Exhibit 10.1

“FORM OF”

MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into this 26th day of May, 2020 (the “Effective Date”) by and between [___________________] (each a “Seller” and collectively, the “Sellers”), TARONIS FUELS, INC., a Delaware corporation (“Purchaser”) and TARONIS-TGS, LLC, a Delaware limited liability company “(Purchaser Designee”), and [__________________________] (the “Company”). Sellers, Purchaser, and the Company are each sometimes referred to herein as a “Party” and collectively as the “Parties.”

RECITALS

A. [redacted]

B. Purchaser desires to acquire in the name of Purchaser Designee, and Sellers wishes to sell, on the terms and conditions set forth in this Agreement, one hundred percent (100%) of the Company’s outstanding membership interests (the “Purchase Interests”), the result of which will be that after the Closing (as hereinafter defined) Purchaser Designee will be the sole member of the Company.

C. Sellers and Purchaser have determined that it is in their mutual best interests, and the best interests of the Company, that any and all other existing agreements concerning the issue, sale or transfer of the Purchase Interests by and between the Parties be cancelled and superseded in their entirety by this Agreement to the effect that Sellers agree to sell, and Purchaser agrees to purchase, the Purchase Interests, pursuant to the terms set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, for and in consideration of the mutual covenants and conditions herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I

Purchase and Sale

1.1 Sale of Purchase Interests. Subject to the terms and conditions set forth in this Agreement and in consideration for the Purchase Price (defined below), Sellers shall sell the Purchase Interests to Purchaser Designee, which such Purchase Interests represents one hundred percent (100%) of the outstanding membership interests in the Company.

1.2 Purchase Price; Allocation of Purchase Price. The price of the Purchase Interests determined under this paragraph shall be Eight Million and No/100 U.S. Dollars ($8,000,000.00) (the “Purchase Price”). The Purchase Price shall be paid by Purchaser to the Sellers, pro rata based upon the percentage of Purchase Interests owned by each as set forth in the Recitals, as follows:

For purposes of this Section 1.2, Purchase Price of the Purchase Interests shall be, and is accepted as the value as of the Effective Date, as determined by mutual agreement amongst the Parties.

ARTICLE II

Closing

2.1 Closing Date. The Closing of the sale of Purchase Interests shall occur on the Effective Date simultaneously with the signature of this Agreement by the Parties, the delivery of the Closing Payment by the Purchaser, the Assignment of the Purchase Interests by the Sellers, and the other actions set forth in this Article II (the “Closing”), and shall be deemed effective for all purposes on the Effective Date. The Closing shall take place at such time and location as the Parties mutually agree and may occur by the electronic exchange of documents. The date on which the Closing occurs shall be the “Closing Date”.

2.2 Continuation of Employment. [redacted]

2.3 Performance by Sellers at Closing. At Closing and as applicable to a respective Seller, the Sellers shall execute and deliver to Purchaser the following:

2.4 Performance by Purchaser and Company at Closing. At Closing, Purchaser shall execute and deliver or cause to be executed and delivered to Sellers the following:

ARTICLE III

Representation and Warranties of the Sellers

Each Seller represents and warrants to Purchaser, severally as to such Seller and not jointly, as of the Closing Date, as follows:

3.1 Authority. Such Seller has all power and authority, without further consent, to enter into and perform all of the obligations under this Agreement and to enter into the other documents that this Agreement contemplates, including, but not limited to the transfer instruments referenced herein.

3.2 Title of Units. Such Seller owns all right, title and interest in the percentage of the Purchase Interests owned by such Seller, as set forth in the Recitals to this Agreement, without lien or encumbrance. Such Seller’s title to the percentage of the Purchase Interests owned by such Seller has not been encumbered by any security interests, charges, restrictions, or other encumbrances of any nature, other than under this Agreement with Purchaser, the Company’s limited liability company agreement or applicable laws (including securities laws).

3.3 No Litigation. To the best of the knowledge of such Seller, no action, proceeding or judgment has been instituted in which an order has been entered restraining, prohibiting or invalidating the transactions contemplated by this Agreement, or affecting the right of Purchaser to own the Purchase Interests. For purposes of this Section 3.3, “knowledge” means the current actual knowledge of such Seller.

3.4 Disclosure. To the best of the knowledge of such Seller, no representation or warranty of such Seller contained in this Agreement, or in any document delivered to Purchaser in connection with the transactions contemplated hereby, contains any untrue statement of a material fact, or omits a material fact necessary to make those statements contained herein or therein not misleading in any respect. For purposes of this Section 3.4, “knowledge” means the current actual knowledge of each Seller.

