Document:

GUARANTY

 

This
Guaranty, dated as of July 3, 2018 (this “Guaranty”) is made by FATBURGER NORTH AMERICA, INC., a Delaware corporation,
PONDEROSA FRANCHISING COMPANY LLC, a Delaware limited liability company, BONANZA RESTAURANT COMPANY LLC, a Delaware limited liability
company, PONDEROSA INTERNATIONAL DEVELOPMENT, INC., a Delaware corporation, PUERTO RICO PONDEROSA, INC., a Delaware corporation,
BUFFALO’S FRANCHISE CONCEPTS, INC., a Nevada corporation, BUFFALO’S FRANCHISE CONCEPTS INC., a Georgia corporation,
FATBURGER CORPORATION, a Delaware corporation and HOMESTYLE DINING LLC, a Delaware limited liability company ( together each other
entity that becomes a guarantor hereunder, the “Guarantors”) in favor of FB LENDING, LLC (the “Lender”).

 

RECITALS:

 

WHEREAS,
FAT Brands Inc., a Delaware corporation (the “Company”) and Guarantors have entered into that certain Loan
and Security Agreement, dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”) with the Lender;

 

WHEREAS,
the Guarantors will derive substantial direct and indirect benefit from the transactions contemplated by the Loan Agreement and
the other Loan Documents; and

 

WHEREAS,
it is a condition to the Lender making any loans or otherwise extending credit or other financial accommodations under the Loan
Agreement that the Guarantors shall guarantee the due payment and performance of all Guaranteed Obligations (as hereinafter defined)
by entering into this Guaranty.

 

NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, each Guarantor
hereby agrees with the Lender, for the benefit of the Lender, as follows:

 

Section
1. Definitions. All capitalized terms not otherwise defined in this Guaranty that are defined in the Loan Agreement shall
have the meanings assigned to such terms by the Loan Agreement.

 

Section
2. Guaranty of the Obligations. Each Guarantor hereby irrevocably and unconditionally
guarantees to the Lender for the benefit of the Lender the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code (the
“Bankruptcy Code”, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).
Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the Borrower to the Lender under the Loan Documents but for the fact that
they are unenforceable or not allowable due to insolvency or the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower.

 

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Section
3. Payment by Guarantors. Each Guarantor hereby agrees, in furtherance of the foregoing and not in limitation of any other
right which the Lender may have at law or in equity against such Guarantor by virtue hereof, that upon the failure of the Borrower
to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), such Guarantor
will upon demand pay, or cause to be paid, in immediately available funds, to the Lender, an amount equal to the sum of the unpaid
principal amount of all Guaranteed Obligations then due as aforesaid, all accrued and unpaid interest on such Guaranteed Obligations
(including interest which, but for a Borrower becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against such Borrower for such interest in the related bankruptcy
case) and all other Guaranteed Obligations then owed to the Lender as aforesaid. Each Guarantor hereby agrees that all payments
under this Agreement will be paid to the Lender, without setoff, deduction or counterclaim at the office of the Lender located
at the address specified in the Loan Agreement in U.S. dollars and in immediately available funds.

 

Section
4. Liability of Guarantors Absolute. Each Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent
and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor
or surety other than the indefeasible payment in full in cash of the Obligations (other than contingent indemnification obligations
not yet due and owing) or the termination or expiration of the Loan Agreement (“Payment in Full”). In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:

 

(a)
This Guaranty is a guaranty of payment when due and not of collectability. This Guaranty is a primary obligation of each Guarantor
and not merely a contract of surety.

 

(b)
The Lender may enforce this Guaranty upon the occurrence of an Event of Default notwithstanding the existence of any dispute between
the Borrower and the Lender with respect to the existence of such Event of Default.

 

(c)
The obligations of each Guarantor hereunder are independent of the obligations of the Borrower and the obligations of any other
Guarantor, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not any action is
brought against the Borrower or any of such other Guarantors and whether or not the Borrower is joined in any such action or actions.

 

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(d)
The Lender, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Guarantor’s liability hereunder,
from time to time may (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner
or terms of payment of the Guaranteed Obligations in accordance with the Loan Agreement; (ii) settle, compromise, release or discharge,
or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement
relating thereto, or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iv)
release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration,
any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation
of any other Person with respect to the Guaranteed Obligations; (v) enforce and apply any security now or hereafter held by or
for the benefit of the Lender in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof,
or exercise any other right or remedy that the Lender may have against any such security, in each case as the Lender in its discretion
may determine consistent herewith and any applicable security agreement, including foreclosure on any such security pursuant to
one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor
against the Borrower or any security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under
the Loan Documents.

 

(e)
This Guaranty and the obligations of each Guarantor hereunder shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than Payment in Full), including the occurrence of any
of the following, whether or not such Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission
to assert or enforce, or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under
the Loan Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto,
or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating
to events of default) of any of the other Loan Documents or any agreement or instrument executed pursuant thereto, or of any other
guaranty or security for the Guaranteed Obligations; including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrower or otherwise; (iii) the Guaranteed Obligations, or any agreement
relating thereto other than this Guaranty, at any time being found to be illegal, invalid or unenforceable in any respect; (iv)
the application of payments received from any source (other than payments received pursuant to the other Loan Documents or from
the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for
indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even
though the Lender might have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) any change, restructuring
or termination of the corporate structure or existence of any Loan Party, including without limitation as a result of the Lender’s
consent to the change, reorganization or termination of the corporate structure or existence of any Loan Party and to any corresponding
restructuring of the Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guaranteed Obligations; (vii) any taking, exchange, release or non-perfection of any collateral
for all or any of the Guaranteed Obligations; (viii) any manner of application of collateral, or proceeds thereof, to all or any
of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations
or any other obligations of any other Person under the Loan Documents or any other assets of Borrower or any of its Affiliates;
(ix) any failure of the Lender to disclose to any Loan Party any information relating to the business, condition (financial or
otherwise), operations, properties or prospects of any Person now or in the future known to the Lender (and each Guarantor hereby
irrevocably waives any duty on the part of the Lender to disclose such information); (x) any defenses, set-offs or counterclaims
which Borrower may allege or assert against the Lender in respect of the Guaranteed Obligations, other than Payment in Full, including
failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; (xi) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to
any extent vary the risk of such Guarantor as an obligor in respect of the Guaranteed Obligations; and (xii) any other circumstance
or any existence of or reliance on any representation by the Lender that might otherwise constitute a defense available to, or
a discharge of, the Borrower, such Guarantor or any other Guarantor, surety or other Person.

 

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Section
5. Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of the Lender: (a) any right to require the Lender,
as a condition of payment or performance by such Guarantor, to (i) proceed against the Borrower, any other Guarantor or any other
Person, (ii) proceed against or exhaust any security held from the Borrower, any such other Guarantor or any other Person, (iii)
proceed against or have resort to any balance of any deposit account or credit on the books of the Lender in favor of the Borrower
or any other Person, or (iv) pursue any other remedy in the power of the Lender whatsoever; (b) any defense arising by reason
of the incapacity, lack of authority or any disability or other defense of the Borrower or any other Guarantor, including any
defense based on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement
or instrument relating thereto or by reason of the cessation of the liability of the Borrower or any other Guarantor from any
cause other than Payment in Full; (c) any defense based upon any statute or rule of law which provides that the obligation of
a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based
upon the Lender’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which is determined
by a final nonappealable judgment by a court of competent jurisdiction to have resulted from bad faith or gross negligence; (e)
(i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any
legal or equitable discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any statute of limitations affecting
such Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that the Lender protect, secure, perfect or insure any security interest or
lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance hereof, notices of default hereunder, notices of any renewal, extension
or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to the Borrower
and notices of any of the matters referred to in Section 4 and any right to consent to any thereof; and (g) any defenses
or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which
may conflict with the terms hereof.

 

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Section
6. Waiver of Subrogation, Contribution, etc. Subject to Section 11, each Guarantor hereby waives any claim, right
or remedy, direct or indirect, that such Guarantor now has or may hereafter have against the Borrower or any other Guarantor or
any of its assets in connection with this Guaranty or the performance by such Guarantor of its obligations hereunder, in each
case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including
without limitation (a) any right of subrogation, reimbursement or indemnification that such Guarantor now has or may hereafter
have against the Borrower with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim,
right or remedy that the Lender now has or may hereafter have against the Borrower, and (c) any benefit of, and any right to participate
in, any collateral or security now or hereafter held by the Lender. In addition, until Payment in Full, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other guarantor of the Guaranteed Obligations. Each
Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such Guarantor may have against the Borrower or against
any collateral or security, and any rights of contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights the Lender may have against the Borrower, to all right, title and interest the Lender may
have in any such collateral or security, and to any right the Lender may have against such other guarantor. If any amount shall
be paid to any Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any time
before Payment in Full, such amount shall be held in trust for the Lender and shall forthwith be paid over to the Lender to be
credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

 

Section
7. Subordination of Other Obligations. Any Indebtedness of the Borrower or any Guarantor now or hereafter held by any Guarantor
is hereby subordinated in right of payment to the Guaranteed Obligations, and any such Indebtedness collected or received by any
Guarantor after an Event of Default has occurred and is continuing shall be held in trust for the Lender and shall forthwith be
paid over to the Lender to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting
in any manner the liability of such Guarantor under any other provision hereof.

