Document:

Exhibit 10.25

 

NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM AND REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

US $78,750.00

 

BLUE SPHERE CORP.

8% CONVERTIBLE REDEEMABLE NOTE

DUE DECEMBER 3, 2015

 

FOR VALUE RECEIVED, Blue Sphere Corp. (the
“Company”) promises to pay to the order of LG CAPITAL FUNDING, LLC and its authorized successors and permitted assigns
("Holder"), the aggregate principal face amount of Seventy Eight Thousand Seven Hundred Fifty Dollars exactly
(U.S. $78,750.00) on December 3, 2015 ("Maturity Date") and to pay interest on the principal amount outstanding
hereunder at the rate of 8% per annum commencing on December 3, 2014. The interest will be paid to the Holder in whose name this
Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest
on, this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY 11225 , initially, and if changed, last appearing on the
records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment
and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted
or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the
records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder
and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or
wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph
4(b) herein.

 

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This Note is subject to the following additional provisions:

 

1.          This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith.

 

2.          The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.          This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and
applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior
to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company's records as the owner hereof for all other purposes, whether or not this Note be overdue,
and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing
to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being
converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including
receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.

 

4.          (a)          The
Holder of this Note is entitled, at its option, at any time, to convert all or any amount of the principal face amount of this
Note then outstanding into shares of the Company's common stock (the "Common Stock"), at a price ("Conversion
Price") for each share of Common Stock equal to 58% of the lowest closing price of the Common Stock as reported
on the National Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common
Stock may be traded in the future ("Exchange"), for the ten prior trading days including the day
upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or other electronic
method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the
same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded.
Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days
of receipt by the Company of the Notice of Conversion. To effect conversions hereunder, the Holder shall not be required to physically
surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon,
has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in
an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s)
converted and the date of such conversion(s). The Holder, and any assignee by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion of this Note, the
unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. Accrued, but unpaid
interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion,
but the number of shares issuable shall be rounded to the nearest whole share. In the event the Company experiences a DTC “Chill”
on its shares, the conversion price shall be decreased to 48% instead of 58% while that “Chill” is in effect. In
no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock
beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the Common Stock of the Company

 

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(b)         Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in
Common Stock ("Interest Shares"). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a
portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

 

(c)        During
the first 180 days this Note is in effect, the Company may redeem this Note by paying to the Holder an amount equal to 150% of
the face amount plus any accrued interest. This Note may not be prepaid after the 180th day. The redemption must be
closed and paid for within 3 business days of the Company sending the redemption demand or the redemption will be invalid and the
Company may not redeem this Note.

 

(d)        Upon
(i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock,
other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into
another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change
the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares
of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"),
then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 140% of the principal amount, plus
accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid
principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately
prior to such Sale Event at the Conversion Price.

 

(e)        In
case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which
this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note
shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of
stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the
Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions
shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash,
the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

 

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5.          No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.          The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7.          The
Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder
in collecting any amount due under this Note.

 

8.          If
one or more of the following described "Events of Default" shall occur:

 

(a)        The
Company shall default in the payment of principal or interest on this Note or any other note issued
to the Holder by the Company and such default is not cured within 10 days; or

 

(b)        Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or
the Securities Purchase Agreement under which this note was issued shall be false or misleading in any material respect; or

 

(c)        The
Company shall fail to perform or observe, in any material respect, any covenant, term, provision, condition, agreement or obligation
of the Company under this Note or any other note issued to the Holder; or

 

(d)        The
Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,
consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal
or state laws as applicable; or

 

(e)        A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or

 

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(f)         Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)        Unless
previously disclosed in the Company’s filings with the Securities and Exchange Commission, one or more money judgments, writs
or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered
or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed
for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder.

 

(h)        The
OTCQB ceases to quote the Common Stock and either (1) the Common Stock continues to be quoted on the OTCPink but no longer reports
under the Securities and Exchange Act of 1934, as amended, or (2) the Common Stock is no longer quoted on an over the counter market.

