

16. Further Assurances. The parties agree to execute and deliver all such
further instruments and take such other and further action as may be reasonably
necessary or appropriate to carry out the provisions of this Agreement.

 

17. Headings. The Section headings appearing in this Agreement are for purposes
of easy reference and shall not be considered a part of this Agreement or in any
way modify, amend or affect its provisions.

 

18. Facsimile or PDF Signatures. Facsimile or PDF signatures will be accepted as
originals.

 

19. Legal Fees. If Consultant and/or its affiliates are required under a
subpoena or other written requests to provide any information, testimony, or
depositions, regarding the Company’s activities during the term of this
agreement or after the termination of this agreement, for or by any persons,
companies or agencies, the Company will provide legal counsel or pay for legal
counsel to represent the Consultant and/or its affiliates.

 

IN WITNESS WHEREOF, the Company and the Consultant have duly executed and
delivered this Agreement as of the day and year first above written.

  

  CONSULTANT:       /s/ Dean S Skupen      

DSS Consulting Corporation

Dean S. Skupen, CPA(retired)

      Company:       By: /s/ Trent Doucet         Name: Trent Doucet        
Title: President

 

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