 

Section
8. Authority of Guarantors or Borrower. It is not necessary for the Lender to inquire into the capacity or powers of the
Guarantors or the Borrower or the officers, directors or any agents acting or purporting to act on behalf of any of them.

 

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Section
9. Financial Condition of Borrower. The Loan may be made to the Borrower or continued from time to time without notice
to or authorization from any Guarantor, regardless of the financial or other condition of the Borrower at the time of any such
grant or continuation. The Lender shall have no obligation to disclose or discuss with any Guarantor its assessment, or any Guarantor’s
assessment, of the financial condition of the Borrower. Each Guarantor acknowledges that it has adequate means to obtain information
from the Borrower on a continuing basis concerning the financial condition of the Borrower and its ability to perform its obligations
under the Loan Documents, and each Guarantor assumes the responsibility for being and keeping informed of the financial condition
of the Borrower and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby
waives and relinquishes any duty on the part of the Lender to disclose any matter, fact or thing relating to the business, operations
or conditions of the Borrower now known or hereafter known by the Lender.

 

Section
10. Bankruptcy, etc.

 

(a)
So long as any Guaranteed Obligations remain outstanding, no Guarantor shall, without the prior written consent of the Lender,
commence or join with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding of or against
the Borrower or any other Guarantor. The obligations of each Guarantor hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of the Borrower or any other Guarantor or by any defense which the Borrower or any
other Guarantor may have by reason of the order, decree or decision of any court or administrative body resulting from any such
proceeding.

 

(b)
Each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the
commencement of any case or proceeding referred to in clause (a) above (or, if interest on any portion of the Guaranteed Obligations
ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued
on such portion of the Guaranteed Obligations if such case or proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of such Guarantor and the Lender that the Guaranteed Obligations which are guaranteed
by each Guarantor pursuant hereto should be determined without regard to any rule of law or order which may relieve the Borrower
of any portion of such Guaranteed Obligations as a result of its bankruptcy, insolvency receivership, reorganization, liquidation
or arrangement. Each Guarantor will permit any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay the Lender, or allow the claim of the Lender in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.

 

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(c)
In the event that all or any portion of the Guaranteed Obligations are paid, the obligations of each Guarantor hereunder shall
continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s)
are rescinded or recovered directly or indirectly from the Lender as a preference, fraudulent transfer or otherwise, and any such
payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder. EACH GUARANTOR
SHALL DEFEND AND INDEMNIFY THE LENDER FROM AND AGAINST ANY CLAIM, DAMAGE, LOSS, LIABILITY, COST OR EXPENSE UNDER THIS SECTION
10(c) (INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCH ACTION OR SUIT INCLUDING SUCH CLAIM,
DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE ARISING AS A RESULT OF THE INDEMNIFIED LENDER’S OWN NEGLIGENCE BUT EXCLUDING SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE THAT IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION
TO HAVE RESULTED FROM SUCH INDEMNIFIED LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

Section
11. Contribution and Subrogation. In order to provide for just and equitable contribution among the Guarantors, the Guarantors
agree that in the event a payment shall be made on any date under this Guaranty by any Guarantor (the “Funding Guarantor”),
each other Guarantor (each a “Contributing Guarantor”) shall indemnify the Funding Guarantor in an amount equal
to the amount of such payment, in each case multiplied by a fraction the numerator of which shall be the net worth of the Contributing
Guarantor as of such date and the denominator of which shall be the aggregate net worth of all the Contributing Guarantors together
with the net worth of the Funding Guarantor as of such date. Any Contributing Guarantor making any payment to a Funding Guarantor
pursuant to this Section 11 shall be subrogated to the rights of such Funding Guarantor to the extent of such payment.

 

Section
12. Fraudulent Transfer Laws. Anything contained in this Guaranty to the contrary notwithstanding, the obligations of each
Guarantor under this Guaranty on any date shall be limited to a maximum aggregate amount equal to the largest amount that would
not, on such date, render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section
548 of the Bankruptcy Code of the United States or any applicable provisions of comparable laws relating to bankruptcy, insolvency,
or reorganization, or relief of debtors (collectively, the “Fraudulent Transfer Laws”), but only to the extent
that any Fraudulent Transfer Law has been found in a final non-appealable judgment of a court of competent jurisdiction to be
applicable to such obligations as of such date, in each case

 

(a)
after giving effect to all liabilities of such Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer
Laws, but specifically excluding

 

(i)
any liabilities of such Guarantor in respect of intercompany indebtedness to the Borrower or other affiliates of the Borrower
to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder;

 

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(ii)
any liabilities of such Guarantor under this Guaranty; and

 

(iii)
any liabilities of such Guarantor under other guarantees of and joint and several co-borrowings of Indebtedness, entered into
on the date this Guaranty becomes effective, which contain a limitation as to maximum amount substantially similar to that set
forth in this Section 12 (each such other guarantee and joint and several co-borrowing entered into on the date this Guaranty
becomes effective, a “Competing Guaranty”) to the extent such Guarantor’s liabilities under such Competing
Guaranty exceed an amount equal to (x) the aggregate principal amount of such Guarantor’s obligations under such Competing
Guaranty (notwithstanding the operation of that limitation contained in such Competing Guaranty that is substantially similar
to this Section 12), multiplied by (y) a fraction (I) the numerator of which is the aggregate principal amount of such
Guarantor’s obligations under such Competing Guaranty (notwithstanding the operation of that limitation contained in such
Competing Guaranty that is substantially similar to this Section 12), and (II) the denominator of which is the sum of (A) the
aggregate principal amount of the obligations of such Guarantor under all other Competing Guaranties (notwithstanding the operation
of those limitations contained in such other Competing Guaranties that are substantially similar to this Section 12), (B) the
aggregate principal amount of the obligations of such Guarantor under this Guaranty (notwithstanding the operation of this Section
12, and (C) the aggregate principal amount of the obligations of such Guarantor under such Competing Guaranty (notwithstanding
the operation of that limitation contained in such Competing Guaranty that is substantially similar to this Section 12)); and

 

(b)
after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of
any rights to subrogation, reimbursement, indemnification or contribution of such Guarantor pursuant to applicable law or pursuant
to the terms of any agreement (including any such right of contribution under Section 11).

 

Section
13. Representations and Warranties. Each Guarantor hereby represents and warrants as follows:

 

(a)
There are no conditions precedent to the effectiveness of this Guaranty. Such Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements involving the Borrower contemplated by the Loan Documents and that
the waivers set forth in this Guaranty are knowingly made in contemplation of such benefits.

 

(b)
Such Guarantor has, independently and without reliance upon the Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Guaranty.

 

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(c)
The obligations of such Guarantor under this Guaranty are the valid, binding and legally enforceable obligations of such Guarantor,
and this Guaranty has been duly and validly executed and delivered by such Guarantor.

 

Section
14. Right of Set-Off. If an Event of Default shall have occurred and be continuing, the Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency)
at any time owing by the Lender to or for the credit or the account of any Guarantor against any and all of the obligations of
such Guarantor now or hereafter existing under this Guaranty to the Lender, irrespective of whether or not the Lender shall have
made any demand under this Guaranty and although such obligations of such Guarantor may be contingent or unmatured or are owed
to a branch or office of the Lender different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of the Lender under this Section are in addition to other rights and remedies (including other rights of setoff) that
the Lender may have. The Lender agrees to notify such Guarantor promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such setoff and application.

 

Section
15. Amendments, Joinder, Etc. No amendment or waiver of any provision of this Guaranty and no consent to any departure
by any Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by such Guarantor and
the Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given. This Guaranty may be supplemented to add additional Guarantors by means of a joinder in the form of Annex I
signed by the entity to be added and the Lender, upon the execution of which such additional Guarantor shall become a Guarantor
hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any instrument
adding an additional Guarantor as a party to this Guaranty shall not require the consent of any other Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Guaranty.

 

Section
16. Notices, Etc. All notices and other communications provided for hereunder shall be sent to the addresses and in the
manner provided for in Section 13.4 of the Loan Agreement. All such notices and communications shall be effective as provided
in Section 13.4 of the Loan Agreement.

 

Section
17. Continuing Guaranty: Assignments under the Loan Agreement. This Guaranty is a continuing guaranty and applies to all
Guaranteed Obligations, whether existing now or in the future and shall (a) remain in full force and effect until Payment in Full,
(b) be binding upon each Guarantor and its successors and assigns, and (c) inure to the benefit of and be enforceable by the Lender
and its successors and permitted transferees and assigns. Without limiting the generality of the foregoing clause, when the Lender
assigns or otherwise transfers any interest held by it under the Loan Agreement or other Loan Document to any other Person pursuant
to the terms of the Loan Agreement or such other Loan Document, that other Person shall thereupon become vested with all the benefits
held by the Lender under this Guaranty.