 

(i)         If
the Common Stock trades on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;

 

(j)         The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion to the extent that such legend is eligible for removal under Section 2(g) of the
Securities Purchase Agreement under which this Note was issued; or

 

(k)        The
Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder; or

 

(l)         The
Company shall not be “current” in its filings with the Securities and Exchange Commission; or

 

(m)       The
Company shall lose the “bid” price for its stock in a market (including the OTCQB marketplace or other exchange).

 

Then, or at any time thereafter, unless
cured, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion,
the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any
kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce
any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event
of Default, interest shall accrue at a default interest rate of 16% per annum or, if such rate is usurious or not permitted by
current law, then at the highest rate of interest permitted by law. In the event of a breach of Section 8(j) the penalty shall
be $250 per day the shares are not issued beginning on the 4th day after the conversion notice was delivered to the
Company and this penalty shall increase to $500 per day beginning on the 10th day; provided that the aggregate penalty
payable shall not exceed 10% of the principal amount of this Note. The penalty for a breach of Section 8(m) shall be an increase
of the outstanding principal amounts by 20%. In case of a breach of Section 8(h), the outstanding principal due under this Note
shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%.

 

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If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails
in such action, the Holder shall be reimbursed by the Company for its reasonable attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding.

 

9.          In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10.        Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.

 

11.        The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer.

 

12.        The
Company shall issue irrevocable transfer agent instructions reserving 3,879,000 shares of its Common Stock
for conversions under this Note (the “Share Reserve”). The reserve shall be replenished as needed to allow for conversions
of this Note. Upon full conversion of this Note, any shares remaining in the Share Reserve shall be cancelled. The Company shall
pay all costs associated with issuing and delivering the shares. The company should at all times reserve a minimum of three times
the amount of shares required if the note would be fully converted. The Holder may reasonably request increases from time to time
to reserve such amounts.

 

13.        The
Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.

 

14.        This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed
within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company
hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This
Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart
to this Agreement shall be effective as an original.

 

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IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed by an officer thereunto duly authorized.

 

	Dated:	Dec. 4. 2014	 

 

	 	BLUE SPHERE CORP.
	 	 	 
	 	By:  	
	 	 	 
	 	Title:	CEO

 

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EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Blue Sphere Corp. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.

 

If Shares are to be issued in the name of
a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.

 

	Date of Conversion:	 	 

	Applicable Conversion Price:	 	 

	Signature:	 	 
	 	[Print Name of Holder and Title of Signer]	 

	Address:	 	 
	 	 	 

 

	SSN or EIN:	 	 

	Shares are to be registered in the following name:	 	 

 

	Name:	 	 

	Address:	 	 

	Tel:	 	 

	Fax:	 	 

	SSN or EIN:	 	 

 

Shares are to be sent or delivered to the following account:

 

	Account Name:	 	 

	Address:	 	 

 

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THIS AGREEMENT for Professional Services is
by and between Surna, Inc. a Nevada Corporation, its subsidiaries and affiliates (hereinafter referred to as “Surna”)
and CWNevada, LLC with an address of 611 S. 6th St., Las Vegas, NV 89101 (hereinafter referred to as “Client”)
becomes effective on the date last written below;

 

WITNESSETH:

 

WHEREAS, Surna is specially trained, experienced,
and competent to perform the special services that will be required by this agreement; and WHEREAS, Surna is willing to render
such professional services, as hereinafter defined, on the following terms and conditions.

 

NOW THEREFORE, Surna and the Client agree as
follows:

 

	1.	Scope of Service. Surna’s services are for the location located at 3132 Highland Drive, Nevada, Las Vegas as described on Surna, Inc. Estimate 1368 (respectively referred to as “Estimate” and “Exhibit A”) and any additional documents attached hereto, and incorporated by reference herein (collectively referred to as the “Agreement”).
	 	 
	2.	Compensation. Client hereby agrees to pay Surna in the following manner. Absent alternative agreement, initial down payment of no less than Fifty percent (50%) payment of the amount owing pursuant to the Agreement is due one month prior to installation or when agreed in the alternative (whichever is later). Three days after commencement, an additional Twenty Five percent (25%) is due with the remaining 25% due 21 days following completion of the installation. All payments can be made in the form of certified funds or wire transfer. If cancellation occurs anytime between down payment and the installation date, Surna retains 50% of the down payment balance as recovery for loss. Travel and incidental expenses may be billed to Client as well as fees for unforeseen circumstance.
	 	 
