Document:

Exhibit 10.2

 

EQUIPMENT,
DEMONSTRATION AND PRODUCT TESTING AGREEMENT

 

THIS
EQUIPMENT, DEMONSTRATION AND PRODUCT DEVELOPMENT AGREEMENT (“Agreement”) is entered into effective this 10th
day of May, 2017 (“Effective Date”) by and between STERLING PHARMS, LLC, a Colorado limited liability
company whose address is 3065 Sterling Circle, Unit C, Boulder, Colorado 80301 (“Sterling”), SURNA, INC.,
a Nevada corporation whose address is 1780 55th Street, Suite A, Boulder, Colorado 80301 (“Surna”). Sterling
and Surna may be referred to herein individually as a “Party” or collectively as the “Parties.”

 

RECITALS

 

A.       Surna,
together with its affiliates and subsidiaries, is engaged in the development, design and distribution of cultivation technologies
for controlled environment agriculture for state-regulated cannabis cultivation facilities and traditional indoor agricultural
facilities, including lighting, environmental control, air sanitation and cultivation facilities designed to meet the specific
environmental conditions required for indoor cultivation and to reduce energy and water consumption (“Surna Business”).

 

B.       
In connection with the Surna Business, Surna manufactures, sells and delivers the following products and services: (i) liquid-based
process cooling and climate control systems, (ii) reflectors and lighting systems, including water-cooled reflectors (iii) a full-service
air sanitation technology program, (iii) a full-service engineering package for designing and engineering commercial scale thermodynamic
systems specific to indoor cultivation facility conditions, (iv) automation and control devices, systems and technologies used
for environmental, lighting and climate control in indoor cultivation facilities, (v) a comprehensive hybrid cultivation facility
design and system utilizing sunlight and a high-power LED lighting system, and (vi) and other products, services, and technologies
now or hereafter developed related to the foregoing (collectively, “Surna Products”).

 

C.       Sterling
is a Colorado-regulated cannabis cultivation facility located at 3065 Sterling Circle, Unit C, Boulder, Colorado 80301 (“Sterling
Facility”).

 

D.       Stephen
Keen, a principal stockholder and a former employee of Surna, is the managing member of Sterling (“Keen”).

 

E.       Sterling
is willing to use Surna Products, and Surna is willing to provide Surna Products, in connection with the operation of the Sterling
Facility, subject to the terms and conditions set forth in this Agreement.

 

F.       Sterling
is willing to allow Surna and its existing and prospective customers to have access to the Sterling Facility for demonstration
tours in a working environment, subject to the terms of this Agreement, and Surna acknowledges the significant benefit that such
demonstration tours will provide to the Surna Business and the hardship that will be incurred by Sterling to accommodate such
demonstration tours during operating hours and in an active cultivation facility.

 

G.       Sterling
is willing to monitor, test and evaluate the Surna Products installed at Sterling Facility and to collect data and provide feedback
to Surna on the energy and operational efficiency and efficacy of the installed Surna Products, and Surna desires to use such
data and feedback in connection with Surna’s Business and to allow Surna to improve, enhance and develop new or additional
product features, innovations and technologies.

 

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THEREFORE,
IT IS AGREED AS FOLLOWS:

 

	1.	EQUIPMENT

 

1.1.       Surna
hereby agrees to provide Sterling for use at the Sterling Facility, and Sterling hereby agrees to use, subject to the terms of
this Agreement, the Surna Products set forth on Exhibit A of this Agreement (“Equipment”). The Equipment
shall at all times be located at the Sterling Facility and shall not be removed from the Sterling Facility by Sterling without
the prior written consent of Surna, provided that, Sterling shall be allowed to move the location of the Equipment within the
Sterling Facility. Sterling and Surna acknowledge and agree that the Equipment is sufficient to handle the cultivation capacity
and needs of the Sterling Facility as of the Effective Date. In the event cultivation capacity and needs of the Sterling Facility
increase, Sterling and Surna may mutually agree, in writing, to the deployment of additional equipment, subject to an adjustment
of the fee as set forth in Section 1.14.

 

1.2.       The
Equipment is and shall at all times be and remain the sole and exclusive personal property of Surna. Sterling shall have no right,
title or interest therein or thereto, and shall not create, incur, assume or suffer to exist any mortgage, lien, pledge or other
encumbrance or attachment of any kind whatsoever upon, affecting or with respect to the Equipment or this Agreement. Sterling
will cooperate with Surna for the purpose of protecting the interests of Surna in the Equipment.

 

1.3.       At
all times during the Term (as defined herein), Sterling shall have the right to use the Equipment solely for licensed or other
legally permitted cultivation purposes at the Sterling Facility, subject to the terms and conditions of this Agreement. During
the Term, Sterling shall comply with all governmental laws, regulations, requirements and rules applicable to the operation of
Sterling’s business and shall comply with all instructions and warranty requirements, and with the conditions and requirements
of Surna, or any other manufacturer of the Equipment, with respect to the use of the Equipment. During the Term, Surna shall comply
with all governmental laws, regulations, requirements and rules applicable to the operation of the Surna Business.

 

1.4.       Sterling
shall be responsible for the initial installation of the Equipment at the Sterling Facility, at Sterling’s cost, subject
to Surna acting as a supervisor to that installation. Surna shall pay all shipping and delivery charges incurred in connection
with the initial installation of the Equipment.