 

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Section
18. INDEMNITY. EACH GUARANTOR SHALL
(AND HEREBY DOES) INDEMNIFY THE LENDER AND EACH RELATED PARTY OF THE LENDER (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”)
AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS (INCLUDING ALL REASONABLE FEES, EXPENSES AND DISBURSEMENTS OF ANY
LAW FIRM) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE IN ANY WAY
RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE, OR ADMINISTRATION OF THIS
GUARANTY; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE DETERMINED
BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNITEE (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”).

 

TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE,
ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES)
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS GUARANTY OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS
CONTEMPLATED HEREBY, ANY ADVANCE OR THE USE OF THE PROCEEDS THEREOF. NO INDEMNITEE SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM
THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC
OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY UNLESS DUE
TO ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION.

 

ALL
AMOUNTS DUE UNDER THIS SECTION 18 SHALL BE PAYABLE WITHIN TEN (10) BUSINESS DAYS AFTER DEMAND THEREFOR. THE AGREEMENTS
IN THIS SECTION SHALL SURVIVE THE TERMINATION OF THE LOAN DOCUMENTS AND THE REPAYMENT, SATISFACTION OR DISCHARGE OF ALL THE OTHER
OBLIGATIONS.

 

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Section
19. Survival of Representations, Warranties and Agreements; Termination. All representations, warranties and agreements
made hereunder or other documents delivered pursuant hereto or in connection herewith shall survive the execution and delivery
hereof and thereof. Such representations and warranties have been or will be relied upon by the Lender, regardless of any investigation
made by the Lender or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default at the
time of any Loan under the Loan Agreement, and shall continue in full force and effect until Payment in Full. Notwithstanding
anything herein or implied by law to the contrary, the agreements of the Guarantors set forth in Section 19 shall survive
Payment in Full.

 

Section
20. No Waiver; Remedies Cumulative. No failure on the part of the Lender to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided in this Guaranty are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

Section
21. Severability. If any provision of this Guaranty is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Guaranty shall not be affected or impaired thereby and (b) the
parties hereto shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid
provisions, the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.
The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

Section
22. Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a
part hereof for any other purpose or be given any substantive effect.

 

Section
23. APPLICABLE LAW. THIS GUARANTY shall be governed by and construed in accordance
with the laws of the State of New York, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

Section
24. CONSENT TO JURISDICTION.

 

(a)
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY,
EACH GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY
OR OTHER DOCUMENT RELATED HERETO. EACH GUARANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY
BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

    	11

    	 

    

 

(b)
Nothing in this Section 24 shall affect the right of the Lender to serve legal process in any other manner permitted by
law or affect the right of the Lender to bring any action or proceeding against any Guarantor in the courts of any other jurisdiction.

 

Section
25. WAIVER OF JURY TRIAL. EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
GUARANTY, OR THE TRANSACTIONS RELATED HERETO, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT
OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section
26. Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with respect
to any of the Guaranteed Obligations, including all charges or fees in connection therewith deemed in the nature of interest under
applicable law, shall not exceed the maximum rate permitted by law (the “Maximum Rate”). If the rate of interest
(determined without regard to the preceding sentence) under the Loan Agreement at any time exceeds the Maximum Rate, the outstanding
amount of the Loan made thereunder shall bear interest at the Maximum Rate until the total amount of interest due hereunder equals
the amount of interest which would have been due hereunder if the stated rates of interest set forth in the Loan Agreement had
at all times been in effect. In addition, if when the Loan made thereunder is repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder
if the stated rates of interest set forth in the Loan Agreement had at all times been in effect, then to the extent permitted
by law, the Guarantors shall pay to the Lender an amount equal to the difference between the amount of interest paid and the amount
of interest which would have been paid if the Maximum Rate had at all times been in effect. Notwithstanding the foregoing, it
is the intention of the Lender and each Guarantor to conform strictly to any applicable usury laws. Accordingly, if the Lender
contracts for, charges, or receives any consideration which constitutes interest in excess of the Maximum Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at the Lender’s option be applied to the outstanding
amount of the Obligations under the Loan Agreement or be refunded to the Borrower.

 

Section
27. Payments Free of Taxes. Any and all payments by or on account of any Guaranteed Obligation hereunder shall be made
free and clear of and without reduction or withholding for any taxes.

 

    	12

    	 

    

 

Section
28. Counterparts. This Guaranty may be executed in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart signature page by electronic mail or facsimile is as effective
as executing and delivering this Guaranty in the presence of the other parties to this Guaranty.

 

Section
29. USA Patriot Act Notice. The Lender, subject to the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the “Act”), hereby notifies each Guarantor that pursuant to the requirements of the Act, it is
required to obtain, verify and record information and documentation that identifies each Guarantor, which information includes
the name and address of such Persons and other information that will allow the Lender to identify such Persons in accordance with
the Act.

 

Section
30. Entire Agreement.

 

(a)
THIS GUARANTY AND THE OTHER LOAN DOCUMENTS ARE THE FINAL EXPRESSION OF THE AGREEMENT BETWEEN THE PARTIES. THIS GUARANTY MAY
NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF ANY CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES. ANY
AND ALL SUCH PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS ARE EXPRESSLY SUPERSEDED BY THIS GUARANTY.

 

(b)
THE PARTIES TO THIS GUARANTY HEREBY ACKNOWLEDGE AND AFFIRM THAT NO UNWRITTEN ORAL AGREEMENT BETWEEN THE PARTIES EXISTS.

 

[Signature
Page Follows]

 

    	13

    	 

    

 

Each
Guarantor has caused this Guaranty to be duly executed as of the date first above written.

 

	 	GUARANTORS:
	 	 	 
	 	Fatburger
    North America, Inc., a Delaware corporation
	 	 	 
	 	By:
    	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Ponderosa
    Franchising Company LLC, a Delaware limited liability company
	 	 	 
	 	By:	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	 Manager

	 	 	 
	 	Bonanza
    Restaurant Company LLC, a Delaware limited liability company
	 	 	 
	 	By:	 /s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Manager
    
	 	 	 
	 	Ponderosa
    International Development, Inc., a Delaware corporation
	 	 	 
	 	By:	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Puerto
    Rico Ponderosa, Inc., a Delaware corporation
	 	 	 
	 	By:	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Chief
    Executive Officer

 

[Signature Page to Guaranty]

 

    	 	 	 

    	 	 	 

    

 

	 	Buffalo’s
    Franchise Concepts, Inc., a Nevada corporation
	 	 	 
	 	By:
    	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Buffalo’s
    Franchise Concepts Inc., a Georgia corporation
	 	 	 
	 	By:
    	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Fatburger
    Corporation, a Delaware corporation
	 	 	 
	 	By:	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Homestyle
    Dining LLC, a Delaware limited liability company
	 	 	 
	 	By:
    	/s/
    Andrew A. Wiederhorn
	 	Name:	Andrew
    A. Wiederhorn
	 	Title:	Manager

 

    	 

    	 

    

 

Annex
1 to the Guaranty

 

SUPPLEMENT
NO. ____ dated as of ______________(the “Supplement”), to the Guaranty dated as of July 3, 2018 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the “Guaranty”), made by Fatburger
North America, Inc., a Delaware corporation, Ponderosa Franchising Company LLC, a Delaware limited liability company, Bonanza
Restaurant Company LLC, a Delaware limited liability company, Ponderosa International Development, Inc., a Delaware corporation,
Puerto Rico Ponderosa, Inc., a Delaware corporation, Buffalo’s Franchise Concepts, Inc., a Nevada corporation, and Buffalo’s
Franchise Concepts Inc., a Georgia corporation (together each other entity that becomes a guarantor hereunder, the “Guarantors”)
in favor of FB Lending, LLC (the “Lender”).

 

A.
Reference is made to the Loan and Security Agreement, dated as of July 3, 2018 (as amended, supplemented or otherwise modified
from time to time, the “Loan Agreement”), by and among FAT Brands Inc., a Delaware corporation (the “Borrower”),
the Guarantors and the Lender.

 

B.
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guaranty
and the Loan Agreement.

 

C.
Section 15 of the Guaranty provides that additional Persons may become Guarantors under the Guaranty by execution and delivery
of an instrument in the form of this Supplement. The undersigned Subsidiary or Affiliate of the Borrower (the “New Guarantor”)
is executing this Supplement to become a Guarantor under the Guaranty.

 

D.
Each New Guarantor is a Subsidiary or Affiliate of the Borrower and will derive substantial direct and indirect benefit from the
transactions contemplated by the Loan Agreement and the other Loan Documents.

 

Accordingly,
the Lender and the New Guarantor agree as follows:

 

SECTION
1. In accordance with Section 15 of the
Guaranty, the New Guarantor by its signature below becomes a Guarantor under the Guaranty with the same force and effect as if
originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Guaranty
applicable to it as a Guarantor thereunder, including without limitation, the indemnification obligations, waiver of damages,
consent to jurisdiction and waiver of jury trial set forth in Sections 18, 24, and 25 of the Guaranty,
and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct
in all material respects on and as of the date hereof. Each reference to a “Guarantor” in the Guaranty shall be deemed
to include the New Guarantor. The Guaranty is hereby incorporated herein by reference.

