Exhibit 4.1


 





EXECUTION
VERSION

 


SECTION
382 RIGHTS AGREEMENT


 


dated
as of March 3, 2021


 


between


 


TARONIS
FUELS, INC.


 


and


 


NEVADA
AGENCY AND TRANSFER COMPANY,


 


as
Rights Agent











 






    	 



    	 



    

 





TABLE
OF CONTENTS

 


	 	 	Page
	SECTION
    1.	Certain
    Definitions	1
	SECTION
    2.	Appointment
    of Rights Agent	12
	SECTION
    3.	Issue
    of Rights and Right Certificates	12
	SECTION
    4.	Form
    of Right Certificates	15
	SECTION
    5.	Execution,
    Countersignature and Registration	15
	SECTION
    6.	Transfer,
    Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated
    Rights	16
	SECTION
    7.	Exercise
    of Rights; Expiration Date of Rights	16
	SECTION
    8.	Cancellation
    and Destruction of Right Certificates	18
	SECTION
    9.	Reservation
    and Availability of Preferred Shares	19
	SECTION
    10.	Preferred
    Shares Record Date	20
	SECTION
    11.	Adjustments
    in Rights After There Is an Acquiring Person; Exchange of Rights for Shares; Business Combinations	20
	SECTION
    12.	Certain
    Adjustments	25
	SECTION
    13.	Certificate
    of Adjustment	27
	SECTION
    14.	Additional
    Covenants	27
	SECTION
    15.	Fractional
    Rights and Fractional Shares	27
	SECTION
    16.	Rights
    of Action	29
	SECTION
    17.	Transfer
    and Ownership of Rights and Right Certificates	29
	SECTION
    18.	Right
    Certificate Holder Not Deemed a Stockholder	30
	SECTION
    19.	Concerning
    the Rights Agent	30
	SECTION
    20.	Merger
    or Consolidation or Change of Name of Rights Agent	31
	SECTION
    21.	Duties
    of Rights Agent	31
	SECTION
    22.	Change
    of Rights Agent	35
	SECTION
    23.	Issuance
    of Additional Rights and Right Certificates	36
	SECTION
    24.	Redemption
    and Termination	36
	SECTION
    25.	Notices	37
	SECTION
    26.	Supplements
    and Amendments	38
	SECTION
    27.	Successors	38
	SECTION
    28.	Benefits
    of Rights Agreement; Determinations and Actions by the Board, etc.	38
	SECTION
    29.	Severability	39
	SECTION
    30.	Governing
    Law	39
	SECTION
    31.	Counterparts;
    Effectiveness	40
	SECTION
    32.	Descriptive
    Headings	40
	SECTION
    33.	Force
    Majeure	40
	SECTION
    34.	Process
    to Seek Exemption	40
	SECTION
    35.	Tax
    Benefits Review	41
	SECTION
    36.	Bank
    Account(s)	41
	SECTION
    37.	Confidentiality	41
	SECTION
    38.	Customer
    Identification Program	41





 


	Exhibits	 
	 	 
	Exhibit
    A	Certificate
    of Designation
	Exhibit
    B	Form
    of Right Certificate
	Exhibit
    C	Summary
    of Rights


 




    	 	i	 



    	 



    

 


SECTION
382 RIGHTS AGREEMENT dated as of March 3, 2021 (the “Rights Agreement”), between TARONIS FUELS, INC., a
Delaware corporation (the “Company”), and NEVADA AGENCY AND TRANSFER COMPANY (the “Rights Agent”).


 


WHEREAS,
the Company has generated NOLs and other Tax Benefits (as such terms are hereinafter defined) for United States Federal income
tax purposes; and such NOLs and other Tax Benefits may potentially provide valuable tax benefits to the Company; the Company desires
to avoid an “ownership change” within the meaning of Section 382 and the Treasury Regulations (as such terms are hereinafter
defined) promulgated thereunder, and thereby preserve the ability to utilize fully such NOLs and other Tax Benefits; and, in furtherance
of such objective, the Company desires to enter into this Rights Agreement; and


 


WHEREAS,
the Board of Directors of the Company (the “Board”) has authorized and declared a dividend of one Right (as
hereinafter defined) for each share of Common Stock, par value $0.000001 per share, of the Company (the “Common Stock”)
at the Close of Business (as hereinafter defined) on March 3, 2021 (the “Record Date”), and has authorized
the issuance of one Right (as such number may hereafter be adjusted pursuant to the provisions of this Rights Agreement) with
respect to each share of Common Stock that shall become outstanding (whether originally issued or delivered from the Company’s
treasury) between the Record Date and the earliest of the Distribution Date, the Redemption Date or the Expiration Date (as such
terms are hereinafter defined); provided, however, that Rights may be issued with respect to shares of Common Stock
that shall become outstanding after the Distribution Date (whether originally issued or delivered from the Company’s treasury)
and prior to the earlier of the Redemption Date or the Expiration Date only in accordance with the provisions of Section 23.
Each Right shall initially represent the right to purchase one one-thousandth (1/1,000th) of a share of Series A Participating
Cumulative Preferred Stock, par value $0.000001 per share, of the Company (the “Preferred Shares”), having
the powers, rights and preferences set forth in the Certificate of Designation attached hereto as Exhibit A.


 


NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:


 


SECTION
1. Certain Definitions. For purposes of this Rights Agreement, the following terms have the meanings indicated:


 


“2022
Annual Meeting” shall mean the annual meeting of stockholders of the Company for 2022.


 


“364th Day
Date” shall mean the date of the 2022 Annual Meeting, if approval by the Company’s stockholders of this
Rights Agreement has not been obtained prior to or on such date; provided that (i) the Company shall have included in its
solicitation materials relating to the 2022 Annual Meeting a proposal for the Company’s stockholders to approve this
Rights Agreement and such solicitation materials for the 2022 Annual Meeting shall have been filed with the Securities and
Exchange Commission before March 2, 2022 and (ii) the 2022 Annual Meeting shall be scheduled to be held within 45 days after
March 2, 2022; and provided further, that if the Company fails to take the actions specified in clauses (i) and (ii)
of the preceding proviso, then “364th Day Date” shall mean March 2, 2022. Notwithstanding the foregoing, if
approval by the Company’s stockholders of this Rights Agreement has been obtained prior to or on the date of the 2022
Annual Meeting, then the 364th Day Date shall be deemed to not have occurred.