 

1.5.       During
the Term, Sterling shall ensure that the Equipment shall be in good condition, repair, and working order, ordinary wear and tear
excepted, provided that, Surna at its cost shall provide maintenance on the Equipment located at the Sterling Facility, in accordance
with Surna’s standard full maintenance package. Sterling shall not make any repairs, modifications or alterations to the
Equipment without the prior written consent of Surna.

 

1.6.       In
the event of any failure of the Equipment due to defects in material and/or manufacturing to the capacities and ratings set forth
in Surna’s catalogs and bulletins, other than damage or failure arising from modifications made to the Equipment by parties
other than Surna or its contractors, repairs or alterations by parties other than Surna or its contractors that adversely affects
the stability or reliability of the Equipment, vandalism, neglect, accident, adverse weather or environmental conditions, abuse
or improper use, improper installation by parties other than Surna or its contractors, commissioning by a party other than Surna
or its contractors, unusual physical or electrical or mechanical stress, operation with any accessory, equipment or part not specifically
approved by Surna, refrigerant or glycol not recommended or supplied by Surna, and or lack of proper start-up or maintenance as
recommended by Surna, Surna will use its commercially reasonable efforts to repair or replace the Equipment in a commercially
reasonable time fame. Surna shall not be obligated to pay for the cost of lost refrigerant or lost product or any other direct,
indirect, or consequential damages, loss or contamination of crop, loss of profits, or reimbursement for loss caused by interruption
of service, arising out of the use of the Equipment. Surna’s obligations and liabilities under this Section 1.6 shall be
limited to furnishing and installing replacement equipment or parts, at its option, at its costs including labor costs associated
therewith.

 

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1.7.       Surna
shall have the right to modify, enhance, substitute and/or exchange components of the Equipment at any time during the Term, subject
to the prior written consent of Sterling; provided, that, such modifications, enhancements, substitutions and/or exchanges, meet
any legal requirements and shall not reduce the features, functionality or capacity of the Equipment. For any modification, enhancement,
substitution or exchange of the Equipment, Surna shall be responsible for the removal of the existing Equipment and the installation
of the new Equipment, at Surna’s cost, including all shipping and delivery costs related thereto. Any modifications, enhancements,
substitution and/or exchanges of the Equipment shall be agreed to in advance and in writing by Surna and Sterling.

 

1.8.       Sterling
acknowledges and agrees that some of the Surna Products provided to Sterling for use under this Agreement will be prototype or
new products that have not been deployed in the marketplace. Such products will be clearly noted as such in any modification,
enhancement, substitution and/or exchange documentation. Sterling acknowledges the foregoing and confirms that any prototype or
new products accepted by Sterling shall be provided without recourse to Surna, provided that, Surna warrants that such prototype
or new products provided to Sterling will be fit for a particular purpose.

 

1.9.       Surna
and its employees, agents, vendors, suppliers and contractors shall have the right, upon reasonable notice to Sterling and subject
to any Sterling security requirements, to access the Facility for purposes of making modifications, enhancements, substitutions
and/or exchanges. Surna shall endeavor to make any such modifications, enhancements, substitutions and/or exchanges between harvests.

 

1.10.       Surna
shall be responsible for any costs associated with any physical damage to the Sterling Facility or any equipment located at the
Sterling Facility (including the Equipment) that is directly caused by Surna’s employees, agents, vendors, suppliers, contractors,
existing or prospective customers and other guests, provided that, Surna will not be responsible for any loss or contamination
of the crop, special and consequential damages, or loss of profits arising in connection with such physical damage.

 

1.11.       Except
as set forth in Section 1.10, from and after the date of delivery of the Equipment to the Sterling Facility, (a) Sterling hereby
assumes and shall bear the entire risk of loss for theft, damage, destruction or other injury to the Equipment from any and every
cause whatsoever, (b) shall, at its cost, maintain property and casualty insurance on the Equipment at not less than the full
replacement cost thereof, with extended coverage, with Surna designated as an additional insured thereunder, and (c) in the event
of damage or loss to the Equipment (or any part thereof) and irrespective of payment from any insurance coverage maintained by
Sterling, Sterling shall, at the sole option of Surna: (i) place the Equipment in good repair, condition and working order at
Sterling’s cost, or (ii) pay to Surna an amount equal to the replacement cost incurred by Surna in replacing the Equipment,
provided that, in all cases, the proceeds of any insurance recovery shall be earmarked for fulfillment of Sterling’s obligations
under either (i) or (ii) above. NO SUCH LOSS OR DAMAGE OF THE EQUIPMENT SHALL IMPAIR OR MODIFY ANY OBLIGATION OF STERLING AND
KEEN UNDER THIS AGREEMENT, WHICH OBLIGATIONS REMAIN IN FULL FORCE AND EFFECT.

 

1.12.       Surna
and Sterling each shall maintain, at their own cost, during the Term hereof, (a) broad form commercial general liability insurance
(including products coverage, and completed operations coverage), and (b) professional liability/errors and omissions coverage.
The limit of liability for such coverage shall be no less than $1 million per claim/occurrence, aggregate $2,000,000, with the
other party being named as an “additional insured” under such policies. Each Party shall also maintain workers’
compensation insurance.

