DISTRIBUTION AND LICENSE AGREEMENT

 

THIS Distribution and License Agreement, (hereinafter “Agreement”), dated the
16th day of July, 2019 is between Taronis Technologies, Inc., a Delaware
Corporation, f/k/a MagneGas Applied Technology Solutions, Inc. and f/k/a
MagneGas Corporation, and MAGNEGAS IP, LLC, a Delaware limited liability company
(collectively, the “Company”); and Taronis Fuels, Inc., a Delaware Corporation
(“Distributor”).

 

RECITALS

 

WHEREAS, the Company owns all right, title and interest in the trademark
registrations identified in Schedule A (the “Trademarks”);

 

WHEREAS, the Company owns all right, title and interest in the patents
identified in Schedule B (the “Patents”);

 

WHEREAS, the Distributor desires to be the exclusive worldwide manufacturer and
distributor of gases created using the equipment and methods claimed within the
Patents;

 

WHEREAS, in exchange for this right, Distributor will compensate Company.

 

NOW, THEREFORE, in consideration of the foregoing Recitals which are
incorporated by reference herein and forth other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:

 

AGREEMENT

 

1. Definitions.

 

  1.1. “Trademark” or “Trademarks” means any registered trademark or trademark
application listed in Schedule A.         1.2. “Patent” or “Patents” means any
registered trademark or trademark application listed in Schedule B.         1.3.
“Trademark Territory” means every country and territory in which a trademark
from Schedule A is in use.         1.4. “Patent Territory” is defined as every
country and territory in which a patent from Schedule B exists.         1.5.
“Product” is defined as any gas produced using the equipment and methods claimed
within any Patent, but excluding water treatment or treated water.         1.6.
“Third-Parties” means any individual or entity that is not a party to this
Agreement.         1.7. “Forecast” means the Distributor’s anticipated purchase
quantities.

 

2. Trademark License Grant. Subject to the terms of this Agreement, Company
grants to Distributor an exclusive license to use the Trademarks in conjunction
with the Product within the Trademark Territory.     3. Patent License Grant.
Subject to the terms of this Agreement, Company grants to Distributor an
exclusive license under the Patents to make, use, sell, and offer for sale the
Product within the Patent Territory.     4. Right to Enforce Trademarks. Company
retains the right to enforce the Trademarks. If Distributor becomes aware of
trademark infringement within the Trademark Territory, Distributor must inform
Company within fourteen (14) calendar days. The Company may then choose whether,
and how, to enforce the Trademarks against Third-Parties. The Company has the
right to file lawsuits to enforce the Trademarks, and the right to join
Distributor if Company determines joinder is appropriate. The Company bears the
cost of such lawsuits, and the right to recover any damages or settlement
payments.

 