3.5 Authorized Capital and Outstanding Units. The Purchase Interests represent all of the issued and outstanding membership interests in the Company, such membership interests are owned by the Sellers in the percentages set forth in the Recitals to this Agreement, and all such membership interests are fully paid, free and clear of all liens, claims and encumbrances (except for such liens, claims and encumbrances under this Agreement, the Company’s limited liability company agreement and applicable laws) and are not subject to options, warrants, contracts, or agreements of any kind, except as set forth in this Agreement and the Company’s limited liability company agreement.

3.6 No Restrictions on Securities; Purchase Interest Holders. There are no authorized, issued, or outstanding securities of the Company, whether equity or debt, of any kind whatsoever and no outstanding options, warrants, rights, conversion privileges or other agreements or instruments obligating the Company to issue any additional membership interests or capital stock of any class or classes of any kind.

ARTICLE IV

Representation and Warranties of Purchaser

Purchaser represents and warrants to each Seller as of the Closing Date, as follows:

4.1 Authority. Purchaser has all power and authority, without further consent, to enter into and perform all of the obligations under this Agreement and to enter into the other documents that this Agreement contemplates.

4.2 Investigation and Access. Purchaser has been provided access to the Company’s financial statements and to all of the documents and information relating to the operations and activities of the Company. Purchaser has further discussed this sale of the Purchase Interests with the Sellers, has been given the opportunity to ask any questions Purchaser has concerning any and all aspects of the operations and activities of the Company, including the fair market value of the Purchase Interests, to Purchaser’s full satisfaction and Purchaser has no further questions. Purchaser acknowledges and agrees that Purchaser has made its own independent investigation into the desirability of purchasing the Purchase Interests for the price and terms set forth herein, and is relying upon that investigation, and the representations and warranties of the Seller set forth in Article III, and not upon any other representations and warranties of the Sellers or any other person.

4.3 Restricted Securities Purchaser acknowledges and understands that the Purchase Interests are being purchased for its own account, for investment purposes only, and not for the account of any other person and not with a view to distribution, assignment or resale to others, in whole or in part, and acknowledges that the sale of the Interest is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Act”).

ARTICLE V

Covenants

5.1 Post-Closing Covenants. In consideration of the Purchase Price, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, following the Closing hereof, and as a condition to complete said Closing, Sellers agree that they have information regarding the Company and will continue to be in a position of trust and confidence, having familiarity with the Company’s operations, including, but not limited to financial and business information, client lists, bidding practices, tax records, unique production and/or service methods, proprietary information, employee benefits, personnel history, accounting procedures, surety limits or terms, bank lending terms, promotions, products, bid methods, strategies, goals, employees, consultants, equipment condition and capability, job status (executory and completed), technology, services, procedures, clients and services, bid processes, potential clients, potential service areas, and general operations of the Company (collectively “Confidential Information”). It is hereby acknowledged by all Parties that all of the foregoing, both individually and combined, define the business of the Company, and are valuable, special, and unique assets of the Company and its business; the disclosure of or inappropriate use of these assets without the specific written authorization of the Company will cause serious harm to the business and goodwill of the Company, potentially causing significant monetary loss. Sellers recognize and acknowledge that the Company has taken reasonable steps to preserve and protect the secrecy of all of the foregoing confidential information and trade secrets.

(a) Non-Disclosure. Each Seller shall keep all Confidential Information and trade secrets, strictly confidential and each Seller shall not disclose any Confidential Information to any third party without the prior written consent of the Company or pursuant to an order of a court of competent jurisdiction.

(b) Non-Solicitation. Commencing on the Closing Date, and subject to the timely payment of the Promissory Note continuing for a term of eighteen (18) months from the Closing Date, each Seller agrees not to (i) solicit, encourage or attempt to induce (or to assist others to do so) any employee or agent of the Company to terminate his or her employment or working relationship with the Company, or to work with such Seller (or any business, person or activity for profit in which such Seller is associated with) in any capacity whatsoever, or (ii) solicit, encourage, attempt to induce or otherwise contact any of the Company’s existing or prospective customers or clients (known to such Seller as of the Closing Date) (or to assist others to do so) for the purpose of reducing, restructuring or terminating its (or their) business relationship with the Company or to shift its business from the Company to any other provider of competing services or goods.

(c) Non-Disparagement. Each Seller and Purchaser mutually agree that they will make no written or oral statements that directly or indirectly disparage the Company, or each other, or their respective officers, directors, employees, agents or affiliates in any manner whatsoever, including, but not limited to the working conditions or employment practices of the Company; provided, however, that nothing herein is intended to prevent any Seller or Purchaser from testifying truthfully in any proceeding or to limit the right of any person to enforce the obligations of any other person under this Agreement.

(d) Remedies Include Injunctive Relief. In the event any Seller or Purchaser breaches or threatens to breach the terms of this Section 5.1, in whole or in part, any non-breaching Party shall be entitled to all remedies to which it may be entitled in law or in equity including injunctive relief, and monetary damages.