 

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1.13.       Sterling
shall pay when due or reimburse Surna for, and shall indemnify and defend Surna against, all fees, assessments and sales, use,
property, excise and other taxes and governmental charges including, without limitation, interest and penalties hereafter imposed
by any federal, foreign, state or local governmental body or agency upon the use of the Equipment under this Agreement. Surna
shall be responsible for all other taxes payable on the Equipment, including any taxes based on the net income of Surna.

 

1.14.       During
the Term, in consideration for Surna’s providing the use of the Equipment to Sterling pursuant to this Section 1, Sterling
shall pay Surna, by check, money order or wire transfer, a fee of $16,500 per quarter, payable in arrears on the last business
day of each calendar quarter. Any fee related to a period consisting of less than a full calendar quarter shall be properly prorated.
In the event that Sterling requests additional equipment or Surna requests to place other equipment at the Sterling Facility,
which additional or other equipment is beyond the features, functionality or capacity of the Equipment set forth on Exhibit
A hereto, the quarterly fee hereunder shall be subject to adjustment based on the mutual agreement of the Parties. If any
fee shall be unpaid after the due date thereof, Sterling shall pay on demand, as an additional late service and/or overhead charge,
but not as interest, on amounts not paid when due an amount equal to one and one-half percent (1.5%) per month of any such unpaid
amount but in no event to exceed maximum lawful charges.

 

1.15.       In
the event this Agreement is terminated or expires pursuant to Section 4 hereof, Sterling agrees to provide access to Surna and
its employees and agents in order to promptly remove the Equipment from the Sterling Facility, at Surna’s cost, provided
that Sterling shall cooperate with and assist Surna, as reasonably requested by Surna, in the takedown and disassembly of the
Equipment. In the event this Agreement expires at the end of the Term hereof, Sterling shall have the option to purchase, during
for a period of thirty (30) days prior to the expiry of the Term, all, but not less than all, the Equipment at market value as
mutually agreed to by the Parties.

 

	2.	ACCESS
                                         TO FACILITY; DATA COLLECTION AND FEEDBACK

 

2.1.       Surna’s
employees, agents, vendors, suppliers and contractors shall have the right, upon no less than seventy-two (72) hours’ notice
to Sterling and subject to Sterling’s security requirements, to access the Sterling Facility for the purposes of undertaking
marketing, data gathering, product evaluation, maintenance work or other legitimate business purposes with respect to the Equipment
and its operation. Only Surna’s employees will be allowed to carry photographic devices into the Sterling Facility, provided
that no photography will be allowed at the Sterling Facility without specific prior approval of Sterling.

 

2.2.       Surna
and its existing and prospective customers shall have the right, upon no less than seventy-two (72) hours’ notice to Sterling
and subject to any Sterling security requirements, to access the Sterling Facility for the purposes of demonstrating the Equipment
in a working environment, provided that demonstrations will be limited to one (1) one-hour tour per day on Tuesdays, Wednesdays
and Thursdays. Any of Surna’s existing and prospective customers entering the Sterling Facility shall be accompanied at
all times by a Surna representative and a Sterling representative, with Sterling agreeing to use its reasonable commercial efforts
to have Keen act as such Sterling representative. Surna warrants and represents each existing and prospective customer entering
the Sterling Facility shall have been qualified by Surna in accordance with its standard practices and, with respect to a prospective
customer, confirmed as a reasonable prospect to become a Surna customer. Any existing or prospective customers of Surna will be
required to execute a non-disclosure agreement prior to taking a demonstration tour of the Sterling Facility.

 

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2.3.       Surna
shall be responsible for any costs associated with any physical damage to the Sterling Facility or any equipment located at the
Sterling Facility (including the Equipment) that is directly caused by Surna’s employees, agents, vendors, suppliers, contractors,
existing or prospective customers and other guests, provided that Surna will not be responsible for any loss or contamination
of the crop, special and consequential damages, or loss of profits arising in connection with such physical damage.

 

2.4.       During
the Term, Sterling shall monitor, test and evaluate the Equipment installed at Sterling Facility for each growth cycle and shall
collect and provide data and feedback to Surna regarding the energy and operational efficiency and efficacy of the installed Equipment,
and other relevant data and feedback with respect to environmental and climate control measures, equipment operating performance
metrics and optimization, and crop growth yields in such format as mutually agreed to by the Parties (collectively, the “Performance
Data”).

 

2.5.       During
the Term, in consideration for Sterling providing access to the Sterling as set forth herein and collecting and providing the
Performance Data, Surna shall pay Sterling, by check, money order or wire transfer, a fee of $12,000 per quarter, payable in arrears
on the last business day of each calendar quarter. Any fee related to a period consisting of less than a full calendar quarter
shall be properly prorated. In the event that Surna requests additional services, which are beyond the scope set forth in this
Section 2, the quarterly fee hereunder shall be subject to adjustment based on the mutual agreement of Sterling and Surna. If
any fee shall be unpaid after the due date thereof, Surna shall pay on demand, as an additional late service and/or overhead charge,
but not as interest, on amounts not paid when due an amount equal to one and one-half percent (1.5%) per month of any such unpaid
amount but in no event to exceed maximum lawful charges.

