Exhibit 10.1

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (as amended hereafter, this “Agreement”) is entered into as of October 21, 2020 and confirms the understanding and agreement by and between TECH CAPITAL, LLC, a California limited liability company (“Lender”), with its headquarters at 2010 North First Street, Suite 300, San Jose, California 95131 (Facsimile No. 408-467-2393), on the one hand, and Taronis Fuels, Inc., a Delaware corporation (“Parent”), MagneGas Welding Supply – Southeast, LLC, a Florida limited liability company (“MagneGas Southeast”), MagneGas Welding Supply – South, LLC, a Texas limited liability company (“MagneGas South”), MagneGas Welding Supply – West, LLC, a California limited liability company (“MagneGas West”), Tech-Gas Solutions, LLC, a Texas limited liability company (“TGS”), Taronis - TAS, LLC, a Florida limited liability company (“Taronis-TAS”), and Taronis – TAH, LLC, a Florida limited liability company (“Taronis-TAH”, together with Parent, MagneGas Southeast, MagneGas South, MagneGas West, TGS, and Taronis-TAS, individually and collectively, “Borrower”), with its headquarters at c/o Taronis Fuels, Inc. 24980 N. 83^rd Avenue, Suite 100, Peoria, Arizona 85383 (their “Chief Executive Office”), on the other hand, regarding the loans to be made by Lender and Lender’s terms and conditions.

RECITALS

A. Borrower has requested Lender to make loans to Borrower for business purposes including working capital.

B. Lender is willing to make such loans to Borrower, on the terms and conditions set forth in the Agreement, and Borrower agrees to make the payments required by this Agreement and to comply with the other terms and conditions of this Agreement.

AGREEMENT

1. Subject to the terms of this Agreement, upon Borrower’s request, Lender shall from time to time in Lender’s Sole Discretion advance sums to Borrower under the Borrowing Base (each, an “Advance” and collectively, “Advances”) so long as no Overadvance exists before the requested advance or would be created by such Advance, with an “Overadvance” to exist when the principal balance of all outstanding Advances and other Obligations (as defined in Paragraph 6) plus any applicable reserves exceed the Allowable Amount. The “Allowable Amount” means the lesser of (a) Ten Million and 00/100 Dollars ($10,000,000.00) (the “Maximum Amount”), or (b) the Borrowing Base, with “Borrowing Base” meaning the sum of (i) Eighty-five percent (85%) of the Net Face Amount of Prime Accounts (both as defined in Paragraph 2), but in any event not in an aggregate amount in excess of Ten Million and 00/100 Dollars ($10,000,000.00) (the “A/R Borrowing Base”), plus (ii) Thirty-five percent (35%) of the Current Market Cost (as defined in Paragraph 2) of raw materials that constitute Eligible Inventory (as defined in Paragraph 2), and Thirty-five percent (35%) of the Current Market Cost of finished goods that constitute Eligible Inventory, but in any event not in an aggregate amount in excess of the lesser of One Million and 00/100 Dollars ($1,000,000.00) or Fifty percent (50%) of the aggregate Net Face Amount of Prime Accounts (the “Inventory Borrowing Base”). Amounts borrowed may be repaid and, subject to the terms of this Agreement, reborrowed at any time during the term of this Agreement. Borrower shall draw all available funds under the A/R Borrowing Base prior to drawing any available funds under the Inventory Borrowing Base. At such time that amounts advanced under the A/R Borrowing Base have been paid in full, with no further intention on the part of Lender to make further Advances, or on the part of Borrower to obtain further Advances, amounts advanced under the Inventory Borrowing Base shall also be due and payable in full. Amounts available under this Agreement shall be advanced prior to amounts available under any other agreement with Lender, unless Lender deems otherwise. To the extent Borrower uses Advances under this Agreement to purchase Collateral (as defined in Paragraph 6), Borrower’s repayment of the Advances shall apply on a “first-in first-out” basis so that the portion of the Advances used to purchase a particular item of Collateral shall be paid in the chronological order in which Borrower purchased the Collateral. Lender may, in its Sole Discretion (as defined below), from time to time, reduce the above percentage or institute reserves against the Borrowing Base to the extent Lender determines in good faith that: the dilution rate of Accounts (as defined in Paragraph 6) for any period has or may be reasonably anticipated to increase in any material respect; the general creditworthiness of one or more account debtors has materially declined; the number of days of turnover of Inventory (as defined in Paragraph 6) for any period has increased in any material respect; the liquidation value of Eligible Inventory, or any category thereof, has materially decreased; cost or count variances exist or are anticipated to exist with respect to Inventory; or the nature or quality of Inventory has materially deteriorated. As used herein, “Sole Discretion” means the exercise by Lender of its reasonable (from the perspective of a secured asset based lender) good faith business judgment in light of all of the facts and circumstances existing with respect to the issue then under consideration by Lender.

2. As used in this Agreement ‘‘Net Face Amount” shall mean with respect to an Account, the gross face amount of such Account less all trade discounts or other deductions to which the account debtor is entitled. “Prime Accounts” shall mean Accounts created by Borrower which: (a) are acceptable to Lender in its Sole Discretion; (b) are creditworthy, and not owing from account debtors that have failed, are insolvent, out of business, or who are subject to a voluntary or involuntary insolvency proceeding; (c) are subject to a perfected first priority security interest held by Lender; (d) have been delivered to Lender in such a manner as Lender may require, including being presented with a “Report of Assignments” or such other procedural requirement established by Lender pursuant to this Agreement or in a procedure manual or otherwise; (e) as of the date of determination, are not more than sixty (60) days past due or remain uncollected more than ninety (90) days from the date of each invoice; (f) have been created by absolute sales of Borrower’s merchandise or services, are genuine, bona fide and collectible, and Borrower has good, unencumbered and absolute title thereto, free of any third party claims and liens; (g) are not subject to any dispute, right of offset, claim, cross-claim, counterclaim, defense or right of cancellation or return; (h) at the time of delivery or transmission to Lender, all property (and/or services) giving rise to such Accounts will have been delivered (from Premises in the United States) to, and/or performed, as applicable, and unconditionally accepted by, each account debtor, and such property shall not have been placed on consignment, guaranteed sale, sale or return, sale on approval, or other terms by which payment by the account debtor is conditional; (i) Borrower has fully performed as required by the terms of all agreements and purchase orders giving rise to such Account; (j) are due and unconditionally payable on terms of forty-five (45) days or less, or on such other terms (as are acceptable to Lender) which are expressly set forth on the face of all invoices, copies of which shall be delivered to Lender, and no such Accounts will then be past due; (k) do not consist of progress billings, bill and hold invoices or retainage invoices; (1) neither the account debtor nor any officer, employee or agent of the account debtor with respect to such Accounts is an officer, employee or agent of or affiliated with Borrower directly or indirectly by virtue of family membership, ownership, control, management or otherwise, nor are any such Accounts owing from account debtors to whom Borrower is or may become liable to for goods or services rendered by such account debtors to Borrower; (m) the account debtors with respect to such Accounts are not any foreign government, the United States of America, any State or any political subdivision, department, agency or instrumentality thereof; (n) from a single account debtor and its affiliates do not in the aggregate constitute more than twenty-five percent (25%) (with such percentage to be up to thirty-five percent (35%) in the aggregate with respect to account debtor TMG Co., LLC and its affiliates; such percentage as applicable to an account debtor, its “Concentration Percentage”) of all otherwise Prime Accounts (but the portion of such Accounts of an account debtor not in excess of its applicable Concentration Percentage may be deemed Prime Accounts); (o) are not owed by any account debtor whose Accounts that have aged ninety (90) days or more from invoice date comprise more than twenty-five percent (25%) of such account debtor’s total Accounts; and (p) are not Accounts with respect to which the account debtor is a resident of a country other than the United States of America except for such Accounts (1) insured by foreign credit insurance acceptable to, and payable to, Lender, or (2) as Lender may consent in its sole discretion; and (q) strictly comply with all Borrower’s warranties and representations to Lender (including those set forth in Paragraph 9). Any Accounts that are not Prime Accounts shall nevertheless be part of the Collateral, and Borrower acknowledges and agrees that (unless otherwise agreed to by Lender in writing) all Accounts shall be assigned to Lender regardless of whether Advances will be made against same. “Value” shall mean the lower of cost or fair market value. “Premises” shall collectively mean the Chief Executive Office and the locations set forth on the attached Schedule 2, Borrower’s existing additional place(s) of business, and Borrower’s hereafter additional place(s) of business (individually and collectively, the “Other Locations”).

As used in this Agreement, “Current Market Cost” means, as determined by Lender in its Sole Discretion, the lower of: (a) cost of Inventory, computed on a first-in-first-out basis in accordance with GAAP (as defined in paragraph 43); or (b) the market value of Inventory. “Eligible Inventory” means, as determined by Lender in its Sole Discretion, Inventory that meets the following criteria: (i) Inventory acceptable to Lender, in its Sole Discretion, for lending purposes; (ii) Inventory held for sale or lease in the ordinary course of Borrower’s business; (iii) Inventory located at Borrower’s Premises (as defined in Paragraph 2); provided, however, that if any such location is owned by a third party other than Borrower, Lender shall have obtained from the owner thereof an agreement relative to Lender’s rights with respect to such Inventory, in form and content satisfactory to Lender; (iv) Inventory shall be that in which Lender has a first perfected security interest; (v) Inventory shall not be subject to a security interest, lien or other encumbrance in favor of any other person or entity; (vi) Inventory shall be of good and merchantable quality free from defects, and that is not slow moving, obsolete, returned, perishable, or manufactured under a license agreement unless the licensor (if other than Borrower) has entered into an agreement in form and content satisfactory to Lender; (vii) Inventory shall be owned by, and in the lawful possession of, Borrower; (viii) Inventory shall be that which does not consist of packaging or shipping materials; (ix) Inventory shall be that which does not consist of supplies used or consumed in Borrower’s business; and (x) Inventory that does not consist of work-in-process. General criteria for Eligible Inventory may be established and revised from time to time by Lender in its Sole Discretion. Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral.

3. Except as provided below, each Advance and the Obligations to Lender shall be paid by the receipt by, and/or the delivery to, Lender of all payments on Accounts (including, without limitation, deposits relating thereto and collections on cash sales) and proceeds of other Collateral. Notwithstanding the foregoing, in the event that an Overadvance exists at any time (and without affecting Lender’s other rights and remedies), Borrower shall immediately repay the entire Overadvance to Lender without demand. In addition, all Obligations, whenever and however created, shall become immediately due and payable without demand: (a) upon the occurrence of an Event of Default (as defined in Paragraph 29) that is not cured prior to the expiration of any cure period applicable to same, if any, or (b) in the case of termination (as set forth in Paragraph 32), whether by notice, lapse of time or otherwise, whichever occurs first. Payments received on Prime Accounts shall be applied to the Obligations first against fees and costs, if any, then against interest and then against principal and with any credit balance consisting of cleared funds in excess of any reserves, in the absence of an Event of Default, to be remitted to Borrower. Payments received from any other source that is not proceeds from a Prime Account shall be applied in the same manner as payments received from a Prime Account as set forth herein. For purposes of calculating borrowing availability under Paragraph 1, payments shall be credited against the Obligations no later than the next business day following the business day payments are received but for purposes of computing interest shall be deemed made as set forth in Paragraph 4, with all payments subject to reversal upon dishonor. Borrower shall be provided on-line internet access (or other access in Lender’s discretion) to information regarding the Obligations, and such information shall be conclusively presumed to be correct and constitute an account stated unless, within thirty (30) days following any such information first becoming available, Borrower delivers (pursuant to Paragraph 35) written objection thereto to Lender.

4. Advances and other Obligations hereunder shall bear interest, on the average daily outstanding balance, at the rate (the “Rate”) of two and three-quarters percentage point(s) (2.75%) per annum over and above the rate announced as the “prime” rate in the Western Edition of the Wall Street Journal which is in effect from time to time (the “Prime Rate”); provided that the Prime Rate shall at all times be deemed to be not less than three and one-quarter percent (3.25%) per annum (the “Deemed Prime Rate”) and provided that the minimum amount of interest payable together with the Administrative Fee (as defined in Paragraph 5) shall in no event be less than Ten Thousand and 00/100 Dollars ($10,000.00) per month (the “Minimum Monthly Interest Payment”). In the event that the Prime Rate is changed, the adjustment in the Rate charged shall be made on the day such change occurs. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed. Interest shall be due and payable monthly on the first day of each month, and if not so paid, shall bear interest at the Rate. At Lender’s option, accrued interest may be charged as an Advance hereunder and added to the Obligations regardless of whether an Overadvance will result. Notwithstanding anything to the contrary contained in this Agreement, for the purpose of computing interest, no payment made by check or any other means including, without limitation, by wire or credit card receipts, shall be deemed made until three (3) business days after receipt thereof by Lender, to allow for and subject to, clearance of funds (such timer period “Clearance Days”).

5. The following fees/deposits shall apply:

(a) Loan Fee – On the effective date of this Agreement (which shall occur upon the initial Advance hereunder) (the “Effective Date’“) and annually, every twelve (12) months thereafter while any Obligations remain outstanding, Borrower, without demand, agrees to pay Lender a loan fee in the amount of one percent (1.0%) of the Maximum Amount (the “Loan Fee”). At Lender’s option, the Loan Fee may be charged as an Advance hereunder and added to the Obligations regardless of whether an Overadvance will result.

(b) Administrative Fee - While any Obligations remain outstanding, on or before the first day of each month, Borrower, without demand, agrees to pay an administrative fee equal to fifteen-hundredths of one percent (0.15%) per month of the average daily outstanding balance of Obligations during the preceding month (the “Administrative Fee”). For purposes of computing the average daily outstanding balance of Obligations during the month and the Administrative Fee payable on account thereof, payments shall be applied as set forth in Paragraphs 3 and 4 above. At Lender’s option, the Administrative Fee may be charged as an Advance hereunder and added to the Obligations regardless of whether an Overadvance will result.

(c) Good Faith Deposit - Lender has received a deposit in the amount of Ten Thousand and 00/100 Dollars ($10,000.00) (the “Good Faith Deposit”) to be applied against audit fees and expenses, document preparation and legal fees and costs, and actual out of pocket costs incurred by or on behalf of Lender in connection with the transaction relating to this Agreement and the Loan Documents (as defined in Paragraph 37). In the event that such fees and costs are less than the Good Faith Deposit, any such excess deposit will be applied to the Loan Fee, or if the Loan Fee has been paid in full, such excess amount shall be applied against then or thereafter existing Obligations. In the event such fees and costs are more than the Good Faith Deposit, any such excess fees and costs will be immediately paid by Borrower without demand or, at Lender’s option, may be charged as an Advance hereunder and added to the Obligations regardless of whether an Overadvance will result.

(d) Intentionally Omitted.

(e) Audit Fee – In connection with periodic audits as required by Lender, Borrower shall pay to Lender without demand audit fees of One Thousand and 00/100 Dollars ($1,000.00) per day, plus actual out of pocket costs related to each audit, provided, that in the absence of an Event of Default, the number of audits conducted during each twelve (12) month contract term shall be limited to two (2) audits. At Lender’s option, the Audit Fee may be charged as an Advance hereunder and added to the Obligations regardless of whether an Overadvance will result.

(f) Overadvance Fee – If an Overadvance exists without Lender’s prior written consent, Borrower shall pay Lender a fee equal to three percent (3.0%) of the original amount of such Overadvance, with such fee not constituting a waiver of Lender’s rights and remedies occasioned by such Overadvance. If an Overadvance exists with Lender’s prior written consent, as one or more of the conditions to such consent, Borrower shall pay Lender a fee in an amount determined by Lender but not in excess of five percent (5.0%) of the original amount of such Overadvance. At Lender’s option, the applicable Overadvance Fee may be charged as an Advance hereunder and added to the Obligations regardless of whether an existing Overadvance will be increased thereby.

(g) Inventory Appraisal Fee – While any: (a) funds are available to Borrower under the Inventory Borrowing Base; or (b) funds that have been advanced under the Inventory Borrowing are owing and payable to Lender, Borrower shall pay on demand any fees reasonably incurred in connection with periodic Inventory appraisal and monitoring fees.

6. This Agreement secures the following: (a) Borrower’s Advances and all other Obligations; (b) all of Borrower’s other present and future obligations to Lender; (c) the repayment of (i) any amounts that Lender may advance or spend for the maintenance or preservation of the Collateral (as defined herein below) or any collateral provided by any Guarantor (as defined in Paragraph 23); and (ii) any other expenditures that Lender may make under the provisions of this Agreement or for the benefit of Borrower; (d) all amounts owed under any modifications, renewals or extensions of any of the foregoing obligations whether or not of the nature contemplated at the date hereof; (e) all other amounts now or in the future owed by Borrower or any Guarantor to Lender; (f) any of the foregoing and interest thereon that arises after the filing of a petition by or against Borrower under the Bankruptcy Code, even if the obligations do not accrue because of the automatic stay under Bankruptcy Code § 362 or otherwise; and (g) interest on the preceding amounts as set forth in this Agreement or the Loan Documents, or if no such agreement, at the maximum rate permitted by law ((a) through (g) collectively, the “Obligations”). These Obligations shall be secured by a continuing security interest in all of the personal property and trade fixtures now owned or hereafter acquired by Borrower whether now existing or hereafter arising and wherever located, together with all collateral now or hereafter described in any form UCC-1 filed against Borrower naming Lender as the secured party, including without limitation, (1) all Accounts; (2) all Chattel Paper including without limitation Electronic Chattel Paper; (3) all Inventory; (4) all Equipment; (5) all trade fixtures and all Fixtures if real property collateral is involved; (6) all Instruments; (7) all Financial Assets, including without limitation, Investment Property; (8) all Documents; (9) all Deposit Accounts; (10) all Letter of Credit Rights; (11) all General Intangibles including without limitation copyrights, trademarks, and patents in all countries, Payment Intangibles and Software, and all rights in and to domain names in whatever form, and all derivative URLs; (12) all Supporting Obligations; (13) any Commercial Tort Claim listed on any schedule provided herewith or hereafter; (14) all returned or repossessed goods arising from or relating to any Accounts or Chattel Paper; (15) all certificates of title and certificates of origin or manufacturers statements of origin relating to any of the foregoing, now owned or hereafter acquired; (16) all property similar to any of the foregoing hereafter acquired by Borrower; (17) all ledger sheets, files, records, documents, instruments, and other books and records (including without limitation related electronic data processing Software) evidencing an interest in or relating to the above; (18) all money, cash or cash equivalents; and (19) to the extent not otherwise included in the foregoing, all proceeds, products, insurance claims, and other rights to payment and all accessions to, replacements for, substitutions for, and rents and profits of, and noncash proceeds of each of the foregoing (all of the foregoing collectively, the “Collateral”). All of the foregoing terms, capitalized or otherwise, shall have the meaning given in the California Uniform Commercial Code, as amended from time to time (the “UCC”). Notwithstanding any contrary term of this Agreement, Collateral shall not include any waste or other materials that have been or may be designated as toxic or hazardous. Each new Advance and other Obligation(s) (and all prior Advances and other Obligations) shall be secured by this Agreement and all other security agreements that Borrower has then given or caused to be given, or thereafter gives or causes to be given, to Lender. Except to the extent otherwise provided, this Agreement does not secure any obligation that is secured by a consensual lien on real property.