 

SECTION
2. The New Guarantor represents and warrants
to the Lender that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles
of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).

 

    	 

    	 

    

 

SECTION
3. This Supplement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement. This Supplement shall become effective
when the Lender shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New
Guarantor and the Lender. Delivery of an executed signature page to this Supplement by electronic mail or fax transmission or
by electronic mail shall be as effective as delivery of a manually executed counterpart of this Supplement.

 

SECTION
4. Except as expressly supplemented hereby, the
Guaranty shall remain in full force and effect.

 

SECTION
5. This supplement shall be governed by and construed in accordance with the laws of the State of New York, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

 

SECTION
6. If any provision of this Supplement is held
to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Supplement
shall not be affected or impaired thereby and (b) the parties hereto shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION
7. All communications and notices hereunder shall
be in writing and given as provided in Section 16 of the Guaranty. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature below.

 

SECTION
8. The New Guarantor agrees to reimburse the
Lender for its costs and expenses in connection with this Supplement, including the fees, disbursements and other charges of counsel
for the Lender.

 

SECTION
9. THIS SUPPLEMENT, THE GUARANTY, AND THE
OTHER LOAN DOCUMENTS ARE THE FINAL EXPRESSION OF THE AGREEMENT BETWEEN THE PARTIES. THIS SUPPLEMENT MAY NOT BE CONTRADICTED BY
EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF ANY CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE PARTIES. ANY AND ALL SUCH PRIOR OR CONTEMPORANEOUS
ORAL AGREEMENTS ARE EXPRESSLY SUPERSEDED BY THIS SUPPLEMENT.

 

THE
PARTIES TO THIS SUPPLEMENT HEREBY ACKNOWLEDGE AND AFFIRM THAT NO UNWRITTEN ORAL AGREEMENT BETWEEN THE PARTIES EXISTS.

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the New Guarantor and the Lender have duly executed this Supplement to the Guaranty as of the day and year first
above written.

 

	 	[Name
    of New Guarantor]
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	                    
	 	Address:	
	 	 	 
	 	 	 
	 	FB
    Lending, LLC as the Lender
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:EXHIBIT
10.1

 

EXECUTIVE
EMPLOYMENT AGREEMENT

 

This
Executive Employment Agreement (this “Agreement”) is made and entered into effective this 9th day
of July, 2017 (the “Effective Date”) by and between Surna Inc., a Nevada corporation whose address is
1780 55th Street, Boulder, Colorado 80301 (the “Company”) and Mark E. Smiens, an adult resident of the
State of Colorado (the “Executive”). The Executive and the Company may be referred to herein individually as
a “Party” or collectively as the “Parties.”

 

AGREED
ACKNOWLEDGMENTS

 

A.       The
Company 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 and air sanitation designed to meet the specific environmental conditions required for indoor cultivation and to reduce
energy and water consumption (the “Business”).

 

B.       In
connection with the Business, the Company manufactures or is developing, 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 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 building 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, the “Products”)

 

C.       The
Business of the Company is highly competitive and requires the creation of intimate and prolonged relationships with the Company’s
customers because of the custom products developed for individual customers, and the significance of adapting to the marketing
plans continually being created by these customers.

 

D.       The
Company has invested and will continue to invest considerable sums of time, money, and other resources in developing the confidence
and loyalty of its customers and potential customers and to recruit, train, support and compensate its employees and potential
employees. In addition, the Company expends significant amounts of time and money to attract, identify, locate, and establish
contacts and business relationships with prospective customers. The loss of these existing and prospective relationships with
customers, and with existing and potential employees, will cause substantial and irreparable harm to the Company, which cannot
be accurately or adequately compensated by money alone.

 

E.       The
Company desires to retain the services of the Executive as a member of the Company’s management team. The Executive desires
to continue such employment and commits to devote all of the Executive’s business time and attention to services benefiting
the Company. Both the Executive and the Company wish to enter into this Agreement to set forth the terms and conditions of the
Executive’s employment with the Company.

 

F.       The
Executive acknowledges that, in connection with the execution of this Agreement, the Executive will be entitled to participate
in an incentive bonus program under the Company’s 2017 Equity Incentive Plan, as adopted by the Company’s Board of
Directors (the “Board”) on August 1, 2017, as may be modified and amended by the Company from time to time
(the “EIP”).

 

    	 	 	 

    	 

    

 

G.       The
Executive acknowledges that, in the course of the Executive’s employment with the Company, the Executive will frequently
come into contact with the Company’s customers and suppliers to such an extent that the Executive may be able to control
or direct, in whole or in part, the business and relationships between the Company and its customers and suppliers. Accordingly,
the Company reposes its trust in the Executive not to disrupt or otherwise misappropriate the customer and supplier relationships
developed and/or supported by the Company.

 

H.       The
Executive will also, during the course of the Executive’s employment with the Company, have frequent and close contact with
the Company’s other executive managers, salespeople, and key staff employees. As a result of the Executive’s position,
the Executive will acquire and have access to confidential information concerning the Company’s employees, prospective employees,
customers, suppliers, and prospective customers and suppliers that is not easily or generally available to the Company’s
competitors.

 

I.       The
Executive acknowledges that, by virtue of the Executive’s position with the Company, the Executive will have access to certain
secret and confidential business data and information belonging to the Company including, but not limited to: marketing plans,
financial strategies, market surveys and assessments, customer and Company technical information, financial statements, budget
data, personnel records, customer profiles and purchase requirements, product design, engineering and technical specifications,
pricing plans and strategies, sales contracts and proposals, private and confidential discussions with executive managers, legal
advice and strategies, performance evaluations, price schedules from suppliers, litigation and planned litigation, capital needs,
lists of customers and potential customers, hiring and training goals, internal operation and production reports and schedules,
compensation packages, customer account projections, licenses, promotional plans and information, corporate policies for internal
operations, bids and proposals by suppliers and to customers, identities and personal profiles of key persons at customers and
potential customers, expense data by customer, and other confidential and sensitive business information developed and maintained
by the Company.

 

J.       The
Company has a valuable and proprietary interest in the confidential information described in paragraph I above and has expended
considerable time and money to safeguard and protect such information from direct or indirect divulgence of same by its employees,
including the Executive. In addition, as part of the Company’s relationship with each of its customers, the Company assures
customers that the unique, confidential, and secret information shared by customers with the Company will be protected from disclosure
to and unauthorized use by others. Any divulgence of such information will constitute an irreparable injury to the Company and
the Company’s customers.

 

K.       The
Executive acknowledges that (i) the Executive’s position with the Company is one of great trust and confidence requiring
that the Executive exercise a high degree of loyalty, honesty, and integrity, (ii) the Executive has and will receive substantial
and adequate monetary consideration and benefits pursuant to this Agreement, (iii) the Executive has read and understood the terms
of this Agreement and signed the same as a free and voluntary act, and (iv) the Executive understands that there is no need to
continue employment with the Company, but the Executive has freely chosen to enter into this Agreement because of a desire to
take advantage of the specific and unique opportunities offered by continued employment with the Company and the additional benefits
provided for herein.

 

AGREEMENTS

 

In
consideration of the Agreed Acknowledgments and the mutual covenants and agreements set forth in this Agreement, the Parties agree
as follows:

 

1.       Acknowledgments.
The acknowledgments set forth above are accurate and are hereby incorporated by reference in this Agreement.

 

    	 	2	 

    	 

    

 

2.       Employment.
The Company hereby employs the Executive and the Executive hereby accepts employment with the Company on the terms and conditions
set forth in this Agreement.

 

3.       Duties.
During the Term (as defined below), the Executive shall be employed by the Company as the Chief Financial Officer (“CFO”)
and, as such, the Executive shall have such responsibilities and authority as are customary for a CFO of a publicly traded company
of similar size and nature as the Company as may be assigned from time to time by the Company’s Board of Directors (the
“Board”), and shall faithfully perform for the Company the duties of such office and shall report directly
to the Chief Executive Officer (the “CEO”) and the Board. At all times during the Term, the Executive shall
adhere to all of the Company’s policies, rules and regulations governing the conduct of its employees, including without
limitation, any compliance manual, code of ethics, employee handbook or other policies adopted by the Company from time to time.
The Company and the Executive acknowledge that the Parties have entered into that certain Indemnification Agreement dated July
9, 2018 (“D&O Indemnity Agreement”). Beginning with the Company’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2018, the Company and Executive acknowledge and agree that the Executive will sign the
Company’s periodic reports to be filed with the Securities and Exchange Commission (the “SEC”) and will
be designated by the Board as the Company’s Principal Financial and Accounting Officer.