 

	3.	RESTRICTIVE
                                         COVENANTS

 

3.1.       Every
invention and improvement conceived, invented or developed by Sterling relating to or useable in the Surna Business then being
carried on or actively contemplated by Surna or the Surna Products now existing or hereafter developed shall become the exclusive
property of Surna. With respect to all inventive ideas originated or developed by Sterling hereunder, which relate to the Surna
Business or the Surna Products during the Term hereof, or as to which Sterling has acquired information as a result of this Agreement,
and all patents obtained on such inventive ideas, (a) Sterling agrees to disclose and assign, without charge, all such inventive
ideas and any patents obtained thereon to Surna, but without expense to Sterling, (b) Sterling agrees that all such inventive
ideas and any patents thereof shall be the exclusive property of Surna, and (c) Sterling will, at any and all times, furnish such
information and assistance and execute such applications and other documents as may be advisable in the opinion of Surna to obtain
both domestic and foreign patents, title to which is to be vested in Surna, and Sterling gives Surna the full and exclusive power
to prosecute all such applications and all proceedings in connection therewith.

 

3.2.       During
the Term hereof and for a period of one (1) year after the termination or expiration of this Agreement, regardless of who initiated
the termination, Sterling will not, directly or indirectly, solicit, interfere with, or divert away from Surna any customer of
Surna who did any business with Surna during the Term hereof.

 

3.3.       During
the Term hereof and for a period of one (1) year after the termination or expiration of this Agreement, regardless of who initiated
the termination, Sterling shall not, directly or indirectly, or on behalf of any other person or entity, hire, solicit, recruit,
or attempt to entice away from Surna or any customer of Surna any person employed by Surna or any customer of Surna. Sterling
shall not approach any such employees for such a prohibited purpose and shall not knowingly cooperate in any other person or entity’s
efforts to do so.

 

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3.4.       
Sterling shall not at any time during the Term hereof or at any time thereafter communicate, divulge or disclose , take, or use
for itself any information, knowledge, data, or materials that were disclosed or obtained by it during the Term (including, without
limitation, the Performance Data and any information and knowledge that was conceived, created, or developed by Sterling during
the course of this Agreement) which is related to the Surna Business and Surna Products and is not already generally known in
Surna’s trade by competitors. This restriction on confidential information disclosure shall apply to knowledge or information
which relates to the Surna Business or the business of Surna’s customers and is in the nature of a business secret of Surna
or Surna’s customers provided, however, that this restriction on confidential information use shall not apply to any information
or knowledge conceived, created, or developed by Sterling as long as Sterling’s use thereof does not compete with the Surna
Business or Surna Products. Included within the scope of this restriction shall be the specific items identified in Section 3.6
hereof and any other information and matters designated by Surna (verbally or in writing) to be confidential during the Term hereof.
The obligations of Sterling with respect to the disclosure and use of confidential information under this Section 3.4 shall cease
to the extent such information becomes generally known in Surna’s trade by competitors through a means other than a breach
of this Agreement by Sterling. In the event Sterling is required by any legal proceedings to disclose confidential information,
Sterling shall provide Surna with prompt notice thereof so that Surna may seek an appropriate protective order and/or waive compliance
by Sterling with the provisions hereof.

 

3.5.       During
the Term hereof and for a period of one (1) year after the termination or expiration of this Agreement, regardless of who initiated
the termination, Sterling shall, alone, or as an agent, employee, servant, officer, partner or stockholder of any other corporation
or business, directly or indirectly, engage in any business activity which relates to the sale, manufacturing, or marketing of
products which are competitive with, substantially similar to, or serve the same function as the Surna Products manufactured,
marketed or sold by Surna. This post-termination restriction is limited to activities in or directed at the geographic area located
in North America where Surna has sold or manufactured the Surna Products at any time during the Term hereof. Sterling specifically
agrees, without limitation, that it will not perform the same or similar responsibilities or services performed for Surna for
any business entity that is engaged in the same business as Surna (i.e., a competitor).

 

3.6.       Upon
request at any time during the Term hereof and without request at the time of the termination or expiration of this Agreement,
without regard for who initiated the termination, Sterling agrees to promptly return (without retaining any copies, summaries,
files or notes derived from source materials) all information and records regarding the Surna Business and the Surna Products,
whether or not created by Sterling during the Term hereof including, all designs, specifications, drawing, engineering, bills
of material and other information related to Surna Products, all corporate and equipment manuals and policies related to Surna
Products, provided that, the foregoing are related to the Surna Business and Surna Products.

 

3.7.       Sterling
represents and acknowledges that none of the activity restrictions set forth in this Section 3 will prevent it from operating
Sterling’s business, cause undue hardship, or adversely impact numerous other business opportunities that are not affected
by the existence of these restrictions. Sterling further acknowledges that it believes the foregoing restrictions to be reasonable
and necessary to protect Surna’s legitimate business interests. Any violation of the restrictions in this Section 3 can
cause harm to Surna of an irreparable nature for which money damages alone will not suffice. Sterling agrees that it will fully
and promptly disclose to any person or entity with which it becomes associated subsequent to the termination or expiration of
this Agreement all of the restrictions on its post-termination activities. Surna shall also have the right to disclose this Agreement
to any business entity utilizing the services of Sterling subsequent to the termination or expiration of this Agreement.