	3.	Independent Contractor Status. It is expressly understood and agreed by both parties that Surna will either be registered as a Contractor in Nevada by the time installation occurs or work under a licensed Contractor to perform the services herein. While engaged in carrying out and complying with any of the terms and conditions of this agreement, Surna is an independent contractor and not an employee of the Client. Surna expressly warrants to not represent, at any time or in any manner, that Surna is an employee of the Client. If any additional costs or fees arise as associated to paying fees to a lead contractor or to license as a contractor, Surna agrees to pay such fees.
	 	 
	4.	Offset Cooling Agreement. Surna hereby agrees that the installed Surna products, which includes a water chilled cooling system, is being installed, and the price has been bid, for the purpose of maintaining an ambient temperature of 78 degrees in the cultivation facility(ies) where plants are grown (“Rooms”). The bid contemplates minimal insulation requirements of R16 in the Rooms and not other parts of the facility where plants are not grown. If the Rooms have R16 insulation or higher, Surna hereby agrees that, in the event that the ambient temperature in the Rooms stays above 78 degrees in a closed environment for a period of longer than 2 hours, the equipment shall be deemed under-powered. In such case, Surna agrees to provide and install additional cooling capacity in the Rooms at no cost to Client and in a commercially reasonable time that takes into account production time and the availability of installation crews until a 78 degree temperature is achieved. Surna understands that time is of the essence in this regard and agrees to provide said service, if needed, as soon as commercially practicable. Surna shall not be liable for heating issues caused by deficiency in Rooms workmanship, defective products that weren’t provided by Surna, negligence on the part of Client or other unforeseen, reasonable circumstances, such as doors being left open or catastrophic events. The 78 degree number is subject to reasonable fluctuations reasonable to the industry (typically 5 degrees above or below 78 degrees but up to as high as 86 degrees) and is not intended to be a 100% accurate number but merely a guidepost.
	 	 
	5.	Billing and Duties of Client. Except when specifically authorized by Client, Surna shall not bill Client for services other than those quoted on the referenced Agreement unless client fails to comply with any of the following duties:

 

	 	a.	Client agrees to provide open access to the facility for a minimum of 12 hours per day with no set minimum of days per week allowed unless pre-agreed between the parties.
	 	 	 
	 	b.	Client agrees to have all electrical installed and up to code prior to Surna arrival. If electrical is not available upon arrival, Client agrees to have an electrician on-site with the ability to have electrical ready without interfering with installation.

 

	Contract for Services - Surna, Inc.	Client initial _____     Surna, Inc. initial _____

 

    	 

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	 	c.	Client agrees that they will not install lights prior to Surna’s installation unless otherwise agreed.
	 	 	 
	 	d.	Client agrees to provide a garden overheat shutoff control for lighting.
	 	 	 
	 	e.	Client agrees to provide complete and accurate plans prior to installation.
	 	 	 
	 	f.	Client agrees to provide an access point for a scissor lift, inclusive of ramps, measuring 80x32x72.
	 	 	 
	 	g.	Client agrees to provide Reverse Osmosis water for use in the cooling system unless otherwise agreed. Surna will provide appropriate type and volume of propylene glycol.
	 	 	 
	 	h.	Client agrees to provide parking for a 30 foot trailer.
	 	 	 
	 	i.	Client agrees to use best efforts to reasonably disclose to Surna any and all conditions or reasons that Surna could or would expect delays in their ability to perform the duties described herein and by reference. 

 

Because failing to comply with any of the above
duties can cause material changes to Surna’s work order and bid price, if Client fails to provide any of the above, Client
will be billed a dead-time charge of $1,000.00 per scheduled day per installer or $250.00 per installer-hour lost per day, whichever
is less, for any delays in starting the job as scheduled or delays incurred during the performance thereof. Further, Surna’s
bid price is based on having access to hardware, plumbing and food and lodging within 3o minutes of the job site. Additional charges
may be incurred for delays in time caused by Clients failure to inform Surna of conditions or reasons for delay that should have
been anticipated (using a reasonable person standard) and disclosed by Client. If, for any reason that is not the fault of Surna,
the project is delayed in such a manner that the Surna installation team is required to leave and return to the job site at a later
date, Client will be billed for the cost of travel to return or change travel plans (including food, travel, lodging and other
associated costs), plus a rate of $500 per installer per newly scheduled day.