(e) Redacted.

5.2 [Redacted]

5.3 [Redacted]

5.4 [Redacted]

ARTICLE VI

Indemnification

6.1 Indemnification by Purchaser. Purchaser shall indemnify, defend and hold harmless each Seller from any debt, liability or claim (including all costs incurred in the settlement or defense of such liability or claim and reasonable attorneys’ fees, but excluding any obligations for trade accounts payable and the indebtedness listed on Exhibit C), whether such liability or claim is known or unknown (collectively, “Losses”) arising from (i) any inaccuracies in or any breach of any representation or warranty of Purchaser contained in this Agreement, and any certificate or other document delivered pursuant hereto, (ii) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Purchaser pursuant to this Agreement, and (iii) the operation and ownership of the Company after the Closing Date.

6.2 Indemnification by Sellers. Each Seller shall, severally and not jointly, indemnify, defend and hold harmless Purchaser from any Losses arising from (i) any inaccuracies in or any breach of any representation or warranty of such Seller contained in this Agreement, and any certificate or other document delivered pursuant hereto, (ii) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by such Seller pursuant to this Agreement, or (iii) the operation and ownership of the Company on or prior to the Closing Date. Any claim for indemnity under clause (i) above must be made within eighteen (18) months from the Closing Date. The maximum aggregate amount of Losses payable by the Sellers under clause (i) of this Section 6.2 is limited to each Seller’s prorated portion of the Purchase Price.

6.3 Exclusive Remedy. The indemnification provisions of this Article VI (together with rights to specific performance and other equitable remedies, including injunctive or other equitable relief) constitute the sole and exclusive remedy with respect to any and all claims relating to the subject matter of the this Agreement, and no other remedy shall be had in law or at equity or otherwise by any Party or any officer, director, employee, agent, affiliate, attorney, consultant, successor or assign of any Party, all such remedies being hereby expressly waived to the fullest extent permitted under applicable law. Without limitation, the indemnification set forth in this Article VI constitutes the sole and exclusive remedy of the Parties arising out of any breach or claimed breach of the representations, warranties, and covenants set forth in this Agreement.

6.4 Purchase Price Adjustment. Any indemnification received under this Article VI shall be treated by Purchaser and Sellers, to the extent permitted by law, as an adjustment to the Purchase Price.

ARTICLE VII

Dispute Resolution: Mediation and Arbitration

7.1 Mediation of Disputes.

(a) Mediation. Except for default due to non-payment, or with respect to any restraining order for alleged breach of any restriction on competition, non-disclosure or non-disparagement provision, in the event of any other dispute between any Parties to this Agreement involving the interpretation or performance of any covenant, condition, or obligation arising under this Agreement, or any of the exhibits attached hereto, that the Parties cannot themselves timely resolve to their mutual satisfaction, such dispute shall first be submitted to mediation. Mediation proceedings shall take place at a location as mutually agreed to between the Parties to this Agreement, or, in the event the Parties are unable to agree, then in Phoenix, Arizona, by a duly qualified, neutral attorney experienced in mediation or other professional mediator chosen by the Parties. The Parties must mutually agree upon selection of the mediator within ten (10) days of either Party sending written notice to the other Party requesting mediation of the dispute. In the event that the Parties cannot timely agree upon selection of the mediator, then said mediator shall be selected in the same manner as the single arbitrator as provided in Subsection 7.2(d)(i) below.

(b) Mediation Proceedings. The mediation shall take place not later than thirty (30) days after selection of the mediator; during which, with the assistance and counseling of said mediator, the Parties shall, in good faith, attempt to resolve their dispute. Any remaining unresolved disputes or issues following completion of said mediation proceedings shall be set forth in writing and be subject to final and binding arbitration in the manner set forth in Section 7.2 below. Each Party to the mediation shall be responsible for their own costs and expenses. The costs of the mediation proceedings itself, and the fees and costs of the mediator, shall be shared equally by the Purchaser on the one hand and the Sellers as a group on the other hand. The Parties to the mediation shall be required to maintain the confidential nature of said proceedings.

7.2 Arbitration of Disputes.

(a) Arbitration. After completion of the Section 7.1 mediation proceedings and notwithstanding the right of the Parties to pursue proceedings in a state or federal court in the event of a default due to non-payment, or with respect to any restraining order for alleged breach of any restriction on competition, non-disclosure or non-disparagement provision, as to any remaining unresolved issues or disputes, the Parties to said mediation shall resolve, exclusively by final and binding arbitration, all such remaining claims, demands, causes of action, disputes, controversies or other matters in question (“Claims”) arising out of, or related to, the terms of this Agreement, and whether such claims originate from contract, tort or otherwise, and whether provided by statute (federal, state or local statutes or laws, and rules, regulations and ordinances interpreting the same), equity or common law, which any Party may have against the others, or their employees or agents in their capacity as such or otherwise.