 

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3.8.       During
the Term and thereafter, neither Party shall knowingly, directly or indirectly, make negative comments or otherwise disparage
the other Party, any of its affiliates, or any of their respective officers, directors, employees, shareholders, agents or businesses
in any manner likely to be harmful to them or their business reputations or personal reputations. Each Party shall direct its
senior management team to not disparage or encourage or induce others to disparage the other Party. The foregoing shall not be
violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or
arbitral proceedings (including depositions in connection with such proceedings); provided that the Party has given the other
Party prompt written notice of any such legal process and cooperated with the other Party’s efforts to seek a protective
order

 

3.9.       The
provisions of this Section 3 restricting the post-termination activities of Sterling shall survive the termination of this Agreement.

 

3.10.       Sterling
and Surna agree that nothing in this Agreement shall be construed to limit or negate the common law of torts or trade secrets
where it provides Surna with broader protection than that provided herein.

 

	4.	TERM;
                                         TERMINATION

 

4.1.       The
initial term of this Agreement shall be three (3) years from the date when the Equipment is first installed (“Initial
Term”) and shall automatically renew for additional one (1) year periods following the expiration of the Initial Term
(collectively, the “Term”); provided, that, either party shall have the right to terminate this Agreement following
the Initial Term upon sixty (60) days’ prior written notice to the other party.

 

4.2.       Either
Party may terminate this Agreement, by written notice to the other Party, for any Material Breach of this Agreement (as defined
herein) by the other Party, as the case may be, if such breach is not cured within thirty (30) days after the breaching Party
receives written notice of such breach from the non-breaching Party; provided, however, that if such breach is not capable of
being cured within such thirty-day period and the breaching Party has commenced and diligently continued actions to cure such
breach within such thirty-day period, except in the case of a payment default, the cure period shall be extended to 180 days,
so long as the breaching Party is making diligent efforts to do so. Such termination shall be effective upon expiration of such
cure period.

 

4.3.       For
purposes of this Agreement, a Material Breach shall mean:

 

4.3.1.       To
the extent permitted by law, failure to make payment of any fee or other amount payable under by this Agreement within 30 days
of the due date; or

 

4.3.2.       If
either Party breaches any representation or warranty contained herein or made any incorrect representation or warranty in any
other document furnished to the other Party in connection herewith; or

 

4.3.3.       If
either Party fails to perform or observe any covenant, condition or agreement to be performed or observed by it hereunder, and
such failure or breach shall continue unremedied in accordance with this Section 4 after the Party becomes aware of such failure
or breach; or

 

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4.3.4.       If
Sterling without Surna’s consent attempts to remove, sell, transfer, encumber, part with possession, or sublet the Equipment
(or any portion thereof) or permit a judgment or other claim to become a lien upon any or all of Sterling’s assets or upon
the Equipment; or

 

4.3.5.       If
either Party (a) dissolves; (b) shall be adjudicated insolvent or a bankrupt, or cease, be unable, or admit in writing its inability,
to pay its debts as they mature, or make a general assignment for the benefit of, or enter into any composition or arrangement
with creditors; (c) shall apply for or consent to the appointment of a receiver, trustee or liquidator of it or of a substantial
part of its property, or authorize such application or consent, or proceedings seeking such appointment shall be instituted against
it without such authorization, consent or application; (d) shall authorize or file a voluntary petition in bankruptcy or apply
for or consent to the application of any bankruptcy, reorganization in bankruptcy, arrangement, readjustment of debt, insolvency,
dissolution, moratorium or other similar law of any jurisdiction, or authorize such application or consent; or proceedings to
such end shall be instituted against it without such authorization, application or consent.

 

5.       REPRESENTATIONS.
Each Party represents that it is duly organized and validly existing in good standing under the laws of the jurisdiction of its
organization, duly qualified to do business in each jurisdiction which is relevant under this Agreement and has full power and
authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance by each Party
to this Agreement has been duly authorized by all necessary action on the part of that Party, and are not inconsistent with its
governing documents. Each Party further represents and warrants that its business is being operated in compliance with all applicable
laws and regulations. Each Party warrants and represents that it has had a full opportunity to consult with legal counsel prior
to executing this Agreement, has read and understands all of the provisions hereof and executed below as a free and voluntary
act, and warrants that it is not under any legal or contractual obligation that would conflict with any of the undertakings set
forth herein and that execution of this Agreement does not violate any agreement to which it is now a party. There have been no
verbal representations or oral promises made by either Party to induce them to enter this Agreement.

 

6.       INDEMNITY.
Each Party shall indemnify and hold the other Party harmless from and against all claims, losses, liabilities (including negligence,
tort and strict liability), damages, judgments, suits, and all legal proceedings, and any and all costs and expenses in connection
therewith (including reasonable attorneys’ fees) arising out of any breach of this Agreement or in any manner connected
with their obligations under this Agreement, including, without limitation, any violation of any applicable laws or claims for
injury to or death of persons or for damage to property. Each Party agrees to give the other Party prompt notice of any such claim
or liability.

 

	7.	MISCELLANEOUS.

 

7.1.       Time
is of the essence with respect to this Agreement. If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a business day (i.e, a Saturday, Sunday or federal holiday), then such action
may be taken or such right may be exercised on the next succeeding business day.