 

4.       Extent
of Services. Except for illnesses and vacation periods, the Executive shall devote the Executive’s full business
time and attention and the Executive’s best efforts to the performance of the Executive’s duties and responsibilities
under this Agreement. Notwithstanding the foregoing, the Executive may participate in charitable, academic, community religious
or other non-profit activities, and in trade or professional organizations, and engage and participate in the specific activities
listed in Exhibit A hereto (the “Permitted Activities”) or such other activities as specifically agreed
to in writing by the Company in advance from time to time in the Company’s sole discretion, provided that all of the Executive’s
activities outside of the Executive’s duties to the Company, individually or in the aggregate, shall comply with the Company’s
conflict of interest policies and corporate governance guidelines as in effect from time to time, do not otherwise interfere with
the Executive’s duties and responsibilities to the Company, and do not compete with or adversely affect the Business of
the Company. Subject to the provisions of Section 11 herein, the Executive may make any passive investment in any publicly traded
entity, or own five percent (5%) or less of the issued and outstanding voting securities of any entity, provided, in any event,
that the Executive is not obligated or required to, and shall not in fact, devote any consulting or managerial effort or services
in connection therewith, except for the Permitted Activities.

 

5.       Place
of Performance. The Executive will perform the Executive’s duties for the Company from the Company’s corporate
offices in Boulder, Colorado (the “Corporate Office”), except that the Executive will travel to perform services
as required for the proper performance of the Executive’s duties under this Agreement.

 

6.       Term;
At-Will Employment; Termination. This Agreement and the Executive’s employment hereunder shall commence on the Effective
Date and, subject to earlier termination as provided in this Section 6, shall continue in full force and effect thereafter until
June 30, 2020 (the “Initial Term”) and, by mutual written agreement of the Parties, may be extended for a term
of one (1) additional year (an “Extended Term”) at the end of the Initial Term, and an additional one (1) year
Extended Term at the end of each Extended Term (the last day of the Initial Term and each such Extended Term is referred to herein
as a “Term Date”). Notwithstanding any other provision of this Agreement to the contrary, either Party may
terminate this Agreement, at any time, with or without Cause (as defined herein), by providing the other Party with thirty (30)
days’ prior written notice. During the Term (as defined below) and for so long as the Executive is employed by Company,
the Executive shall be an at-will employee of Company. The employment of the Executive by the Company shall terminate immediately
upon death of the Executive. Any termination of the Executive’s employment by the Company or by the Executive (other than
termination pursuant to death) shall be communicated by written notice of termination to the other Party hereto in accordance
with this Agreement. The Executive acknowledges and agrees that this Agreement does not constitute a contract of employment or
obligate the Company to employ the Executive for a stated period of time. For purposes of this Agreement, “Term”
shall mean the actual duration of the Executive’s employment hereunder, taking into account any extensions or any termination
of employment pursuant to this Section 6, and “Date of Termination” shall mean the date the Executive’s
employment is terminated in accordance with this Section 6.

 

    	 	3	 

    	 

    

 

7.       Compensation.

 

a.       Salary.
The Company shall pay the Executive an annualized base salary (the “Base Salary”) of $175,000 per year, which
shall be payable in equal installments in accordance with the Company’s standard payroll practice from time to time, less
customary or legally required withholdings and deductions, for periods actually worked by the Executive.

 

b.       Incentive
Bonus Program. The Executive shall be eligible to receive an annual incentive bonus (each an “Annual Incentive
Bonus”) for each completed year of employment during the Term in accordance with a bonus policy adopted by the Board
(or an authorized committee thereof), as may be amended or modified from time to time. The bonus policy will provide that the
Executive shall be entitled to earn an Annual Incentive Bonus for such completed year of employment based on performance criteria
determined in the sole discretion of the Board. The Annual Incentive Bonus for a completed year of employment shall be paid within
forty-five (45) days following the end of the completed year. Other than as set forth in Section 9, the Executive must be employed
by, or be providing services to, the Company or an affiliate of the Company on the date an Annual Incentive Bonus is to be paid
to be eligible to receive the Annual Incentive Bonus for such completed year of employment. Payment of the Annual Incentive Bonus
may be made in the form of cash, stock bonus (issued pursuant to the EIP), or a combination thereof, as determined in the sole
discretion of the Board (or an authorized committee thereof). As a condition to the Company’s obligations with respect to
any stock bonus (including, without limitation, any obligation to deliver any shares of Common Stock with respect to any stock
bonus), the Executive shall make arrangements satisfactory to the Company to pay to the Company any federal, state, local, or
foreign taxes of any kind required to be withheld with respect to the delivery of shares of Common Stock with respect to such
stock bonus.

 

In
lieu of the Annual Incentive Bonus for each completed year of employment during the Initial Term, which the Executive acknowledges
that the Executive will not be eligible to receive, the Company has adopted a special incentive bonus program under which the
Executive will be eligible to receive an incentive bonus on each December 31 and June 30 during the Initial Term (the “Special
Incentive Bonus”). For each of the four (4) Special Incentive Bonuses payable during the Initial Term, the Executive
shall be eligible to receive a bonus of 1,000,000 shares of the Company’s Common Stock, provided the Board has determined,
in its sole discretion, that: (a) for the first Special Incentive Bonus period ended December 31, 2018, the Executive’s
performance has been average or better, and (b) for the Special Incentive Bonus periods ending June 30, 2019, December 31, 2019
and June 30, 2020, the Executive has achieved certain benchmarks and milestones as mutually agreed to by the Executive and the
Board in advance of each such period, based on one or more of the performance criteria or measures set forth in Exhibit B
hereto. The Special Incentive Bonus for each period shall be paid within forty-five (45) days following December 31 or June 30,
as applicable, and any shares of Common Stock with respect to any Special Incentive Bonus will be issued under the EIP. Other
than as set forth in Section 9, the Executive must be employed by, or providing services to, the Company or an affiliate of the
Company on the date the Special Incentive Bonus is to be paid to be eligible to receive the Special Incentive Bonus for such period.
As a condition to the Company’s obligations with respect to each Special Incentive Bonus (including, without limitation,
any obligation to deliver any shares of Common Stock with respect to any Special Incentive Bonus), the Executive shall make arrangements
satisfactory to the Company to pay to the Company any federal, state, local, or foreign taxes of any kind required to be withheld
with respect to the delivery of shares of Common Stock with respect to such Special Incentive Bonus. In the event of a Change
of Control prior to June 30, 2020, then the remaining Special Incentive Bonuses related to any Special Incentive Bonus period
ending after the date of the Change of Control shall become due and payable on the date of the Change of Control, provided the
Executive is employed by, or providing services to, the Company on the date immediately preceding the date of the Change of Control.
A “Change of Control” means a reorganization, merger, statutory share exchange, or consolidation or similar
transaction involving the Company, or a sale or other disposition of all or substantially all of the assets of the Company, unless,
following such transaction, all or substantially all of the individuals and entities who were the beneficial owners of the Company’s
equity and voting securities immediately prior to such transaction beneficially own, directly or indirectly, more than fifty percent
(50%) of the value of the then outstanding equity securities and the combined voting power of the then outstanding voting securities.

 

    	 	4	 

    	 

    

 

c.       Equity
Incentive Plan. In addition to the Executive’s eligibility to participate in the Special Incentive Bonus, the Executive
will be eligible to participate in the EIP, beginning on the six-month anniversary of the Executive’s employment. Notwithstanding
the foregoing, the Executive acknowledges and agrees that the Special Incentive Bonus is the primary form of equity compensation
to which the Executive will be entitled during the Initial Term.

 

d.       Clawback.
Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation,
paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Company which is subject to recovery
under any law, governmental regulation, or stock exchange listing requirement, will be subject to such deductions and clawback
as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement.

 

8.       Fringe
Benefits. The Company shall provide the following benefits to the Executive during the Term:

 

a.       Executive
Benefit Plans. The Executive will be eligible to participate in any employee benefit plans including, without limitation,
group insurance, profit sharing and 401(k) plans, sponsored generally by the Company for its employees as may be offered from
time to time. Notwithstanding the foregoing, the Company may modify or terminate any employee benefit plan at any time.

 

b.       Vacation.
The Executive shall accrue in accordance with the Company’s vacation policy as in effect from time to time twenty (20) days
per year of paid vacation time, provided that, any earned but unused vacation in a year may not be carried forward to future years.

 

c.       Personal
Days, Sick Leave and Holidays. The Executive shall be entitled to receive paid personal days, sick days and holidays under
the guidelines established by the Company from time to time for the Company’s executive and management employees, provided
that, any earned but unused personal and sick days in a year may not be carried forward to future years. Due to time-off previously
scheduled by the Executive prior to execution of this Agreement, the Company will allow the Executive to take unpaid time-off
for the dates set forth on Exhibit C hereto.