(b) Arbitration Procedures. Any arbitration hereunder shall be in accordance with the law of the State of Arizona and to the extent that any issue or procedure covering the arbitration is not adequately addressed, said issue or procedure shall then be in accordance with the then current rules of the American Arbitration Association (“AAA”) that are applicable to the Claims asserted. Notwithstanding the foregoing, the arbitration need not be submitted to the American Arbitration Association for administration. The arbitrator shall be a practicing attorney or retired judge with at least ten (10) years total working experience and shall be mutually selected by the Parties. No demand for arbitration may be made after the date when the institution of legal or equitable proceedings based on such Claims would be barred by the applicable statute of limitation. The arbitrator is not authorized to award punitive or other damages not measured by the prevailing Party’s actual damages. An award of damages shall include pre-award interest at the Arizona statutory rate from the time of the act or acts giving rise to the award.

(c) Enforcement. If a Party refuses to honor its obligations under this Agreement, subject to Section 7.1 and Section 7.2(a) and (b), the other Parties may compel arbitration in either the federal or state court. The arbitrator shall apply the substantive law of the State of Arizona, or federal law, or both, as applicable to the claims asserted. The arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforcement of this arbitration provision, including any claim that all or part of this provision is void or voidable, and any claim that an issue or dispute related to or arising out of this Agreement, is not subject to arbitration. The type and amount of discovery allowed in the arbitration proceedings shall be in the sole discretion of the arbitrator. Any and all of the arbitrator’s orders, decisions and awards shall be final and binding, and may be enforceable in, and judgment upon any award rendered by the arbitrator, may be confirmed and entered by, any federal or state court having jurisdiction. All proceedings conducted pursuant to this Agreement, including any order, decision or award of the arbitrator, shall be kept confidential by the Parties; provided, however, that Parties may communicate the details of the proceedings conducted pursuant to this Agreement to their financial advisors and others with a need to know.

(d) Number of Arbitrators; Venue; Written Decision and Findings. The arbitration shall be decided by a single arbitrator under Section 7.2(d)(i).

(i) Single Arbitrator. A single arbitrator shall first be appointed by agreement of the Parties, if such agreement can be reached within ten (10) days of receipt of notice by one Party that any other Party has commenced arbitration proceedings. The mediator chosen to hear the dispute pursuant to Section 7.1 shall not serve as the single arbitrator. In the absence of timely agreement, and if the Section 7.1 mediator was not chosen pursuant to the provisions of this Subsection 7.2(d) (e.g., because the Parties to the dispute mutually agreed upon the selection of the mediator), then the Parties shall request a list of seven (7) arbitrators versed in the area of law that is the subject of the claim. The Parties shall select the single arbitrator from said list, by agreement, if possible, and in the absence of said agreement within ten (10) days of receipt of said list, the arbitrator shall be selected from said list by each Party, in turn striking a name from said list until only a single name remains, who shall be the sole arbitrator.

(ii) Resignation of Arbitrator. If any arbitrator resigns, a replacement shall be determined pursuant to Section 7.2(d)(i).

(iii) Venue. The Parties agree that venue for arbitration shall be as mutually agreed to between the Parties to this Agreement, or, in the event the Parties are unable to agree, then in Phoenix, Arizona.

(iv) Written Decision. The arbitrator shall issue written findings and award setting forth his or her decisions concerning said arbitration and the reasoned basis for such findings and award.

(e) Costs of Arbitration. When arbitration is actually conducted pursuant to this Agreement: (i) the Purchaser on the one hand and the Sellers on the other hand shall share equally the obligation for payment of all of the arbitrator’s fees and any facility charges, if applicable, to secure the place of arbitration; and (ii) if said arbitrator determines that an award of attorney fees and costs to the prevailing Party or Parties would be fair and equitable under the circumstances at the time of arbitration, then the Party or Parties in whose favor the arbitrator renders the award shall be entitled to have and recover from the other Party or Parties all other costs incurred, including reasonable attorney fees and expert witness fees, to the extent that such fees and costs would be allocable if incurred in a court action. To the extent that said arbitrator’s award does not award attorney fees and costs to any Party, then, in such event, each Party shall bear its own costs and attorney fees (exclusive of the facility charge portion of the costs of arbitration and fees of the arbitrator, which are to be shared equally between the Purchaser on the one hand and the Sellers on the other hand).

(f) Right to Appeal. The arbitrator does not have authority (i) to render a decision which contains a reversible error of state or federal law, or (ii) to apply a cause of action or remedy not expressly provided for under existing state or federal law. Any Party may appeal an award rendered by the arbitrators in violation of this Section 7.2(f) by filing an appeal with the proper court having jurisdiction over the matter within thirty (30) days of the date upon which such final decision was rendered.