7. Borrower shall preserve Borrower’s existence and not, in one transaction or a series of related transactions: (a) merge into or consolidate with any other entity or form any subsidiary companies (except for subsidiary companies formed as a result of a Permitted Acquisition, as defined below), or sell any of Borrower’s assets (except for sales of Inventory in the ordinary course of business but subject to the terms of Paragraph 30); (b) change the Borrower’s State of organization or formation or Borrower’s legal name; (c) relocate its Chief Executive Office or Premises; or (d) open any new locations unless Borrower, with respect to (b), (c) or (d) above (1) gives thirty (30) days’ prior written notification to Lender; and (2) executes and delivers, or causes to be executed and delivered, to Lender such agreements, documents, and instruments as Lender may deem necessary or desirable to protect Lender’s interests in the Collateral at such locations, including without limitation, UCC-1 Financing Statements and waivers with an acknowledgement of Lender’s interest from any landlord, bailee, or warehouseman in form and substance satisfactory to Lender, or as Lender may require as a result of such change. The Collateral, however, shall not at any time now or hereafter be stored with a landlord, bailee, warehouseman, or similar party without Lender’s prior written consent and Lender’s receipt of the above waivers with an acknowledgement from the third party that it is holding the Collateral for the benefit of Lender. Borrower shall provide Lender with thirty (30) days advanced notice of the sale or contemplated sale of the Premises whether owned or leased. Borrower will cooperate with Lender in obtaining possession or control, where Lender chooses to require possession or control in addition to the filing of a financing statement. Borrower will cooperate with Lender in obtaining possession or control with respect to Collateral consisting of Deposit Accounts, Investment Property, Letter of Credit Rights, and Electronic Chattel Paper. If Borrower has or shall acquire a commercial tort claim, Borrower shall promptly notify Lender in a writing signed by Borrower of the general details thereof and grant to Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to Lender. As used herein, a “Permitted Acquisition” means a purchase by Borrower of assets located in the United States constituting a business, business division or product line of another entity or person (“Acquired Assets”) or a purchase by Borrower of all of the equity interests of another entity organized, and having its chief executive office, in the United States (“Acquired Entity”) that meets all of the following additional conditions or is otherwise approved in advance in writing by Lender: (i) no Event of Default shall exist on the date of any acquisition or result from the consummation of such acquisition, (ii) as applicable, the Acquired Assets shall generally involve the same line of business as Borrower, or the Acquired Entity shall be in the same general line of business as Borrower, (iii) Lender shall be granted, and obtain, a first priority perfected security interest in all Acquired Assets, and in all assets of the Acquired Entity, as applicable, provided, that Lender shall not file a UCC-1 Financing Statement or other lien notice filing with respect to an Acquired Entity or its assets until immediately following the closing of the applicable acquisition, (iv) in the case of an Acquired Entity, such entity shall become a Borrower or a guarantor of the Obligations, as required by Lender, and such entity shall execute such documentation required Lender (in form and substance satisfactory to Lender) in order to become a Borrower or a guarantor of the Obligations, (v) the Acquired Assets or the Acquired Entity, as applicable, shall not have any indebtedness, liens or other obligations associated therewith that are prohibited by this Agreement and no such prohibited indebtedness, liens or other obligations will arise now or in the future as a result of such proposed acquisition, (vi) any such Permitted Acquisition shall be funded by (1) cash raised by Borrower Taronis Fuels, Inc. from investors, provided, that no such transaction with investors shall result in an Event of Default, (2) by the incurrence of indebtedness in form and amount acceptable to Lender, and subject to a debt and/or lien subordination agreement, as applicable, in form and substance acceptable to Lender, and/or (3) by the use of an Advance under this Agreement so long as after giving to such an Advance Borrower shall have excess availability for Advances under the Borrowing Base of at least $500,000, and so long as no Event of Default then exists or will result from the making of any such Advance, and (vii) Borrower shall have provided notice to Lender in writing no later than twenty (20) days prior to the closing of any proposed acquisition describing in detail (1) the identity of the seller and the assets or equity interests proposed to be acquired, (2) the purchase price and all other consideration to be paid including consideration in the form of liabilities to be assumed by Borrower in connection with such proposed acquisition, (3) the payment terms relative to such proposed acquisition, (4) that Borrower has complied with all of the terms set forth in this definition of Permitted Acquisition, and (5) the approximate closing date of such proposed acquisition. Concurrently with the delivery of such notice and continuing until the closing of such proposed acquisition, Borrower shall deliver to Lender current drafts of the purchase contract and all other documentation relative to such proposed acquisition and Borrower shall make available to Lender all financial, legal and other due diligence materials received or reviewed by Borrower in connection with such proposed acquisition, subject to Lender executing a non-disclosure/non-circumvent agreement covering same. Without limiting any Borrowing Base requirements set forth in this Agreement, as a condition for inclusion in the Borrowing Base of any assets acquired pursuant to a Permitted Acquisition, Lender, among other things, shall have completed satisfactory collateral due diligence with respect thereto, including such audits and review of books and records as Lender may require, and Lender shall have obtained the requisite credit approvals relating to same. Lender shall have no right to contact a prospective acquisition target in connection with its due diligence or otherwise circumvent the Borrower in any respect without the prior written consent of Borrower.

8. Borrower shall not do business under any name other than those set forth in the preamble to this Agreement unless Borrower has provided to Lender evidence it has taken such legal steps required with respect to fictitious or assumed names under the applicable laws of the jurisdictions in which Borrower is located and/or does business. To that effect, Lender has received acceptable documentation indicating that Borrower will be doing business under the following additional name(s): “MagneGas Welding Supply”.

9. So long as any Obligations remain outstanding, Borrower warrants, represents and agrees that: (a) all Accounts and all Inventory against which Borrower seeks Advances, shall be Prime Accounts and Eligible Inventory, as applicable; (b) all Collateral in which a security interest has been or will be given or caused to be given by Borrower to Lender is and will be a first priority security interest on the property described in each such security agreement (except insofar as Borrower has notified Lender to the contrary in writing and Lender has consented) and shall remain personal property at all times; (c) the property covered by all security agreements given or caused to be given by Borrower to Lender (1) is solely owned by Borrower or the party described in such security agreement; or (2) Borrower or such party has rights in or the power to grant a security interest in such property; (d) the property covered by all security agreements given or caused to be given by Borrower to Lender is free and clear of all liens, encumbrances, security interests, adverse claims, or restrictions on transfer or pledge except as created by such security agreements; (e) the Collateral covered by all security agreements given or caused to be given by Borrower to Lender is kept in good condition and repair (reasonable wear and tear excepted), is not subject to waste, will not be affixed to any real property in any manner which would change the Collateral’s nature from that of personal property to real property and/or fixture, and (except for sales of Inventory in the ordinary course of business but subject to the terms of Paragraph 30) will not be removed from the Premises described in such security agreements without first obtaining Lender’s prior written consent; (f) all Collateral consisting of goods shall be located solely in States disclosed to Lender in writing or such other State as Lender consents to in advance in writing, such consent to which shalt not be unreasonably withheld or delayed given Borrower’s usual course of business (the “Collateral State(s)”); (g) all facts, figures, representations given, or caused to be given by Borrower to Lender in connection with the Value of the Collateral or regarding each Advance or Account or pertaining to anything done under this Agreement shall be true and correct; and (h) Borrower’s books and records fully and accurately reflect all of Borrower’s assets and liabilities (absolute and contingent), are kept in the ordinary course of business in accordance with GAAP, (as defined in Paragraph 43) consistently applied and all information contained therein is true and correct.

10. So long as any Obligations remain outstanding, Borrower warrants, represents, and agrees that: (a) except for Permitted Indebtedness (as defined below), Borrower will not borrow any money or incur any indebtedness except pursuant to this Agreement or the Loan Documents without first obtaining the consent of Lender; (b) Borrower will not guarantee or otherwise become liable with respect to the financial obligations of any third party; (c) Borrower will not make any distributions or declare or pay any dividends (whether in cash or stock) on, or purchase, acquire, redeem or retire any of Borrower’s capital stock without Lender’s prior written consent except that Borrower shall be allowed to purchase, acquire, redeem or retire its capital stock if no Event of Default then exists or will result from any of such actions and so long as after giving effect to any of such actions Borrower has excess availability for Advances under the Borrower Base of at least $500,000; (d) Borrower will not directly or indirectly make or acquire any beneficial interest in, or make any loan or capital contribution to any third party without Lender’s prior written consent; (e) Borrower shall not directly or indirectly enter into or permit to exist any transaction with any affiliate of Borrower except in an arms’ length transaction for adequate consideration conducted in the ordinary course of business and which is previously disclosed to Lender, nor shall Borrower transfer any of its assets to an affiliate of Borrower without Lender’s prior written consent; (f) Borrower shall immediately notify Lender if Borrower’s C.E.O., C.F.O. or Controller are no longer employed or die or become disabled, and Borrower shall hire a replacement for same that is satisfactory to Lender within 8 weeks of so notifying Lender; (g) all taxes of any governmental or taxing authority due or payable by, or imposed or assessed against Borrower have been paid and shall be paid in full before delinquency; (h) all filings or other actions required under applicable law, including but not limited to securities law, have been made or shall be made before delinquency; (i) except as set forth on Schedule 1, there are no actions or proceedings pending by or against Borrower before any court or administrative agency, and there are no pending, threatened, or known to be imminent litigation, governmental investigations or claims, complaints, or prosecutions involving Borrower, and Borrower is not bound by the terms of any settlement agreement, consent decree, court order, injunction or the like relating to formerly pending, pending, or threatened actions, proceedings, or prosecutions involving Borrower, except as heretofore disclosed in writing to Lender; (j) Borrower has the legal power and authority to enter into this Agreement and to perform and discharge all of its obligations hereunder; (k) Borrower’s exact legal name is as set forth in the first paragraph of this Agreement; (1) Borrower is the type of entity indicated in the preamble to this Agreement and Borrower will do all things necessary to preserve its good standing as such type of entity under the laws of the State of Borrower’s organization and the state(s) where Borrower conducts business; and (m) the person executing this Agreement has full authority to do so and to bind Borrower under Borrower’s governing articles, bylaws or other governing documents. Lender does not authorize, and Borrower agrees not to: (1) make any sales, leases or licenses of any of the Collateral outside of the ordinary course of business or in contravention of the terms of this Agreement or the Loan Documents; (2) enter into an exclusive license of any of the Collateral, a license of any of the Collateral outside of the ordinary course of business or in contravention of the terms of this Agreement or the Loan Documents or fail to notify Lender of any license permitted hereunder; or (3) grant or permit to exist any other security interest or lien in any of the Collateral, or on any income, profits or proceeds therefrom, except for Permitted Liens (as defined below). Borrower shall accept no returns and shall grant no allowances or credits to account debtors without notifying Lender at the time it provides Lender with its periodic Accounts reporting as set forth in Section 23 below. Lender shall have the right to impose a reserve against the A/R Borrowing Base for actual or anticipated returns, allowances, and credits. As used herein, “Permitted Indebtedness” means: (i) indebtedness set forth in the latest financial statements of Borrower submitted to Lender on or prior to the Effective Date and any other indebtedness existing of the Effective Date so long as Borrower has disclosed any such indebtedness that is material or incurred outside the ordinary course of business; (ii) indebtedness consisting of unsecured trade credit owing by Borrower to its vendors or suppliers incurred in the ordinary course of Borrower’s business and not in connection with the borrowing of money; (iii) unsecured indebtedness for borrowed money not to exceed ten million and 00/100 Dollars ($10,000,000) at any one time outstanding; (iv) indebtedness incurred in connection with capital leases of equipment and purchase money indebtedness incurred to purchase equipment, provided, that (A) the liens securing same attach only to the equipment acquired by the incurrence of such debt, and (B) the aggregate amount of such debt (including capital leases) does not exceed five million and 00/100 Dollars ($5,000,000) at any one time outstanding; (v) indebtedness incurred in the ordinary course of Borrower’s business in connection with operating leases of equipment; (vi) indebtedness consisting of obligations under real property leases for Borrower’s premises incurred in the ordinary course of business; (vii) amounts owing under licenses in the ordinary course of Borrower’s business, so long as (if required by Lender) the licensor has entered into an agreement in favor of, and in form and content satisfactory to Lender, and amounts owing under agreements and contracts in the ordinary course of Borrower’s business and not in connection with the borrowing of money; (viii) subordinated indebtedness consented to in advance in writing by Lender which, if required by Lender, is subject to a subordination agreement in favor of, and in form and content satisfactory to, Lender; and (ix) refinancings, renewals, or extensions of the foregoing, provided (A) the terms and conditions thereof do not materially impair the prospect of repayment of the Obligations, (B) the principal amount thereof is not increased, (C) the liens, if any, securing such refinanced, renewed or extended indebtedness do not attach to any assets in addition to those assets, if any, securing the indebtedness to be refinanced, renewed or extended, (D) a person or entity that was not an obligor or guarantor of such indebtedness when it was originally incurred shall not become an obligor or guarantor thereof, (E) the terms of such refinancing, renewal or extension are no less favorable to Borrower or Lender than the indebtedness being refinanced, renewed or extended, and (F) in the event that the indebtedness that is being refinanced is subordinated to the Obligations, then the indebtedness incurred by such refinancing shall be subject to the terms of a subordination agreement that is at least as favorable to Lender as the subordination agreement applicable to indebtedness that is being refinanced. As used herein “Permitted Liens” means: (i) liens and security interests in favor of Lender; (ii) liens and security interests existing on the Effective Date that have been disclosed in writing to Lender and which, if required by Lender, are subject to subordination agreements in favor of, and in form and content satisfactory to, Lender; (iii) liens for unpaid taxes, assessments or other governmental charges that are not yet delinquent; (iv) liens against specific equipment that is subject of operating leases or capital leases of such equipment or purchase money indebtedness incurred to purchase such equipment so long as the indebtedness associated therewith constitutes Permitted Indebtedness; (v) liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with borrowed money, and which liens are for sums not yet delinquent; (vi) liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository institution, provided that such deposit accounts and funds are not primarily intended by the Borrower to provide collateral to the depository institution; (vii) with respect to real property in which Borrower has an interest, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof, provided, that if such real property is collateral for the Obligations, such easements, rights of way, and zoning restrictions shall be subject to Lender’s acceptance of same; and (viii) in connection with refinancings, renewals or extensions of Permitted Indebtedness, liens associated therewith that are permitted by the terms set forth in the definition of Permitted Indebtedness.

11. Borrower agrees to execute upon demand by Lender any and all documents or statements intended to perfect and/or continue Lender’s security interest in the Collateral, in whatsoever form Lender may require including but not limited to an abbreviated Collateral description such as “All Assets of the Borrower”, as provided for and defined in Division 9 of the California UCC, but Lender shall be entitled and is hereby expressly authorized to execute and file the same on Borrower’s behalf, and Lender is hereby appointed Borrower’s attorney-in-fact for such purpose.

12. Each warranty, representation, and agreement contained in this Agreement shall be automatically deemed repeated and reaffirmed with each Advance and shall be conclusively presumed to have been relied on by Lender regardless of any investigation made, or information possessed by Lender. The warranties, representations and agreements set forth herein shall be cumulative and in addition to any and all other warranties, representations and agreements contained in any other document or instrument which Borrower shall give, or cause to be given, to Lender either now or hereafter.

13. Notwithstanding termination of this Agreement, all assignments, pledges, liens, and/or other security interests now or hereafter granted to Lender and all other obligations required of Borrower pursuant to this Agreement, any of the other Loan Documents, or any other procedure manual or other requirement of Lender shall continue in full force until all of the Obligations owing to Lender have been paid, including without limitation Borrower’s obligation to continue to turn over sales information and invoices, and collections thereon, to Lender.

14. Borrower shall promptly pay any and all expenses of storing, warehousing, insuring, handling and shipping of Borrower’s property, any and all excise, property, sales and other taxes (providing Lender with evidence of payment thereof) levied or imposed by any governmental or taxing authority on Borrower or on any of Borrower’s property or any property caused to be given to Lender as security, and any amounts owing to any third party that could give rise to any security interest, encumbrance or lien on any of Borrower’s property or any property serving as Lender’s Collateral. If Borrower fails to promptly pay when due, whether to Lender or any other person, monies which Borrower is required to pay under any requirement of this Agreement, Lender may, but need not, pay the same and charge Borrower’s account therefore and Borrower shall promptly reimburse Lender therefor. Any and all sums shall become additional indebtedness owing to Lender and shall bear interest at the rate provided in Paragraph 4 hereof and shall be covered by all security now or hereafter given by Borrower or which Borrower causes to be given to Lender. Lender need not inquire as to, or contest the validity of, any such expense, tax, security interest, encumbrance or lien, and the receipt for the payment thereof from the appropriate governmental agency or other entity shall be conclusive evidence that the same was validly due and owing.

15. All documents to be delivered by Borrower to Lender shall contain such terms and be in such form as Lender may reasonably require. Each assignment, pledge or other security agreement shall include and cover all of Borrower’s right, title, and interest in property described therein and all of Borrower’s books, records, and files relating thereto. All ledger sheets, files, records and documents, files and records relating to Accounts, Inventory, or other Collateral assigned to Lender shall, unless delivered to or removed by Lender, be kept on the Premises in trust for, and without cost to Lender. Lender may at any time remove from the Premises all documents, files and records relating to the Collateral.

16. Prior to Lender’s first verification of Inventory or audit of Borrower’s Accounts, Lender may, in Lender’s Sole Discretion, determine or redetermine the Value of Borrower’s Inventory and value of Accounts by applying to Borrower’s assigned values thereof such percentage as Lender deems appropriate, based upon Lender’s initial sample or other basis. Lender may likewise determine or redetermine the values thereof between Lender’s Inventory verifications and audits of Borrower’s Accounts, based upon Lender’s last preceding verification, audit, sampling, review, or other basis in Lender’s Sole Discretion.

17. Borrower acknowledges and agrees that Lender may from time to time at its discretion obtain or prepare such further credit reports and other reports as it may deem necessary to continue to keep itself apprised regarding the continued financial condition of Borrower and hereby authorizes Lender to obtain or prepare such credit and other reports from time to time as Lender deems appropriate.

18. Lender may without notice to or the assent of Borrower: (a) after the occurrence of an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if applicable, notify any account debtor that its Accounts have been assigned to Lender by Borrower and that payment thereof is to be made to the order of, and directed solely to, Lender; and (b) at any time, send, or cause to be sent by its designee, written or telephonic requests for verification of any Accounts directly to the applicable account debtor. At Lender’s request, all invoices and statements sent to any account debtor shall state that the relevant Accounts have been assigned to Lender and that any payments in respect thereof are payable directly and solely to Lender. Borrower shall direct, at Borrower expense and in the manner requested by Lender from time to time in its sole discretion, that payments and other proceeds of Accounts and other Collateral be sent to Lender which manner may include, without limitation, being sent: (i) directly to a Lender owned bank account; (ii) directly by account debtor(s) to a post office box (the “Post Office Box”), owned by Lender or Borrower and designated in the name of Lender or Borrower, but as to which access is limited solely to Lender; (iii) directly by account debtor(s) to a deposit account maintained by Borrower, provided (1) Lender has received a control agreement over same, in form acceptable to Lender, and (2) such account is a blocked account to which only Lender may have access (the “Blocked Account”); or (iv) directly by account debtor(s) to a lockbox account (the “Lockbox”) owned by Lender or Borrower, and maintained in Borrower’s or Lender’s name by a financial institution or other party acceptable to Lender, which Lockbox shall also have an associated Blocked Account (collectively, the “Lockbox Account”), with Lender to receive a lockbox control agreement and/or a blocked account control agreement, each in form acceptable to Lender, and as to which Lockbox Account only Lender may have access. Hereinafter, the Post Office Box, the Blocked Account, and/or the Lockbox Account are referred to as the “Collateral Control Account(s)”. Borrower hereby grants to Lender a security interest in its interests in the Collateral Control Account(s) and, without limitation, the items deposited therein and funds therein, over which Collateral Control Account(s) Borrower shall have no control and into which remittances and other collections and proceeds of Accounts and other Collateral shall be deposited immediately upon their receipt.