 

	6.	Advice and Status Reporting. Surna shall provide the Client with timely advice of all material developments arising during performance of its services hereunder orally or in writing, as Surna considers commercially reasonable.

 

	7.	Designation of Primary Provider of Services. The primary provider of the services called for by this agreement shall be Surna.

 

	8.	Assignment and Subcontracting. It is recognized by the parties hereto that a substantial inducement to Client for entering into this agreement was, and is, the professional reputation and competence of Surna.

 

	9.	Insurance. On or before beginning any of the services or work called for by any term of this Agreement, Surna, at its own cost and expense, shall carry, for the duration of the agreement, insurance appropriate for the work to be performed.

 

	10.	Indemnification-Surna’s Responsibility. It is understood and agreed that Surna has the professional skills and knowledge necessary to perform the work agreed to be performed under this agreement and that Client relies upon the professional skills of Surna to do and perform Surna’s work in a skillful and professional manner, and Surna thus agrees to so perform the work or directly oversee those who do.

 

	11.	Performance. It is understood and agreed that Surna is apprised of the scope of the work to be performed under this agreement based upon plans provided by the client or a site visit by a Surna representative and Surna agrees that the work can and shall be performed in a fully competent manner. Surna agrees to cure defects caused by its own negligence or improper installation. Parts and supplies utilized in installation that are not manufactured by Seller (3rd Party Supplies) (Exhibit B) will be replaced under the warranty if failure occurs. However, resulting damages from unanticipated failure of 3rd Party Supplies are beyond Surna’s control and therefore Surna shall not be liable for damages resulting from the failure thereof.

 

	12.	Mutual Indemnity. Surna and Client shall mutually indemnify, defend, and hold each other, its officers, employees, agents, and volunteers harmless from and against any and all liability, claims, suits, actions, damages, and causes of action arising during the term of this agreement out of any personal injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state, or municipal law or ordinance, or other cause in connection with the negligent or intentional acts or omissions of the other, its employees, subcontractors, or agents, or on account of the performance or character of this work, except for any such claim arising solely out of the active negligence, sole negligence, or willful misconduct of the other, its officers, employees, agents, or volunteers.

 

	13.	Licenses. If a license of any kind (other than those required of a subcontractor or contractor to register their services with the state), which term is intended to include evidence of registration, is required of Surna, its employees, agents, or subcontractors by federal or state law, Client warrants that such license will be obtained for Surna, in valid and in good standing, and that any applicable bond will have been posted in accordance with all applicable laws and regulations. Surna agrees to assist in this process where commercially reasonable and further states that Surna understands it must pay the costs associated to licensure as a contractor or sub-contractor. Permit fees are not included in the bid price and will be added as an additional cost after installation is complete.

 

	Contract for Services - Surna, Inc.	Client initial _____     Surna, Inc. initial _____

 

    	 

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	14.	Nondiscriminatory Employment Practices. In the performance of this agreement, Surna agrees to comply with the requirements of Nondiscriminatory Employment Practices.

 

	15.	Termination. In the event of termination, Surna shall be entitled to compensation for services performed or subject to the terms and conditions contained herein.

 

	16.	Notices. Notices required by this agreement shall be personally delivered or mailed, postage prepaid, as follows:

 

	 	To Surna: 	Surna, Inc. – General Counsel
	 	 	1780 55th St., Unit C
	 	 	Boulder, CO 80301
	 	 	 
	 	To the Client: 	CWNevada, LLC
	 	 	 611 S. 6th Street 
	 	 	 Las Vegas, NV 89101

 

Each party shall provide the
other party with telephone and written notice of any change in address as soon as practicable. Notices given by personal delivery
shall be effective immediately. Notices given by mail shall be deemed to have been delivered forty-eight hours after having been
deposited in United States or International certified mail.