 






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“Acquiring
Person” shall mean any Person who or which, alone or together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 4.99% or more of the Common Shares then outstanding, but not including (a) the Company, any Subsidiary
of the Company, any employee benefit or compensation plan of the Company or of any of its Subsidiaries or any Person organized,
appointed or established by the Company and holding Common Shares for or pursuant to the terms of any such employee benefit or
compensation plan, (b) any Grandfathered Person, unless such Grandfathered Person becomes the Beneficial Owner of a percentage
of Common Shares then outstanding exceeding such Grandfathered Person’s Grandfathered Percentage by 0.5% or more of the
outstanding Common Shares or (c) any Exempt Person; provided, however, that no Person who or which, alone or together
with all Affiliates and Associates of such Person, has become and is the Beneficial Owner of 4.99% or more (or in the case of
a Grandfathered Person, has exceeded and is exceeding such Grandfathered Person’s Grandfathered Percentage by 0.5% or more)
of the Common Shares at the time outstanding, will be deemed to have become an Acquiring Person solely as the result of (i) a
change in the aggregate number of Common Shares outstanding since the last date on which such Person acquired Beneficial Ownership
of any Common Shares, including pursuant to a dividend or distribution of shares by the Company made on a pro rata basis to all
holders of Common Shares or the issuance of shares by the Company pursuant to a split or subdivision of the outstanding Common
Shares; (ii) equity compensation awards granted to such Person by the Company or as a result of an adjustment to the number of
Common Shares represented by such equity compensation award pursuant to the terms thereof, unless and until such time, in the
case of clause (i) and clause (ii), as such Person or one or more of its Affiliates or Associates thereafter acquires Beneficial
Ownership of one additional Common Share (other than any Common Shares acquired as described in clause (i) or (ii) above); or
(iii) the acquisition by such Person or one or more of its Affiliates or Associates of Beneficial Ownership of additional Common
Shares if the Board determines that such acquisition was made in good faith without the knowledge by such Person or one or more
of its Affiliates or Associates that such Person would thereby become an Acquiring Person (including because (A) such Person was
unaware that it Beneficially Owned a percentage of then-outstanding Common Shares that would otherwise cause such Person, together
with all Affiliates and Associates of such Person, to become an “Acquiring Person” or (B) such Person was aware of
the extent of its Beneficial Ownership but was unaware of the consequences of such Beneficial Ownership under this Rights Agreement),
which determination of the Board shall be conclusive and binding on such Person, the Rights Agent, the holders of the Rights and
all other Persons.


 


Notwithstanding
clause (iii) of the proviso in the prior sentence, unless the Board determines pursuant to the definition of “Exempt Person”
that an Inadvertent Acquiror is an Exempt Person, if any Person that is not an Acquiring Person due to such clause (iii) does
not reduce its, together with all of its Affiliates’ and Associates’, percentage of Beneficial Ownership of Common
Shares to less than 4.99% (or in the case of a Grandfathered Person, to less than 0.5% in excess of its Grandfathered Percentage)
by the Close of Business on the tenth calendar day after notice from the Company (the date of notice being the first day) that
such Person’s Beneficial Ownership of Common Shares would make it an Acquiring Person, such Person shall, at the end of
such ten calendar day period, become an Acquiring Person (and such clause (iii) shall no longer apply to such Person). If any
Person that is not an Acquiring Person due to such clause (iii) and the requirements of the prior sentence shall again become
the Beneficial Owner of 4.99% or more (or in the case of a Grandfathered Person, a percentage of Common Shares then outstanding
exceeding such Grandfathered Person’s Grandfathered Percentage by 0.5% or more) of the Common Shares then outstanding, such
Person shall be deemed an “Acquiring Person”, subject to the exceptions set forth in this definition.


 






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Notwithstanding
the foregoing, no Person shall become an “Acquiring Person” solely as a result of an Exempt Transaction.


 


Notwithstanding
the foregoing, no Person shall become an “Acquiring Person” solely as the result of an acquisition of Common Shares
by the Company which, by reducing the number of Common Shares outstanding, increases the proportion of the Common Shares beneficially
owned by such Person to 4.99% or more (or in the case of a Grandfathered Person, has exceeded and is exceeding such Grandfathered
Person’s Grandfathered Percentage by 0.5% or more) of the Common Shares at the time outstanding unless and until such time
as such Person or one or more of its Affiliates or Associates thereafter acquires Beneficial Ownership of one additional Common
Share unless, upon becoming the Beneficial Owner of such additional Common Share, such Person is not then the Beneficial Owner
of 4.99% or more (or in the case of a Grandfathered Person, of a percentage of Common Shares then outstanding exceeding such Grandfathered
Person’s Grandfathered Percentage by 0.5% or more) of the Common Shares at the time outstanding.


 


“Affiliate”
and “Associate”, when used with reference to any Person, shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Rights Agreement,
and to the extent not included within the foregoing, shall also include, with respect to any Person, any other Person whose Common
Shares would be deemed to be constructively owned by such first Person, owned by a single “entity” as defined in Section
1.382-3(a)(1) of the Treasury Regulations, or otherwise aggregated with shares owned by such first Person, pursuant to the provisions
of the Code, or any successor or replacement provision, and the Treasury Regulations promulgated thereunder.


 


A
Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own”,
and shall be deemed to have “Beneficial Ownership” of, any securities:


 


(a)
which such Person or any of such Person’s Affiliates or Associates is deemed to “beneficially own” within
the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Rights
Agreement; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own,
or to have Beneficial Ownership of, any Common Shares by virtue of owning securities or other interests (including rights, options
or warrants) that are convertible or exchangeable into, or exercisable for, such Common Shares, except to the extent that upon
the acquisition or transfer of such securities or other interests, such securities or other interests would be treated as exercised
under Section 1.382-4(d) or other applicable sections of the Treasury Regulations;


 






    	 	3	 



    	 



    

 


(b)
which such Person or any of such Person’s Affiliates or Associates has, directly or indirectly: (i) the legal, equitable
or contractual right or obligation to acquire (whether such right is exercisable or such obligation is required to be performed
immediately or only after the passage of time, compliance with regulatory requirements, fulfillment of a condition or otherwise,
or whether within the control of such Person) pursuant to any agreement, arrangement or understanding (written or oral), or upon
the exercise of conversion rights, exchange rights, other rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed under this clause (i) to be the Beneficial Owner of, or to beneficially own,
or to have Beneficial Ownership of, (A) any Common Shares by virtue of owning securities or other interests (including rights,
options or warrants) that are convertible or exchangeable into, or exercisable for, such Common Shares, except to the extent that
upon the acquisition or transfer of such securities or other interests, such securities or other interests would be treated as
exercised under Section 1.382-4(d) or other applicable sections of the Treasury Regulations or (B) any securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase or exchange thereunder or cease to be subject to withdrawal by the tendering
security holder; or (ii) the right to vote or dispose of, including pursuant to any agreement, arrangement or understanding (written
or oral); provided, however, that a Person shall not be deemed under this clause (ii) to be the Beneficial Owner
of, or to beneficially own, or to have Beneficial Ownership of, any security if (A) the agreement, arrangement or understanding
(written or oral) to vote such security arises solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made generally to all holders of Common Shares of the Company in connection with a Proper
Stockholder Solicitation and pursuant to, and in accordance with, the applicable rules and regulations under the Exchange Act
and (B) the beneficial ownership of such security is not also then reportable on Schedule 13D or 13G under the Exchange Act (or
any comparable or successor report);