19. With respect to any Blocked Account or Lockbox Account, Borrower (at its expense) shall cause the provider of such account to deliver duplicate copies to Lender on each Business Day (or Lender shall be provided with on-line viewer access and a password so that it can directly obtain copies) of (i) checks received in such account, (ii) envelopes, remittance papers, and other detail which might be included in the envelope with remittances, and (iii) an account batch listing (or similar reporting) which details the sequence number, dollar amount of checks, deposit total and account number credited for each deposit (all of the foregoing, the “Remittance Reporting”). In the event that the provider of such account will not deliver duplicate copies to Lender (or provide on-line viewer access to Lender), Borrower agrees to deliver to Lender copies of the Remittance Reporting on each Business Day. Borrower acknowledges and agrees that notwithstanding anything to the contrary contained in this Agreement, remittances and other collections and proceeds of Accounts and other Collateral made to such account shall not be deemed received by Lender (and the Obligations shall not be credited nor shall Clearance Days commence) until Lender has received the Remittance Reporting.

20. If instead, Lender in writing grants Borrower the revocable privilege to collect, at Borrower’s expense, some or all of the payments or other proceeds of Accounts and other Collateral, such privilege shall be upon the express conditions that all such payments and other proceeds shall (a) be received by Borrower in trust for Lender; (b) not be commingled with Borrower’s funds; (c) be delivered to Lender in kind within twenty-four (24) hours after Borrower’s receipt of the same; and (d) continue to be delivered to Lender until such time as the Obligations are paid in full and this Agreement is terminated. Borrower’s collection privilege as described above is subject to revocation by Lender at any time and shall be automatically revoked upon the occurrence of an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any. Unless the instruments so received by Borrower are dishonored, Lender shall credit the amount thereof against Borrower’s Obligations to Lender as set forth in Paragraphs 3 and 4 above.

21. Lender is hereby irrevocably appointed Borrower’s attorney-in-fact with authority and power to: (A) endorse Borrower’s name on any checks, notes, acceptances, money orders, drafts, or other forms of payment or security that may come into Lender’s possession, if applicable, (whether checks or other forms of payment are (i) in the name of Borrower, (ii) in any other name under which it now does business or does business in the future, or (iii) in the names of its products now or in the future, and Borrower additionally agrees not to make any protest of any kind against Lender for negotiating such checks or other items described herein); (B) following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, sign Borrower’s name on any invoice or bill of lading related to any Accounts, on drafts against account debtors, on schedules and assignments of Accounts, on verification of Accounts, and notices to account debtors; (C) establish a lockbox arrangement and/or following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, notify the post office authorities to change the address for delivery of Borrower’s mail; (D) following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, receive and open all mail addressed to Borrower and retain all mail relating to Lender’s security, forwarding all other mail to Borrower; (E) send, whether in writing or by telephone, requests for verification of Accounts; (F) following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, with respect to Accounts or other Collateral, extend the time of payment of, compromise or settle, and adjust disputes and claims, upon any terms, which may include a release of any account debtor or other obligor; (G) following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, make, settle and adjust all claims of Borrower’s policies of insurance and make all decisions with respect thereto; (H) following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, qualify Borrower to do business in any state if Borrower shall promptly fail to do so following request by Lender; (I) following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, and at any other time as Lender may reasonably determine as necessary, if Borrower has refused or failed to promptly do so, execute and deliver any documents which Lender determines are reasonably necessary in order to protect the interests of Lender hereunder; and (J) do all things necessary to carry out this Agreement. Lender shall have the right at any time to enforce Borrower’s rights against the account debtors and obligors, and Lender may bring all proceedings for collection in Lender’s name or in Borrower’s name and may exercise Borrower’s right of stoppage in transit, replevin, and reclamation.

22. If any property referred to or covered by any Account assigned to Lender shall remain in, or revert to, Borrower’s possession, Borrower will forthwith set it apart, mark and designate it as Lender’s Collateral and promptly notify Lender.

23. Borrower will prepare and deliver to Lender its financial statements, balance sheets, profit and loss statements (and may cause same to be delivered from any guarantor of any of the Obligations or indebtedness hereunder, “Guarantor”), and such other reports, analysis, operating data, and/or filings required under securities law as Lender may from time to time reasonably request orally or in writing, all in form acceptable to Lender, but in any event shall provide the following:

24. Lender or its agents or employees shall have the right (during reasonable business hours if prior to an Event of Default and, at any time, after an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any) to have access to Borrower’s premises, to examine, inspect and/or audit any or all of Borrower’s books and records, including but not limited to minute books, ledgers, records indicating, summarizing or evidencing the assets (including Accounts, Inventory and Equipment) and liabilities, and all information relating thereto, records indicating, summarizing or evidencing Borrower’s business operations or financial condition, and all computer programs, disc or tape files, printouts, runs and other computer prepared information and the equipment containing such information, and permit Lender or its employees or agents to copy and make extracts therefrom. Borrower hereby irrevocably authorizes all accountants and third parties to disclose and deliver to Lender at Borrower’s expense all financial information, books and records, work papers, management reports and other information in their possession relating to Borrower.

25. Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as are ordinarily insured against by other owners in similar businesses. Borrower shall also maintain business interruption, public liability, product liability, and property damage insurance relating to Borrower’s ownership and use of the Collateral, as well as insurance against larceny, embezzlement, and criminal misappropriation. Additionally, Borrower shall maintain workers’ compensation insurance coverage for all employees as required by law. All such policies of insurance shall be in such form, with such companies, and in such amounts as may be reasonably satisfactory to Lender. All such policies of insurance (except those of public and product liability) shall contain a 438BFU lender’s loss payable endorsement or comparable endorsement, in a form satisfactory to Lender, showing Lender as additional loss payee thereof (and with respect to public and product liability shall contain an additional insured endorsement or comparable endorsement, in a form satisfactory to Lender), and shall contain a waiver of warranties, and shall specify that the insurer must give at least thirty (30) days’ prior written notice to Lender before canceling its policy for any reason. Borrower shall deliver to Lender certified copies of such policies of insurance and evidence of the payment of all premiums therefor. All proceeds payable under any such policy shall be payable to Lender to be applied on account of the Obligations. Unless Borrower provides Lender with evidence of the insurance coverage as required by this Agreement, Lender may purchase such insurance at Borrower’s expense to protect Lender’s interests. This insurance may, but need not, also protect Borrower’s interests. If any Collateral becomes damaged, the insurance coverage that Lender purchases may not pay any claim Borrower makes or any claim made against Borrower. Borrower may later cancel this coverage after providing evidence that Borrower has obtained property coverage elsewhere. Borrower is responsible for the cost of any insurance purchased by Lender, which shall constitute Lender Expenses (as defined in Paragraph 26). The cost of obtaining of this insurance may, at Lender’s option, be charged as an Advance and added to the Obligations regardless of whether an Overadvance results. If the cost is added to the Obligations, the Rate will apply to this added amount. The effective date of coverage may be the date on which Borrower’s prior coverage lapsed or the date Borrower failed to provide proof of coverage. The insurance coverage that Lender purchases may be considerably more expensive than the insurance coverage that Borrower could obtain and may not satisfy any need for property damage coverage or any mandatory liability insurance requirements imposed by Borrower’s contractual arrangements or applicable law.

26. Borrower promises and agrees to pay all costs and expenses and all reasonable attorneys’ fees and expenses incurred by Lender in connection with and in any way related to this Agreement or the Loan Documents or the transactions contemplated thereby (including without limitation title searches, title reports, title insurance, recording fees, filing fees, publication fees, appraisals, and the prosecution of motions or actions seeking relief from any stay or restraint under the United States Bankruptcy Code from pursuing any remedy hereunder), whether or not suit between Borrower and/or any Guarantor, on the one hand, and Lender, on the other hand, is brought. Borrower shall pay to Lender all costs reasonably incurred by Lender for the purpose of enforcing Lender’s rights hereunder and under the Loan Documents, including without limitation: (a) costs of foreclosure; (b) costs of obtaining money damages; and (c) a reasonable fee for the services of attorneys employed by Lender for any purpose related to this Agreement, the Loan Documents or the Obligations, including consultation, drafting documents, sending notices or instituting, prosecuting or defending litigation or arbitration, and in the case of bankruptcy, without limitation, in providing debtor-in possession financing, in seeking relief from the automatic stay, and in prosecuting a complaint to determine dischargeability and other matters to enforce Lender’s rights; and (d) costs, and expenses of third party claims or any other suit paid or incurred by Lender in enforcing or defending the Loan Documents and adjusting or settling disputes and claims with account debtors with respect to the Accounts; and Lender’s reasonable attorneys’ fees and expenses incurred in advising, structuring, drafting, reviewing, administering, amending, terminating, enforcing the Obligations (all of the foregoing together with any other costs, expenses, and reasonable attorneys’ fees set forth in this Agreement and the Loan Documents, “Lender Expenses”). At Lender’s option, Lender Expenses may be charged as an Advance and added to the Obligations regardless of whether an Overadvance will result.

27. Borrower shall require and use its best efforts to ensure compliance by all operators and occupants of the Premises with all applicable Environmental Laws (as defined in Paragraph 28). Borrower agrees to defend, indemnify, save, and hold Lender and its officers, employees, and agents harmless against all obligations, demands, claims, and liabilities claimed or asserted by any other person arising out of or relating to discharges or releases of Hazardous Substance or Hazardous Waste (both as defined in Paragraph 28) into the environment, including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substance or Hazardous Waste or the clean-up or other remediation thereof, and all losses (including without limitation attorneys’ fees and legal and other costs from outside counsel or in-house counsel) in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential thereto; provided, however, that no such indemnification shall apply with respect to any liability directly arising out of the gross negligence or willful misconduct on the part of Lender or any of its officers, employees and agents in connection with Hazardous Waste or Hazardous Substance.

28. “Environmental Laws” means all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or waste into the environment, including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals, or industrial, toxic or hazardous substances or waste or the clean-up or other remediation thereof, including without limitation 42 U.S.C. 9601 (14), Comprehensive Environmental Response, Compensation and Liability Act of 1980 set forth at 42 U.S.C. 9601 et seq. (“CERCLA”), or the Resource Conservation and Recovery Act of 1986 set forth at 42 U.S.C. 9601 et seq. (“RCRA”) and all successor statutes and amendments thereto. “Hazardous Substance” or “Hazardous Waste” means any hazardous waste or hazardous substance, as defined in 42 U.S.C. 9601 (14) or any successor statute, all as amended from time to time.

29. Without limiting any other portion of this Agreement, all Borrower’s indebtedness and Obligations shall automatically accelerate and become immediately due and payable, and the revocable collection privilege referred to in Paragraph 20, if applicable, shall be automatically revoked, upon termination (by lapse of time or otherwise) of this Agreement or upon the happening of any one of the following (which shall constitute an “Event of Default” upon its occurrence or, if applicable, upon the expiration of any cure period applicable to same as set forth below:

(a) Borrower’s or any Guarantor’s failure to make any payment of any or all of the Obligations to Lender when due;

(b) The occurrence of an Overadvance that is not repaid within five (5) business days of its occurrence, unless waived by Lender in writing;

(c) Any material adverse change in Borrower’s business (including, without limitation, the ownership thereof) or financial condition or that of any Guarantor, or any change in Borrower’s ability to pay and perform the Obligations when due, or any decline in the Value of any property given to Lender as security;

(d) Any change in the perfection or priority of any security interest in any Collateral of Borrower or collateral of any Guarantor, or any change in Lender’s rights and remedies hereunder or under the Loan Documents, unless such change can be and is remedied within five (5) business days following the date any such change becomes known to Lender and Borrower, provided, however, Lender shall not be obligated to make Advances to Borrower during such remedy period;

(e) Borrower or any Guarantor fails or neglects to perform, keep, or observe, or is in breach of any term, provision, condition, covenant, or agreement contained in this Agreement, or any of the Loan Documents, or in any other present or future agreement between Borrower or any Guarantor, on the one hand, and Lender, on the other hand; any default by Borrower or any Guarantor under, or breach of, any warranty, representation, obligation, agreement, condition or undertaking contained herein or in any of the Loan Documents which Borrower or any Guarantor now or hereafter executes and delivers to Lender, or which Borrower or any Guarantor now or hereafter causes to be executed and delivered to Lender, unless such failure, neglect, or breach of any of the foregoing can be and is cured within five (5) business days following the date of its occurrence, provided, however, that there shall be no such opportunity to cure any of the foregoing pursuant to the terms of this Paragraph 29(e) if its circumstance involves: (i) an Event of Default otherwise specified in this Paragraph 29 or in Paragraph 6 of that certain Security Agreement (All Assets) being entered into concurrently herewith with Guarantor (the “Guaranty”) (but with this proviso not to negate any cure period, if any, set forth elsewhere in this Paragraph 29 or in Paragraph 6 of the Guaranty), (ii) a misrepresentation or other bad act by Borrower or Guarantor without regard to any contrary terms set forth in this Paragraph 29 which could purport to provide for a cure of same (but with this proviso not to negate any cure period, if any, set forth elsewhere in this Agreement or the Guaranty), (iii) a breach of a negative covenant set forth in Paragraphs 7, 8, 9 or 10 of this Agreement or in Paragraph 4 of the Guaranty (but with this proviso not to negate any cure period, if any, set forth elsewhere in such Paragraphs of this Agreement or the Guaranty), or (iv) a breach of Paragraphs 19, 20, 24 or 25 of this Agreement or Paragraphs 4.3 (with respect to Lender’s inspection rights) 4.6, or 5 of the Guaranty (but with this proviso not to negate any cure period, if any, set forth elsewhere in such Paragraphs of this Agreement or the Guaranty), and provided, further, that Lender shall not be obligated to make Advances to Borrower during any such cure period;

(f) The withdrawal or cancellation of (1) any guaranty of, or any validity agreement or support agreement relating to, the Obligations; or (2) the termination of, or breach of the terms of, any subordination agreement whereby any indebtedness and/or liens is subordinated to Borrower’s Obligations and/or Lender’s liens on the Collateral or collateral of any Guarantor;

(g) Borrower or any Guarantor ceases to do business as a going concern, makes an assignment of any property for the benefit of creditors, or fails to pay its debts or obligations as they become due or otherwise becomes insolvent;

(h) The filing by or against Borrower or any Guarantor of any petition or application in bankruptcy, reorganization, arrangement, trusteeship or receivership, or other insolvency relief, whether under the United States Bankruptcy Code or otherwise, or the appointment of a trustee or receiver over all or any part of the property or business of Borrower or any Guarantor;

(i) Any of the property or Collateral covered by any of the security agreements given or caused to be given by Borrower or any Guarantor to Lender is lost, secreted, misused, destroyed, transferred, or disposed of or is located in any state other than the Collateral State(s) unless Lender has so agreed in writing or unless any property or Collateral that is lost or destroyed can be replaced by insurance with coverage for such loss or destruction to be promptly confirmed by the applicable insurance company in writing;

(j) Borrower’s or any Guarantor’s failure to comply with any, or become subject to any administrative or judicial proceeding under, any federal, state or local (1) hazardous waste or environmental law; (2) asset forfeiture law; or (3) other law, where noncompliance may have any material adverse effect on the Collateral;

(k) Lender’s receipt, at any time following the Effective Date of a report from the Secretary of State indicating that Lender’s security interest in the Collateral or collateral of any Guarantor is not prior to all other security interests or encumbrances unless remedied within five (5) business days following Lender’s notice to Borrower of same, provided, however, Lender shall not be obligated to make Advances to Borrower during such remedy period;

(l) Failure to provide Lender with a waiver and consent from the owner or lessor of any now or hereafter existing Premises or a bailment agreement or warehouseman’s waiver from the owner, lessor or operator of any now or hereafter existing Premises as applicable, including following the addition of a new Premises or a change in (1) the location of any of Borrower’s Premises; or (2) the ownership of any of the Premises;

(m) Any delinquency on Borrower’s or any Guarantor’s part in paying any tax when it comes due;

(n) Borrower makes any prohibited payment on account of indebtedness that has been subordinated in right to payment to the payment of the Obligations;

(o) Borrower or any Guarantor defaults in the payment or performance under any of its material third party agreements, or any material third party agreement to which either is party is cancelled, matures or terminates, and which circumstances would have a material adverse effect on either of such parties;

(p) Borrower or any Guarantor is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any part of its business affairs;

(q) A judgment or other claim in excess of $300,000 is entered against Borrower or any Guarantor or becomes a lien or encumbrance upon any property of Borrower or any Guarantor and such judgment, claim or lien is not satisfied in full within sixty (60) days of being entered against the Borrower or any Guarantor, as applicable;

(r) Any property of Borrower or any Guarantor is attached, seized, subjected to a writ or distress warrant or is levied upon;

(s) A notice of lien, levy or assessment is filed with respect to any property of Borrower or any Guarantor by any governmental authority, or any debts owing to any governmental authority becomes a lien upon any of such property; or

(t) An event of default under any of the Loan Documents (subject to applicable cure periods, if any) or in connection with any of the Obligations shall be an Event of Default under this Agreement, and vice versa.

Notwithstanding anything contained in this Section 29 to the contrary, Lender shall refrain from exercising its default rights and remedies and an Event of Default shall not be deemed to have occurred by reason of the occurrence of the events set forth in Sections 29(h) (but only with respect to proceeding referenced in such Section 29(h) initiated by third parties involuntarily against Borrower and not initiated voluntarily by Borrower), 29(m), 29(q), 29(r), or 29(s) hereof if, within ten (10) days from the date thereof, the same is released, discharged, dismissed, bonded against or satisfied; provided, however, Lender shall not be obligated to make Advances to Borrower during such period.