 

d.       Business
Expense Reimbursement. Subject to the Company’s policies and procedures for the reimbursement of business expenses
incurred by its executive and management employees, the Company shall reimburse the Executive for reasonable expenses incurred
by the Executive in connection with the performance of the Executive’s duties pursuant to this Agreement, including, but
not limited to, travel expenses, continuing professional education, professional conventions or similar professional functions
and other reasonable business expenses. The Executive agrees to provide the Company with receipts and/or documentation sufficient
to permit the Company to take its full business expense deduction. The Company shall have no obligation to reimburse the Executive
for expenses claimed if the Executive does not provide sufficient receipts and/or documentation. The Executive shall submit requests
for reimbursement of business expenses at least once every month. The Executive shall not be entitled to a corporate credit card,
and any frequent flyer miles earned for travel contemplated under this Agreement shall be owned by the Executive.

 

    	 	5	 

    	 

    

 

e.       Miscellaneous
Benefits. The Executive is also entitled to receive any other fringe benefits that Company may from time to time make
available generally to its management employees.

 

9.       Effects
of Termination.

 

a.       Accrued
Benefits. If the employment of the Executive should terminate at the election of the Company with or without Cause, at
the election of the Executive, due to the Executive’s death, or upon expiration of the Term, then the Company will pay or
provide to the Executive or, in the event of the Executive’s death, to the estate of the Executive:

 

i.       any
earned and accrued but unpaid Base Salary through the Date of Termination payable in accordance with the Company’s normal
payroll practices;

 

ii.       reimbursement
for any unreimbursed business expenses incurred through the Date of Termination in accordance with Section 8(d); and

 

iii.       all
other applicable payments or benefits to which the Executive shall be entitled under, and paid or provided in accordance with,
the terms of any applicable arrangement, plan or program under Section 8(a)-(c) (collectively, Sections 9(a)(i)-(iii), payable
in accordance with this Section 9(a), shall be hereafter referred to as the “Accrued Benefits”).

 

b.       Death
Benefit. If the employment of the Executive should terminate during the Term due to the Executive’s death, then
the Company will pay or provide to the estate of the Executive (in addition to the Accrued Benefits payable under Section 9(a)),
subject to Section 9(e), any accrued but unpaid Special Incentive Bonus for any completed period of employment prior to
the Executive’s death, payable when the applicable Special Incentive Bonus for such completed period of employment would
have otherwise been paid.

 

c.       Termination
by the Company without Cause. If the employment of the Executive should terminate at the election of the Company without
Cause, the Company will pay or provide to the Executive (in addition to the Accrued Benefits payable under Section 9(a)), subject
to Sections 9(e) and 10:

 

i.       continued
payment of the Executive’s Base Salary for a period equal to the lesser of thirty (30) days from the Date of Termination
or the then applicable Term Date, whichever occurs first, payable in accordance with the Company’s normal payroll practices
(but off employee payroll) (the “Severance Payments”); provided that, the first payment of the Severance Payments
shall be made on the fifteenth (15th) day after the Date of Termination, and will include payment of any amount of
the Severance Payments that were otherwise due prior thereto; and

 

ii.       any
accrued but unpaid Special Incentive Bonus for any completed period of employment prior to the Executive’s termination,
payable when the applicable Special Incentive Bonus for such completed period of employment would have otherwise been paid.

 

    	 	6	 

    	 

    

 

For
purposes of this Agreement, the term “Cause” means that the Executive: (i) has been convicted of, or entered
a plea of guilty or “nolo contendere” to, a felony or a crime involving moral turpitude causing material harm
to the standing and reputation of the Company, (ii) violated any of the Executive’s obligations under this Agreement, any
award agreement under the EIP, any proprietary rights, non-competition, non-disclosure or other restrictive covenant agreements
in effect between the Executive and the Company, including such agreements in this Agreement, which are demonstrably willful or
deliberate on the Executive’s part, (iii) has willfully or deliberately failed to perform the Executive’s material
duties assigned by, or to follow the lawful orders and direction of, the Board (other than by reason of illness or temporary disability),
(iv) has engaged in illegal conduct, gross misconduct, fraud or material dishonesty in connection with the Business of the Company,
(v) has engaged in willful misappropriation or embezzlement of any of the Company’s funds or property, or (vi) has engaged
in conduct that violated the Company’s then existing written internal policies or procedures and which is detrimental to
the Business or reputation of the Company. Any of the aforesaid clauses (ii), (iii) and (vi) may be cured by the Executive, if
curable, if cured within fifteen (15) days after receipt by the Executive of written notice of the same. In the event such acts
or omissions are capable of being cured, the effective date of termination, in the event of the Executive’s failure to cure,
must be at least fifteen (15) days after such notice of termination to afford the Executive the ability to cure the same. The
Company may place the Executive on paid leave for up to sixty (60) consecutive days while it is determining whether there is a
basis to terminate Executive’s employment for Cause.

 

d.       Expiration
of Term. In the event that the Initial Term expires on June 30, 2020 without being extended by the Parties, the Company
will pay or provide to the Executive (in addition to the Accrued Benefits payable under Section 9(a)), subject to Section 9(e),
any accrued but unpaid Special Incentive Bonus for the six-month period ended June 30, 2020, payable when the applicable Special
Incentive Bonus for such completed period of employment would have otherwise been paid.

 

e.       Release.
Any payments or benefits by the Company required under Sections 9(b), 9(c), and 9(d) shall be conditioned on and shall not be
payable unless the Company receives from the Executive (or, in the event of the Executive’s death, the estate of the Executive)
within thirty (30) days of the Date of Termination a fully effective and non-revocable written release in form and substance reasonably
acceptable to the Company of any and all past, present or future claims that the Executive (or, in the event of the Executive’s
death, the estate of the Executive) may have against the Company or any of its affiliates and any of their respective officers,
directors and other related parties (all claims released in this Section 9(e) being referred to as the “Released Claims”),
provided, however, that the Released Claims shall not include any claim by the Executive for indemnification from the Company
relating to any act or omission prior to the Date of Termination, in each instance to the extent the Executive would have the
right to be indemnified therefor under (and not otherwise prohibited or restricted by): (i) the laws of the State of Nevada, (ii)
any Federal law applicable to the Company or the Executive, (iii) the Company’s articles of incorporation or bylaws, as
amended, and (iv) the D&O Indemnity Agreement. The Company agrees to provide a form of release within seven (7) days of the
Date of Termination.

 

f.       Termination
of Authority. Immediately upon the Executive terminating or being terminated from the Executive’s employment with
the Company for any reason, notwithstanding anything else appearing in this Agreement or otherwise, the Executive will stop serving
the functions of the Executive’s terminated or expired position(s), including but not limited to any director or officer
positions at the Company or any of its affiliates, and shall be without any of the authority or responsibility for such position(s).

 

    	 	7	 

    	 

    

 

10.       Section
409A.

 

a.       Although
the Company does not guarantee the tax treatment of any payments under this Agreement, the intent of the Parties is that the payments
and benefits under this Agreement be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and all Treasury Regulations and guidance promulgated thereunder (“Code Section 409A”)
and to the maximum extent permitted this Agreement shall be limited, construed and interpreted in accordance with such intent.
In no event whatsoever shall the Company or its affiliates or their respective officers, directors, employees or agents be liable
for any additional tax, interest or penalties that may be imposed on the Executive by Code Section 409A or damages for failing
to comply with Code Section 409A.

 

b.       Notwithstanding
any other provision of this Agreement to the contrary, to the extent that any reimbursement of expenses constitutes “deferred
compensation” under Code Section 409A, such reimbursement shall be provided no later than December 31st of the
year following the year in which the expense was incurred (or, where applicable, no later than such earlier time required by this
Agreement). The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent
year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any
other year.

 

c.       For
purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)),
the right to receive payments in the form of installment payments shall be treated as a right to receive a series of separate
payments and, accordingly, each installment payment shall at all times be considered a separate and distinct payment. Whenever
a payment under this Agreement may be paid within a specified period, the actual date of payment within the specified period shall
be within the sole discretion of the Company.

 

d.       Notwithstanding
any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service (as defined
in Code Section 409A), the Executive is a “Specified Executive”, then the Company will defer the payment or commencement
of any nonqualified deferred compensation subject to Code Section 409A payable upon separation from service (without any reduction
in such payments or benefits ultimately paid or provided to the Executive) until the date that is six (6) months following separation
from service or, if earlier, the earliest other date as is permitted under Code Section 409A (and any amounts that otherwise would
have been paid during this deferral period will be paid in a lump sum on the day after the expiration of the six (6)- month period
or such shorter period, if applicable). The Executive will be a “Specified Executive” for purposes of this Agreement
if, on the date of the Executive’s separation from service, the Executive is an individual who is, under the method of determination
adopted by the Company designated as, or within the category of executives deemed to be, a “Specified Executive” within
the meaning and in accordance with Treasury Regulation Section 1.409A-1(i). The Company shall determine in its sole discretion
all matters relating to who is designated as a “Specified Executive” and the application of and effects of the change
in such determination.

 

e.       Notwithstanding
anything in this Agreement or elsewhere to the contrary, a termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “non-qualified
deferred compensation” within the meaning of Code Section 409A upon or following a termination of the Executive’s
employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and,
for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment”
or like terms shall mean “separation from service” and the date of such separation from service shall be the date
of termination for purposes of any such payment or benefits.