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5. Right to Enforce Patents. The Company retains the sole right to enforce the
Patents. If Distributor becomes aware of patent infringement within the Patent
Territory, Distributor must inform Company within fourteen (14) calendar days.
The Company may then choose whether, and how, to enforce the Patents against
Third-Parties. The Company has the right to file lawsuits to enforce the
Patents, and the right to join Distributor if Company determines joinder is
appropriate. The Company bears the cost of such lawsuits, and the right to
recover any damages or settlement payments.     6. Prohibition of Sublicensing
and Sale of Similar Products. Distributor may sublicense Trademarks or Patents
with written consent of the Company.     7. Patent and Trademark Fees. Company
is solely responsible for tracking and paying all fees and costs associated with
maintaining registration of the Trademarks and Patents.     8. Grant Back of
Products Developed by Distributor. Distributor, or its employees and members,
may choose to develop inventions related to Products (“Distributor Invention”).
If Distributor believes that it has reduced to practice a product that is an
invention and is an appropriate subject of patent protection, Distributor shall
contact Company within thirty (30) days, and prior to any public disclosure.
Distributor hereby assigns any Inventions related to Products to Company. It is
the sole responsibility of Company to file and prosecute any patent applications
to achieve patents for Distributor Inventions. Schedule B will be amended from
time to time to include any patents/applications resulting from a Distributor
Invention, and that Distributor and Company agree to license.     9. Licensing
New Trademarks to Distributor. The Company may seek to use and/or register
additional trademarks. If the additional trademarks are related to the Product,
Company may add the trademarks to Schedule A. Distributor will cooperate with
Company to facilitate registration of additional trademarks, including helping
Company to provide proof of use to the relevant trademark office, including
executing any documents reasonably necessary for the procurement of
registrations.     10. Licensing New Patents to Distributor. The Company may
file additional patent applications, and be awarded additional patents. If the
additional patents/applications are related to the Product, Company may add the
patents/applications to Schedule B. The Company acknowledges that if additional
patents are issued to Company, and the patents are related to the Product,
Company will only license to Distributor and not to Third-Parties.     11.
Royalty Payment. Distributor shall pay Company a royalty in exchange for the
above licenses (“Royalty Payments”). Royalty Payments are calculated as seven
percent (7%) of any net cash proceeds received by the Distributor in relation to
use of the above licenses in any form or fashion. Distributor shall issue a
Royalty Payment each month. The Royalty Payment is due no later than thirty (30)
days after receipt of net cash proceeds received by the Distributor in relation
to is use of the above licenses. Royalty payments will be wired or deposited
electronically to an account specified by Company.     12. Sales Forecasts. Upon
request, Distributor shall provide a Forecast of anticipated purchase quantities
to Company. The scope of a requested Forecast will be negotiated between Company
and Distributor at the time of the request.     13.  Marking. All Products and
advertising of Products bearing the Trademark must be marked with appropriate
legend. Specifically, TM or ®, and such other legend as from time to time
required by Company. All Products and advertising of the Products claimed by the
Patents must be marked in accordance with 35 USC 287(a) as follows:

 

  13.1.1. U.S. Pat. No. [Patent number(s) from Schedule B]

 

14. Quality Control. Distributor agrees to use Trademarks in conjunction with
the Products under the quality standards and business practices that Company
will from time to time establish and promulgate. The Company maintains the
right, at any reasonable time, and without prior notice, to inspect
Distributor’s use of the Trademarks in conjunction with Products for the purpose
of insuring that the quality of Product under Trademarks meets or exceeds
Company’s standards. The Distributor agrees to provide Product of a high
quality, fit for its intended purpose.

 

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15. Term and Termination. This Agreement shall remain in effect in perpetuity
from the Effective Date, subject to termination as set forth herein.

 

  15.1. This Agreement may be terminated by the Company if:

 

  15.1.1. Company serves written notice of termination on Distributor twelve
(12) months in advance of the anniversary of the Effective Date of this
Agreement; or         15.1.2. Distributor fails to make a Royalty Payment when
due; or         15.1.3. Distributor ceases production of any gas available for
creation under this Agreement for a period of three (3) months.

 

  15.2. In the event the other party breaches its obligation(s) under this
Agreement, a party may terminate this Agreement in whole or in part subject to
such notice if it sends a written notice demanding to cure the breach within
reasonable period to the breaching party and breaching party fails to cure such
breach.

 

16. Governing Law. This Agreement is interpreted and governed by the laws of
Delaware, and the United States of America, as appropriate.     17. Venue. Venue
for any litigation concerning this Agreement, the Patents, or Trademarks is the
City of Phoenix, Maricopa County, State of Arizona or the Federal District Court
situated in the City of Phoenix, Arizona.     18. Dispute Resolution.