 


(c)
which are beneficially owned, directly or indirectly, by any other Person (or an Affiliate or Associate thereof) with which such
Person (or any of such Person’s Affiliates or Associates) (i) has any agreement, arrangement or understanding (written or
oral) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to clause
(b)(ii) of this definition) or disposing of any securities of the Company or (ii) has any agreement, arrangement or understanding
(written or oral) to cooperate in obtaining, changing or influencing the control of the Company; or


 


(d)
which are the subject of, or the reference securities for, or that underlie, any Derivative Interest (as defined below) of such
Person or any of such Person’s Affiliates or Associates, with the number of Common Shares deemed Beneficially Owned being
the notional or other number of Common Shares specified in the documentation evidencing the Derivative Interest as being subject
to be acquired upon the exercise or settlement of the Derivative Interest or as the basis upon which the value or settlement amount
of such Derivative Interest is to be calculated in whole or in part or, if no such number of Common Shares is specified in such
documentation, as determined by the Board in its sole discretion to be the number of Common Shares to which the Derivative Interest
relates.


 


Notwithstanding
the foregoing, nothing contained in this definition shall cause a Person to be deemed the “Beneficial Owner” of, or
to “beneficially own”, or to have “Beneficial Ownership” of, securities (A) if the Person is ordinarily
engaged in business as an underwriter of securities and has acquired such securities in a bona fide firm commitment underwriting
pursuant to an underwriting agreement with the Company until the expiration of 40 calendar days (or such later date as the Board
may determine in any specific case) after the date of such acquisition, and then only if such securities continue to be owned
by such Person at such expiration of 40 calendar days (or such later date as the Board may determine in any specific case), or
(B) if such Person is a “clearing agency” (as defined in Section 3(a)(23) of the Exchange Act) and has acquired such
securities solely as a result of such status.


 






    	 	4	 



    	 



    

 


Notwithstanding
anything in this Rights Agreement to the contrary, to the extent not contained in this definition, a Person shall be deemed the
“Beneficial Owner” of and shall be deemed to “beneficially own” or have “Beneficial Ownership”
of, Common Shares that such Person would be deemed to constructively own or that otherwise would be aggregated with shares owned
by such Person pursuant to Section 382, or any successor provision or replacement provision of the Code and the Treasury Regulations
promulgated thereunder.


 


“Board”
shall have the meaning set forth in the introductory paragraph of this Rights Agreement.


 


“Book
Value”, when used with reference to Common Shares issued by any Person, shall mean the amount of equity of such Person
applicable to each Common Share, determined (a) in accordance with United States generally accepted accounting principles in effect
on the date as of which such Book Value is to be determined, (b) using all the consolidated assets and all the consolidated liabilities
of such Person on the date as of which such Book Value is to be determined, except that no value shall be included in such assets
for goodwill arising from consummation of a business combination (including, without limitation, a Business Combination), and
(c) after giving effect to (i) the exercise of all rights, options and warrants to purchase such Common Shares (other than the
Rights), and the conversion of all securities convertible into such Common Shares, at an exercise or conversion price, per Common
Share, which is less than such Book Value before giving effect to such exercise or conversion (whether or not exercisability or
convertibility is conditioned upon occurrence of a future event), (ii) all dividends and other distributions on the capital stock
of such Person declared prior to the date as of which such Book Value is to be determined and to be paid or made after such date,
and (iii) any other agreement, arrangement or understanding (written or oral), or transaction or other action contemplated prior
to the date as of which such Book Value is to be determined that would have the effect of thereafter reducing such Book Value.


 


“Business
Combination” shall have the meaning set forth in Section 11(c)(i).


 


“Business
Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions
in the City of New York, are authorized or obligated by law or executive order to close.


 


“Certificate
of Designation” shall mean the Certificate of Designation of the Preferred Shares, a copy of which is attached hereto
as Exhibit A.


 


“Close
of Business” on any given date shall mean 5:00 p.m., New York City time, on such date; provided, however,
that, if such date is not a Business Day, “Close of Business” shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.


 


“Code”
shall mean Internal Revenue Code of 1986, as amended.


 






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“Common
Shares”, when used with reference to the Company prior to a Business Combination, shall mean the shares of Common Stock
or any other shares of capital stock of the Company into which the Common Stock shall be reclassified or changed and any other
interest that would be treated as “stock” of the Company for purposes of Section 382 (including Treasury Regulation
Section 1.382-2T(f)(18)) in this Section 1 and all other provisions of this Rights Agreement in which such meaning is necessary
in order to ensure that this Rights Agreement is effective in carrying out its stated purpose and intent of preserving the Company’s
NOLs and other Tax Benefits. “Common Shares”, when used with reference to any Person (other than the Company
prior to a Business Combination), shall mean shares of capital stock of such Person (if such Person is a corporation) of any class
or series, or units of equity interests in such Person (if such Person is not a corporation) of any class or series, the terms
of which do not limit (as a maximum amount and not merely in proportional terms) the amount of dividends or income payable or
distributable on such class or series or the amount of assets distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that such class or series is subject to redemption at
the option of such Person, or any shares of capital stock or units of equity interests into which the foregoing shall be reclassified
or changed, and if there shall be more than one class or series of such shares of capital stock or units of equity interests of
such Person, then “Common Shares” of such Person shall mean the class or series of capital stock of such Person
or units of equity interests in such Person having voting power (being the power under ordinary circumstances (and not merely
upon the happening of a contingency) to vote in the election of directors of such Person (if such Person is a corporation) or
to participate in the management and control of such Person (if such Person is not a corporation)), or in the case of multiple
classes or series having voting power, having the greatest voting power.


 


“Common
Stock” shall have the meaning set forth in the introductory paragraph of this Rights Agreement.