 

	17.	Security Interest. Surna is hereby granted a security interest on any and all installed fixtures and materials until payment for services has been received in full.

 

	18.	Warranty of Workmanship. Surna warrants workmanship for one year from the date of installation. Client has the option to purchase extended warranties.

 

	19.	Amendments. This agreement is not subject to modification or amendment, except by a writing executed by both Surna and Client, which writing shall expressly state that it is intended by the parties to amend the terms and conditions of this agreement.

 

	20.	Waiver. The waiver by either party of a breach by the other of any provision of this agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this agreement.

 

	21.	Severability. Should any part of this agreement be declared by a final decision by a court or tribunal of competent jurisdiction to be unconstitutional, invalid, or beyond the authority of either party to enter into or carry out, such decision shall not affect the validity of the remainder of this agreement, which shall continue in full force and effect, provided that the remainder of this agreement, absent the unexcised portion, can be reasonably interpreted to give effect to the intentions of the parties.

 

	22.	Controlling Law. This agreement and all matters relating to it shall be governed by the laws of the State of Nevada.

 

	23.	Time is not of the Essence. Surna agrees to diligently prosecute the services to be provided under this agreement to completion and in accordance with any schedules specified herein. However, in the performance of this agreement, time is not of the essence even though both parties agree to expeditiously complete the performance of their duties to resolve the purpose of this agreement.

 

	24.	Whole Agreement. This agreement contemplates the bid prices and additional documentation attached hereto. Combined, these documents constitute the entire understanding and agreement of the parties. This agreement integrates all of the terms and conditions mentioned herein or incidental hereto and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof.

 

	25.	Changes in Terms. In executing this agreement, unless agreed in a signed writing executed by both parties, the governing terms and documents shall be those provided from Surna to client for signature. Any changes made thereto including, but not limited to, changes in scope, engineering or other plans, or other terms, without prior written approval of the parties, shall be deemed void.

 

	Contract for Services - Surna, Inc.	Client initial _____     Surna, Inc. initial _____

 

    	 

    	4

    

 

	26.	Counterparts. This agreement may be executed in counterpart and, when taken as a whole, shall be read and interpreted as one document.

 

IN WITNESS WHEREOF, Surna has executed this
agreement, and the Client, duly authorized to act, has executed this agreement.

 

	SURNA, Inc., 	date: ________	Client:                              	date: ________ 

 

	By                                                                                	By                                                                               
	 	 
	Its                                                                                	Its                                                                                

 

	Contract for Services - Surna, Inc.	Client initial _____     Surna, Inc. initial _____

 

    	 

    	 

     

Terms
and Conditions for 3132 Highland Drive, Nevada, Las Vegas (“3132”):

 

1.
Sale of Goods. The Seller shall sell to the Buyer and the Buyer shall purchase from the Seller the goods set forth on Estimate
number 1368 for Surna, Inc. (respectively referred to as “Estimate” and “Exhibit A”). Unless otherwise
stated herein, Buyer shall pay all taxes and costs (includes items such as sales taxes, the cost of pulling permits, shipping
and other miscellaneous expenses not otherwise anticipated) imposed on, in connection with, or measured by the transaction contemplated
by this agreement in addition to the prices set forth herein. It is understood that Buyer has an application for a license to
legally cultivate marijuana for the location commonly referred to as 3132 with the County of Clark in the State of Nevada. This
agreement shall become null and void if Buyer’s application is denied and therefore licensure for cultivation (as described
further in this ¶17(a)) is not rewarded from Clark County, Nevada. If licensure is approved and later revoked this contract
remains valid for phase 1 of construction as defined by the manufactured goods being purchased for the address designated on the
agreement.

 

2.
Invoices; Payment. Unless otherwise agreed or stated herein payment is required by wire transfer or certified funds. A
deposit equivalent to fifty percent (50%) of the purchase price is due prior to manufacturing start date. Buyer has five (5) business
days from placing the order to cancel the order and receive a refund of their deposit, less 10% to cover administrative costs.
After five (5) business days, any cancellation will result in forfeiture of the deposit. The remaining balance is due upon shipment
unless paid earlier. Any deliveries shipped COD require payment by cashier’s check or other certified funds.