 

  18.1. If a dispute arises from or relates to this Agreement or the breach
thereof, and if the dispute cannot be settled through direct discussions, the
parties agree to endeavor first to settle the dispute by mediation administered
by the American Arbitration Association under its Commercial Mediation
Procedures before resorting to arbitration. The parties further agree that any
unresolved controversy or claim arising out of or relating to this contract, or
breach thereof, shall be settled by arbitration administered by the American
Arbitration Association in accordance with its Commercial Arbitration Rules and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. The arbitrator(s) shall be qualified in the field
of intellectual property. The place of arbitration shall be Phoenix, Arizona.
The arbitration shall be governed by the laws of the State of Arizona.        
18.2. In making determinations regarding the scope of exchange of electronic
information, the arbitrator(s) and the parties agree to be guided by The Sedona
Principles, Third Edition: Best Practices, Recommendations & Principles for
Addressing Electronic Document Production.         18.3. Hearings will take
place pursuant to the standard procedures of the Commercial Arbitration Rules
that contemplate in person hearings.         18.4. The arbitrators will have no
authority to award punitive or other damages not measured by the prevailing
party’s actual damages, except as may be required by statute.         18.5. The
arbitrator(s) shall award to the prevailing party, if any, as determined by the
arbitrators, all of their costs and fees. “Costs and fees” mean all reasonable
pre-award expenses of the arbitration, including the arbitrators’ fees,
administrative fees, travel expenses, out-of-pocket expenses such as copying and
telephone, court costs, witness fees, and attorneys’ fees. The award of the
arbitrators shall be accompanied by a reasoned opinion.

 

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19. Notices. All notices relating to this Agreement must be in writing, and are
deemed given when personally delivered, or upon delivery when sent by a method
that permits tracking and signature confirmation (e.g., FedEx), or when emailed
and confirmation provided by return email. Notices are to be addressed as
follows:

 

Company         TARONIS TECHNOLOGIES, INC.,       Attention: Chief Executive
Officer      

Address: 300 W. Clarendon Avenue

#230, Phoenix, Arizona 85013

    Distributor         TARONIS FUELS, INC.       Attention: General Counsel    
 

Address: 300 W. Clarendon Avenue

#230, Phoenix, Arizona 85013

 

Either party may change its address for notices by giving notice to the other
party in the manner set forth in this section.

 

20. Integration. This Agreement constitutes the entire understanding and
contractual rights and obligations of the parties concerning this Agreement, the
Patents, and the Trademarks, and any prior or contemporaneous terms not
expressed herein are not enforceable.     21. Severability. The parties intend
as follows:

 

  21.1. that if any provision of this Agreement is held to be unenforceable,
then that provision will be modified to the minimum extent necessary to make it
enforceable, unless that modification is not permitted by law, in which case
that provision will be disregarded         21.2. that if an unenforceable
provision is modified or disregarded in accordance with this section 21, then
the rest of the agreement will remain in effect as written; and         21.3.
that any unenforceable provision will remain as written in any circumstances
other than those in which the provision is held to be unenforceable.

 

22. Legal Fees. If either party brings an action to enforce their rights under
this Agreement, the prevailing party may recover its expenses and reasonable
legal fees from the losing party incurred in connection with the action and any
appeal.

 

[Signature Page Follows]

 

[The Remainder of This Page is Intentionally Blank]

 

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IN WITNESS WHEREOF, this Agreement is executed and agreed to on behalf of the
parties by their respective, duly authorized officers or representatives
identified below.

 

COMPANY:         By: /s/ Scott Mahoney   Name: Scott Mahoney   Title: Chief
Executive Officer         DISTRIBUTOR:         By: /s/ Scott Mahoney   Name:
Scott Mahoney   Title: President  

 

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Schedule A – Trademarks

 

Mark  

Class

Goods/Services

  Country   Serial No.   Reg. No.   Owner of Mark   Registration Date          
                MagneGas   IC 004. US 001 006 015. G & S: Fuel for motor
vehicles, namely an oxygen-rich, hydrocarbon-free gas produced as a byproduct of
recycling liquid waste such as anti-freeze, oil waste and sewage.   US  
78039484   2812824  