(g) Waiver of Trial. The Parties acknowledge that by signing this Agreement including this mediation (Section 7.1) and arbitration (Section 7.2) provision, said Party is waiving any right that said Party may otherwise have to a jury trial, or a court trial, in regard to any claim hereunder, including a claim for breach of this Agreement.

7.3 Attorneys’ Fees. In the event of any dispute regarding the interpretation or enforcement of this Agreement that was not settled by mediation, and therefore was subject to binding arbitration, and except as otherwise provided in Subsection 7.2(e) (i.e., a decision by the arbitrator not to award attorney’s fees and costs because to do so, in the arbitrator’s opinion, would not be fair and equitable), the prevailing Party or Parties in such dispute, and whether or not litigation is commenced to enforce said arbitration award by the prevailing Party or Parties, shall be entitled to recover its or their reasonable attorney fees and costs and expenses, including, but not limited to, court costs, and specifically including with the definition of “costs” all charges, expenses, consultant fees, expert witness fees, and attorney fees that the prevailing Party or Parties may incur, with or without litigation, in such dispute that was the subject of binding arbitration, whether at trial or upon appeal, and including any bankruptcy or other insolvency proceedings involving the non-prevailing Party or Parties. The term “prevailing Party or Parties” as used in this Agreement means the Party or Parties who successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even though not necessarily receiving an award of damages or other form of recovery.

ARTICLE VIII

Miscellaneous

8.1 Notices. All notices required for by this Agreement shall be made in writing by the mailing of the notice in the U.S. mail to the last known address of the Party entitled thereto, registered or certified mail, return receipt requested. The addresses of the Parties at Closing are:

8.2 Counterparts. For the convenience of the Parties hereto, this Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.3 Parties in Interest. This Agreement shall benefit and bind the Parties and their respective successors, and the Sellers’ heirs and personal representatives.

8.4 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Arizona.

8.5 Entire Agreement. This Agreement contains the entire understanding of the Parties relating to the subject matter hereof and supersedes any prior agreements, written or oral, with respect to the same subject matter.

8.6 Legal Representation. PURCHASER, PURCHASER DESIGNEE AND ITS ATTORNEY HAVE NOT REPRESENTED THE SELLERS IN THE NEGOTIATION AND PREPARATION OF THIS AGREEMENT. IN REGARD TO THIS AGREEMENT, SELLERS HAVE BEEN ADVISED TO SEEK INDEPENDENT LEGAL COUNSEL. THE LANGUAGE USED IN THIS AGREEMENT WILL BE DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES TO EXPRESS THEIR MUTUAL INTENT, AND NO RULES OF STRICT CONSTRUCTION WILL BE APPLIED AGAINST ANY PARTY.

8.7 Survival of Agreement After Closing. Unless otherwise specifically set forth herein, the representations, warranties and agreements contained in this Agreement, or in any document delivered pursuant hereto, shall survive the Closing of the transactions contemplated hereby, subject to the limitations set forth in Section 6.2.

8.8 Severability. Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable, all other provisions of this Agreement shall be given effect separately from the provision or provisions determined to be illegal or unenforceable and shall not be affected thereby.

8.9 Trading of Stock. The Parties acknowledge that the Purchaser is a public company quoted on the OTC Markets. If any material, non-public information is disclosed pursuant to this Agreement or the Confidential Information, each Seller agrees that it will comply with SEC Regulation FD (Fair Disclosure), and refrain from trading in Taronis Fuels, Inc. stock until the material non-public information is publicly disseminated.

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IN WITNESS WHEREOF the Parties have caused this Agreement to be executed as of the Effective Date.

Exhibit 10.2

“FORM OF”

PROMISSORY NOTE

Borrower: Taronis Fuels, Inc. and Taronis-TGS, LLC

Lender(s): [                  ]

PROMISE TO PAY. Taronis Fuels, Inc., a Delaware corporation, and Taronis-TGS, LLC, a Delaware limited liability company (collectively, the “Borrower”), jointly and severally, promise to pay to [                 ] (collectively, the “Lender”), without set off, in lawful money of the United States of America, the principal amount of Four Million and 00/100 Dollars ($4,000,000) (“Principal”), together with interest at the rate of Eight Percent (8%) per annum on the unpaid outstanding principal balance of this Promissory Note (“Interest”). Interest shall accrue on the unpaid balance of this Promissory Note using an Actual/360 day counting method. Principal and Interest shall be paid in accordance with Schedule A, attached hereto and incorporated by reference herein.

REPAYMENT. The Borrower shall make payments of Principal and Interest in equal monthly installments in accordance with Schedule A.

MATURITY DATE. The Principal amount and accrued Interest on this Promissory Note must be paid in full on or before May 26, 2022.