 


“Company”
shall have the meaning set forth in the heading of this Rights Agreement; provided, however, that if there is a
Business Combination, “Company” shall have the meaning set forth in Section 11(c)(iii).


 


The
term “control” with respect to any Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, by or through stock ownership, agency or otherwise, or pursuant to or in connection with an agreement,
arrangement or understanding (written or oral) with one or more other Persons by or through stock ownership, agency or otherwise;
and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.


 


“Customer
Identification Program” shall have the meaning set forth in Section 38.


 


“Derivative
Interest” shall mean any derivative securities (as defined under Rule 16a-1 under the Exchange Act) that increase in
value as the value of the underlying equity increases, including, but not limited to, a long convertible security, a long call
option and a short put option position, in each case, regardless of whether (x) such interest conveys any voting rights in such
security, (y) such interest is required to be, or is capable of being, settled through delivery of such security or (z) transactions
hedge the economic effect of such interest.


 


“Distribution
Date” shall have the meaning set forth in Section 3(b).


 






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“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended (or any comparable or successor law or act) as in effect
on the date in question, unless otherwise specifically provided.


 


“Exchange
Consideration” shall have the meaning set forth in Section 11(b)(i).


 


“Exempt
Person” shall mean any Person, alone or together with all Affiliates and Associates of such Person, whose Beneficial
Ownership of 4.99% or more of the then outstanding Common Shares, as determined by the Board in its sole discretion, or a duly
constituted committee of Independent Directors, in its sole discretion, including a determination pursuant to Section 34,
(a) would not jeopardize or endanger the availability to the Company of its NOLs or other Tax Benefits, taking into account such
facts and circumstances as the Board (or any such committee) reasonably deems relevant, or (b) is otherwise in the best interests
of the Company; provided, however, that the Board, or a duly constituted committee of Independent Directors, makes
such determination either (x) before the time such Person otherwise would have become an Acquiring Person, or (y) after the time
such Person otherwise would have become an Acquiring Person if the Board, or a duly constituted committee of Independent Directors,
has determined that such Person is an Inadvertent Acquiror; provided, further, that such Person will cease to be
an “Exempt Person” if the Board, in its sole discretion, or a duly constituted committee of Independent Directors,
in its sole discretion, makes a contrary determination with respect to the effect of such Person’s Beneficial Ownership
(together with all Affiliates and Associates of such Person) with respect to the availability to the Company of its NOLs or other
Tax Benefits, taking into account such facts and circumstances as the Board (or any such committee) reasonably deems relevant.
In granting an exemption under this definition, the Board, or a duly constituted committee of Independent Directors, may require
any Person who would otherwise be an Acquiring Person to make certain representations, undertakings or covenants or to agree that
any violation or attempted violation of such representations, undertakings or covenants will result in such consequences and be
subject to such conditions as the Board, or a duly constituted committee of Independent Directors, may determine in its sole discretion,
including that any such violation shall result in such Person becoming an Acquiring Person.


 


“Exempt
Transaction” shall mean any transaction that the Board determines, or a duly constituted committee of Independent Directors
determines, is exempt from this Rights Agreement, which determination shall be made in the sole discretion of the Board (or any
such committee) prior to the date of such transaction, including if the Board (or any such committee) determines that (a) neither
the Beneficial Ownership of Common Shares by any Person, directly or indirectly, as a result of such transaction nor any other
aspect of such transaction would jeopardize or endanger the availability to the Company of the NOLs or other Tax Benefits, taking
into account such facts and circumstances as the Board (or any such committee) reasonably deems relevant, or (b) such transaction
is otherwise in the best interests of the Company. In granting an exemption under this definition, the Board, or a duly constituted
committee of Independent Directors, may require any Person who would otherwise be an Acquiring Person to make certain representations,
undertakings or covenants or to agree that any violation or attempted violation of such representations, undertakings or covenants
will result in such consequences and be subject to such conditions as the Board, or a duly constituted committee of Independent
Directors, may determine in its sole discretion, including that any such violation shall result in such Person becoming an Acquiring
Person.


 






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“Exemption
Request” shall have the meaning set forth in Section 34.


 


“Expiration
Date” shall have the meaning set forth in Section 7(a).


 


“Final
Expiration Date” shall mean the Close of Business on March 2, 2024.


 


“Funds”
shall have the meaning set forth in Section 36.


 


“Grandfathered
Percentage” shall mean, with respect to any Grandfathered Person, the percentage of the outstanding Common Shares of
the Company that such Grandfathered Person, together with all Affiliates and Associates of such Grandfathered Person, Beneficially
Owns as of the Close of Business on the date hereof; provided that, in the event any Grandfathered Person shall sell, transfer,
or otherwise dispose of any outstanding Common Shares of the Company after the Close of Business on the date hereof, the Grandfathered
Percentage shall, subsequent to such sale, transfer or disposition, mean, with respect to such Grandfathered Person, the lesser
of (a) the Grandfathered Percentage as in effect immediately prior to such sale, transfer or disposition or (b) the percentage
of outstanding Common Shares of the Company that such Grandfathered Person, together with all Affiliates and Associates of such
Grandfathered Person, Beneficially Owns immediately following such sale, transfer or disposition.


 


“Grandfathered
Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, is, as of the
Close of Business on the date hereof, the Beneficial Owner (as disclosed in public filings with the Securities and Exchange Commission
on the Close of Business on the date hereof) of 4.99% or more of the Common Shares of the Company then outstanding. Notwithstanding
anything to the contrary provided in this Rights Agreement, any Grandfathered Person who after the Close of Business on the date
hereof becomes the Beneficial Owner of less than 4.99% of the Common Shares of the Company then outstanding shall cease to be
a Grandfathered Person and shall be subject to all of the provisions of this Rights Agreement in the same manner as any Person
who or which is not and was never a Grandfathered Person.


 


“Inadvertent
Acquiror” shall mean any Person who would be an Acquiring Person but for clause (iii) of the proviso in the definition
of “Acquiring Person”.


 


“include”,
“includes” and “including” shall be deemed to be followed by the words “without limitation”.


 


“Independent
Director” shall mean an independent director as defined under Listing Rules of the New York Stock Exchange.