30. Upon the occurrence of any Event of Default described in Paragraph 29 that is not cured prior to the expiration of any cure period applicable to same, if any, all Obligations shall, without notice or demand, become immediately due and payable at Lender’s option. Thereafter, all amounts outstanding shall bear interest at the rate of an additional five percent (5.00%) per annum in excess of the Rate (the “Default Rate”). Lender may, upon the occurrence of an Event of Default, exercise and all rights and remedies pursuant to the laws of the State of California, the UCC, the Loan Documents or other applicable law, and Lender may cease making Advances or extending credit to or for the benefit of Borrower under this Agreement, the Loan Documents, or any other agreement between Borrower and Lender. Lender may, upon the occurrence of an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, revoke Borrower’s right (as permitted in this Agreement) to sell, license or otherwise dispose of any of the Collateral including, without limitation, (a) its right to sell Inventory in the ordinary course of business free and clear of Lender’s security interest therein, and (b) Borrower’s right to grant non-exclusive licenses of the Collateral in the ordinary course of business. Upon the occurrence of any such Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, Lender may immediately, or at any time or times thereafter, without any demand or notice to Borrower or any Guarantor and without advertisement or notice, all of which are expressly waived, commence an action for the recovery of any and all such Obligations, commence proceedings, without giving any warranties of merchantability, fitness for purpose, title or similar warranty, to sell, lease or otherwise dispose of any and all Collateral covered by this Agreement and by all security agreements given or caused to be given by Borrower to Lender or, without legal proceedings, enter such places as any of such Collateral may be found and take possession of such Collateral and sell the same. Lender is hereby granted an irrevocable license or other right to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and Borrower’s rights under all licenses shall inure to Lender’s benefit. Such Collateral may be sold where it is located at the time of the breach or default, or elsewhere, at public or private sale, for cash, upon credit or otherwise at Lender’s sole option and discretion. With respect to any of Borrower’s owned or leased Premises, Borrower hereby grants Lender a license to enter into possession of such Premises and to occupy the same, without charge, for up to one hundred twenty (120) days in order to exercise any of Lender’s rights or remedies provided herein or in any of the other Loan Documents, at law, in equity, or otherwise. Lender and Borrower waive any requirements that such property be physically present at the place of sale. Lender shall provide Borrower such notice of any private or public sale as may be reasonable. Lender has no obligation to clean up or otherwise prepare the Collateral for sale. Lender may specifically disclaim any warranties of title or any similar warranty. Any person, including Lender, may purchase at any such sale, free from any right of redemption which is expressly waived by Borrower, and if Lender is the purchaser, may turn all or part of any of Borrower’s indebtedness to Lender in toward payment of the purchase price. The proceeds of any such sale or other disposition shall be applied, first, to all costs, charges and expenses incurred in taking, removing, holding, repairing and selling such Collateral, including without limitation, all attorneys’ fees and costs incurred by Lender, and second, to the payment of all Obligations, whether due, or to become due, and whether arising under this Agreement or otherwise. The surplus, if any, shall be delivered to Borrower or as otherwise required by applicable law. Borrower shall pay any deficiency forthwith.

31. Borrower waives presentment, demand, protest, and notice of dishonor as to any instrument. Borrower consents to any extensions, modifications, allowances, compromises or releases of security which Lender may grant, none of which shall release Borrower or any Guarantor from, or affect, any of Borrower’s or any Guarantor’s obligations.

32. This Agreement shall be effective on the Effective Date and shall remain in full force and effect for a period of twelve (12) month(s) (the “Basic Term”). Notwithstanding the preceding sentence, this Agreement shall be renewed automatically for successive periods (each, a “Renewal Term”) equal to the Basic Term unless this Agreement is terminated by Borrower giving written notice (a “Termination Notice”) to Lender specifying such termination. Termination Notices shall be given by the means specified in Paragraph 35 specifying such termination not less than thirty (30) days prior to the effective date of such termination, addressed to Lender at the address set forth herein, and the termination shall be effective as of the date fixed in such notice. Notwithstanding the foregoing, Lender reserves the right to terminate this Agreement at Lender’s sole discretion upon giving thirty (30) days’ prior written notice to Borrower or should an Event of Default occur that is not cured prior to the expiration of any cure period applicable to same, if any, Lender may terminate this Agreement at any time without prior notice. After termination and when Lender has finally received all sums due on account of the Obligations, Lender shall reassign to Borrower all Collateral held by Lender, and shall execute a cancellation of, and/or reconveyance under, all security agreements given by Borrower to Lender.

33. If the Obligations are prepaid in full on a final basis prior to the end of the Basic Term or any Renewal Term, a “Prepayment” shall be deemed to have occurred. In the event that such Prepayment shall have occurred, Borrower shall pay to Lender a prepayment fee in an amount equal to the Minimum Monthly Interest Payment times the amount of months remaining in the then applicable Basic Term or Renewal Term if such Prepayment occurs at any time including during a Renewal Term (the “Prepayment Fee”), provided, that there shall be no Prepayment Fee if the Obligations are prepaid in full on a final basis prior to the end of the Basic Term or any Renewal term as a result of Lender’s termination of this Agreement in the absence of an Event of Default in Lender’s sole discretion pursuant to the terms of Paragraph 32. In addition, Borrower shall also pay any prepayment fees provided for in any other agreement with Lender. The Prepayment Fee provided for in this Section 33 and in any other agreements with Lender shall be deemed included in the Obligations. A Prepayment may be deemed to have occurred regardless of whether such payment or other reduction (a) is voluntary or involuntary; (b) is occasioned by Lender’s acceleration of the Obligations or demand hereunder following an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any; (c) is made by Borrower or other third party, including any Guarantor; (d) results from Lender’s receipt or collection of proceeds of Collateral, including insurance proceeds or condemnation awards; (e) results from Lender’s exercise of Lender’s right of setoff; and/or (f) is made during a bankruptcy, insolvency, reorganization or other proceeding, or is made pursuant to any plan of reorganization or liquidation.

34. Lender may, in its discretion, institute reserves or make Advances under this Agreement or under any other agreements evidencing the Obligations in connection with amounts due from Borrower or any Guarantor to Lender under this Agreement or under any other agreements evidencing the Obligations. Lender may at its option to protect the interests of Lender institute reserves or advance sums to Borrower or any Guarantor under the Agreement or under any other agreements evidencing the Obligations and pay such sums directly to a third party (including in the event there is an obligation owed by Borrower or any Guarantor to the third party or in the event the third party is also a borrower of Lender).

35. All notices or demands hereunder shall be in writing and may be made, and deemed to be given, as follows: (a) if delivered in person or by courier (overnight or otherwise), on the date when it is delivered; (b) if by facsimile, when received at the correct number (proof of which shall be an original facsimile transmission confirmation slip or equivalent); or (c) if sent by certified or registered mail or the equivalent, on the earlier of the date such mail is actually delivered or three (3) days after deposit thereof in the mail, unless the date of actual delivery or such date three (3) days after deposit thereof in the mail (as applicable) is not a business day in which case such communication shall be deemed given and effective on the first following business day. Any such notice or communication given hereunder shall be addressed to the intended recipient at its address or facsimile number specified in the preamble to this Agreement. The parties hereto may change the address or at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

36. Borrower has the risk of loss of the Collateral. Lender shall not be liable or responsible for the safekeeping of any Collateral. Lender shall not be responsible for any lost profits of Borrower arising from any breach of contract, tort, or any other wrong arising from the establishment, administration, or collection of the Obligations. Lender has no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral.

37. Borrower hereby releases and exculpates Lender, Lender’s officers, employees, agents, designees, attorneys, directors, shareholders, and accountants (the “Lender Parties”) from any liability arising from any acts under this Agreement, the documents executed in connection with this Agreement or subsequent to this Agreement or in furtherance thereof (each individually and collectively the “Loan Documents”), whether of omission or commission, and whether based upon any error of judgment or mistake of law or fact, except to the extent of any liability caused by any of the Lender Parties’ gross negligence or willful misconduct as finally determined by a court of competent jurisdiction, but in no event shall the Lender Parties have any liability to Borrower for lost profits or other special or consequential damages. Borrower agrees to indemnify the Lender Parties against, and hold each of them harmless from, any liability of any kind or nature, including attorneys’ fees and Lender’s Expenses which may be imposed upon, incurred by, or asserted against any of the Lender Parties, in any way relating to or arising out of this Agreement or the transactions contemplated hereby, except to the extent of any liability caused by any of the Lender Parties’ gross negligence or willful misconduct as finally determined by a court of competent jurisdiction, with the foregoing indemnity and hold harmless to survive termination of this Agreement and payment and performance of the Obligations and continue thereafter.

38. If there are two or more Borrowers, then (a) Advances and other Obligations hereunder shall be deemed to be made to and incurred by each and all Borrowers and each Borrower shall be jointly and severally obligated to repay the Advances and other Obligations; (b) each Borrower jointly and severally makes, and is liable for, each and every warranty, representation, obligation, covenant and undertaking under this Agreement; (c) when permitted by the context, the word “Borrower” shall include and mean all, or any one of the undersigned Borrowers; (d) each Borrower hereby waives its rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to any Borrower by reason of Sections 2787 to 2855, inclusive of the California Civil Code or similar provision; (e) each Borrower waives all rights and defenses it may have if this Agreement is secured by real property, which means, among other things: (1) Lender may collect from any Borrower without first foreclosing on any real or personal property collateral pledged by Borrower; and (2) if Lender forecloses on any real property collateral pledged by any Borrower: (i) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (ii) Lender may collect from any Borrower even if Lender, by foreclosing on the real property collateral, has destroyed any right any Borrower may have to collect from any other Borrower. This is an unconditional and irrevocable waiver of any rights and defenses any Borrower may have because Borrower’s debt is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure or similar provisions; (f) each Borrower waives all rights and defenses arising out of an election of remedies by Lender, even though that election of remedies, such as a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed any Borrower’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the Code of Civil Procedure or otherwise, and each Borrower further waives any and all benefits or defenses, if any, arising directly or indirectly under any one or more of Sections 3116, 3118, 3119, 3419, 3605, 9504, 9505, and 9507 of the California Uniform Commercial Code or similar provisions; and (g) each Borrower hereby agrees that it is jointly and severally, directly, and primarily liable to Lender for payment and performance in full of all duties, obligations, and liabilities under this Agreement and each other document, instrument, and agreement entered into by any Borrower with or in favor of Lender in connection herewith, and that such liability is independent of the duties, obligations, and liabilities of any other Borrower or any other Guarantor, as applicable. Each reference herein to Borrower shall mean each and every Borrower that is a party hereto, individually and collectively, jointly and severally.

39. Borrower consents to Lender’s use of Borrower’s company names and logos in Lender’s written and oral presentations, including in Lender’s advertising, promotional, and marketing materials, client lists, news releases, and Web site. In connection with any client references in such written or oral presentations, Borrower consents to the use of individual names and quotations. Borrower’s consents herein shall terminate upon the termination of this Agreement.

40. Lender’s rights and remedies under this Agreement and all security agreements shall be cumulative and Lender shall have all other rights and remedies not inconsistent therewith as provided by law; no exercise by Lender of one right or remedy shall be deemed an election and no waiver by Lender of any default on Borrower’s part shall be deemed a continuing waiver or course of dealing. No delay or omission by Lender shall constitute a waiver or election. This Agreement shall be binding on the Effective Date and this Agreement shall bind and inure to the benefit of heirs, legatees, executors, administrators, successors, and assigns of Lender and shall bind all parties, which become bound as a borrower to this Agreement. Lender may assign any and all of Lender’s rights and interests under this Agreement. However, Borrower may not assign this Agreement or any rights hereunder without Lender’s prior written consent. No such consent by Lender shall release Borrower or any Guarantor. Lender reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in, Lender’s rights and benefits under each of the documents executed herewith or hereafter. In connection therewith, Lender may disclose all documents and information that Lender now has or may hereafter acquire relating to any credit extended by Lender to Borrower, or about Borrower or Borrower’s business, any Guarantor or the business of any such Guarantor, or any Collateral hereunder. If an assignment is made by Lender, Borrower shall render performance under this Agreement to such assignee. Borrower waives and will not assert against any assignee any claims, defenses or set-offs that Borrower could assert against Lender except defenses that cannot be waived.

41. Paragraphs and paragraph numbers have been set forth herein for convenience only; unless the contrary is compelled by the context, everything contained in each paragraph applies equally to all paragraphs herein. Neither this Agreement nor any uncertainty, or ambiguity herein shall be construed or resolved against Lender or Borrower whether under any rule of construction or otherwise; on the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words so used as to fairly accomplish the purposes and intentions of all parties hereto. When permitted by the context, the singular includes the plural and vice versa. No reference to “proceeds” in this Agreement authorizes any sale, transfer, or other disposition of the Collateral by Borrower (except for sales of Inventory in the ordinary course of business but subject to the terms of Paragraph 30). “Includes” and “including” are not limiting. “Or” is not exclusive. “All” includes “any” and “any” includes “all”. Any reference herein to a “writing”, a “written document”, or an executed document shall also mean an “authenticated” writing or document or “authentication” (as defined in the UCC) unless Lender shall otherwise require an original writing.

42. This Agreement and all transactions contemplated hereunder and/or evidenced hereby shall be governed by, construed under, and enforced in accordance with the internal laws of the State of California without giving effect to conflicts of law principles. This Agreement and all agreements relating to the subject matter hereof are the product of negotiation and preparation by and among each party and its respective attorneys, and shall be construed accordingly. The parties waive the provisions of California Civil Code §1654 or similar provision.

43. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP (as in effect in the United States). All other terms contained in this Agreement, which are not specifically defined herein, shall have the meanings provided in the UCC to the extent the same are used herein. “GAAP” means generally accepted accounting principles (as in effect in the United States) set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and pronouncements of the Financial Accounting Standards Board (or any successor authority) that are applicable as of the date of determination.

44. Any Collateral pledged to Lender to secure any of the Obligations of Borrower under this Agreement shall also secure any of the other Obligations of Borrower to Lender under any other agreements between Borrower and Lender, except that any real property pledged to secure any Obligations of Borrower under this Agreement shall only secure any other Obligation of Borrower if Lender specifically so agrees in writing.

45. Each and every provision of this Agreement shall be severable from every other provision for the purposes of determining legal enforceability of any such provision or provisions.

46. This Agreement, together with the Loan Documents, embodies the entire agreement and understanding among and between the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior or contemporaneous agreements and understandings between said parties, verbal or written, express or implied, relating to the subject matter hereof. No promises of any kind have been made by Lender or any third party to induce Borrower to execute this Agreement or the Loan Documents. No course of dealing, course of performance or trade usage, and no parol evidence of any nature, shall be used to supplement or modify any terms of this Agreement or the Loan Documents. Neither this Agreement nor any provisions hereof may be changed, waived, discharged, or terminated, nor may any consent to the departure from the terms hereof be given, orally (even if supported by new consideration), but may only be by an instrument in writing signed by all parties to this Agreement. Any waiver or consent so given shall be effective only in the specific instance and for the specific purpose for which given.

47. This Agreement and any of the Loan Documents may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. This Agreement and any of the Loan Documents, or a signature page thereto intended to be attached to a copy of this Agreement or any of the Loan Documents, signed and transmitted by facsimile machine, telecopier, or other electronic means (including via transmittal of an e-mail or a ‘‘pdf ‘ file) shall be deemed and treated as an original document. The signature of any person thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document. At the request of any party hereto, any facsimile, telecopy or other electronic document is to be re-executed in original form by the persons who executed the facsimile, telecopy of other electronic document. No party hereto may raise the use of a facsimile machine, telecopier, or other electronic means or the fact that any signature was transmitted through the use of a facsimile machine, telecopier, or other electronic means as a defense to the enforcement of this Agreement or any of the Loan Documents.

48. If the incurrence or payment of the Obligations by Borrower or any Guarantor or the transfer by either or both of such parties to Lender of any property of either or both such parties should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditor’s rights, including provisions of the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended, and any successor statute relating to fraudulent conveyances, preferences, and other voidable or recoverable payments or money or transfers or property (collectively, a “Voidable Transfer”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice or its counsel, then, as to any such Voidable Transfer or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of Lender related thereto, the liability of Borrower or such Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

49. The parties hereby agree that (a) this Agreement is entered into and that Borrower’s performance to Lender occurs at San Jose, California; and (b) all actions or proceedings arising in connection with this Agreement and/or the Loan Documents shall be tried and litigated only in the State and Federal courts located in the County of Santa Clara, State of California or, at the sole option of Lender, in any other court in which Lender shall initiate legal or equitable proceedings and which has subject matter jurisdiction over the matter in controversy. Each of Borrower and Lender waives, to the extent permitted under applicable law, any right each may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this section. BORROWER AND LENDER HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN ANY ACTION HEREUNDER OR UNDER THE LOAN DOCUMENTS OR ARISING OUT OF THE TRANSACTIONS BETWEEN BORROWER AND LENDER.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure §638 as such section may be amended and/or re-numbered from time to time (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceeding shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§638 through 645.1 inclusive, as such sections may be amended and/or re-numbered from time to time. No provision of this Section shall limit the right of any party (a) to exercise self-help remedies (including setoff), (b) to foreclose against or sell any collateral, by power of sale or otherwise, or (c) to obtain or oppose provisional or ancillary remedies from a court of competent jurisdiction before, after or during the pendency of a reference. The exercise of, or opposition to, any such remedy does not waive the right of any party to reference pursuant to this Section. In the event of any challenge to the legality or enforceability of this Section, the prevailing party shall be entitled to recover the costs and expenses, including reasonable attorneys’ fees, incurred by it in connection therewith.

This Loan and Security Agreement is subject to the terms and conditions set forth in Addendum A attached hereto and made a part hereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Loan and Security Agreement to be executed as of the date first set forth above.

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Exhibit 10.2

SECURITY AGREEMENT (ALL ASSETS)

This Security Agreement (All Assets) (as amended, this “Agreement”) is entered into as of October 21, 2020 by and between each of the undersigned (individually and collectively, “Guarantor”) and TECH CAPITAL, LLC, a California limited liability company (“Lender”), at San Jose, California.

RECITALS

A. Lender has provided or will provide financial accommodations to Taronis Fuels, Inc., a Delaware corporation (“Parent”), MagneGas Welding Supply – Southeast, LLC, a Florida limited liability company (“MagneGas Southeast”), MagneGas Welding Supply – South, LLC, a Texas limited liability company (“MagneGas South”), MagneGas Welding Supply – West, LLC, a California limited liability company (“MagneGas West”), Tech-Gas Solutions, LLC, a Texas limited liability company (“TGS”), Taronis - TAS, LLC, a Florida limited liability company (“Taronis-TAS”), and Taronis – TAH, LLC, a Florida limited liability company (“Taronis-TAH”, together with Parent, MagneGas Southeast, MagneGas South, MagneGas West, TGS, and Taronis-TAS, individually and collectively, “Borrower”) pursuant to (a) that certain Loan and Security Agreement, entered into in connection herewith (as amended, the “Loan and Security Agreement”), and (b) the Loan Documents (as defined hereinafter).

B. Guarantor has executed that certain General Continuing Guaranty (as amended, the “Guaranty”) in favor of Lender, whereby Guarantor agrees to guarantee the obligations owing by Borrower to Lender, as set forth more completely in the Guaranty.

C. This Agreement is being executed by Guarantor in favor of Lender to secure the Obligations as defined hereinafter.

AGREEMENT

1. Incorporation by Reference. The foregoing Recitals and the agreements referred to in such Recitals are incorporated herein by this reference as though set forth in full herein.

2. Definitions.

All other terms contained in this Agreement which are not specifically defined herein, shall have the meanings provided in the Code. All references herein to the singular or plural shall also mean the plural or the singular, respectively. The term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Any section, subsection, clause, schedule, and exhibit references are to this Agreement unless otherwise specified. Any reference in this Agreement or in the Loan Documents to this Agreement or any of the Loan Documents shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, and supplements, thereto and thereof, as applicable. As used herein, the following terms shall have the following meanings:

“Accounts” means all currently existing and hereafter arising accounts as defined in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a right to payment of a monetary obligation for property sold or services rendered, and any and all credit insurance, guaranties, or security therefor.