COLLATERAL. The Borrower shall pledge to the Lender and grant a security interest thereto One Hundred Percent (100%) of the membership interests in [                ] (“Collateral”). The Collateral will be secured by a Membership Interest Pledge Agreement (the “Pledge Agreement”) to be executed herewith. Borrower hereby permits the Lender to file a UCC-1 financing statement with the [                ] Secretary of State perfecting its security interest in the pledged Collateral.

BANK INFORMATION; WIRE INSTRUCTIONS. All amounts due hereunder shall be payable to the nominated bank account(s) of the Lender.

MAXIMUM INTEREST AMOUNT. Any amount assessed or collected as interest under the terms of this Promissory Note will be limited to the maximum amount of interest allowed by state or federal law, whichever is greater. Amounts collected in excess of the maximum lawful amount will be applied first to the unpaid Principal balance of the Promissory Note and any remainder will be paid to the Lender as a fee.

SUBORDINATED NOTE. This Promissory Note shall be subordinated in right to all indebtedness of Borrower for borrowed money payable to a bank or other financial institution, whether incurred before or after the date hereof; provided however, that such subordination shall not impair the obligation of Borrower to make payments on the Promissory Note during any period that Borrower is not in default of such indebtedness and no default under such indebtedness would be caused by such payment.

PREPAYMENT. The Borrower may prepay Principal plus accrued Interest at any time.

DEFAULT. Each of the following shall constitute an event of default (“Event of Default”) under this Promissory Note:

Borrower agrees that if an Event of Default occurs, Lender may, without notice or demand, except as otherwise required by statute or otherwise specifically provided in this Note, accelerate the maturity of this Note and declare the entire unpaid principal balance and all accrued interest at once due and payable, and exercise all other rights and remedies Lender may have under this Note and the Pledge Agreement, including any one or more of the foregoing remedies.

Upon the occurrence of an Event of Default, the outstanding principal and all accrued and unpaid interest of this Note shall bear interest at a rate of 10% per annum, compounded annually from the date of such Event of Default until such principal and accrued interest (and any interest accruing thereon after the occurrence of such Event of Default) shall be paid in full.

OPPORTUNITY TO CURE. Except as otherwise stated herein, upon any Event of Default, Borrower shall be entitled to written notice describing the asserted Event of Default and a thirty (30) calendar day opportunity to cure commencing on the date written notice is received by the Borrower (the “Cure Period”) before Lender may declare Borrower is in full non-cure default. If Borrower defaults upon this Promissory Note, Lender shall deliver written notice to Borrower via email to [                ] notifying Borrower of such default and the reasonable particulars of such default. Receipt of notice shall be deemed received on the date upon which the written notice is sent to the above referenced email addresses.

GOVERNING LAW. This Promissory Note will be governed by, construed and enforced in accordance with federal law and the laws of the State of [                ]. This Promissory Note has been accepted by Lender in the State of [                ].

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of [                ] County, State of [                ].

ATTORNEY’S FEES. If Payee requires the services of an attorney to enforce the payment of this Note or if this Note is collected through any lawsuit, probate, bankruptcy, or other judicial proceeding, Borrower agrees to pay Lender all court costs, attorney’s fees and expenses, and other collection costs incurred by Lender.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $500.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.

SUCCESSOR INTERESTS. The terms of this Promissory Note shall be binding upon Borrower and shall inure to the benefit of Lender and its successors and assigns.

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PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

Exhibit 10.3

“FORM OF”

MEMBERSHIP INTEREST PLEDGE AGREEMENT

THIS MEMBERSHIP INTEREST PLEDGE AGREEMENT (this “Agreement”) is made as of this 26^th day of May, 2020 (“Effective Date”), by Taronis-TGS, LLC (“Pledgor”), for the benefit of [                 ]. The term “Pledgee” shall mean [  ], in [his/her/its] capacity as collateral agent for [        ].

RECITALS:

WHEREAS, [                 ], owns all of the membership interest in and to Pledgor;

WHEREAS, [                            ] and Pledgor have executed a Promissory Note as co-makers (the “Note”) in the amount of Four Million and 00/100 Dollars (US$4,000,000), on even date herewith for the benefit of Pledgee.

WHEREAS, as additional collateral and security the Pledgor has agreed to pledge one hundred percent of its ownership of [                              ](“Ownership Interest”), to Pledgee.

WHEREAS, the Pledgor has agreed to pledge to the Pledgee the Ownership Interest, on the terms and conditions set forth below, to secure the full performance of the Pledgor’s obligations under the Note and this Agreement.

AGREEMENT:

NOW, THEREFORE, in consideration of the matters described in the foregoing Recitals, which Recitals are incorporated herein and made a part hereof, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees as follows:

1. Definitions.

(a) Certificates. The term “Certificates” means the certificates evidencing ownership of the Collateral.

(b) Collateral. The term “Collateral” means the Ownership Interest.