 


“Major
Part”, when used with reference to the assets of the Company and its Subsidiaries as of any date, shall mean assets
(a) having a fair market value aggregating 50% or more of the total fair market value of all the assets of the Company and its
Subsidiaries (taken as a whole) as of the date in question, (b) accounting for 50% or more of the total value (net of depreciation
and amortization) of all the assets of the Company and its Subsidiaries (taken as a whole) as would be shown on a consolidated
or combined balance sheet of the Company and its Subsidiaries as of the date in question, prepared in accordance with United States
generally accepted accounting principles then in effect, or (c) accounting for 50% or more of the total amount of earnings before
interest, taxes, depreciation and amortization or of the revenues of the Company and its Subsidiaries (taken as a whole) as would
be shown on, or derived from, a consolidated or combined statement of income or net earnings of the Company and its Subsidiaries
for the period of 12 months ending on the last day of the Company’s monthly accounting period next preceding the date in
question, prepared in accordance with United States generally accepted accounting principles then in effect.


 






    	 	8	 



    	 



    

 


“Market
Value”, when used with reference to Common Shares or Preferred Shares on any date, shall mean the average of the daily
closing prices, per share, of such Common Shares or Preferred Shares, as applicable, for the period which is the shorter of (a)
30 consecutive Trading Days ending on the Trading Day immediately prior to the date in question or (b) the number of consecutive
Trading Days beginning on the Trading Day immediately after the date of the first public announcement of the event requiring a
determination of the Market Value of Common Shares or Preferred Shares, as applicable, and ending on the Trading Day immediately
prior to the record date of such event. The closing price for each Trading Day shall be the closing price quoted on the principal
United States securities exchange registered under the Exchange Act (or any recognized foreign stock exchange) on which such securities
are listed, or, if such securities are not listed on any such exchange, the closing price (or, if no sale takes place on such
Trading Day, the average of the closing bid and asked prices on such Trading Day) as quoted by the OTC Bulletin Board or, if such
securities are not listed on the OTC Bulletin Board, on any similar quotation service such as the OTCQB Market or any other reputable
quotations system specified by the Board, or if no such quotations are available, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in such securities selected by the Board, or if on any such Trading
Day no market maker is making a market in such securities, the closing price of such securities on such Trading Day shall be deemed
to be the fair value of such securities as determined in good faith by the Board (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent, the holders of Rights and all other Persons);
provided, however, that if a Trading Day occurs during a period following an announcement of any action of the type
described in Section 12(a) that would require an adjustment thereunder by the issuer of the securities the closing price
of which is to be determined, then, and in each such case, the closing price of such securities shall be appropriately adjusted
to reflect the effect of such action on the market price of such securities; and provided further, however, that
for the purpose of determining the closing price of the Preferred Shares for any Trading Day on which there is no market maker
for the Preferred Shares, the closing price on such Trading Day shall be deemed to be the Formula Number (as defined in the Certificate
of Designation) multiplied by the closing price of the Common Shares of the Company on such Trading Day.


 


“New
York Stock Exchange” shall mean the New York Stock Exchange Market LLC.


 


“NOL”
shall mean the Company’s net operating loss carryforwards.


 


“Person”
shall mean an individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated
organization or other entity, or a group of Persons making a “coordinated acquisition” of shares or otherwise treated
as an entity within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations, and shall include any successor (by merger
or otherwise) of such individual or entity, but shall not include a Public Group (as defined in Section 1.382-2T(f)(13) of the
Treasury Regulations).


 






    	 	9	 



    	 



    

 


“Post
Transferee” shall have the meaning set forth in Section 7(e).


 


“Preferred
Shares” shall have the meaning set forth in the introductory paragraph of this Rights Agreement. Any reference in this
Rights Agreement to Preferred Shares shall be deemed to include any authorized fraction of a Preferred Share, unless the context
otherwise requires.


 


“Principal
Party” shall mean the Surviving Person in a Business Combination; provided, however, that, (i) if such
Surviving Person is a direct or indirect Subsidiary of any other Person, “Principal Party” shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a Subsidiary of another Person, and (ii) in the
event ultimate control of such Surviving Person is shared by two or more Persons, “Principal Party” shall mean
that Person that is immediately controlled by such two or more Persons.


 


“Prior
Transferee” shall have the meaning set forth in Section 7(e).


 


“Proper
Stockholder Solicitation” shall mean each of: (a) the annual meeting of the stockholders of the Company; (b) a special
meeting of the stockholders of the Company called pursuant to and in accordance with the Delaware General Corporation Law, the
Amended and Restated Certificate of Incorporation of the Company and the Amended and Restated Bylaws of the Company; or (c) an
action by written consent of the stockholders of the Company (only to the extent permitted in the Amended and Restated Certificate
of Incorporation of the Company, as it may be further amended).


 


“Purchase
Price” with respect to each Right shall mean $25.00, as such amount may from time to time be adjusted as provided in
this Rights Agreement, and shall be payable in lawful money of the United States of America. All references herein to the Purchase
Price shall mean the Purchase Price as in effect at the time in question.


 


“Record
Date” shall have the meaning set forth in the introductory paragraph of this Rights Agreement.


 


“Redemption
Date” shall have the meaning set forth in Section 24(a).


 


“Redemption
Price” with respect to each Right shall mean $0.0001, as such amount may from time to time be adjusted in accordance
with Section 12. All references herein to the Redemption Price shall mean the Redemption Price as in effect at the time
in question.


 


“Registered
Common Shares” shall mean Common Shares that are, as of the date of consummation of a Business Combination, and have
continuously been for the 12 months immediately preceding such date, registered under Section 12 of the Exchange Act, and
if a Person has multiple classes or series of Registered Common Shares outstanding, “Registered Common Shares”
of such Person shall mean the class or series of Registered Common Shares of such Person having voting power (being the power
under ordinary circumstances (and not merely upon the happening of a contingency) to vote in the election of directors of such
Person (if such Person is a corporation) or to participate in the management and control of such Person (if such Person is not
a corporation)), or in the case of multiple classes or series having voting power, having the greatest voting power.


 






    	 	10	 



    	 



    

 


“Requesting
Person” shall have the meaning set forth in Section 34.


 


“Right
Certificate” shall mean a certificate evidencing a Right in substantially the form attached hereto as Exhibit B.


 


“Rights”
shall mean the rights to purchase Preferred Shares (or other securities) as provided in this Rights Agreement.


 


“Section
382” shall mean section 382 of the Code or any amended or successor version thereof.


 


“Securities
Act” shall mean the Securities Act of 1933, as amended (or any comparable or successor law or act), as in effect on
the date in question, unless otherwise specifically provided.