 

3.
Delivery; Title; and Risk of Loss. Unless otherwise stated herein, the Seller shall deliver the Goods FOB to the Seller’s
facility as expeditiously as possible and title to and risk of loss of the Goods will pass to the Buyer after delivery and Scope
of Work performed by the Seller are complete. Any stated delivery dates are approximate. The Seller will not be liable for any
losses, damages, penalties, or expenses for failure to meet any reasonable delivery date unless damages accrue to any of the goods
during the installation process through any negligent conduct by the Seller.

 

4.
Breach of Warranty; Due Diligence. The Goods are sold under warranty. The Seller hereby affords the Buyer the opportunity
for full and complete investigations, examinations, and inspections upon receipt. However, Seller disclaims all warranties of
quality, whether express or implied, including the warranties of merchantability and fitness for particular purpose if equipment
failure occurs as caused by: a) issues when Seller does not install or maintain the purchased products or pre-approve an installer
or maintenance provider for the products; or (b) Buyer not following posted instructions for care, set-up and installation posted
on Seller’s website (found at surna.com) and provided in shipping materials; or (c) Buyer not installing an overheat shutoff
for facility lighting that shuts lights off when temperatures exceed 86 degrees; or (d) overheat shutoff failures; or (e) Buyer
committing an act of negligence.

 

5.
Unanticipated Failure. Seller and Buyer agree that the potential for unanticipated failure exists with any manufactured
goods. In mutual efforts to reasonably attempt to prevent or quickly cure unanticipated failures, Buyer agrees that it will: a)
install and maintain all electrical up to code; and (b) to notify Seller within one hour, or within a commercially reasonable
time, of any overheat shutoffs that occur or of any observed or perceived failures of the cooling system; and (c) ensure that
all maintenance and installation performed is performed by Surna or an authorized representative thereof.

 

6.
Limitation of Liability and Right to Cure. In no event will the Seller’s liability exceed $250,000.00 or replacement
of the specific Goods provided by the Seller giving rise to any claim or cause of action. Parts and supplies utilized in installation
that are not manufactured by Seller (3rd Party Supplies) will be replaced under the warranty if failure occurs. Seller and Buyer
agree Buyer is obligated to provide notice to seller of any defect or failure and that upon notification, Seller shall have the
right to and shall immediately cure any defect in the warrantied manufactured goods and, if cured, Buyer excuses Sellers liability
for any indirect, special, consequential, or punitive damages (including lost profits) arising out of or relating to this agreement
or the transactions it contemplates and irrespective of whether the Seller has been advised of the possibility of any such damage.
Nothing in this provision is meant to exclude valid claims based in breach of contract, tort or negligence and is simply intended
to allow for Surna to cure any deficiencies with their manufactured or installed goods.

 

7.
Limitation of Actions. No action arising out of or relating to this agreement or the transactions it contemplates may be
commenced against the Seller more than 12 months after the basis for such claim could reasonably have been discovered.

 

8.
Governing Law and Designation of Forum. (a) The laws of the State of Nevada (without giving effect to its conflicts of
law principles) govern all matters arising out of or relating to this agreement and the transactions it contemplates, including,
without limitation, its interpretation, construction, validity, performance (including the details of performance), and enforcement.
(b) A party bringing a legal action or proceeding against the other party arising out of or relating to this agreement or the
transactions it contemplates must bring the legal action or proceeding in any court of the State of Nevada sitting in Clark, County.
Each party to this agreement consents to the exclusive jurisdiction of the courts of the State of Nevada sitting in Clark County
and its appellate courts, for the purpose of all legal actions and proceedings arising out of or relating to this agreement or
the transactions it contemplates.

 

9.
Force Majeure. The Seller will not be liable for delays in performance or for non-performance due to unforeseen circumstances
or causes beyond the Seller’s reasonable control.

 

10.
Assignment; Delegation. If Buyer assigns prior to completion of payment, all payments shall accelerate to the date of assignment
and become immediately due to Seller unless otherwise agreed in a signed writing.