“Agreement” has the meaning given in the preamble hereto.

“Borrower” has the meaning given in Recital A hereof.

“Chattel Paper” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, as a record or records that evidence both (a) a monetary obligation; and (b) one of the following: (i) a security interest in specific goods; (ii) a security interest in specific goods and software used in the goods; (iii) a security interest in specific goods and license of software used in the goods; or (iv) a lease of specific goods and license of Software used in the goods.

“Code” means the California Uniform Commercial Code or any successor statute, as same may be amended from time to time hereafter.

“Collateral” means all of the personal property now owned or hereafter acquired by Guarantor whether now existing or hereafter arising and wherever located, including without limitation: (a.) all Accounts; (b.) all Chattel Paper including without limitation Electronic Chattel Paper; (c.) all Inventory; (d.) all Equipment; (e.) all Trade Fixtures; (f.) all Fixtures, but only if related to Real Property Collateral; (g.) all Instruments; (h.) all Financial Assets, including without limitation, Investment Property; (i.) all Documents; (j.) all Deposit Accounts; (k.) all Letter of Credit Rights; (l.) all General Intangibles including without limitation copyrights, trademarks, and patents, Payment Intangibles and Software; (m.) all Supporting Obligations; (n.) any Commercial Tort Claim listed on any schedule provided herewith or hereafter; (o.) all returned or repossessed goods arising from or relating to any Accounts or Chattel Paper; (p.) all certificates of title and certificates of origin or manufacturers statements of origin relating to any of the foregoing, now owned or hereafter acquired; (q.) all property similar to any of the foregoing hereafter acquired by Guarantor; (r.) all ledger sheets, files, records, documents, instruments, and other books and records (including without limitation related electronic data processing Software) evidencing an interest in or relating to the above; (s.) all money, cash or cash equivalents; and (t.) to the extent not otherwise included in the foregoing, all proceeds, products, insurance claims, and other rights to payment and all accessions to, replacements for, attachments to, substitutions for, and rents and profits of, and noncash proceeds of, each of the foregoing, including, without limitation, cash or other property which were proceeds and are recovered by a bankruptcy trustee or otherwise as a preferential transfer by Guarantor. Notwithstanding any contrary term of this Agreement, “Collateral” shall not include any waste or other materials that have been or may be designated as a Hazardous Substance or a Hazardous Waste.

“Commercial Tort Claim” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a claim arising in tort with respect to which the claimant is an organization or if the claimant is an individual, the claim arose in (a.) the course of the claimant’s business or professions; and (b.) does not include damages arising out of personal injury to or death of an individual.

“Deposit Account(s)” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a demand, time, savings, passbook, or similar account maintained with a bank.

“Documents” has the meaning given in the Code, as such definition may be changed from time to time, and shall include, but not be limited to, a document of title or a receipt of the type described in Subdivision 2 of Section 7201 regarding warehouse receipts.

“Electronic Chattel Paper” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, Chattel Paper evidenced by a record or records consisting of information stored in an electronic medium.

“Environmental Laws” means all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment, including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals, or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof, including without limitation 42 U.S.C. 9601 (14), Comprehensive Environmental Response, Compensation and Liability Act of 1980 set forth at 42 U.S.C. 9601 et seq. (“CERCLA”), or the Resource Conservation and Recovery Act of 1986 set forth at 42 U.S.C. 9601 et seq. (“RCRA”) and all successor statutes and amendments thereto.

“Equipment” means all of Guarantor now owned and hereafter acquired Equipment as defined in the Code, as such definition may be amended from time to time, and wherever located, and shall include, but not be limited to, all goods (other than Inventory, farm products, or consumer goods) including without limitation machinery, computers and computer hardware and software (whether owned or licensed), vehicles, tools, furniture, Trade Fixtures (but not including Fixtures unless Real Property Collateral has been pledged to Lender), all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located.

“Financial Assets” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, any of the following: (a) a security; (b) an obligation of a person or a share, participation, or other interest in a person or in property or an enterprise of a person, that is, or is of a type, dealt in or traded on financial markets or that is recognized in any area in which it is issued or dealt in as a medium for investment; and (c) any property that is held by a securities intermediary for another person in a securities account that has expressly agreed with the other person that the property is to be treated as a financial asset.

“Fixtures” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, goods that have become so related to particular real property that an interest in them arises under real property law, but shall not include Trade Fixtures.

“General Intangibles” means general intangibles as defined in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, registered and unregistered patents, trademarks, service marks, copyrights, trade names, applications for the foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer lists, licenses, whether as licensor or licensee, choses in action and other claims and existing and future leasehold interests in Equipment, Payment Intangibles and Software), all whether arising under the laws of the United States of America or any other country.

“Guarantor’s Books” means all of Guarantor’s books and records including without limitation, all ledgers, records indicating, summarizing, or evidencing Guarantor’s properties or assets (including, without limitation, the Collateral) or liabilities, all information relating to Guarantor’s business operations or financial condition, and all computer programs, disc or tape files, printouts, runs, or other computer prepared information, and the Equipment containing such information.

“Guaranty” has the meaning given in Recital B hereof.

“Hazardous Substance(s)” and “Hazardous Waste(s)” means all or any of the following:

(a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”;

(b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources;

(c) any flammable substances or explosives or any radioactive materials; and

(d) asbestos in any form or electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty (50) parts per million.

“Instrument(s)” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a negotiable instrument or any other writing that evidences a right to payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment. The term “Instrument” shall include but not be limited to promissory notes.

“Inventory” means all present and future Inventory, as defined in the Code, as such definition may be amended from time to time, wherever located, and shall include but not be limited to, goods held for sale or lease or to be furnished under a contract of service and all present and future raw materials, work in process, finished goods, and packing and shipping materials, wherever located, and any documents of title representing any of the above.

“Investment Property” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, securities, security accounts, commodity contracts, or commodity accounts.

“Lender” has the meaning given in the preamble hereto.

“Letter of Credit Rights” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a right to payment or performance under a letter of credit, whether or not beneficiary has demanded or is at the time entitled to demand payment or performance.

“Loan Documents” means collectively, this Agreement, the Guaranty, the Loan and Security Agreement, any term notes, and all other notes, other guarantees, security agreements, subordination agreements, and other agreements, documents and instruments now or at any time hereafter executed and/or delivered by Guarantor, Borrower or any obligor in connection with this Agreement or otherwise, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

“Material Event of Default” has the meaning given in Section 6.1.

“Obligations” shall be used in its most comprehensive sense and shall include, without limitation, any loan and any and all advances, debts, obligations, and liabilities of Guarantor to Lender, heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily, and however arising, including, without limitation, (i) Obligations owing by Guarantor to third parties which have granted Lender a security interest in the accounts, chattel paper and/or general intangibles of said third party; (ii) any and all reasonable attorneys’ fees and costs of outside legal counsel, expenses, costs, premiums, charges and/or interest owed by Guarantor to Lender, whether under the Agreement, or otherwise, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether Guarantor may be liable individually or jointly with others, whether recovery upon such Obligations may be or hereafter becomes barred by any statute of limitations or whether such Obligations may be or hereafter becomes otherwise unenforceable, and includes Guarantor’s prompt, full and faithful performance, observance and discharge of each and every term, condition, agreement, representation, warranty undertaking and provision to be performed by Guarantor under this Agreement, the Guaranty or under any of the Loan Documents to which Guarantor is a party; (iii) any and all obligations or liabilities of Guarantor to Lender arising out of any other agreement by Guarantor including without limitation any agreement to indemnify Lender for environmental liability or to clean up hazardous waste; (iv) any and all Obligations for which Guarantor would otherwise be liable to Lender were it not for the invalidity, irregularity or unenforceability of them by reason of any bankruptcy, insolvency or other law or order of any kind, including from and after the filing by or against Guarantor of a bankruptcy petition, whether an involuntary or voluntary bankruptcy case, and all reasonable attorneys’ fees and costs of outside legal counsel related thereto; and (v) any and all amendments, modifications, renewals and/or extensions of any of the above, including without limit amendments, modifications, renewals and/or extensions which are evidenced by new or additional instruments, documents or agreements, all costs incurred by Lender in establishing, determining, continuing, or defending the validity or priority of its security interest, or in pursuing its rights and remedies under this Agreement or under any other agreement between Lender and Guarantor or in connection with any proceeding involving Lender as a result of any financial accommodation made by Lender to Guarantor; and all other costs of collecting Obligations, including without limitation reasonable attorneys’ fees and costs of outside legal counsel.

“Payment Intangibles” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a General Intangible under which the account debtor’s principal obligation is a monetary obligation.

“Permitted Liens” means liens and security interests held by Lender or agreed to in writing by Lender.

“Real Property Collateral” means any item(s) of real property pledged to Lender by Guarantor.

“Software” has the meaning given in the Code, as such definition may be amended from time to time hereafter, and shall include, but not be limited to, a computer program and any supporting information provided in connection with a transaction relating to the program.

“Supporting Obligations” has the meaning given in the Code, as such definition may be amended from time to time, and shall include, but not be limited to, a letter-of-credit right or secondary obligation that supports the payment or performance of an Account, Chattel Paper, a Document, a General Intangible, an Instrument, or a Financial Asset, including without limitation, Investment Property.

“Trade Fixtures” means Equipment and furnishings which are used in Guarantor’s business or operations which become affixed to the premises (a) at which Guarantor has its chief executive office or any other office, or (b) which are owned or operated by Guarantor.

3. Security Interest in the Collateral.

3.1. Grant of Security Interest.

Guarantor hereby grants to Lender a continuing security interest in the Collateral to secure payment when due, whether by stated maturity, demand, acceleration or otherwise, of all Obligations.

3.2. Express Authority of Lender to Execute UCC Financing Statement(s).

Notwithstanding any provision hereof, Lender is hereby expressly authorized to execute and file on behalf of Guarantor, UCC Financing Statement(s), including but not limited to corrections, amendments, and modifications thereof, including, without limitation, the use of an abbreviated description of any Collateral such as “All Assets of the Debtor” on any and all of the foregoing.

3.3. Delivery of Additional Documentation.

At any time that Lender so reasonably requests, Guarantor shall hereby authorize the preparation and filing by Lender and/or shall execute and deliver to Lender such additional financing statements, continuation financing statements, control agreements, fixture filings, security agreements, chattel mortgages, pledges, assignments, endorsements of certificates of title, applications for title, affidavits, reports, notices, schedules of Accounts, letters of authority, and all other documents that Lender may request, in form satisfactory to Lender, to perfect and continue the perfection of Lender’s security interests in the Collateral, and in order to fully consummate all of the transactions contemplated by this Agreement, the Guaranty and the Loan Documents to which Guarantor is a party.

4. Warranties, Covenants, and Agreements. Guarantor warrants, covenants and agrees as follows:

4.1. Guarantor shall furnish to Lender, in form and at intervals as Lender may reasonably request, any information Lender may request that is reasonably related to the Loan and Security Agreement or Loan Documents and allow Lender to examine, inspect, and copy any of Guarantor’s books and records during normal business hours with advanced written notice. Guarantor shall, at the request of Lender, mark its records and the Collateral to clearly indicate the security interest of Lender under this Agreement. Lender agrees to give Guarantor notice of its intent to examine, inspect, and copy any of Guarantor’s records. Notwithstanding the foregoing, after the occurrence of and during the continuation of a Material Event of Default, as defined below, no such prior notice shall be required. In that regard (i) any fraud, defalcation or conversion on the part of Guarantor shall be deemed to be a Material Event of Default; and (ii) there shall be no requirement that such fraud, defalcation or conversion be continuing in order to permit Lender to exercise any rights or remedies available to Lender under this Agreement, the Guaranty, the Loan Documents to which Guarantor is a party, or applicable law.

4.2. At the time any Collateral becomes, or is represented to be, subject to a security interest in favor of Lender, Guarantor shall be deemed to have warranted that (a) Guarantor is the lawful owner of the Collateral and has the right and authority to subject it to a security interest granted to Lender; (b) none of the Collateral is subject to any security interest other than that of Lender or Permitted Liens;(c) there are no financing statements on file unknown to Lender, other than in favor of Lender or the holders of Permitted Liens; and (d) Guarantor acquired its rights in the Collateral in the ordinary course of its business.

4.3. Guarantor shall keep the Collateral free at all times from all claims, liens, security interests, and encumbrances other than (a) those in favor of Lender; (b) the holders of Permitted Liens, or (c) those that are of the same types of liens, security interests or encumbrances listed in the “Permitted Liens” definition of the Loan and Security Agreement without regard to any “Permitted Indebtedness” limitations set forth in such “Permitted Liens” definition. Guarantor shall not, without the prior written consent of Lender, sell, transfer or lease, or permit to be sold, transferred or leased, any or all of the Collateral, and will not return any Inventory to its supplier. Lender or its representatives may at all times during normal business hours and with advanced written notice inspect the Collateral and may enter upon all premises where the Collateral is kept or might be located; provided, however, that Lender agrees to give Guarantor notice of its intent to inspect the Collateral and enter upon the premises where the Collateral is kept or might be located. Notwithstanding the foregoing, after the occurrence of and during the continuation of a Material Event of Default, no such prior notice shall be required. In that regard (i) any fraud, defalcation, or conversion on the part of Guarantor shall be deemed to be a Material Event of Default; and (ii) there shall be no requirement that such fraud, defalcation or conversion be continuing in order to permit Lender to exercise any rights or remedies available to Lender under this Agreement, the Guaranty, the Loan Documents to which Guarantor is a party, or applicable law.

4.4. Guarantor shall do all acts and or cause to be executed all writings requested by Lender to establish, maintain and continue a perfected and first security interest of Lender in the Collateral except as otherwise specifically agreed by Lender. Guarantor agrees that Lender has no obligation to acquire or perfect any lien on or security interest in any asset(s), whether real property or personal property, to secure payment of the Obligations.

4.5. Guarantor shall pay within the time that they can be paid without interest or penalty, all taxes, assessments and similar charges which at any time are or may become a lien, charge, or encumbrance upon any Collateral. If Guarantor fails to pay any of these taxes, assessments, or other charges in the time provided above, Lender has the option (but not the obligation) to do so and Guarantor agrees to repay all amounts so expended by Lender immediately upon demand.

4.6. Guarantor shall keep the Collateral in good condition and will protect it from loss, damage, or deterioration from any cause, excepting only normal wear and tear in the ordinary course of Guarantor’s business. Guarantor has and will maintain at all times (a) with respect to the Collateral, insurance under an “all risk” policy against fire and other risks customarily insured against; and (b) public liability insurance and other insurance as may be required by law or required by Lender, all of which insurance shall be in amount, form and content, and written by companies as may be satisfactory to Lender, containing a lender’s loss payable endorsement acceptable to lender. Guarantor will deliver to Lender immediately upon demand evidence satisfactory to Lender that the required insurance has been procured. If Guarantor fails to maintain satisfactory insurance, Lender has the option (but not the obligation) to do so and Guarantor agrees to repay all amounts so expended by Lender immediately upon demand.

4.7. If Guarantor owns Accounts, then on each occasion on which Guarantor evidences to Lender the account balances on and the nature and extent of the Accounts, Guarantor shall be deemed to have warranted at that time that except as otherwise indicated (and subject to the obligation on the part of Guarantor to immediately advise Lender if any such warranty is or has become incorrect due to Guarantor having (i) learned additional facts; or (ii) developments outside of Guarantor’s control) (a) each of those Accounts is then valid and enforceable without performance by Guarantor of any act; (b) each of those Accounts balances is in fact owing; (c) there are no setoffs, recoupments, credits, contra accounts, counterclaims or defenses against any of those Accounts of which Guarantor is aware; (d) as to any Accounts represented by a note, trade acceptance, draft or other instrument or by any chattel paper or document, the same have been endorsed and/or delivered by Guarantor to Lender; (e) Guarantor has not received with respect to any Accounts, any notice of the death of the related account debtor, nor the dissolution, liquidation, termination of existence, insolvency, business failure, appointment of a receiver for, assignment for the benefit of creditors by, or filing of a petition in bankruptcy by or against, the account debtor; and (f) as to any Accounts, the account debtor is not an affiliate of Guarantor, the United States of America or any department, agency or instrumentality of it, or a citizen or resident of any jurisdiction outside of the United States. Guarantor will do all acts and will execute all writings requested by Lender to perform, enforce performance of, and collect all Accounts. Guarantor shall neither make nor permit any modification, compromise, or substitution for any Accounts in any amount without the prior written consent of Lender. Guarantor shall, at Lender’s request, arrange for verification of Accounts directly with the account debtors of Guarantor or by other methods acceptable to lender.

4.8. Guarantor at all times shall be in compliance with all applicable laws, including, without limitation, any Environmental Laws.

4.9. Intentionally Omitted.

4.10. If Lender, acting in its sole discretion, redelivers any Collateral to Guarantor or Guarantor’s designee for the purpose of (a) the ultimate sale or exchange thereof; (b) presentation, collection, renewal, or registration of transfer thereof; or (c) loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with it preliminary to sale or exchange; such redelivery shall be in trust for the benefit of Lender and shall not constitute a release of Lender’s security interest in it or in the proceeds or products of it unless Lender specifically so agrees in writing. If Guarantor requests any such redelivery approved by Lender in its sole discretion, Guarantor will deliver with such request a proposed form of financing statement in form and substance satisfactory to Lender, which financing statement will be field by Lender. Any proceeds of Collateral coming into Guarantor’s possession as a result of any such redelivery shall be held in trust for Lender and immediately delivered to Lender for application on the Obligations. Lender may (in its sole discretion) deliver any or all of the Collateral to Guarantor, and such delivery by Lender shall discharge Lender from all liability or responsibility for such Collateral. Lender, at its option, may require delivery of any Collateral to Lender at any time with such endorsements or assignments of the Collateral as Lender may request.

4.11. Upon the occurrence of a Material Event of Default, Lender may, as to Collateral (a) cause any or all of such Collateral to be transferred to its name or to the name of its nominees; (b) receive or collect by legal proceedings or otherwise all dividends, interest, principal payments and other sums and all other distributions at any time payable or receivable on account of such Collateral, and hold the same as Collateral, or apply the same to the Obligations, the manner and distribution of the application to be in the sole discretion of Lender; (c) enter into any extension, subordination, reorganization, deposit, merger or consolidation agreement or any other agreement relating to or affecting such Collateral, and deposit or surrender control of such Collateral, and accept other property in exchange for such Collateral and hold or apply the property or money so received pursuant to this Agreement.

4.12. Lender may assign any of the Obligations and deliver any or all the Collateral to its assignee, which then shall have with respect to Collateral so delivered all the rights and powers of Lender under this Agreement, and after that Lender shall be fully discharged from all liability and responsibility with respect to Collateral so delivered.