 


“Share
Acquisition Date” shall mean the date on which the Company learns that a Person has become an Acquiring Person; provided,
however that, if such Person is determined by the Board (a) to be an Exempt Person or (b) to be an Inadvertent Acquiror,
then in the case of each of clause (a) and (b), the Share Acquisition Date shall be deemed not to have occurred; but only for
so long as such Person (i) in the case of clause (a), remains an Exempt Person or (ii) in the case of clause (b), does not thereafter
become an Acquiring Person pursuant to the second sentence of the definition of “Acquiring Person”, unless, in the
case of each of clause (i) and clause (ii), the Distribution Date shall have occurred.


 


“Subsidiary”
of another Person shall mean a Person, at least a majority of the total outstanding voting power (being the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote in the election of directors of such Person (if such
Person is a corporation) or to participate in the management and control of such Person (if such Person is not a corporation))
of which is owned, directly or indirectly, by another Person or by one or more other Subsidiaries of such other Person or by such
other Person and one or more other Subsidiaries of such other Person.


 


“Surviving
Person” shall mean (a) the Person which is the continuing or surviving Person in a consolidation, merger, share exchange
or other business combination specified in Section 11(c)(i)(A) or 11(c)(i)(B) or (b) the Person to which the Major
Part of the assets of the Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred or disposed of in a
transaction specified in Section 11(c)(i)(C); provided, however, that, if the Major Part of the assets of
the Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred or disposed of in one or more related transactions
specified in Section 11(c)(i)(C) to more than one Person, the “Surviving Person” in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with the greatest fair market value in such transaction
or transactions.


 


“Tax
Benefits” shall mean the net operating loss carryovers, capital loss carryovers, general business credit carryovers,
alternative minimum tax credit carryovers, foreign tax credit carryovers, research and development credit carryovers and any loss
or deduction attributable to a “net unrealized built-in loss” within the meaning of Section 382, and the Treasury
Regulations promulgated thereunder, of the Company or any of its Subsidiaries.


 






    	 	11	 



    	 



    

 


“Trading
Day” shall mean a day on which the OTCQB or any other quotation service, trading system or principal national securities
exchange (or principal recognized foreign stock exchange, as the case may be) on which any securities or Rights, as the case may
be, are listed, quoted or admitted to trading is open for the transaction of business or, if the securities or Rights in question
are not listed, quoted or admitted to trading on any quotation service, trading system or national securities exchange (or recognized
foreign stock exchange, as the case may be), a Business Day.


 


“Treasury
Regulations” shall mean final, temporary and proposed tax regulations promulgated under the Code, as amended.


 


“Trust”
shall have the meaning set forth in Section 11(b)(ii).


 


“Trust
Agreement” shall have the meaning set forth in Section 11(b)(ii).


 


SECTION
2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance
with the express terms and conditions hereof (and no implied terms and conditions), and the Rights Agent hereby accepts such appointment.
Subject to 10 days’ prior written notice to the Rights Agent, the Company may from time to time appoint one or more co-Rights
Agents as it may deem necessary or desirable (the term “Rights Agent” being used herein to refer, collectively,
to the Rights Agent together with any such co-Rights Agents). In the event the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as the Company shall determine, and shall be provided
in writing to the Rights Agent and any such co-Rights Agent. The Rights Agent shall have no duty to supervise and shall not be
liable for the acts or omissions of any such co-Rights Agents.


 


SECTION
3. Issue of Rights and Right Certificates.


 


(a)
One Right shall be associated with each Common Share outstanding on the Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest to occur of the Distribution Date, the Redemption Date or the Expiration
Date and each additional Common Share with which Rights are issued after the Distribution Date but prior to the earlier of the
Redemption Date or the Expiration Date as provided in Section 23, subject to adjustment as provided in this Rights Agreement.


 






    	 	12	 



    	 



    

 


(b)
Until the earlier of (i) the Share Acquisition Date and (ii) such date, if any, as may be designated by the Board following the
commencement of, or the first public disclosure of an intent to commence, a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit or compensation plan of the Company or of any of its Subsidiaries,
or any Person organized, appointed or established by the Company and holding Common Shares for or pursuant to the terms of any
such employee benefit or compensation plan) for outstanding Common Shares, if upon consummation of such tender or exchange offer
such Person could be the Beneficial Owner of 4.99% or more of the outstanding Common Shares (the Close of Business on the earlier
of such dates being the “Distribution Date”), (x) the Rights shall, except as otherwise provided in Section
3(c), be evidenced by the certificates for Common Shares registered in the names of the holders thereof, or, in the case of
Common Shares held in uncertificated form, by the transaction statement or other record of ownership of such Common Shares and
not by separate Right Certificates, and (y) the Rights, including the right to receive Right Certificates, shall be transferable
only in connection with the transfer of the underlying Common Shares. As soon as practicable after the Distribution Date, the
Company shall prepare and execute, the Rights Agent shall countersign, and the Company will send or cause to be sent (and the
Rights Agent shall, if requested and provided with all necessary information, at the expense of the Company send) by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company or the transfer agent or registrar for the Common Shares, one or more Right
Certificates evidencing one whole Right for each Common Share held by such record holder, subject to the provisions of Section
15 and to adjustment as provided in this Rights Agreement. As of and after the Distribution Date, the Rights shall be evidenced
solely by such Right Certificates. The Company shall, as promptly as practicable, notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally, the Company shall confirm same in writing on or
prior to the Business Day next following. Until such written notice is received by the Rights Agent, the Rights Agent may presume
conclusively for all purposes that the Distribution Date has not occurred.


 


(c)
As soon as practicable after the Record Date, the Company will send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form attached hereto as Exhibit C (the “Summary of Rights”), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on the Record Date at the address of such holder shown
on the records of the Company or the transfer agent or registrar for the Common Shares. With respect to any Common Shares outstanding
as of the Record Date, and until the earliest of the Distribution Date, the Redemption Date or the Expiration Date, (i) in the
case of certificated shares, (A) the Rights associated with the Common Shares represented by any certificate shall be evidenced
by such certificate for the Common Shares with a copy of the Summary of Rights attached thereto and the registered holders of
the Common Shares shall also be the registered holders of the associated Rights and (B) the surrender for transfer of any such
certificate, even without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby, and (ii) in the case of Common Shares held in uncertificated form, (A) the Rights
associated with the Common Shares shall be evidenced by the balances indicated in the book-entry account system of the transfer
agent for such Common Shares and the registered holders of the Common Shares shall also be the registered holders of the associated
Rights and (B) the transfer of any Common Shares in the book-entry account system of the transfer agent for such Common Shares
shall also constitute the transfer of the Rights associated with such Common Shares.