(c) Company. The term “Company” means [                              ].

(d) Cure Period. The term “Cure Period” shall having the meaning set forth in the Note relating to any Event of Default.

(e) Event of Default. The term “Event of Default” shall have the meanings set forth in the Note.

(f) Note. The term “Note” means that certain Secured Promissory Note dated May 26, 2020, in the amount of Four Million and 00/100 Dollars (US$4,000,000), tendered by Taronis Fuels, Inc. and Pledgor as co-makers to the Pledgee.

2. Pledge of Membership Interests and Creation of Security Interest. The Pledgor pledges the Collateral to the Pledgee to secure the full and punctual payment and discharge of the Note, and grants to the Pledgee a continuing security interest in the Collateral and the Certificate. At the time of execution of this Agreement, Pledgor shall deliver to the Pledgee the Certificate and an Irrevocable Transfer Power relating to the Collateral executed in blank, to be held by Pledgee in escrow subject to the terms and conditions of this Agreement.

3. Covenants and Warranties of Pledgor. The Pledgor covenants and warrants as follows:

(a) Payment of Indebtedness. The Pledgor will promptly pay the Note amounts when due. In doing so, the Pledgor shall comply fully with all terms and provisions of the Note and this Agreement, and any other related documents.

(b) Ownership of Collateral. The Pledgor has marketable title to the Collateral, free from prior liens, encumbrances, or pledges of any kind.

(c) Liens. The parties will neither create nor permit the creation of any lien or other encumbrance of the Collateral without each party’s the prior written consent.

(d) Transfers. The parties will neither make nor permit any transfer of the Collateral, except as provided in this Agreement, without each party’s prior written consent.

(e) Maintain Corporation Existence. The Pledgor shall cause the Company to maintain its corporate existence in the State of [                ] and comply with all applicable federal, state, or local statutes and regulations. Pledgor shall maintain its corporate existence in the State of [                ] and comply with all applicable federal, state, or local statutes and regulations. Pledgor shall provide Pledgee at least 30 days written notice of any change in its corporate status or its principal office location.

(g) Merger or Sale of Assets. The Pledgor shall not permit the Company to enter into any merger agreement or to sell any material asset without prior written consent of the Pledgee, which consent will not be unreasonably withheld.

4. Duties of Pledgee. The Pledgee covenants and warrants as follows:

(a) Return of Collateral. The Pledgee shall release the security interest granted herein and ensure the return of the Certificate to the Pledgor and destruction of the Irrevocable Transfer Power upon the complete and satisfactory performance of the Note.

(b) Protection of Collateral. Pledgee shall not sell the Collateral or engage in any acts which will cause or contribute to the depreciation of the value of the Collateral, other than to take action necessary to levy upon the Collateral pursuant to an uncured Event of Default.

5. Exercise of Member Rights.

(a) Receipt of Dividends and/or Distributions. As long as no Event of Default has occurred, the Pledgor shall have the right to receive and retain any dividends or other distributions approved and paid on the Collateral.

(b) Right to Vote. As long as no Event of Default has occurred, the Pledgor may vote the Collateral for all purposes allowed within the restrictions set by this Agreement, the Note, and related documents.

(c) Compliance with Securities Laws. The requirements of United States and [  ] state securities laws, or other applicable securities laws, and similar laws analogous in purpose or effect may limit the Pledgee’s actions if the Pledgee elects, following an Event of Default, to dispose of any part of the Collateral, and also may limit the subsequent transferee’s ability to transfer the Collateral. Accordingly, the Pledgee agrees that if the Pledgee sells the Collateral at any public or private sale, the Pledgee will only effect that the sale in accordance with applicable securities laws.

6. Default and Return of Collateral.

(a) Notice of Default and Cure. The Pledgee shall deliver notice of any Event of Default to the Pledgor. The Pledgor shall have the right to cure any Event of Default in accordance with the Cure Period specified under the Note. If the Pledgor fails to cure an Event of Default as described in the Note, then, after expiration of the Cure Period specified in the Note, the Pledgee may pursue any and all remedies provided in this Agreement.

(b) Pledgee May Register Shares. Should an Event of Default occur, upon expiration of any applicable Cure Period specified in the Note, the Pledgee may immediately cause the Collateral to be transferred to the Pledgee’s name on the ownership records of the Company and may exercise any right normally incident to the ownership of the Collateral.

(c) Sale of Collateral. Upon the transfer of the Collateral the Pledgee, the Pledgee may sell all or any part of the Collateral at public or private sale. The Pledgor may purchase all or any part of the Collateral at the sale and may “credit bid” the amount due under the Note in such sale. Proceeds of any sale shall be applied first to pay all costs and expenses related to the Event of Default and sale of the Collateral, including all attorneys’ fees and the costs and expenses of the Pledgee, and second, to pay all amounts owed on the Note on the date of sale. The balance of the proceeds, if any, shall be remitted to the Pledgor. Pledgor agrees that Pledgee may retain the Collateral in full satisfaction of the Note in lieu of a public or private sale of the Collateral.