4.13. Guarantor delivers this Agreement based solely on Guarantor’s independent investigation of (or decision not to investigate) the financial condition of Borrower and is not relying on any information furnished by Lender. Guarantor assumes full responsibility for obtaining any further information concerning Borrower’s financial condition, the status of the Obligations or any other matter that the undersigned may deem necessary or appropriate now or later. Guarantor waives any duty on the part of Lender, and agrees that Guarantor is not relying upon nor expecting Lender to disclose to Guarantor any fact now or later known by Lender, whether relating to the operations or condition of Borrower, the existence, liabilities or financial condition of any guarantor of the Obligations, the occurrence of any default with respect to the Obligations, or otherwise, notwithstanding any effect such fact may have upon Guarantor’s risk or Guarantor’s rights against Borrower. Guarantor knowingly accepts the full range of risk encompassed in this Agreement, which risk includes without limitation the possibility that Borrower may incur Obligations to Lender after the financial condition of Borrower or Borrower’s ability to pay debts as they mature, has deteriorated.

4.14. Guarantor shall defend, indemnify and hold harmless Lender, its employees, agents, shareholders, officers, and directors from and against any and all claims, damages, fines, expenses, liabilities or causes of action of whatever kind, including without limitation consultant fees, legal expenses, and reasonable attorneys’ fees and costs of outside legal counsel, suffered by any of them as a direct or indirect result of any actual or asserted violation of any law, including, without limitation, Environmental Laws, or of any remediation relating to any property required by any law, including without limitation, Environmental Laws.

4.15. Guarantor agrees to pay Lender all such costs and expenses incurred by Lender relating to this Agreement, the Guaranty, the Loan Documents to which Guarantor is a party, the Collateral or the Obligations, immediately upon demand, and until paid all costs shall bear interest at the highest interest rate applicable to Borrower under the Loan and Security Agreement, but not in excess of the maximum rate permitted by law. Any reference in this Agreement to reasonable attorneys’ fees shall be deemed a reference to the reasonable attorneys’ fees, costs, and expenses of outside counsel, whether or not a suit or action is instituted, and to court costs if a suit or action is instituted, and whether such reasonable attorneys’ fees, court costs or expenses are incurred at the trial court level, on appeal, in a bankruptcy, administrative or probate proceeding or otherwise.

5. Collection of Proceeds.

5.1. Guarantor agrees to collect and enforce payment of all Collateral until such time as Lender shall direct Guarantor to the contrary. Immediately upon notice to Guarantor by Lender and at all times after that, Guarantor agrees to fully and promptly cooperate and assist Lender in the collection and enforcement of all Collateral and to hold in trust for Lender all payments received in connection with Collateral and from the sale, lease or other disposition of any Collateral, all rights by way of suretyship or guaranty and all rights in the nature of a lien or security interest which Guarantor now or later has regarding Collateral. Immediately upon and after such notice, Guarantor agrees to (a) endorse to Lender and immediately deliver to Lender all payments received on Collateral or from the sale, lease or other disposition of any Collateral or arising from any other rights or interests of Guarantor in the Collateral, in the form received by Guarantor without commingling with any other funds, and (b) immediately deliver to Lender all property in Guarantor’s possession or later coming into Guarantor’s possession through enforcement of Guarantor’s rights or interests in the Collateral. Guarantor irrevocably authorizes Lender or any Lender employee or agent to endorse the name of Guarantor upon any checks or other items that are received in payment for any Collateral, and to do any and all things necessary in order to reduce these items to money. Lender shall have no duty as to the collection or protection of Collateral or the proceeds of it, nor as to the preservation of any related rights. Guarantor agrees to take all steps necessary to preserve rights against prior parties with respect to the Collateral. Nothing in this Section 5.1 shall be deemed to constitute consent by Lender to any sale, lease, or other disposition of any Collateral.

5.2. If Guarantor owns Accounts, Guarantor agrees that immediately upon Lender’s request (whether or not a Material Event of Default exists) Guarantor shall at its sole expense establish and maintain (or Lender, at Lender’s option, may establish and maintain at Guarantor’s expense): (a) a United States Post Office lock box which shall be titled as designated by Lender (the “Lock Box”), to which Lender shall have exclusive access and control, with Guarantor expressly irrevocably authorizing Lender, from time to time, to remove contents from the Lock Box, and with Guarantor agreeing to notify all account debtors and other parties obligated to Guarantor that all payments made to Guarantor shall be remitted, for the credit of Guarantor, to the Lock Box, and Guarantor, at Lender’s request, shall include a like statement on all invoices; and/or (b) a non-interest bearing deposit account with Lender or a bank acceptable to Lender which shall be titled as designated by Lender (the “Cash Collateral Account”) to which Lender shall have exclusive access and control, with Guarantor expressly irrevocably authorizing Lender, from time to time, to remove proceeds from the Cash Collateral Account, and with Guarantor agreeing to notify all account debtors and other parties obligated to Guarantor that all payments made to Guarantor shall be remitted, for the credit of Guarantor, to the Cash Collateral Account, and Guarantor, at Lender’s request, shall include a like statement on all invoices. Guarantor shall execute all documents and authorizations as may be required by Lender to establish and maintain the Lock Box and the Cash Collateral Account.

5.3. All items or amounts which are remitted to the Lock Box, the Cash Collateral Account or otherwise delivered by or for the benefit of Guarantor to Lender on account of partial or full payment of, or with respect to, any Collateral shall, at Lender’s option, be (i) applied to the payment of the Obligations, whether then due or not, in such order or at such time of application as Lender may determine in its sole discretion; (ii) maintained in the Cash Collateral Account, or (iii) remitted to Guarantor or to such other person(s) as may be entitled to such items or amounts under applicable law. Guarantor agrees that Lender shall not be liable for any loss or damage which Guarantor may suffer as a result of Lender’s processing of items or its exercise of any other rights or remedies under this Agreement, including without limitation indirect, special or consequential damages, loss of revenues or profits, or any claim, demand or action by any third party arising out of or in connection with the processing of items or the exercise of any other rights or remedies under this Agreement. Guarantor agrees to indemnify and hold Lender harmless from and against all such third party claims, demands, or actions, and all related expenses or liabilities, including, without limitation, reasonable attorneys’ fees and costs of outside legal counsel.

6. Default, Enforcement of Rights and Application of Proceeds.

6.1. Guarantor shall be in default under this Agreement upon the occurrence of any of the following events which have not been cured during any applicable cure period, if any (each, a “Material Event of Default”):

6.1.1. Any failure by Guarantor to pay the Obligations when due, or such portion of it as may be due, by acceleration or otherwise;

6.1.2. Any failure or neglect to comply with, or breach of, or default under, any term of this Agreement, or any other agreement or commitment between Guarantor and Lender;

6.1.3. Any warranty, representation, financial statement, or other information made, given or furnished to Lender by or on behalf of Guarantor shall be, or shall prove to have been, false, misleading or intentionally misleading when made, given, or furnished;

6.1.4. Any loss, theft, substantial damage or destruction to or of any Collateral, or the issuance or filing of any attachment, levy, garnishment or the commencement of any proceeding in connection with any Collateral or of any other judicial process of, upon or in respect of Guarantor, or any Collateral;

6.1.5. Sale or other disposition by Guarantor of any portion of its assets or property outside the ordinary course of business or voluntary suspension of the transaction of business by Guarantor, or death, dissolution, termination of existence, merger or consolidation with an unaffiliated third party, a foreign affiliate or with any domestic affiliated party that has not provided Lender with an all assets secured guaranty of Borrower’s obligations under the Loan and Security Agreement and Loans Documents, insolvency proceeding, business failure, or assignment for the benefit of creditors of or by Guarantor; or commencement of any proceedings under any state or federal bankruptcy or insolvency law by or against Guarantor; or the appointment of a receiver, trustee, court appointee, sequestrator or otherwise, for all or any part of the property of Guarantor;

6.1.6. Lender, upon thorough review of the financial position of the Guarantor, deems itself insecure believing that the prospect of payment of the Obligations or performance of this Agreement is impaired or shall fear deterioration, removal, or waste of Collateral; or

6.1.7. Any breach or default under this Agreement, the Guaranty, the Loan Documents to which Guarantor is a party or any other present or future agreement between Guarantor and Lender shall become a Material Event of Default if Guarantor has not cured said breach or default within the time period (if any) specified by Lender in its sole discretion in any notice of default.

6.2. Upon the occurrence of a Material Event of Default, Lender may at its sole discretion and without prior notice, declare any or all of the Obligations to be immediately due and payable, and shall have and may exercise any one or more of the following rights and remedies:

6.2.1. exercise all the rights and remedies upon default, in foreclosure and otherwise, available to secured parties under the provisions of the Code and other applicable law;

6.2.2. institute legal proceedings to foreclose upon the lien and security interest granted by this Agreement, to recover judgment for all amounts then due and owing as Obligations, and to collect the same out of any Collateral or the proceeds of any sale of Collateral;

6.2.3. institute legal proceedings for the sale, under the judgment or decree of any court, of any or all Collateral; and/or

6.2.4. personally or by agents, attorneys, or appointment of a receiver, enter upon any premises where Collateral may then be located, and take possession of all or any of it and/or render it unusable; and without being responsible for loss or damage to such Collateral, hold, operate, sell, lease, or dispose of all or any Collateral at one or more public or private sales, leasings or other dispositions, at places and times and on terms and conditions as Lender may deem fit, without any previous demand or advertisement; and except as provided in this Agreement, all notice of sale, lease or other disposition, and advertisement, and other notice or demand, any right or equity of redemption, and any obligation of a prospective purchaser or lessee to inquire as to the power and authority of Lender to sell, lease, or otherwise dispose of the Collateral or as to the application by Lender of the proceeds of sale or otherwise, which would otherwise be required by, or available to Guarantor under, applicable law are hereby expressly waived by Guarantor to the fullest extent permitted.

At any sale pursuant to this Section 6.2, whether under the power of sale, by virtue of judicial proceedings or otherwise, it shall not be necessary for Lender or a public officer under order of a court to have present physical or constructive possession of Collateral to be sold. The recitals contained in any conveyances and receipts made and given by Lender or the public officer to any purchase at any sale made pursuant to this Agreement shall conclusively establish the truth and accuracy of the matters stated therein (including, without limitation, as to the amounts of the principal of and interest on the Obligations, the accrual and nonpayment of it and advertisement and conduct of the sale); and all prerequisites to the sale shall be presumed to have been satisfied and performed. Upon any sale of any Collateral, the receipt of the officer making the sale under judicial proceedings or of Lender shall be sufficient discharge to the purchaser for the purchase money, and the purchaser shall not be obligated to see to the application of the money. Any sale of any Collateral under this Agreement shall be a perpetual bar against Guarantor with respect to such Collateral.

6.3. Guarantor shall at the request of Lender, notify the account debtors or obligors of Lender’s security interest in the Collateral, including, without limitation, the Accounts and Inventory and all proceeds, and advise such account debtors or obligors to direct all payments thereof to Lender. Lender may, itself, upon (a) the occurrence of any Material Event of Default; or (b) in any event, if Lender believes it is necessary to do so, so notify and direct any account debtor or obligor.

6.4. The proceeds of any sale or other disposition of Collateral authorized by this Agreement shall be applied by Lender as follows: first, to all expenses authorized by the Code and all reasonable attorneys’ fees and legal expenses incurred by Lender and costs of outside legal counsel; second, to interest incurred on the Obligations, third, to principal; and fourth, to remaining Obligations, with the surplus, if any, to be paid over to Guarantor or to such other person(s) as may be entitled to it under applicable law. Guarantor shall remain liable for any deficiency, which it shall pay to Lender immediately upon demand.

6.5. Nothing in this Agreement is intended, nor shall it be construed, to preclude Lender from pursuing any other remedy provided by law for the collection of the Obligations or for the recovery of any other sum to which Lender may be entitled for the breach of this Agreement by Guarantor, or for Lender’s realization upon the Collateral. Nothing in this Agreement shall reduce or release in any way any rights or security interests of Lender contained in any existing agreement between Guarantor and Lender.

6.6. No (a) waiver of default or forbearance; or (b) consent to any act of Guarantor by Lender shall be effective unless in writing and signed by an authorized officer of Lender. No (a) waiver of any default; or (b) forbearance on the part of Lender in enforcing any of its rights under this Agreement shall operate as a waiver by Lender of any other default or of the same default on a future occasion or of any rights.

6.7. Guarantor irrevocably appoints Lender or any agent of Lender (which appointment is coupled with an interest) the true and lawful attorney of Guarantor (with full power of substitution) in the name, place, and stead of, and at the expense of, Guarantor:

6.7.1. to demand, receive, sue for, and give receipts or acquittances for any monies due or to become due on any Collateral and to endorse any item representing any payment on or proceeds of the Collateral;

6.7.2. to execute and file in the name of and on behalf of Guarantor all financing statements or other filings deemed necessary or desirable by Lender to evidence, perfect, or continue the security interests granted in this Agreement;

6.7.3. to qualify Guarantor to do business in any jurisdiction if Guarantor shall fail to do so promptly following request by Lender; and

6.7.4. to do and perform any act on behalf of Guarantor permitted or required under this Agreement.

Upon the occurrence and during the continuance of a Material Event of Default, Guarantor also agrees, upon the request of Lender, to assemble the Collateral and make it available to Lender at any place designated by Lender.

7. General Terms.

7.1. Address for Notices. Until Lender is advised in writing by Guarantor to the contrary, all notices, requests and demands required under this Agreement or by law shall be given to, or made upon, Guarantor and Lender at the addresses indicated in Section 7.18 below.

7.2. Notice of Changes. Guarantor will give Lender not less than ninety (90) days’ prior written notice of all contemplated changes in Guarantor’s name, chief executive office location, and/or location of any Collateral.

7.3. No Assumption of Guarantor’s Duties. Lender assumes no duty of performance or other responsibility under any contracts contained within the Collateral.

7.4. Lender’s Right to Assign. Lender has the right to sell, assign, transfer, negotiate, or grant participations or any interest in, any or all of the Obligations and any related obligations, including without limitation this Agreement. In connection with the above, but without limiting its ability to make other disclosures to the full extent allowable, Lender may disclose all Loan Documents and information which Lender now or later has relating to Guarantor, the Obligations or this Agreement, however obtained. Guarantor further agree(s) that Lender may provide information relating to this Agreement or relating to Guarantor to Lender’s parent, affiliates, subsidiaries, and service providers.

7.5. Right of Settoff. In addition to Lender’s other rights, any obligations owing from Lender to Guarantor can be set off and applied by Lender against any Obligations at any time(s) either before or after maturity or demand without notice to anyone.

7.6. Guarantor Waivers. Guarantor waives any right to require Lender to: (a) proceed against any person or property; (b) give notice of the terms, time and place of any public or private sale of personal property security held from Borrower or any other person, or otherwise comply with the provisions of Sections 9-609 et seq of the Code; or (c) pursue any other remedy in Lender’s power. Guarantor waives notice of acceptance of this Agreement and presentment, demand, protest, notice of protest, dishonor, notice of dishonor, notice of default, notice of intent to accelerate or demand payment of any Obligations, any and all other notices to which the undersigned might otherwise be entitled, and diligence in collecting any Obligations, and agree(s) that Lender may, once or any number or times, modify the terms of any Obligations, compromise, extend, increase, accelerate, renew or forbear to enforce payment of any or all Obligations, or permit Borrower to incur additional Obligations, all without notice to Guarantor and without affecting in any manner the unconditional obligation of Guarantor under this Agreement. Guarantor unconditionally and irrevocably waives each and every defense and setoff of any nature which, under principles of guaranty or otherwise, would operate to impair or diminish in any way the obligations of Guarantor under this Agreement and acknowledges that such waiver is by this reference incorporated into each security agreement, collateral assignment, pledge and/or other document from Guarantor now or later securing the Obligations, and acknowledges that as of the date of this Agreement no such defense or setoff exists.

7.7. Waiver of Guarantor Rights. Until Lender has been paid in full with no agreement or obligation to extend any further financial accommodations to Borrower, Guarantor waives any and all rights (whether by subrogation, indemnity, reimbursement, or otherwise) to recover from Borrower any amounts paid or the value of any Collateral given by Guarantor pursuant to this Agreement.

7.8. Timing of Required Notices. In the event that applicable law shall obligate Lender to give prior notice to Guarantor of any enforcement action to be taken under this Agreement, Guarantor agrees that a written notice given to Guarantor at least ten (10) days before the date of the act shall be reasonable notice of the intended action and, specifically, reasonable notification of the time and place of any public sale or of the time after which any private sale, lease, or other disposition is to be made, unless a shorter notice period is reasonable under the circumstances. Such notice shall be deemed to be given under this Agreement when delivered to Guarantor or when placed in an envelope addressed to Guarantor and deposited, with postage prepaid, in a post office or official depository under the exclusive care and custody of the United States Postal Service or delivered to an overnight courier. The mailing shall be by overnight courier, certified mail, or first-class mail.

7.9. Reinstatement of Obligations. Notwithstanding any prior revocation, termination, surrender, or discharge of this Agreement in whole or in part, the effectiveness of this Agreement shall automatically continue or be reinstated in the event that any payment received or credit given by Lender in respect of the Obligations is returned, disgorged, or rescinded under any applicable law, including, without limitation, any bankruptcy or insolvency laws, in which case this Agreement, shall be enforceable against Guarantor as if the returned, disgorged, or rescinded payment or credit had not been received or given by Lender, and whether or not Lender relied upon this payment or credit or changed its position as a consequence of it. In the event of continuation or reinstatement of this Agreement, Guarantor agrees upon demand by Lender to execute and deliver to Lender those Loan Documents which Lender determines are appropriate to further evidence (in the public records or otherwise) this continuation or reinstatement, although the failure of Guarantor to do so shall not affect in any way the reinstatement or continuation.

7.10. Successors and Assigns. This Agreement and all the rights and remedies of Lender under this Agreement shall inure to the benefit of Lender’s successors and assigns and to any other holder who derives from Lender title to or an interest in the Obligations or any portion of it, and shall bind Guarantor and the heirs, legal representatives, successors, and assigns of Guarantor. Nothing in this Section 7.10 is or shall be deemed to constitute consent by Lender to any assignment by Guarantor with any such assignment by Guarantor to be void ab initio.

7.11. Multiple Guarantors. If there is more than one Guarantor, all undertakings, warranties and covenants made by Guarantor and all rights, powers and authorities given to or conferred upon Lender are made or given jointly and severally.

7.12. Meaning of Certain Terms. Except as otherwise provided in this Agreement, all terms in this Agreement which are defined in the Code have the meanings assigned to them in Division 9 (or, absent definition in Division 9, in any other division) of the Code.

7.13. No Prejudice to Lender’s Rights; Amendments to Agreement. No single or partial exercise, or delay in the exercise, of any right or power under this Agreement, shall preclude other or further exercise of the rights and powers under this Agreement. The unenforceability of any provision of this Agreement shall not affect the enforceability of the remainder of this Agreement. This Agreement constitutes the entire agreement of Guarantor and Lender with respect to the subject matter of this Agreement. No amendment or modification of this Agreement shall be effective unless the same shall be in writing and signed by Guarantor and an authorized officer of Lender.

7.14. Governing Law; Venue. This Agreement shall in all respects be governed by and construed in accordance with the internal laws of the State of California without regard to conflict of laws principles. The parties hereto agree that all actions or proceedings arising in connection with this Agreement, the Guarantor or the Obligations shall be tried and litigated only in the State and Federal courts located in the County of Santa Clara, State of California, or, at the sole option of Lender, in any other court in which Lender shall initial legal or equitable proceedings and which has subject matter jurisdiction over the matter at issue. Borrower and Lender waives, any right each may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section.