 


(d)
In the case of certificated Common Shares certificates issued for Common Shares after the Record Date (including upon transfer
or exchange of outstanding Common Shares), but prior to the earliest to occur of the Distribution Date, the Redemption Date or
the Expiration Date, shall have printed on, written on or otherwise affixed to them a legend in substantially the following form
or such similar legend as the Company may deem appropriate and is not inconsistent with the provisions of the Rights Agreement:


 






    	 	13	 



    	 



    

 


This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Section 382 Rights Agreement dated
as of March 3, 2021 (as it may be amended from time to time (the “Rights Agreement”)), between TARONIS FUELS,
INC. (the “Company”) and NEVADA AGENCY AND TRANSFER COMPANY, (or any successor Rights Agent, the “Rights
Agent”), the terms of which (including restrictions on the transfer of such Rights) are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights shall be evidenced by separate certificates and shall no longer be evidenced by this
certificate. The Company shall mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt
of a written request therefor. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.


 


Notwithstanding
this Section 3(d), neither the omission of a legend nor the inclusion of a legend that makes reference to a rights agreement
other than the Rights Agreement shall affect the enforceability of any part of this Rights Agreement or the rights of any holder
of Rights.


 


(e)
In the case of Common Shares held in uncertificated form, the Company shall cause the confirmation and account statements sent
to holders of Common Shares in book-entry form (including upon transfer or exchange of outstanding Common Shares) prior to the
earliest of the Distribution Date, the Redemption Date or the Expiration Date to bear a legend in substantially the following
form:


 


Each
share of Common Stock, par value $0.000001 per share, of TARONIS FUELS, INC. (the “Company”) entitles the holder
thereof to certain Rights as set forth in a Section 382 Rights Agreement dated as of March 3, 2021 (as it may be amended from
time to time (the “Rights Agreement”)), between the Company and NEVADA AGENCY AND TRANSFER COMPANY, (or any
successor Rights Agent, the “Rights Agent”), the terms of which (including restrictions on the transfer of
such Rights) are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of
the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights shall be evidenced by separate certificates
and shall no longer be evidenced by the shares to which this statement relates. The Company shall mail to the holder of shares
to which this statement relates a copy of the Rights Agreement without charge after receipt of a written request therefor. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.


 


Notwithstanding
this Section 3(e), neither the omission of a legend nor the inclusion of a legend that makes reference to a rights agreement
other than the Rights Agreement shall affect the enforceability of any part of this Rights Agreement or the rights of any holder
of Rights.


 






    	 	14	 



    	 



    

 


SECTION
4. Form of Right Certificates. The Right Certificates (and the form of election to purchase and form of assignment to be
printed on the reverse side thereof) shall be in substantially the form set forth as Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate
(but which do not affect the rights, duties or responsibilities of the Rights Agent) and as are not inconsistent with the provisions
of this Rights Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform
to usage. Subject to the other provisions of this Rights Agreement (including Sections 7, 11 and 23), the
Right Certificates, whenever issued, shall be dated as of the Distribution Date and shall entitle the holders thereof to purchase
such number of Preferred Shares as shall be set forth therein for the Purchase Price set forth therein, subject to adjustment
as provided in this Rights Agreement.


 


SECTION
5. Execution, Countersignature and Registration.


 


(a)
The Right Certificates shall be executed on behalf of the Company by the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Treasurer or any Vice President, either manually or by facsimile signature, and may
have affixed thereto the Company’s seal or a facsimile thereof. The Right Certificates shall be countersigned by the Rights
Agent either manually or by facsimile signature, and shall not be valid or obligatory for any purpose unless so countersigned.
In the event that any officer of the Company who shall have signed any of the Right Certificates shall cease to be such an officer
of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such an officer of the Company; and any Right Certificate may
be signed on behalf of the Company by any person who, at the actual date of execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of execution of this Rights Agreement any such person
was not such an officer of the Company.


 


(b)
Following the Distribution Date, the Rights Agent shall keep or cause to be kept, at its office designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced by each of the Right Certificates, the certificate
number of each of the Right Certificates and the date of each of the Right Certificates.


 






    	 	15	 



    	 



    

 


SECTION
6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights.







 


(a)
Subject to Sections 7(e) and 15, at any time after the Distribution Date, and at or prior to the Close of Business
on the earlier of the Redemption Date or the Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become null and void pursuant to Section 7(e)) may be transferred, split-up, combined or
exchanged for another Right Certificate or Right Certificates representing, in the aggregate, the same number of Rights as the
Right Certificate or Right Certificates surrendered then represented. Any registered holder desiring to transfer, split-up, combine
or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent and shall
surrender the Right Certificate or Right Certificates to be transferred, split-up, combined or exchanged at the office of the
Rights Agent designated for such purpose; provided, however, that neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the transfer of any Right Certificate surrendered for transfer until
the registered holder shall have properly completed and duly signed the certification contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 7(e) and 15, countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split-up, combination
or exchange of Right Certificates. If and to the extent the Company does require payment of any such taxes or charges, the Company
shall give the Rights Agent prompt written notice thereof and the Rights Agent shall not deliver any Right Certificate unless
and until it is satisfied that all such payments have been made, and the Rights Agent shall promptly forward any such sum collected
by it to the Company or to such Persons as the Company may specify by written notice. The Rights Agent shall have no duty or obligation
under any Section of this Rights Agreement that requires the payment of taxes or charges unless and until it is satisfied that
all such taxes and/or charges have been paid.


 


(b)
Subject to Sections 7(e) and 15, upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a valid Right Certificate, and, in case of loss, theft or destruction,
of an open surety bond reasonably satisfactory to them, holding the Rights Agent and the Company harmless, and, at the Company’s
request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if mutilated, the Company shall execute a new Right Certificate of
like tenor and deliver such new Right Certificate to the Rights Agent for countersignature and delivery to the registered owner
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.


 


(c)
Notwithstanding any other provision hereof, the Company and the Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.


 


SECTION
7. Exercise of Rights; Expiration Date of Rights.


 


(a)
Subject to the other provisions of this Rights Agreement (including Section 7(e) and Section 11), each Right shall
entitle the registered holder thereof, upon exercise thereof as provided in this Rights Agreement, to purchase for the Purchase
Price, at any time after the Distribution Date and at or prior to the earlier of (i) the Final Expiration Date, (ii) the Redemption
Date, (iii) the Close of Business on the effective date of the repeal of Section 382 if the Board determines that this Rights
Agreement is no longer necessary or desirable for the preservation of NOLs or other Tax Benefits, (iv) the Close of Business on
the first day of a taxable year of the Company to which the Board determines that no NOLs or other Tax Benefits may be carried
forward, or (v) the Close of Business on the occurrence of the 364th Day Date (the earliest of the events described
in clauses (i), (iii), (iv) or (v) being herein referred to as the “Expiration Date”), one one-thousandth (1/1,000th)
of a Preferred Share, subject to adjustment as provided in this Rights Agreement.