 

	1	Terms and Conditions, Surna, Inc.	Surna ____ Buyer ____

 

    	 

    	 

    

 

11.
Recovery of Expenses. In any adversarial proceedings between the parties arising out of this agreement or the transactions
it contemplates, the prevailing party will be entitled to recover from the other party, in addition to any other relief awarded,
all expenses that the prevailing party incurs, including legal fees and expenses.

 

12.
Entire Agreement. This agreement constitutes the entire agreement between the parties with respect to the subject matter
of this agreement and supersedes all other agreements, whether written or oral, between the parties.

 

13.
Amendments. No amendment to this agreement will be effective unless it is in writing and signed by both parties.

 

14.
Effectiveness; Date. This agreement will become effective when both parties have signed it. The date this agreement is
signed by the last party to sign it (as indicated by the date associated with that party’s signature) will be deemed the
date of this agreement.

 

15.
Counterparts; Electronic Signatures. This agreement may be signed in one or more counterparts, which together will form
a single agreement. This agreement may be signed electronically.

 

16.
Dehumidification. Buyer understands that Seller has made a good faith effort to predict dehumidification requirements,
however, buyer also understands and has been made aware of the fact that dehumidification needs are variable from facility to
facility and cannot be accurately quantified. Seller is providing dehumidification as part of its system, but does not guarantee
that a specific humidity level can be reached. Buyer understands that he or she may need to provide additional supplemental dehumidification
on a case by case basis. However, Seller warrants that this estimate contemplates meeting necessary dehumidification functions,
and if humidity consistently exceeds 65% in flowering areas, Surna will provide additional dehumidifiers to Buyer at Surna’s
manufactured cost. This relates to dehumidification only and issues regarding absence of humidity are solely the responsibility
of Buyer.

 

17.
Additional Terms and Conditions: 

 

	A.	This
                                         agreement is cancellable without penalty only in the event that buyer does not obtain
                                         a cultivation license for subject facility. A cultivation license shall be considered
                                         obtained whether it is a conditional license or a full license (“License”).
                                         Should buyer’s License fail to issue, this agreement becomes void. In the event
                                         that the buyer’s license is issued as anticipated at the time of the agreement,
                                         client agrees that deposit will be paid per agreement and production will begin within
                                         no more than 90 days from license issuance, unless otherwise agreed.
	 	 
	B.	In
                                         exchange for the 10% discount indicated on buyer’s estimates, upon satisfactory
                                         completion of installation, buyer agrees to the following:

 

		1.	Allow up to 12 visitors to
buyer’s facility within a 2 year period. 2 year period commences on the day that facility is complete and goes live with
cultivation.
	 	 	 
		2.	Allow Surna to refer up to
20 potential customers directly to buyers for testimonial of system efficiency and overall experience (by phone or e-mail).
	 	 	 
		3.	Allow Surna to take photos
and video of buyer’s facility, and to use photos and video for promotional purposes, including but not limited to social
media accounts, website(s), trade shows, printed brochures, presentations, etc.
	 	 	 
		4.	Allow Surna to use the name
of client’s facility for promotional purposes.
	 	 	 
		5.	Write a letter of recommendation
for Surna’s system for promotional purposes and distribution to potential clients.

 

	C.	Surna’s responsibilities
relative to section 17B are as follows:

 

	 	1.	Surna will provide ample notice
(5 days unless otherwise agreed) to buyer prior to sending any visitor. Surna will accompany visitors whenever possible, unless
otherwise agreed. Surna will not knowingly refer any potential client who intends to do business in Clark County, NV to client
for tour or testimonial.

 

WHEREFORE,
the parties set forth signature as acknowledgment and commitment to the terms and conditions listed herein,

 

	 	 	 
	Authorized
    Signature (Buyer)	 	Authorized
    Signature (Surna, Inc)

 

	 	 	 
	Title	 Date	 	Title	 Date

 

	2	Terms and Conditions, Surna, Inc.	Surna ____ Buyer ____

 

    	 

    	 

    
  

 

    	 

    	 

    

  

 

    	 

    	 

    

 

Addendum
to 3132

	 	1.	All
    start dates are subject to modification by CWNevada.

 

 Signed
this 9th day of January, 2015,

	/s/
    Tom Bollich	 	/s/
    Brian Padgett
	CEO –
    Surna	 	Principal
    – CWNevada

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