 

7.2.       This
Agreement constitutes the entire understanding or agreement between Surna and Sterling relating to the subject matter hereof and
there is no understanding or agreement, oral or written, which is not set forth herein. This Agreement may only be amended by
a writing signed by Surna and Sterling.

 

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7.3.       This
Agreement shall be binding upon and inure to the benefit of and shall be enforceable by and against each Party and their respective
successors and assigns, provided that this Agreement shall not be assignable by either Party, except that either Party may assign
it to an affiliate of that Party and shall assign it in connection with a transaction involving the succession by a third party
to all or substantially all of that Party’s business and/or assets (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise). When assigned to a successor, the assignee shall assume this Agreement and expressly
agree to perform this Agreement in the same manner and to the same extent as the Party assigning it would be required to perform
it in the absence of such an assignment and the assigning Party shall be released of all obligations hereunder.

 

7.4.       No
provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed by the Parties.
No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

7.5.       The
titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.

 

7.6.       Any
notice, report or demand required or permitted by any provisions of this Agreement shall be in writing and shall be deemed to
have been sufficiently given or served for all purposes if sent by registered or certified mail or overnight delivery (with evidence
of delivery) charges prepaid, to the address of the party to whom such notice is to be given as shown on the cover sheet hereof
or as such party may from time to time direct in writing. Notices are deemed to have been received on the date that they are delivered
to the address.

 

7.7.       Surna
intends to publicly announce and disclose this Agreement and the subject matter hereof in accordance with applicable laws. Until
such time as Surna has publicly announced and/or disclosed this Agreement and the subject matter hereof, Sterling shall not publicly
announce or disclose to any third party the existence of this Agreement or the subject matter.

 

7.8.       All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Colorado, without regard to the principles of conflicts of law
thereof.

 

7.9.       Any
disputes arising hereunder, including disputes arising from or related to a termination of this Agreement, and any disputes or
claims arising from the subject matter of this Agreement shall be resolved by binding arbitration. Notice of a demand to arbitrate
a dispute by either party shall be given in writing to the other at their last known address. Arbitration shall be commenced by
the filing by a party of an arbitration demand with the American Arbitration Association (“AAA”) in its office in
Denver, Colorado. The arbitration and resolution of the dispute shall be resolved by a single arbitrator appointed by the AAA
pursuant to AAA rules. The arbitration shall in all respects be governed and conducted by applicable AAA rules, and any award
and/or decision shall be conclusive and binding on the parties. The arbitration shall be conducted in Denver, Colorado regardless
of the particular plant or facility of the Parties. The arbitrator shall supply a written opinion supporting any award, and judgment
may be entered on the award in any court of competent jurisdiction. Each Party shall pay its own fees and expenses for the arbitration
except for any costs and charges imposed by the AAA which may be assessed against the losing party by the arbitrator. Any fees
of the arbitrator for his services shall in all events be shared and paid equally by the Parties.

 

    	9 

    	 

    

 

7.10.       In
the event that preliminary or permanent injunctive relief is necessary or desirable in order to prevent a Party from acting contrary
to this Agreement or to prevent irreparable harm prior to a confirmation of an arbitration award, then either Party is authorized
and entitled to commence a lawsuit solely to obtain equitable relief against the other pending the completion of the arbitration
in a court having jurisdiction over the Parties. All rights and remedies of the parties shall be cumulative and in addition to
any other rights and remedies obtainable from arbitration.

 

7.11.       In
the event that any court or arbitrator finds or holds any restriction contained in this Agreement to be unreasonable, invalid,
or unenforceable, then it is the express intent of the Parties that the court or arbitrator so holding shall modify or amend the
offending restriction or restrictions in any reasonable fashion so as to render it or them enforceable to the fullest extent possible
under prevailing law. In the event that any restriction is deemed void and unenforceable and not suitable or capable of being
so modified, then such restriction shall be severed. Each term and provision of this Agreement is and shall be construed as severable
in whole or in part, and, if any provision or the application thereof to particular circumstances should be invalid, illegal,
or unenforceable, then the remaining terms and provisions shall not be affected and shall remain fully enforceable. An adjudication
or finding of invalidity or unenforceability for one jurisdiction of any particular provision shall not invalidate or void such
provision in any other jurisdiction. It is the express intent of the Parties that all restrictions imposed by this Agreement be
construed and applied to avoid legal nullities and with a view towards enforcement whenever possible.

 

7.12.       The
Parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise this Agreement
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments thereto. The word “including” shall
be construed to include the words “without limitation.” In this Agreement, unless the context otherwise requires,
references to the singular shall include the plural and vice versa.

 

7.13.       This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

[Remainder
of this page intentionally left blank. Signature page follows.]

 

    	10 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective the day and year first above written.

 

	STERLING PHARMS, LLC	SURNA, INC. 
	 	 	 	 
	By:	/s/
    Stephen     Keen	By:	/s/
    Trent Doucet 
	 	Stephen
    Keen, Managing Member	 	Trent
    Doucet, Chief Executive Officer

 

    	11Exhibit
10.3

 

INDEMNIFICATION
AGREEMENT

 

THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into as of this ___ day of ______, 20__, by
and between Surna, Inc., a Nevada corporation (the “Company”), and the undersigned (“Indemnitee”).