7.15. Payable Upon Demand Obligations. To the extent that any of the Obligations is payable upon demand, nothing contained in this Agreement shall modify the terms and conditions of that portion of the Obligations nor shall anything contained in this Agreement prevent Lender from making demand, without notice and with or without reason, for immediate payment of any or all of that portion of the Obligations at any time(s), whether or not a Material Event of Default has occurred or continues.

7.16. Chief Executive Office; Other Locations. Guarantor’s chief executive office is located and shall be maintained at the address indicated below its signature. If Collateral is located at other than the chief executive office, such Collateral is located and shall be maintained at the following locations: (see attached).

7.17. Termination of Agreement. This Agreement shall be terminated only by the filing of a termination statement in accordance with the applicable provisions of the Code, but any Obligations which by their terms survive termination of the Agreement including, without limitation, the obligations contained in Sections 4.14, 5.3 and 7.9 of this Agreement shall survive termination.

7.18. Notices. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by overnight mail, registered or certified mail, postage prepaid, return receipt requested, or by electronic mail or telefacsimile to Guarantor or to Lender, as the case may be, at its address set forth below:

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. All notices or demands sent in accordance with this Section, other than notices by Lender in connection with Sections 9610, 9611, 9615, 9617, 9618, 9620, 9621, or 9624 of the Code, shall be deemed received on the earlier of the date of actual receipt or three (3) days after the deposit thereof in the mail. Guarantor acknowledges and agrees that notices sent by Lender in connection with the foregoing described Sections of the Code shall be deemed sent when deposited in the mail or transmitted by telefacsimile or other similar method set forth above.

7.19. Further Assurances. Guarantor shall execute such other and further agreements, documents and instruments and take such further actions as Lender may require in order to implement the provisions of this Agreement and to perfect and protect the security interests granted to Lender pursuant to this Agreement.

7.20. Counterparts; Electronic Execution. This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if all original signatures were on the same copy of the signature page of this Agreement. Delivery of an executed counterpart of the signature page to this Agreement by telefacsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement, and any party delivering such an executed counterpart of this Agreement to any party shall thereafter promptly deliver a manually executed counterpart to such party, provided that the failure to deliver such manually executed counterpart shall not affect the validity, enforceability or binding effect of this Agreement.

7.21. Integration. This Agreement embodies the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements and understanding between said parties, verbal or written, express or implied, relating to the subject matter hereof. No course of dealing, course of perfection or trade usage and no parol evidence of any nature shall be used to supplement or modify any terms of this Agreement.

7.22. Indemnification. Except with respect to any liability arising out of the gross negligence or willful misconduct on the part of the Lender or any of its officers, employees and agents, Guarantor shall indemnify, defend (with attorneys selected by Lender) and hold Lender and its agents, contacts, employees, and officers harmless from any and all liability with respect to: (i) any stamp or other taxes which may be determined to be payable in connection with the execution of this Agreement, the Guaranty, the Loan Documents to which Guarantor is a party, or any action of Lender with respect to the Collateral, including, without limitation, the transfer of the Collateral to Lender’s name or that of Lender’s nominee or any purchaser at a foreclosure sale; and (ii) obligations, demands, claims, and liabilities arising out of or relating to (1) the transactions contemplated by this Agreement, the Guaranty, any of the other Loan Documents to which Guarantor is a party, or any action of Lender with respect to the Collateral, (2) any actions filed by any customers against Lender or its officers, agents or employees in connection with any Accounts, (3) any breach of this Agreement by Guarantor or any default or event of default hereunder, (4) any claims by third parties arising from Lender’s efforts to collect or attempt to collect any Collateral, and/or (5) any willful or negligent acts or omissions by Guarantor or its agents or employees. This provision shall survive the termination of this Agreement.

8. WAIVER OF JURY TRIAL; REFERENCE PROCEEDING. GUARANTOR AND LENDER ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF THE PARTIES WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OBLIGATIONS.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery that shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and order applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. In the event of any challenge to the legality or enforceability of this Section, the prevailing party shall be entitled to recover the costs and expenses, including reasonable attorneys’ fees, incurred by it in connection therewith.

[Remainder of Page Intentionally Left Blank; Signatures Commence on Next Page]

IN WITNESS WHEREOF, the parties have executed this Security Agreement (All Assets) as of the date first set forth above.

Guarantor:

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

[Signatures Continued on Next Page]

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

[Signatures Continued on Next Page]

Chief Executive Office and Contact Information:

24980 N. 83^rd Avenue, Suite 100

Peoria, Arizona 85383

Attn: Tyler Wilson, Esq.

Telephone No.:  

Facsimile No.:

E-Mail:  

Lender:

Addendum A to Security Agreement (All Assets)

Pursuant to this Addendum A to Security Agreement (All Assets) (this “Addendum”), the foregoing Security Agreement (All Assets) (the “Agreement”) by and between TECH CAPITAL, LLC, a California limited liability company (“Lender”) and the above-signed Guarantors (individually ad collectively “Guarantor”) is hereby amended and/or supplemented by the following terms and conditions, which are incorporated by this reference in the Agreement, as the following additional sections of the Agreement:

9. Intentionally left blank.

Schedule to Section 7.16

(Other Locations)

Exhibit 10.3

Intellectual Property Security Agreement

This Intellectual Property Security Agreement (this “Agreement”) is made as of this 21st day of October, 2020 by and between MAGNEGAS IP, LLC, a Delaware limited liability company (“Pledgor”) and TECH CAPITAL, LLC, a California limited liability company (“Secured Party”).

RECITALS

A. Secured Party has agreed to lend to Taronis Fuels, Inc., a Delaware corporation (“Parent”), MagneGas Welding Supply – Southeast, LLC, a Florida limited liability company (“MagneGas Southeast”), MagneGas Welding Supply – South, LLC, a Texas limited liability company (“MagneGas South”), MagneGas Welding Supply – West, LLC, a California limited liability company (“MagneGas West”), Tech-Gas Solutions, LLC, a Texas limited liability company (“TGS”), Taronis - TAS, LLC, a Florida limited liability company (“Taronis-TAS”), and Taronis – TAH, LLC, a Florida limited liability company (“Taronis-TAH”, together with Parent, MagneGas Southeast, MagneGas South, MagneGas West, TGS, and Taronis-TAS, individually and collectively, “Borrower”) certain funds (the “Loan”), and Borrower desires to borrow such funds from Secured Party, which Loan will be secured in part pursuant to the terms of a Loan and Security Agreement, and/or Secured Promissory Note executed or to be executed in connection herewith (individually and collectively, as amended, the “Loan Agreement”).

B. In order to induce Secured Party to make the Loan, Pledgor has agreed to guaranty Borrower’s indebtedness under the Loan Agreement and to grant a security interest in certain intangible property to Secured Party for purposes of securing the obligations of Pledgor to Secured Party under its guaranty.

AGREEMENT

NOW, THEREFORE, the parties hereto agree as follows:

1. Patent Mortgage and Grant of Security Interest. As collateral security for the prompt and complete payment and performance of all of Pledgor’s present or future indebtedness, obligation and liabilities to Secured Party, Pledgor hereby grants a security interest and mortgage to Secured Party in Pledgor’s entire right, title and interest in, to and under the following (all of which shall collectively be called the “Collateral”):

a. Any and all copyright rights, copyright application, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held, including without limitation those set forth on Exhibit A attached hereto (collectively, the “Copyrights”);

b. Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, or acquired or held;

c. Any and all design rights which may be available to Pledgor now or hereafter existing, created, acquired or held;

d. All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same, including without limitation the patents and patent applications set forth on Exhibit B attached hereto (collectively, the “Patents”);

e. Any trademark and service mark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Pledgor connected with and symbolized by such trademarks, including without limitation those set forth on Exhibit C attached hereto (collectively, the “Trademarks”).

f. Any and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above;

g. All licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use; and

h. All proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

2. Authorization. Pledgor irrevocably authorizes the Secured Party to perfect its security interest in the Collateral including recording this document with the Register of Copyrights and the Commissioner of Patents and Trademarks record this Agreement.

3. Covenants and Warranties. Pledgor represents, warrants, covenants and agrees as follows:

a. Pledgor is now the sole owner of the Collateral, except for licenses granted by Pledgor to its customers in the ordinary course of business and except for liens, encumbrances or security interests described in Exhibit D attached hereto;

b. Performance of this Agreement does not conflict with or result in a breach of any agreement to which Pledgor is party or by which Pledgor is bound;

c. During the term of this Agreement, Pledgor will not transfer or otherwise encumber any interest in the Collateral, except for licenses granted by Pledgor to its customers in the ordinary course of business, copies of which Pledgor will provide from time to time to Secured Party at the request of Secured Party;

d. Each of the Patents is valid and enforceable, and no part of the Collateral has been judged invalid or unenforceable, in whole or in part, and no claim has been made that any part of the Collateral violates the rights of any third party;

e. Pledgor shall promptly advise Secured Party of any material change in the composition of the Collateral, including but not limited to any subsequent ownership right of the Pledgor in or to any Trademark, Patent or Copyright not specified in this Agreement;

f. Pledgor shall (i.) protect, defend and maintain the validity and enforceability of the Trademarks, Patents and Copyrights, (ii.) use its best efforts to detect infringements of the Trademarks, Patents and Copyrights and promptly advise Secured Party in writing of material infringements detected and (iii.) not allow any Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to the public without the written consent of Secured Party, which shall not be unreasonably withheld;

g. Pledgor shall not register any maskworks, software, computer programs or other works of authorship subject to United States copyright protection with the United States Copyright Office without first complying with the following: (i) providing Secured Party with at least fifteen (15) days’ prior written notice thereof; and (ii) providing Secured Party with a copy of the application for any such registration. Pledgor irrevocably authorizes the Secured Party to perfect its security interest in any maskworks, software, computer programs, or other works of authorship registered by Pledgor;

h. This Agreement creates, and in the case of after acquired Collateral, this Agreement will create at the time Pledgor first has rights in such after acquired Collateral, in favor of Secured Party a valid and perfected first priority security interest in the Collateral in the United States securing the payment and performance of the obligations evidenced by the Loan Agreement upon making the filings referred to in clause 3.i below;

i. Except for, and upon, the filing with the United States Patent and Trademark Office with respect to the Patents and Trademarks and the filing with the United States Copyright Office with respect to Copyrights, necessary to perfect the security interests created hereunder, and, except as has been already made or obtained, no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required either (i.) for the grant by Pledgor of the security interest granted hereby or for the execution, delivery or performance of this Agreement or by Pledgor; or (ii.) for the perfection in the United States or the exercise by Secured Party of its rights and remedies hereunder;

j. All information heretofore, herein or hereafter supplied to Secured Party by or on behalf of Pledgor with respect to the Collateral is accurate and complete in all material respects;

k. Pledgor shall not enter into any agreement that would materially impair or conflict with Pledgor’s obligations hereunder without Secured Party’s prior written consent. Pledgor shall not permit the inclusion in any contract to which it becomes a party of any provisions that could or might in any way impair or prevent the creation of a security interest in Pledgor’s rights and interests in any property included within the definition of the Collateral acquired under such contracts; and

l. Pledgor will promptly notify Secured Party in writing of any event that materially adversely affects the value of any of the Collateral, the ability of Pledgor or Secured Party to dispose of any of the Collateral or the rights and remedies of Secured Party in relation thereto, including the levy of any legal process against any of the Collateral.

4. Secured Party’s Rights. Secured Party shall have the right, but not the obligation, to take, at Pledgor’s sole expense, any actions that Pledgor is required under this Agreement to take but which Pledgor fails to take, after five (5) business days’ telephonic or written notice to Pledgor. Pledgor shall reimburse and indemnify Secured Party for all costs and expenses incurred in the reasonable exercise of its rights under this section 4.

5. Inspection Rights. Pledgor hereby grants to Secured Party and its employees, representatives and agents the right to visit, during reasonable hours upon prior reasonable notice to Pledgor, and any of Pledgor’s and its subcontractors’ plants and facilities that manufacture, install or store products (or that have done so during the prior six-month period) that are sold under any of the Collateral, and to inspect the products and quality control records relating thereto upon reasonable notice to Pledgor and as often as may be reasonably requested; provided, however, nothing herein shall entitle Secured Party to access to Pledgor’s trade secrets and other proprietary information.

6. Further Assurances; Attorney in Fact.

a. On a continuing basis, Pledgor will, subject to any prior licenses, encumbrances and restrictions and prospective licenses, make, execute, acknowledge and deliver, and file and record in the proper filing and recording places in the United States, all such instruments, including, appropriate financing and continuation statements and collateral agreements and filings with the United States Patent and Trademark Office and United States Copyright Office, and take all such action as may reasonably be deemed necessary or advisable, or as requested by Secured Party to carry out the intent and purposes of this Agreement, or for assuring and confirming to Secured Party the grant or perfection of a security interest in all Patents.

b. Pledgor hereby irrevocably appoints Secured Party as Pledgor’s attorney-in-fact, with full authority in the place and stead of Pledgor and in the name of Pledgor, Secured Party or otherwise, from time to time in Secured Party’s discretion:

i. To modify in its sole discretion this Agreement without first obtaining Pledgor’s approval of or signature to such modification by amending Exhibit A, Exhibit B and Exhibit C thereof, to include reference to any right title or interest in any copyrights, patents, or trademarks acquired by Pledgor after the execution hereof or to delete any reference to any right, title, interest in any copyrights, patents, or trademarks in which Pledgor no longer has or claims any right, title or interest; and,

ii. To file, in its sole discretion, one or more UCC financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of Pledgor where permitted by law.

7. Events of Default. The occurrence of any of the following shall constitute an Event of Default under this Agreement:

a. An Event of Default occurs under the Loan Agreement or any other agreement between Pledgor and Secured Party including under Pledgor’s guaranty; or

b. Pledgor breaches any warranty or agreement made by Pledgor in this Agreement.

8. Remedies. Upon the occurrence of an Event of Default that is not cured prior to the expiration of any cure period applicable to same, if any, Secured Party shall have the right to exercise all the remedies of a secured party under the California Uniform Commercial Code or other applicable law, including without limitation the right to require Pledgor to assemble the Collateral and to make it available to Secured Party at a place designated by Secured Party. Pledgor will pay any expenses (including attorneys’ fees) incurred by Secured Party in connection with the exercise of any of Secured Party’s rights hereunder, including without limitation any expense incurred in disposing of the Collateral. All of Secured Party’s rights and remedies with respect to the Collateral shall be cumulative.

9. Indemnity. Pledgor agrees to defend, indemnify and hold harmless Secured Party and its officers, employees, and agents against: (a.) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement, and (b.) all losses or expenses in any way suffered, incurred, or paid by Secured Party as a result of or in any way arising out of, following or consequential to transactions between Secured Party and Pledgor, whether under this Agreement or otherwise (including, without limitation, attorneys’ fees and expenses), except for losses arising from or out of Secured Party’s gross negligence or willful misconduct.

10. Release. At such time as Pledgor shall completely satisfy all of the obligations secured hereunder, Secured Party shall execute and deliver to Pledgor all deeds, releases and other instruments as may be necessary or proper to revest in Pledgor full title to the property granted hereunder, subject to any disposition thereof which may have been made by Secured Party pursuant hereto.

11. Course of Dealing. No course of dealing, nor any failure to exercise, nor any delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

12. Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that Pledgor may not assign this Agreement or any rights or duties hereunder without Secured Party’s prior written consent, and Secured Party may not assign this Agreement without the prior written consent of the Pledgor except in the cases of: (a) the exercise of Secured Party’s remedies under Paragraph 8, (b) an assignment to the parent or a wholly owned subsidiary of the Secured Party upon prior notice to Pledgor, (c) an assignment of: (i) an interest in the Loan and Security Agreement and related loan documents in connection with Secured Party’s sale and assignment of a loan participation, or (ii) an assignment of the Loan and Security Agreement and related loan documents, to a commercial bank, finance company, or other financial institution (organized under the laws of the United States, or any state thereof) engaged in making, purchasing or otherwise investing in commercial loans, but with Secured Party agreeing to provide Pledgor with written notice at least ten (10) days’ prior to any assignment permitted by this subsection (c). Any prohibited assignment shall be absolutely void.

13. Attorneys’ Fees. If any action relating to this Agreement is brought by either party hereto against the other party, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs, and disbursements.

14. Integration; Amendments. This is an integrated Agreement and supersedes all prior agreements or negotiations regarding the subject matter hereof. This Agreement may be amended only by a written instrument signed by both parties hereto.

15. Counterparts; Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute the same instrument. This Agreement or a signed signature page thereto (intended to be attached to a copy of this Agreement) transmitted by facsimile machine, telecopier, or other electronic means (including via transmittal of a “pdf” file) shall be deemed and treated as an original document and an original signature.

16. California Law and Jurisdiction. This Agreement shall be governed by the laws of the State of California, without regard for choice of law provisions. Pledgor and Secured Party consent to the non-exclusive jurisdiction of any state or federal court located in Santa Clara County, California.

17. Jury Trial Waiver; Reference Proceeding. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF A PARTY UNDER THIS AGREEMENT. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure §638 as such section may be amended and/or re-numbered from time to time (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceeding shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§638 through 645.1 inclusive, as such sections may be amended and/or re-numbered from time to time. No provision of this Section shall limit the right of any party (a) to exercise self-help remedies (including setoff), (b) to foreclose against or sell any collateral, by power of sale or otherwise, or (c) to obtain or oppose provisional or ancillary remedies from a court of competent jurisdiction before, after or during the pendency of a reference. The exercise of, or opposition to, any such remedy does not waive the right of any party to reference pursuant to this Section. In the event of any challenge to the legality or enforceability of this Section, the prevailing party shall be entitled to recover the costs and expenses, including reasonable attorneys’ fees, incurred by it in connection therewith.

[Remainder of Page Intentionally Left Blank; Signatures on Next Page]

IN WITNESS WHEREOF, the parties hereto have executed this Intellectual Property Security Agreement on the day and year first above written.