(d) Remedies Cumulative. Upon and Event of Default, the Pledgee shall have all rights available to the Pledgee at law or in equity, including all rights available under the [ Commercial Code ], and all rights and remedies granted under this Agreement, the Note, and any related documents. These rights and remedies shall be cumulative and may be exercised singly or concurrently with all other rights and remedies the Pledgee may have.

7. Termination of Agreement. This Agreement shall remain in effect until the obligations under the Note have been discharged in full, at which time it shall terminate, and the Pledgee shall release the security interest granted herein, return the Collateral to the Pledgor or its assigns, and destroy the Irrevocable Transfer Power.

8. Attorney-in-Fact. Upon any uncured Event of Default, Pledgor hereby irrevocably appoints Pledgee as Pledgor’s attorney-in-fact (such power of attorney being coupled with an interest) and proxy to take actions with respect to the Collateral, including, without limitation, actions necessary for Pledgee to vote or grant proxies to vote the Collateral, exercise any rights relating to the Collateral including the right exercise any right of appraisal and redemption under applicable laws relating to the equity securities issued by the issuer of the Collateral; to file, prosecute, compromise, settle and otherwise participate in actions against the issuer of the Collateral or against such issuer’s officers and directors and other persons having any duty to the holders of equity securities issued by such issuer; and to assign, pledge, convey or otherwise transfer title in or dispose of the Collateral in accordance with the terms hereof to anyone else.

9. Miscellaneous.

(a) Waiver. No right or obligation under this Agreement will be deemed to have been waived unless evidenced by a writing signed by the party against which the waiver is asserted, or by its duly authorized representative. Any waiver will be effective only with respect to the specific instance involved and will not impair or limit the right of the waiving party to insist upon strict performance of the right or obligation in any other instance, in any other respect, or at any other time.

(b) Notice. Any notice or other communication required or permitted under this Agreement shall be to the addresses set forth above or otherwise provided in writing by the respective parties hereto.

(c) Modifications to be in Writing. To be effective, any modification to this Agreement must be in writing signed by all parties to the Agreement.

(d) Agreement Binding upon Successors and Assigns. This Agreement shall bind the Pledgor and its successors and assigns. All rights, privileges, and powers granted to the Pledgee under this Agreement shall benefit the Pledgee and its successors and assigns.

(e) Assignment of Agreement. At any time, the Pledgee may assign or transfer any of its rights or powers under this Agreement to any person or entity. The Pledgor may not transfer its rights, duties, or obligations under this Agreement without the prior written consent of the Pledgee.

(f) Further Assurances. Both the Pledgor and the Pledgee agree to take any further actions and to make, execute, and deliver any further written instruments which may be reasonably required to carry out the terms, provisions, intentions, and purposes of this Agreement.

(g) Attorneys’ Fees and Costs. If the Pledgor or the Pledgee institutes legal proceedings, to settle any controversy arising under this Agreement, then the prevailing party shall be entitled to reasonable attorney’s fees and costs.

(h) Governing Law. This Agreement shall be enforced, governed, and construed in all respects in accordance with the substantive and procedural laws of the State of [  ], United States of America, except in the case where [  ] law applies to the Collateral.

(i) Severability. If any provision of this Agreement or any application of any provision is determined to be unenforceable, the remainder of this Agreement shall be unaffected. If the provision is found to be unenforceable when applied to particular persons or circumstances, the application of the provision to other persons or circumstances shall be unaffected.

(j) Headings. Headings used in this Agreement have been included for convenience and ease of reference only and will not in any manner influence the construction or interpretation of any provision of this Agreement.

(k) References. Except as otherwise specifically indicated, all references in this Agreement to numbered or lettered sections or subsections refer to sections or subsections of this Agreement. All references to Exhibits refer to Exhibits attached to this Agreement. All references to “this Agreement,” or to any Exhibit to this Agreement, shall include any subsequent amendments to this Agreement, or to the Exhibit, as the case may be.

(l) Number and Gender. When required by the context, the word “it” will include the plural and the word “its” will include the singular; the masculine will include the feminine gender and the neuter, and vice versa; and the word “person” will include corporation, partnership, or other form of association.

(m) Counterparts. This Agreement may be executed in any number of counterparts, including via DocuSign, each of which will be deemed to be an original and all of which together will constitute a single agreement.

(n) Entire Agreement. This Agreement, the Note and any related documents represent the entire understanding of the parties with respect to the subject matter of the Agreement. There are no other prior or contemporaneous agreements, either written or oral, among the parties with respect to this subject.

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EXECUTED AND DELIVERED, as of the date first above written.