 

WHEREAS,
at the request of the Company, Indemnitee currently serves as an executive officer and/or director of the Company and may, therefore,
be subjected to claims, suits or proceedings arising as a result of his service; and

 

WHEREAS,
as an inducement to Indemnitee to continue to serve as such executive officer and/or director, the Company has agreed to indemnify
and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the fullest
extent permitted by law, except as otherwise expressly provided for herein; and

 

WHEREAS,
the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses; and

 

NOW,
THEREFORE, in consideration of the premises and the covenants contained herein, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Company and Indemnitee
do hereby covenant and agree as follows:

 

Section
1. Definitions. For purposes of this Agreement:

 

(a)
“Change of Control” shall mean the occurrence of any of the following events after the Effective Date of this
Agreement:

 

(i)       
the sale or other disposition of all or substantially all of the Company’s assets; or

 

(ii)       the acquisition, whether directly, indirectly, beneficially (within the meaning of rule 13d-3 of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) or of record, as a result of a merger, consolidation or otherwise,
of securities of the Company representing fifteen percent (15%) or more of the aggregate voting power of the Company’s then-outstanding
Common Stock by any “person” (within the meaning of Sections 13(d) and 14(d) of the 1934 Act), including, but not
limited to, any corporation or group of persons acting in concert, other than (i) the Company or its subsidiaries and/or (ii)
any employee pension benefit plan (within the meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974)
of the Company or its subsidiaries, including a trust established pursuant to any such plan; or

 

    	 

    	 

    

 

(iii)       the individuals who were members of the Board of Directors as of the Effective Date (the “Incumbent Board”)
cease to constitute at least two-thirds (2/3) of the Board of Directors; provided, however, that any director appointed
by at least two-thirds (2/3) of the then Incumbent Board or nominated by at least two-thirds (2/3) of the Board of Directors or
the Corporate Governance / Nominating Committee of the Board of Directors (a majority of the members of the Corporate Governance
/ Nominating Committee shall be members of the then Incumbent Board or appointees thereof), other than any director appointed
or nominated in connection with, or as a result of, a threatened or actual proxy or control contest, shall be deemed to constitute
a member of the Incumbent Board.

 

(b)
“Corporate Status” means the status of a person who is or was a director, trustee, officer, employee or agent
of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for which
such person is or was serving at the request of the Company.

 

(c)
“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.

 

(d)
“Effective Date” means the date set forth in the first paragraph of this Agreement.

 

(e)
“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

 

(f)
“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation
law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material
to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement. If a Change of Control has not occurred, Independent Counsel
shall be selected by the Board of Directors, with the approval of Indemnitee, which approval will not be unreasonably withheld.
If a Change of Control has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board of Directors,
which approval will not be unreasonably withheld.

 

    	 

    	 

    

 

(g)
“Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative
(including on appeal), except one (i) initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce his rights
under this Agreement or (ii) pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing
by the Company and Indemnitee.

 

Section
2. Services by Indemnitee. Indemnitee will serve as an executive officer and/or director of the Company. However, this Agreement
shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any
period otherwise required by law or by other agreements or commitments of the parties, if any.

 

Section
3. Indemnification — General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this
Agreement and (b) otherwise to the fullest extent permitted by Nevada law in effect on the date hereof and as amended from time
to time; provided, however, that no change in Nevada law shall have the effect of reducing the benefits available to Indemnitee
hereunder based on Nevada law as in effect on the date hereof. The rights of Indemnitee provided in this Section 3 shall include,
without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted
by Chapter 78 of the Revised Nevada Revised Statutes (“NRS”).

 

Section
4. Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness
in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this
Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses
actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless
it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a)
was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause
to believe that his conduct was unlawful.

 

    	 

    	 

    

 

Section
5. Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in
this Section 5 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened,
pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this
Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred
by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee
was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.

 

Section
6. Court-Ordered Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction,
upon application of Indemnitee and such notice as the court shall require, may order indemnification in the following circumstances:

 

(a)
if it determines Indemnitee is entitled to reimbursement under Chapter 78 of the NRS, the court shall order indemnification, in
which case Indemnitee shall be entitled to recover the expenses of securing such reimbursement; or

 

(b)
if it determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances,
whether or not Indemnitee (i) has met the standards of conduct set forth in Chapter 78 of the NRS or (ii) has been adjudged liable
for receipt of an improper personal benefit under Chapter 78 of the NRS, the court may order such indemnification as the court
shall deem proper.

 

Section
7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this
Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of his Corporate Status, made
a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he shall be indemnified for all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him
or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate
basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

    	 

    	 

    

 

Section
8. Advance of Expenses. The Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection
with any Proceeding to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt
by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred
by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good
faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement
has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit
A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse
the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall
ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described
in Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding,
such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be
an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial
ability to repay such advanced Expenses and without any requirement to post security therefor.

 

Section
9. Procedure for Determination of Entitlement to Indemnification. (a) To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification.
The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors
in writing that Indemnitee has requested indemnification. (b) Upon written request by Indemnitee for indemnification pursuant
to the first sentence of Section 9(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change
of Control shall not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a majority vote
of a quorum consisting of Disinterested Directors (“Disinterested Directors”), or (B) if a quorum of the Board
of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors
so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee,
or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company; and, if it is
so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement
to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or Expenses incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

 

    	 

    	 

    

 

Section
10. Presumptions and Effect of Certain Proceedings. (a) In making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement,
and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination
contrary to that presumption. (b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee
did not meet the requisite standard of conduct described herein for indemnification.