 

11.       Activity
Restrictions; Executive Covenants.

 

a.
       Purpose. As previously acknowledged, the Company has invested heavily
in its information systems, personnel, product development, customers, and customer development. As a member of the Company’s
executive management group, the Executive is entrusted with the fruits of these investments and the decisions to be made regarding
similar future investments. In order to participate in the benefits of a highly compensated position of trust with the Company,
the Company requires a written commitment from key employees that its trust will not be misplaced and its investments lost or
damaged. Accordingly, the Executive makes the following promises regarding the Executive’s activities.

 

    	 	8	 

    	 

    

 

b.
       Best Efforts. The Executive will at all times perform all of the Executive’s
assigned duties faithfully and exert the Executive’s best efforts to fully perform those duties pursuant to the express
and implicit terms of this Agreement to the reasonable satisfaction of the Company. During employment, the Executive will not
engage in or become interested in any calling, activity, or other business which is or may be contrary to or in competition with
the interests and welfare of the Company.

 

c.
       Inventions; Intellectual Property.

 

i.       Inventions.
Every invention and improvement conceived, invented or developed by the Executive relating to or useable in the Business then
being carried on or actively contemplated by the Company now existing or hereafter developed shall become the exclusive property
of the Company. With respect to all inventive ideas originated or developed by the Executive which relate to the Business during
the Term hereof, or as to which the Executive has acquired information as a result of the Executive’s employment with the
Company, and all patents obtained on such inventive ideas, (a) the Executive agrees to disclose and assign, without charge, all
such inventive ideas and any patents obtained thereon to the Company, but without expense to the Executive, (b) the Executive
agrees that all such inventive ideas and any patents thereof shall be the exclusive property of the Company, and (c) the Executive
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 the Company to obtain both domestic and foreign patents, title to which is to be vested in the Company,
and the Executive shall give the Company the full and exclusive power to prosecute all such applications and all proceedings in
connection therewith.

 

ii.       Intellectual
Property. The Executive shall promptly disclose to the Company or any successor or assign, and grant to the Company or
its successors and assigns without any separate remuneration or compensation other than that received by the Executive in the
course of the Executive’s employment, the Executive’s entire right, title and interest in and to any and all inventions,
developments, discoveries, models, or business plans or opportunities, or any other intellectual property of any type or nature
whatsoever related to the Business or the Products (“Intellectual Property”), developed by the Executive during
the period of the Executive’s employment by the Company or its affiliates and whether developed by the Executive during
or after business hours, or alone or in connection with others, that is in any way related to the Business of the Company, its
successors or assigns. This provision shall not apply to books or articles authored by the Executive during non-work hours, consistent
with the Executive’s obligations under this Agreement, so long as such books or articles (a) are not funded in whole or
in part by the Company, and (b) do not contain any confidential information or Intellectual Property of the Company. The Executive
agrees, at the Company’s expense, to take all steps necessary or proper to vest title to all such Intellectual Property
in the Company, and cooperate fully and assist the Company in any litigation or other proceedings involving any such Intellectual
Property.

 

d.
       Non-solicitation of Business. 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, the Executive
will not, directly or indirectly, solicit, interfere with, or divert away from the Company any customer of the Company who did
any business with the Company during the Term hereof.

 

e.
       Non-enticement of Personnel. 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, the Executive
shall not, directly or indirectly, as an individual or on behalf of any other person or entity, hire, solicit, recruit, or attempt
to entice away from the Company or any customer of the Company any person employed by or providing services to the Company or
any customer of the Company. The Executive 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. The Company’s customers are third-party beneficiaries
of this covenant and shall have standing to enforce the terms of this Section 11(e) by seeking whatever equitable and legal remedies
may be available to the Company hereunder.

 

    	 	9	 

    	 

    

 

f.
       Confidentiality. The Executive shall not at any time during the Term hereof
or at any time thereafter communicate, divulge, disclose, take, or use for himself any information, knowledge, data, or materials
that were disclosed or obtained by the Executive during the Term (including, without limitation, any information and knowledge
that was conceived, created, or developed by the Executive during the course of the Executive’s employment with the Company)
which is related to the Business and the Products and is not already generally known in the Company’s trade by competitors.
This restriction on confidential information disclosure and use shall apply to knowledge or information which relates to the Business
or the business of the Company’s customers and is in the nature of a business secret of the Company or the Company’s
customers. Included within the scope of this restriction shall be the specific items identified in Section 11(h) hereof and any
other information and matters designated by the Company (verbally or in writing) to be confidential during the Term hereof. The
Company’s customers are third-party beneficiaries of the aforestated covenants in this Section 11(f) and shall have standing
to enforce its terms and seek whatever equitable or legal remedy that is necessary to repay or avoid harm to them, including,
but not limited to, any remedy available to the Company under this Agreement. The obligations of the Executive with respect to
the disclosure and use of confidential information under this Section 11(f) shall cease to the extent such information becomes
generally known in the Company’s trade by competitors through a means other than a breach of this Agreement by the Executive.
In the event the Executive is required by any legal proceedings to disclose confidential information, the Executive shall provide
the Company with prompt notice thereof so that the Company may seek an appropriate protective order and/or waive compliance by
the Executive with the provisions hereof.

 

g.
       Non-competition. 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, the Executive shall not, alone,
or as an agent, employee, servant, officer, partner or stockholder of any other corporation or business, directly or indirectly,
engage in employment or 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 Products manufactured, marketed or sold by the Company either
now or at any time during the Term. This post-termination restriction is limited to activities in or directed at the geographic
area located in North America where the Company has sold or manufactured the Products at any time during the Term hereof. The
Executive specifically agrees, without limitation, that the Executive will not accept a similar position or perform the same or
similar responsibilities or services as performed for the Company for any business entity that is engaged in a business that is
the same, or substantially similar to, the Business (i.e., a competitor).

 

h.
       Return of Company Materials. 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, the Executive agrees to promptly return (without retaining any copies, summaries, files or notes derived from source
materials) all information and records regarding the Business and the Products, whether or not created by the Executive during
the Term hereof including, but not be limited to: all financial, sales and purchase data for the Business and the Company’s
customers, all financial statements and projections, all marketing surveys and analyses, all strategic planning material, all
data on the Company’s competitors, all customer information, all records regarding prospective customers of the Company,
all documents regarding pending or threatened litigation involving the Company, all legal opinions, all personnel evaluations
for the Company’s employees and outside vendors and contractors, all computer hardware and software, all price lists and
formulas, all pricing quotations or proposals, all lists or compilations of customers and prospects, all promotional materials,
all internal operating reports, all budgets and projections, all information related to the Company’s product development
and intellectual property, all product designs, specifications, drawing, engineering, bills of material and other information
related to the Products, all corporate and equipment manuals and policies, all contracts with customers and suppliers, all supplier
prices and quotations, all business correspondence, all catalogs and product samples, all sensitive customer information, all
sales reports and invoices, and all tangible and intangible property owned by the Company.

 

    	 	10	 

    	 

    

 

i.
       Non-Disparagement. During the Term and thereafter, the Executive shall
not knowingly, directly or indirectly, make negative comments or otherwise disparage the Company, 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. The Company shall direct its officers, directors and senior management
team to not disparage or encourage or induce others to disparage the Executive. 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 Executive has given the Company prompt written
notice of any such legal process and cooperated with the Company’s efforts to seek a protective order.

 

j.
       Executive’s Representations. The Executive represents and acknowledges
that none of the activity restrictions set forth in this Section 11 will prevent the Executive from obtaining employment, cause
undue hardship, cause a relocation, or adversely impact numerous other business and employment opportunities that are not affected
by the existence of these restrictions. The Executive further acknowledges that the Executive believes the foregoing restrictions
to be reasonable and necessary to protect the Company’s legitimate business interests. Any violation of the restrictions
in this Section 11 can cause harm to the Company of an irreparable nature for which money damages alone will not suffice. The
Executive agrees that the Executive will fully and promptly disclose to any person or entity with which the Executive becomes
associated subsequent to the termination or expiration of this Agreement all of the restrictions on the Executive’s post-termination
activities. The Company shall also have the right to disclose this Agreement to any business entity hiring or utilizing the services
of the Executive subsequent to the termination or expiration of this Agreement.

 

k.
       Common Law and Trade Secrets. The Executive and the Company agree that
nothing in this Agreement shall be construed to limit or negate the common law of torts or trade secrets where it provides the
Company with broader protection than that provided herein.

 

l.
       Tolling. In the event of any violation of the provisions of this Section
11, the Executive acknowledges and agrees that the post-termination restrictions contained in this Section 11 shall be extended
by a period of time equal to the period of such violation, it being the intention of the Parties hereto that the running of the
applicable post-termination restriction period shall be tolled during any period of such violation.