MAGNEGAS CORPORATION DELAWARE

150 Rainville Road Tarpon Springs Florida 34689

  February 10, 2004                           MagneGas 2   IC 004. US 001 006
015. G & S: Fuels.   US   86642367   5156799  

MAGNEGAS CORPORATION DELAWARE

11885 44th Street North Clearwater Florida 33762

  March 7, 2017                           mAgnetote   IC 007. US 013 019 021 023
031 034 035. G & S: Portable tank system being a gas welding apparatus and
containing a gas used for cutting and welding metal   US   86816532   5157232  

MAGNEGAS CORPORATION DELAWARE

11885 44th Street North Clearwater Florida 33762

  March 7, 2017                           venturi   IC 007. US 013 019 021 023
031 034 035. G & S: machines for gasification, namely, industrial
electrochemical reactors for converting liquid waste into gaseous hydrocarbon
fuels   US   86454770   4952283  

MAGNEGAS CORPORATION DELAWARE

150 Rainville Road Tarpon Springs Florida 34689

  May 3, 2016                           VENTURI Plasma Arc Flow   IC 008.
Machines for producing synthetic gas and decontaminating and sterilizing
liquefied waste streams   US   TBD   TBD  

Taronis Technologies, Inc.

DELAWARE

11885 44 th Street North

Clearwater, FL 33762

  TBD

 

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Schedule B – Patents

 

Serial Number   Date of Filing   Publication Number   Patent Number   Patent or
Patent Application Title                   09/372,277   8/11/1999      
6,183,604   DURABLE AND EFFICIENT EQUIPMENT FOR THE PRODUCTION OF A COMBUSTIBLE
AND NON-POLLUTANT GAS FROM UNDERWATER ARCS AND METHOD THEREFOR                  
09/970,405   10/03/2001   2003/0133855   6,663,752   CLEAN BURNING LIQUID FUEL
PRODUCED VIA A SELF-SUSTAINING PROCESSING OF LIQUID FEEDSTOCK                  
09/896,422   6/29/2001   2002/0004022   6,673,322   APPARATUS FOR MAKING A
NOVEL, HIGHLY EFFICIENT, NONPOLLUTANT, OXYGEN RICH AND COST COMPETITIVE
COMBUSTIBLE GAS AND ASSOCIATED METHOD                   10/008,813   12/07/2001
  2003/0106787   6,926,872   APPARATUS AND METHOD FOR PRODUCING A CLEAN BURNING
COMBUSTIBLE GAS WITH LONG LIFE ELECTRODES AND MULTIPLE PLASMA-ARC-FLOWS        
          10/020,091   12/14/2001   2003/0113597   6,972,118   APPARATUS AND
METHOD FOR PROCESSING HYDROGEN, OXYGEN AND OTHER GASES                  
12/828,905   07/01/2010   2012/0000787   8,236,150   PLASMA-ARC-THROUGH
APPARATUS AND PROCESS FOR SUBMERGED ELECTRIC ARCS                   14/244,229  
04/03/2014   2014/0299463   9,700,870   Method and Apparatus for the Industrial
Production of New Hydrogen-Rich Fuels                   14/288,807   05/28/2014
  N/A   9,433,916   Plasma-arc-through Apparatus and Process for Submerged
Electric Arcs with Venting                   15/230,537   8/08/2016   US
2016-0340790 A1   10,100,416   Plasma-arc-through Apparatus and Process for
Submerged Electric Arcs with Venting                   15/612,457   6/02/2017  
US 2017-0321130 A1   10,100,262   Method and Apparatus for the Industrial
Production of New Hydrogen-Rich Fuels                   62/542,689   8/08/2017  
-   -   System, Method, and Apparatus for Gasification of a Solid or Liquid    
              15/720,816   9/29/2017   US 2018-0093248 A1   -   Apparatus for
Flow-Through of Electric Arcs                   16/052,759   8/02/2018   -   -  
System, Method, and Apparatus for Gasification of a Solid or Liquid

 

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