 

Section
11. Remedies of Indemnitee. (a) If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is
not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this
Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(b) of this Agreement
within 30 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant
to Section 7 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification
is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall
be entitled to an adjudication in an appropriate court of the State of Nevada, or in any other court of competent jurisdiction,
of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following
the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a); provided, however,
that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this
Agreement. (b) In any judicial proceeding or arbitration commenced pursuant to this Section 11 the Company shall have the burden
of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. (c) If a determination
shall have been made pursuant to Section 9(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification.

(d)
In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication of or an award in arbitration to enforce
his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company,
and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication
or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive
part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with
such judicial adjudication or arbitration shall be appropriately prorated.

 

    	 

    	 

    

 

Section
12. Defense of the Underlying Proceeding. (a) Indemnitee shall notify the Company promptly upon being served with or receiving
any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding
which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to
give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee,
to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding
or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the
Company is thereby actually so prejudiced. (b) Subject to the provisions of the last sentence of this Section 12(b) and of Section
12(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder;
provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt
of notice of any such Proceeding under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee,
which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any
settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional
term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form
and substance reasonably satisfactory to Indemnitee. This Section 12(b) shall not apply to a Proceeding brought by Indemnitee
under Section 11 above or Section 18 below. (c) Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion
of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims
to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably
concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an
actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii)
if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented
by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably
withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement
or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes
any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee
shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall
not be unreasonably withheld, at the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection
with any such matter.

 

Section
13. Non-Exclusivity; Survival of Rights; Subrogation; Insurance.

(a)
The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under applicable law, the Articles of Incorporation of the Company (as
amended from time to time, the “Charter”) or the bylaws of the Company (as amended from time to time, the “Bylaws”),
any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors,
or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. (b) In the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights. (c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise
indemnifiable or payable or reimbursable as expenses hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

 

    	 

    	 

    

 

Section
14. Insurance. The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on
terms and conditions deemed appropriate by the Board of Directors of the Company, with the advice of counsel, covering Indemnitee
or any claim made against Indemnitee for service as a director or officer of the Company and covering the Company for any indemnification
or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee for service as a director or officer
of the Company. Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee
for any payment by Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate
of all judgments, penalties, fines, settlements and reasonable Expenses incurred by Indemnitee in connection with a Proceeding
over the coverage of any insurance referred to in the previous sentence.

 

Section
15. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee
is, by reason of his Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other party, and
to which Indemnitee is not a party, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith.

 

Section
16. Duration of Agreement; Binding Effect. (a) This Agreement shall continue until and terminate ten years after the date
that Indemnitee’s Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder shall continue until
the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance
of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.
(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and
be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue
as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written
request of the Company, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators
and other legal representatives. (c) The Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company,
by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

Section
17. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for
any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section
of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal
or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

    	 

    	 

    

 

Section
18. Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee
shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by
Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this Agreement or otherwise or (b) the Company’s
Bylaws, the Charter, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board
of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

 

Section
19. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes
be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed
by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement. Electronic
signatures or signatures contained in a portable document format (PDF) of this Agreement shall be deemed an original signature.

 

Section
20. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

 

Section
21. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section
22. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to
have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall
have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:

 

(a)
If to Indemnitee, to: The address set forth on the signature page hereto.

 

(b)
If to the Company, to:

 

Surna,
Inc.

1780
55th Street, Suite A

Boulder,
Colorado 80301

 

    	 

    	 

    

 

or
to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may
be.

 

Section
23. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Nevada applicable to contracts formed and to be performed entirely within the State of Nevada, without
regard to its conflicts of laws rules, to the extent such rules would require or permit the application of the laws of another
jurisdiction.

 

Section
24. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	 	SURNA,
    INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	INDEMNITEE	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	Address:		 

 

    	 

    	 

    

 

EXHIBIT A

 

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

 

To: The Board of Directors of Surna, Inc.

 

Re: Undertaking to Repay Expenses Advanced

 

Ladies and Gentlemen:

 

This undertaking is
being provided pursuant to that certain Indemnification Agreement (the “Indemnification Agreement”) dated ____
day of _______, 20__, by and between Surna, Inc. (the “Company”) and the undersigned Indemnitee (“Indemnitee”),
pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the “Proceeding”).

 

Terms used herein and
not otherwise defined shall have the meanings specified in the Indemnification Agreement.

 

I am subject to the
Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm
that at all times, insofar as I was involved as [a director/officer] of the Company, in any of the facts or events giving
rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property
or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me
was unlawful.

 

In consideration of
the advance of Expenses by the Company for reasonable attorneys’ fees and related expenses incurred by me in connection
with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it
is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit
in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or
omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or
matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved
as described in Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim,
issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.

 

IN WITNESS WHEREOF,
I have executed this Affirmation and Undertaking on this ___day of _____, 20___.

 

	 	INDEMNITEE
	 	 	 
	 	By:
    	                       
	 	Name:
	           
	 	Title:
	 

 

	WITNESS	 
	                        	 	SEAL

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