 

m.
       Rights and Remedies upon Breach. The Executive acknowledges and agrees
that any breach by the Executive of any of the provisions of Section 11 (the “Restrictive Covenants”) would
result in irreparable injury and damage for which money damages would not provide an adequate remedy. Therefore, if the Executive
breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company and its affiliates
shall have the following rights and remedies, each of which rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available
to the Company and its affiliates, under law or in equity (including, without limitation, the recovery of damages):

 

i.       the
right and remedy to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages)
by any court of competent jurisdiction, including, without limitation, the right to an entry against the Executive of restraining
orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants; and

 

    	 	11	 

    	 

    

 

ii.       the
right and remedy to require the Executive to account for and pay over to the Company or any of its affiliates all compensation,
profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by the
Executive as the result of any transactions constituting a breach of the Restrictive Covenants, and the Executive shall account
for and pay over such Benefits to the Company and, if applicable, its affected affiliates.

 

12.       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company’s successors and assigns
and the Executive’s personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees.
This Agreement shall not be assignable by the Executive, it being understood and agreed that this is a contract for the Executive’s
personal services. This Agreement shall not be assignable by the Company, except that the Company may assign it to an affiliate
of the Company and shall assign it in connection with a transaction involving the succession by a third party to all or substantially
all of the Company’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 Company would be required to perform it in the absence of such
an assignment and the Company shall be released of all obligations hereunder. For all purposes under this Agreement, the term
“Company” shall include any successor to the Company’s business and/or assets that executes and delivers the
assumption agreement described in the immediately preceding sentence or that becomes bound by this Agreement by operation of law.
This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns as provided
in this Section 12 and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except as otherwise
set forth in this Agreement.

 

13.       Alternative
Dispute Resolution.

 

a.       Coverage.
Except as otherwise expressly provided in this Agreement or by law, this Section 13 is the sole and exclusive method by which
the Executive and the Company are required to resolve any and all disputes arising out of or related to the Executive’s
employment with the Company or the termination of that employment, each of which is referred to as “Employment-Related
Dispute,” including, but not limited to, disputes arising out of or related to any of the following subjects: (i) compensation
or other terms or conditions of the Executive’s employment, (ii) application or enforcement of any Company program or policy
to the Executive, (iii) any disciplinary action or other adverse employment decision of the Company or any statement related to
the Executive’s employment, performance or termination, (iv) any policy of the Company or any agreement between the Executive
and the Company, (v) disputes over the arbitrability of any controversy or claim which arguably is or may be subject to this Section
13, (vi) claims arising out of or related to any current or future federal, state or local civil rights laws, fair employment
laws, wage and hour laws, fair labor or employment standards laws, laws against discrimination, equal pay laws, wage and salary
payment laws, plant or facility closing or layoff laws, laws in regard to employment benefits or protections, family and medical
leave laws, and whistleblower laws, including by way of example, but not limited to, the federal Civil Rights Acts of 1866, 1871,
1964 and 1991, the Pregnancy Discrimination Act of 1978, the Age Discrimination in Employment Act of 1967, the Equal Pay Act of
1963, the Fair Labor Standards Act of 1938, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993,
and the Executive Retirement Income Security Act of 1978, as they have been or may be amended from time to time, or (vii) any
other dispute arising out of or related to the Executive’s employment or the Executive’s termination.

 

    	 	12	 

    	 

    

 

b.       Negotiation;
Mediation. Any Employment-Related Dispute asserted by one Party against the other Party shall be delivered in writing
to the other Party. During the fifteen (15)-day period following receipt of the assertion by the other Party, the Parties shall
attempt in good faith to negotiate a resolution of the Employment-Related Disputes so asserted. If the Employment-Related Disputes
so asserted cannot be settled through negotiation and remains unresolved after the fifteen (15)-day negotiation period, the Executive
or the Company may submit the dispute to mediation and the Parties shall attempt in good faith to resolve the dispute by mediation,
under the mediation procedure of the American Arbitration Association (“AAA”). Unless the Parties agree otherwise
in writing, the mediation shall be conducted by a single mediator, and the mediator shall be selected from an appropriate AAA
panel pursuant to the AAA rules, respectively. The mediation shall be conducted in Denver, Colorado. Unless the Parties agree
otherwise, the cost of the mediator’s professional fees and expenses and any reasonable administrative fee will be shared
and paid equally by the Parties, and each Party shall bear its own attorneys’ fees and costs of the mediation.

 

c.       
Binding Arbitration. If the Employment-Related Disputes so asserted cannot be settled through mediation and remains
unresolved thirty (30) days after the appointment of a mediator, the Executive or the Company may submit the dispute to arbitration
and the dispute shall be settled in 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 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 the arbitrator’s services shall in all events be shared and paid
equally by the Parties.

 

d.       Equitable
Relief. 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, including
without limitation as provided under Section 14(h) hereof, 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.

 

e.       Severability.
In the event that any court or arbitrator finds or holds any restriction contained in this Agreement, including the Restrictive
Covenants, 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

 

    	 	13	 

    	 

    

 

14.       Miscellaneous.

 

a.       Time
of the Essence. 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.

 

b.       Entire
Agreement. This Agreement constitutes the entire understanding or agreement between the Company and the Executive relating
to the subject matter hereof and there is no understanding or agreement, oral or written, which is not set forth herein. This
Agreement supersedes and replaces any prior employment agreement or understanding, oral or written, between the Company and the
Executive. This Agreement may only be amended by a writing signed by the Company and the Executive.

 

c.       Waiver.
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.

 

d.       Construction.
In the event of a conflict or ambiguity created between the Company’s current personnel manual for all employees and this
Agreement, it is agreed that this Agreement shall control. No policies, procedures, or statements of any nature by the Company
shall modify this Agreement or be construed to create express or implied obligations to the Executive. 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.
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. The word “Company” shall be construed to include
the Company and its subsidiaries and affiliates, whether now existing or hereafter established.

 

e.       Notices.
All notices and other communications hereunder shall be in writing, and shall be deemed to have been duly given if delivered personally
or if sent by overnight courier or by certified mail, return receipt requested, postage prepaid, to the relevant address set forth
below, or to such other address as the recipient of such notice or communication shall have specified in writing to the other
Party hereto, in accordance with this Section 14(e).

 

	 	i.	If
    to the Company: 	Surna
    Inc.
	 	 	 	1780
    55th Street
	 	 	 	Boulder,
    Colorado 80301
	 	 	 	Attention:
    CEO

 

ii.       If
to the Executive, at the Executive’s last residence shown on the records of the Company.

 

f.       
Public Announcements. The Company intends to publicly announce and disclose this Agreement and the subject matter
hereof in accordance with applicable laws. Until such time as the Company has publicly announced and/or disclosed this Agreement
and the subject matter hereof, the Executive shall not publicly announce or disclose to any third party the existence of this
Agreement or the subject matter hereof.

 

    	 	14	 

    	 

    

 

g.       Governing
Law. 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.

 

h.       Equitable
Relief. The Executive acknowledges and agrees that, notwithstanding anything herein to the contrary, including without
limitation Section 13(d) hereof, upon any breach by the Executive of the Executive’s obligations under Section 11, the Company
will have no adequate remedy at law, and accordingly shall be immediately entitled to specific performance and other appropriate
injunctive and equitable relief in a court of competent jurisdiction.

 

i.       Cooperation
in Future Matters. The Executive hereby agrees that for a period of eighteen (18) months following the Executive’s
termination of employment, the Executive shall cooperate fully with the Company’s reasonable requests relating to matters
that pertain to the Executive’s employment by the Company, including, without limitation, providing information or limited
consultation as to such matters, participating in legal proceedings, investigations or audits on behalf of the Company, or otherwise
making himself reasonably available to the Company for other related purposes. Any such cooperation shall be performed at scheduled
times taking into consideration the Executive’s other commitments. The Executive shall not be required to perform such cooperation
to the extent it conflicts with any requirements of exclusivity of services for another employer or otherwise, nor in any manner
that in the good faith belief of the Executive would conflict with the Executive’s rights under or ability to enforce this
Agreement.

 

j.       Withholding.
Any payments provided for in this Agreement shall be paid net of any applicable income tax withholding required under federal,
state or local law.

 

k.       Survival.
Notwithstanding anything in this Agreement or elsewhere to the contrary, the provisions of Sections 9, 10, 11, 12, 13 and 14 shall
survive the termination of the Executive’s employment or this Agreement.

 

l.       Execution
and Counterparts. 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.]

 

    	 	15	 

    	 

    

 

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

 

	EXECUTIVE	 	COMPANY
	 	 	 
		 	Surna
    Inc.
	 	 	 
	/s/
    Mark E. Smiens	 	By:	/s/
    Chris     Bechtel
	Mark
    E. Smiens, Individually 	 	 	Chris
    Bechtel, Chief Executive Officer

 

[Signature
Page to Executive Employment Agreement]

 

    	 	 	 

    	 

    

 

EXHIBIT
A

 

Permitted
Activities

 

None

 

    	 	 	 

    	 

    

 

EXHIBIT
B

 

    	 	 	 

    	 

    

 

EXHIBIT
C

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