Exhibit “A”

Exhibit “B”

Exhibit 10.4

GENERAL CONTINUING GUARANTY

October 21, 2020

TECH CAPITAL, LLC

2010 N. First Street, Suite 300

San Jose, CA 95131

To: TECH CAPITAL, LLC

For good and valuable consideration, and in order to induce TECH CAPITAL, LLC, a California limited liability company (“Lender”), to extend and/or continue to extend financial accommodations to Taronis Fuels, Inc., a Delaware corporation (“Parent”), MagneGas Welding Supply – Southeast, LLC, a Florida limited liability company (“MagneGas Southeast”), MagneGas Welding Supply – South, LLC, a Texas limited liability company (“MagneGas South”), MagneGas Welding Supply – West, LLC, a California limited liability company (“MagneGas West”), Tech-Gas Solutions, LLC, a Texas limited liability company (“TGS”), Taronis - TAS, LLC, a Florida limited liability company (“Taronis-TAS”), and Taronis – TAH, LLC, a Florida limited liability company (“Taronis-TAH”, together with Parent, MagneGas Southeast, MagneGas South, MagneGas West, TGS, and Taronis-TAS, individually and collectively, “Borrower”), on a co-borrower basis, pursuant to the terms and conditions of that certain Loan and Security Agreement (individually and collectively, the “Agreement”), to be executed in connection herewith, evidencing and otherwise relating to a loan by Lender to Borrower in the original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00) (the “Loan”), or pursuant to any other present or future agreement between Lender and Borrower, and in consideration thereof, and in consideration of any loans, advances, or financial accommodations heretofore or hereafter granted by Lender to or for the account of Borrower, whether pursuant to the Agreement, or otherwise, the undersigned guarantors (individually and collectively, “Guarantor”), whose addresses are set forth below each of their respective signatures, hereby, jointly and severally, guarantees, promises and undertakes as follows:

1. Guarantor unconditionally, absolutely and irrevocably guarantees and promises to pay to Lender, or order, on demand, in lawful money of the United States, any and all indebtedness and/or obligations of Borrower to Lender and the payment to Lender of all sums which may be presently due and owing and all sums which shall in the future become due and owing to Lender from Borrower whether under the Agreement or otherwise. The term “indebtedness” and “obligations” (hereinafter collectively referred to as the “Obligations”) are used herein in their most comprehensive sense and include, without limitation, the Loan and any and all advances, debts, obligations, and liabilities of Borrower, heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily, and however arising, including, without limitation, (a) any and all attorneys’ fees, expenses, costs, premiums, charges and/or interest owed by Borrower to Lender, whether under the Agreement, or otherwise, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether Borrower may be liable individually or jointly with others, whether recovery upon such indebtedness may be or hereafter becomes barred by any statute of limitation or whether such indebtedness may be or hereafter becomes otherwise unenforceable, and includes Borrower’s prompt, full and faithful performance, observance and discharge or each and every term, condition, agreement, representation, warranty, undertaking and provision to be performed by Borrower under the Agreement; (b) any and all obligations or liabilities of Borrower to Lender arising out of any other agreement by Borrower including without limitation any agreement to indemnify Lender for environmental liability or to clean up hazardous waste; (c) any and all indebtedness, obligations or liabilities for which Borrower would otherwise be liable to Lender were it not for the invalidity, irregularity or unenforceability of them by reason of any bankruptcy, insolvency or other law or order of any kind, including from and after the filing by or against Borrower of a bankruptcy petition, whether an involuntary or voluntary bankruptcy case, and all attorneys’ fees related thereto; and (d) any and all amendments, modifications, renewals and/or extensions of any of the above, including without limitation amendments, modifications, renewals and/or extensions which are evidenced by new or additional instruments, documents or agreements.

2. This General Continuing Guaranty, together with all addenda, exhibits and schedules hereto, as the same now exists or hereafter may be amended, modified, supplemented, extended, renewed, restated or replaced (this “Guaranty”) is a continuing guaranty that shall remain effective until all of the Obligations and all of the indebtedness and obligations evidenced by the Agreement have been fully and finally paid and are no longer subject to Borrower, as a debtor-in-possession, and/or any trustee or receiver in bankruptcy, seeking to set aside such payments or seeking to recoup the amount of such payments, or any part thereof or disgorgement on the part of the Lender, and relates to any Obligations, including those which arise under successive transactions which shall either continue the Obligations from time to time or renew them after they have been satisfied. Guarantor hereby absolutely, knowingly, unconditionally, and expressly waives and agrees not to assert any right it has under Section 2815 of the California Civil Code, or otherwise, to revoke this Guaranty as to future indebtedness. If such a revocation is effective notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that (a) no such revocation shall be effective until written notice thereof has been received by Lender, (b) no such revocation shall apply to any Guaranteed Obligations in existence on such date (including, any subsequent continuation, extension, or renewal thereof, or change in the interest rate, payment terms, or other terms and conditions thereof) plus all interest thereon, then and thereafter accruing, and all attorneys’ fees, court costs and collection charges theretofore and thereafter incurred in endeavoring to collect or enforce any of the foregoing against Debtor, Guarantor or any other person liable thereon (whether or not suit is brought) and any other expenses of, for or incidental to the collection thereof, (c) no such revocation shall apply to any Guaranteed Obligations made or created after such date to the extent made or created pursuant to a legally binding commitment of Lender in existence on the date of such revocation, (d) no payment by Guarantor, Borrower, or from any other source, prior to the date of such revocation shall reduce the maximum obligation of Guarantor hereunder, and (e) any payment by Borrower or from any source other than Guarantor, subsequent to the date of such revocation, shall first be applied to that portion of the Guaranteed Obligations as to which the revocation is effective and which are not, therefore, guaranteed hereunder, and to the extent so applied shall not reduce the maximum obligation of Guarantor hereunder.

3. Guarantor agrees that it is directly and primarily liable to Lender, that the obligations hereunder are independent of the Obligations of Borrower, and that a separate action or actions may be brought and prosecuted against Guarantor irrespective of whether Borrower or any other party liable for the Obligations, whether directly or as a guarantor, is joined in any such action or actions. Guarantor agrees that any releases which may be given by Lender to Borrower or any other guarantor or endorser shall not release it from this Guaranty.

4. In the event that any bankruptcy, insolvency, receivership or similar proceeding is instituted by or against Guarantor and/or Borrower or in the event that either Guarantor or Borrower become insolvent, make an assignment for the benefit of creditors, or attempt to effect a composition with creditors, or if there be any default under the Agreement (whether declared or not), then, at Lender’s election, without notice or demand, the obligations of Guarantor created hereunder shall become due, payable and enforceable against Guarantor whether or not the Obligations are then due and payable.

5. Guarantor agrees to indemnify Lender and hold Lender harmless against all obligations, demands, claims, liens, damages, actions, suits, judgments, costs and expenses, including, without limitation, attorneys’ fees (including, without limitation, estimated legal fees imputed to in-house counsel and staff), and legal costs, and liabilities, by whomsoever asserted and against all losses in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential to transactions with Borrower whether under the Agreement, or otherwise, and also agrees that this Guaranty shall not be impaired by any modification, supplement, extension, or amendment of any contract or agreement to which Lender and Borrower may hereafter agree, nor by any modification, release, or other alteration of any of the Obligations hereby guaranteed or of any security therefor, nor by any agreements or arrangements whatsoever with Borrower or anyone else.

6. Guarantor hereby authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to time to: (a) renew, compromise, extend, accelerate, or otherwise change the interest rate, time for payment, or the other terms of any of the Obligations guaranteed hereby, and exchange, enforce, waive, and release any security therefor; (b) apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine; (c) release or substitute any one or more endorser(s) or guarantor(s); (d) assign, without notice, this Guaranty in whole or in part and/or Lender’s rights hereunder to anyone at any time; and (e) run such further credit reports and other reports as it may deem necessary to continue to keep itself apprised regarding the continued financial condition of Guarantor during the term of this Guaranty and hereby authorizes Lender to run such credit and other reports from time to time as Lender deems appropriate. Guarantor agrees that Lender may do any or all of the foregoing in such manner, upon such term, and at such times as Lender, in its discretion, deems advisable, without, in any way or respect, impairing, affecting, reducing or releasing Guarantor from its undertakings hereunder and Guarantor hereby consents to each and all of the foregoing acts, events and/or occurrences. Guarantor hereby agrees to be bound by any terms and conditions of the Agreement, which are specifically applicable to Guarantor.

7. Guarantor hereby waives any right to assert against Lender as a defense, counterclaim, set-off or cross-claim, any defense (legal or equitable), set-off, counterclaim, and/or claim which Guarantor may now or at any time hereafter have against Borrower and/or any other party liable to Lender in any way or manner.

8. Guarantor hereby waives all defenses, counterclaims and offsets of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity and/or enforceability of the Agreement, or any security interest.

9. Guarantor hereby waives any defense arising by reason of any claim or defense based upon an election of remedies by Lender, which, in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against Borrower for reimbursement, and/or any rights of Guarantor to proceed against Borrower or against any other person or security, including, but not limited to, any defense based upon an election of remedies by Lender under the provisions of Section 580d of the California Code of Civil Procedure, and/or any similar law of California or of any other State or of the United States. Guarantor waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notices of acceptance of this Guaranty, and notices of the existence, creation, or incurring of new or additional indebtedness, and all other notices or formalities to which Guarantor may be entitled. Guarantor waives any right to a jury trial in any action hereunder or arising out of Lender’s transactions with Borrower. Guarantor also hereby waives any right of subrogation it may have or assert, or any other right of reimbursement from Borrower or any other party, unless Lender expressly consents to Guarantor’s assertion of such rights. Without limiting the foregoing, Guarantor expressly waives all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2815, 2819, 2822, 2839, 2845, 2847, 2849, 2849, 2850, 2899 and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d and 726, and/or any similar law of California or off any other State or of the United States, as those statutory provisions are now in effect and hereafter amended, and under any other similar statutes now and hereafter in effect deemed applicable to this Guaranty and its enforcement.

10. Guarantor waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notices of intent to accelerate or demand payment of any kind, diligence in collecting any Obligations, notices of acceptance of this Guaranty, notices of the existence, creation, or incurring of new or additional indebtedness, notices respecting the terms, time and place of any public or private sale of personal property security held from Borrower or any other person, and all other notices or formalities to which Guarantor may be entitled. Each Guarantor hereby waives any claim, right or remedy now existing or hereafter acquired against the Borrower, which claims arise from the performance of such Guarantor’s obligations under the respective guaranties, including without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification or participation in any claim, right or remedy against Borrower for any security which Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise. Lender may modify the terms of any Obligations, compromise, extend, increase, accelerate, renew or forbear to enforce payment of any or all Obligations, or permit Borrower to incur additional Obligations, all without notice to Guarantor and without affecting in any manner the unconditional obligation of Guarantor under this Guaranty. Guarantor further waives any and all other notices to which Guarantor might otherwise be entitled. Guarantor acknowledges and agrees that the liabilities created by this Guaranty are direct and are not conditioned upon pursuit by Lender of any remedy Lender may have against Borrower or any other person or any security. No invalidity, irregularity or unenforceability of any part or all of the Obligations or any documents evidencing the same, by reason of any bankruptcy, insolvency or other law or order of any kind or for any other reason, and no defense or setoff available at any time to Borrower, shall impair, affect or be a defense or setoff to the obligations of Guarantor under this Guaranty.

11. Any and all present and future debts and obligations of Borrower to Guarantor are hereby postponed in favor of and subordinated to the full payment and performance of all present and future debts and obligations of Borrower to Lender. All monies or other property of Guarantor at any time in Lender’s possession may be held by Lender as security for any and all obligations of Guarantor to Lender no matter how or when arising whether absolute or contingent, whether due or to become due, and whether under this Guaranty or otherwise. Guarantor also agrees that Lender’s books and records showing the account between Lender and Borrower shall be admissible in any action or proceeding and shall be binding upon Guarantor for the purpose of establishing the terms set forth therein and shall constitute prima facie proof thereof

12. Based solely on its own independent investigation and not upon any information provided by Lender, Guarantor acknowledges that it is presently informed of the financial condition of Borrower and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Guarantor hereby covenants that it will continue to keep itself informed of Borrower’s financial condition and of all other circumstances which bear upon the risk of nonpayment. Absent a written request for such information by Guarantor to Lender, Guarantor hereby waives its rights, if any, to require the disclosure of, and Lender is relieved of any obligation or duty to disclose to Guarantor, any information which Lender may now or hereafter acquire concerning such condition or circumstances. Guarantor agrees that it is not relying upon nor expecting Lender to disclose to Guarantor any fact now or later known by Lender, whether relating to the operations or condition of Borrower, the existence, liabilities or financial condition of any co-guarantor of the Obligations, the occurrence of any default with respect to the Obligations, or otherwise, notwithstanding any effect these facts may have upon Guarantor’s risk under this Guaranty or Guarantor’s rights against Borrower. Guarantor knowingly accepts the full range of risk encompassed in this Guaranty, which risk includes without limitation the possibility that Borrower may incur Obligations to Lender after the financial condition of Borrower, or its ability to pay its debts as they mature, has deteriorated.

13. Notwithstanding any prior revocation, termination, surrender or discharge of this Guaranty (or of any lien, pledge or security interest securing this Guaranty) in whole or in part, and of all liens, pledges and security interests securing this Guaranty, this Guaranty shall continue in full force and effect until Borrower’s Obligations are fully paid, performed and discharged and Lender gives Guarantor written notice of that fact. Borrower’s Obligations shall not be considered fully paid, performed and discharged unless and until all payments by Borrower to Lender are no longer subject to any right on the part of any person whomsoever including but not limited to Borrower, Borrower as a debtor-in-possession, and/or any trustee or receiver in bankruptcy, to set aside such payments or seeking to recoup the amount of such payments, or any part thereof. In the event that any such payments by Borrower to Lender are set aside after the making thereof, in whole or in part, or settled without litigation, to the extent of such settlement, all of which is within Lender’s discretion, Guarantor shall be liable for the full amount Lender is required to repay plus costs, interest, attorneys’ fees and any and all expenses which Lender paid or incurred in connection therewith. The foregoing shall include, by way of example and not by way of limitation, all rights to recover preferences voidable under the United States Bankruptcy Code and any liability imposed, or sought to be imposed, against Lender relating to the environmental condition of, or the presence of hazardous or toxic substances on, in or about, any property given as collateral to Lender by Borrower. For purposes of this Guaranty, “environmental condition” includes, without limitation, conditions existing with respect to the surface or ground water, drinking water supply, land surface or subsurface and the air; and “hazardous or toxic substances’ shall include all substances now or subsequently determined by any federal, state or local authority to be hazardous or toxic, or otherwise regulated by any of these authorities.

14. This Guaranty shall be binding upon the successors and assigns of Guarantor and shall inure to the benefit of Lender’s successors and assigns. However, Borrower and Guarantor may not assign this Guaranty or any rights hereunder without Lender’s prior written consent and any prohibited assignment shall be absolutely void. Neither an unconsented assignment nor an assignment consented to by Lender shall release Guarantor of any Obligation or indebtedness hereunder. Lender reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in, Lender’s rights and benefits under this Guaranty and each of the related documents executed herewith or hereafter with Guarantor acknowledging and agreeing to same, and with Guarantor further acknowledging and agreeing that all of its Obligations owing to Lender under this Guaranty and any related documents executed herewith or hereafter shall be owing to such purchaser, assignee, transferee, participant or other successor party. In connection therewith, Lender may disclose all documents and information which Lender now has or may hereafter acquire relating to Guarantor or the business of Guarantor, or any collateral required hereunder. Any waiver of any rights under this Guaranty or under any other agreement, instrument, or paper signed by Guarantor is neither valid nor effective unless made in writing and signed by Lender. No delay or omission in the part of the Lender in exercising any right shall operate as a waiver thereof or of any other right. If Guarantor is a natural person, the death of Guarantor shall not terminate this Guaranty. If Guarantor is a partnership or an unincorporated association, Guarantor’s rights and liability shall not be affected by any changes in the name of the entity or its membership.

15. All notices, demands and other communications which Guarantor or Lender may desire, or may be required, to give to the other shall be in writing and shall be sent via registered or certified mail, nationally recognized overnight courier, or personally delivered and shall be addressed to the party at the addresses set forth in the preamble of this Guaranty. Any such notice, demand or communication shall be deemed given when received if personally delivered or sent by overnight courier, or deposited in the United States mail, postage prepaid, if sent by registered or certified mail. The address of either Guarantor or Lender may be changed by notice given in accordance with this paragraph.

16. This is an integrated agreement and is the sole and final agreement with respect to the subject matter hereof, and supersedes all prior negotiations and agreements. No modification of this Guaranty shall be effective for any purpose unless it is in writing and executed by an officer of Lender authorized to do so.

17. Guarantor agrees to pay all attorneys’ fees and all other costs and out-of-pocket expenses (including, without limitation, estimated legal fees imputed to in-house counsel and staff) which may be incurred by Lender in the enforcement of this Guaranty or in any way arising out of, following, or consequential to the enforcement of Borrower’s Obligations, whether under this Guaranty, the Agreement, or otherwise, including without limitation the prosecution or defense of (a) motions or actions for relief from any stay under the Bankruptcy Code, (b) motions to deny dischargeability of any debt under the Bankruptcy Code, (c) motions to grant or deny use of cash collateral or extend financing, (d) motions to challenge or assert preference liability motions or fraudulent transfer liability motions, and (e) all other motions brought by Borrower, Guarantor, Lender or third parties in any way relating to Lender’s rights with respect to such Borrower, Guarantor, or third party and/or affecting any collateral securing any obligation owed to Lender by Borrower, Guarantor, or any third party, or probate proceedings.

18. In all cases where the word “Guarantor” is used in this Guaranty, it shall mean and apply equally to each of and all of the individuals and/or entities which have executed this Guaranty. If any Obligation is guaranteed by two or more guarantors, the obligation of Guarantor shall be several and also joint, each with all and also each with any one or more of the others, and may be enforced at the option of Lender against each severally, any two or more jointly, or some severally and some jointly. The term “Borrower” includes any debtor-in-possession or trustee in bankruptcy which succeeds to the interests of Borrower.

19. This Guaranty or other guaranty related documents may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. This Guaranty or other guaranty related documents, or a signature page thereto intended to be attached to a copy of this Guaranty or other guaranty related documents, signed and transmitted by facsimile machine, telecopier or other electronic means (including via transmittal of a “pdf” file) shall be deemed and treated as an original document. The signature of any person thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document. At the request of any party hereto, any facsimile, telecopy or other electronic document is to be re-executed in original form by the persons who executed the facsimile, telecopy or other electronic document. No party hereto may raise the use of a facsimile machine, telecopier, or other electronic means or the fact that any signature was transmitted through the use of a facsimile machine, telecopier, or other electronic means as a defense to the enforcement of this Guaranty or other guaranty related document.

20. All acts and transactions hereunder and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without regard to choice of law principles. The parties hereby agree that (a) this Guaranty is entered into and that Guarantor’s performance to Lender occurs at San Jose, California, and (b) all actions and proceedings arising in connection with this Guaranty and/or the Agreement shall be tried and litigated only in the State and Federal courts located in the County of Santa Clara, State of California or, at the sole option of Lender, in any other court which Lender shall initiate legal or equitable proceedings and which has subject matter jurisdiction over the matter in controversy. Each of Guarantor and Lender waive,any right each may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this section.

GUARANTOR ACKNOWLEDGES THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT IT MAY BE WAIVED. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, GUARANTOR AND LENDER KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR THE OBLIGATIONS.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provision of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact of law, and shall report a statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

GUARANTOR ACKNOWLEDGES THAT GUARANTOR HAS HAD THE OPPORTUNITY TO READ AND REVIEW WITH GUARANTOR’S COUNSEL THIS GUARANTY AND GUARANTOR ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.

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IN WITNESS WHEREOF, the undersigned has/have executed this Guaranty as of the date set forth above.

MAGNEGAS IP, LLC,

a Delaware limited liability company (“Guarantor”)

MAGNEGAS PRODUCTION, LLC,

a Delaware limited liability company (“Guarantor”)

MAGNEGAS REAL ESTATE HOLDINGS, LLC,

a Delaware limited liability company (“Guarantor”)

TARONIS – TGS, LLC,

a Delaware limited liability company (“Guarantor”)

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MAGNEGAS IRELAND LIMITED,

an Irish private limited company (“Guarantor”)

MAGNEGAS LIMITED,

an English private limited company (“Guarantor”)

TARONIS NETHERLANDS B.V.,

A Dutch private limited liability company (“Guarantor”)