 






    	 	16	 



    	 



    

 


(b)
Subject to the other provisions of this Rights Agreement (including Section 7(e)), the registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise provided in this Rights Agreement) in whole or in part at any time
after the Distribution Date and at or prior to the earlier of (i) the Expiration Date and (ii) the Redemption Date, upon surrender
of the Right Certificate, with the form of election to purchase on the reverse side thereof properly completed and duly executed,
to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Purchase Price
for each one one-thousandth (1/1,000th) of a Preferred Share (as such fraction may be adjusted as provided in this Rights Agreement)
as to which the Rights are exercised, together with any amount equal to any applicable transfer tax, in the manner required hereby.


 


(c)
Subject to the other provisions of this Rights Agreement (including Section 7(e)), upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase properly completed and duly executed, accompanied by payment
of the Purchase Price for the Preferred Shares to be purchased together with an amount equal to any applicable transfer tax, in
lawful money of the United States of America, in cash or by certified check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) either (A) requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of Preferred Shares to
be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests or (B) if the Company
shall have elected to deposit the Preferred Shares with a depositary agent under a depositary arrangement, requisition from the
depositary agent depositary receipts representing the number of one one-thousandths (1/1,000ths) of a Preferred Share (as such
fraction may be adjusted as provided in this Rights Agreement) to be purchased (in which case certificates for the Preferred Shares
to be represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company shall direct
the depositary agent to comply with all such requests, (ii) when necessary to comply with this Rights Agreement (or otherwise
when appropriate, as determined by the Company with written notice to the Rights Agent), requisition from the Company the amount
of cash, if any, to be paid in lieu of issuance of fractional shares in accordance with Section 15, (iii) after receipt
of such certificates or depositary receipts, cause the same to be delivered to or, upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when necessary to comply
with this Rights Agreement (or otherwise when appropriate, as determined by the Company with written notice to the Rights Agent),
after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Right Certificate.


 


(d)
In case the registered holder of any Right Certificate shall exercise fewer than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions
of Section 15.


 






    	 	17	 



    	 



    

 


(e)
Notwithstanding anything in this Rights Agreement to the contrary, any Rights that are at any time beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any Associate
or Affiliate of such Acquiring Person) who becomes a transferee after the Acquiring Person becomes such (a “Post Transferee”),
(iii) a transferee of an Acquiring Person (or of any Associate or Affiliate of such Acquiring Person) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person (or from such Affiliate or Associate) to holders of equity interests in such
Acquiring Person (or such Affiliate or Associate) or to any Person with whom the Acquiring Person (or such Affiliate or Associate)
has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board
has determined is part of a plan, agreement, arrangement or understanding (written or oral) which has as a primary purpose or
effect the avoidance of this Section 7(e) (a “Prior Transferee”), or (iv) any subsequent transferee
receiving transferred Rights from a Post Transferee or a Prior Transferee, either directly or through one or more intermediate
transferees, shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Rights Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) are complied with, but, it and the Rights Agent shall have no
liability to any holder of any Right Certificate or any other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliate or Associate, or any transferee thereof, hereunder. The Company shall give the
Rights Agent written notice of the identity of any Acquiring Person, Associate or Affiliate known to it, or the nominee of any
of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Rights Agreement, shall not
be liable for and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Associate or Affiliate,
or the nominee of any of the foregoing unless and until it shall have received such notice.


 


(f)
Notwithstanding anything in this Rights Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder of any Right Certificates upon the occurrence of any purported exercise
as set forth in this Section 7 unless such registered holder shall have (i) properly completed and duly signed the certificate
contained in the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise
and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company and the Rights Agent shall reasonably request.


 


SECTION
8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered or presented for the purpose
of exercise, transfer, split-up, combination or exchange shall, and any Right Certificate representing Rights that have become
null and void and nontransferable pursuant to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or,
if surrendered or presented to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by this Rights Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any Right Certificate purchased or acquired by the Company. The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company, destroy such canceled
Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.


 






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SECTION
9. Reservation and Availability of Preferred Shares.


 


(a)
The Company shall cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any authorized
and issued Preferred Shares held in its treasury, free from preemptive rights or any right of first refusal, a number of Preferred
Shares sufficient to permit the exercise in full of all outstanding Rights.


 


(b)
If there are not sufficient Preferred Shares issued but not outstanding or authorized but unissued to permit the exercise or exchange
of Rights in accordance with this Rights Agreement, the Company shall take all such action as may be necessary to authorize additional
Preferred Shares for issuance upon the exercise or exchange of Rights pursuant to this Rights Agreement; provided, however,
that if the Company is unable to cause the authorization of additional Preferred Shares, then the Company shall, or, if action
by the Company’s stockholders is necessary to cause such authorization, in lieu of seeking any such authorization, the Company
may, to the extent necessary and permitted by applicable law and any agreements or instruments in effect prior to the Distribution
Date to which it is a party, (i) upon surrender of a Right, pay cash equal to the Purchase Price in lieu of issuing Preferred
Shares and requiring payment therefor, (ii) upon due exercise of a Right and payment of the Purchase Price for each Preferred
Share as to which such Right is exercised, issue common stock or other equity and/or debt securities having a value equal to the
value of the Preferred Shares that otherwise would have been issuable pursuant to this Rights Agreement, which value shall be
determined by a nationally recognized investment banking firm selected by the Board, or (iii) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which such Right is exercised, distribute a combination of Preferred
Shares, cash and/or other equity and/or debt securities having an aggregate value equal to the value of the Preferred Shares that
otherwise would have been issuable pursuant to this Rights Agreement, which value shall be determined by a nationally recognized
investment banking firm selected by the Board. To the extent that any legal or contractual restrictions (pursuant to agreements
or instruments in effect prior to the Distribution Date to which it is party) prevent the Company from paying the full amount
payable in accordance with the foregoing sentence, the Company shall pay to holders of the Rights as to which such payments are
being made all amounts that are not then restricted on a pro rata basis as such payments become permissible under such legal or
contractual restrictions until such payments have been paid in full.


 


(c)
The Company shall take all actions as may be necessary to ensure that all Preferred Shares delivered upon exercise or exchange
of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and nonassessable shares.


 


(d)
The Company shall pay when due and payable any and all Federal and state transfer taxes and charges which may be payable in respect
of the issuance or delivery of Right Certificates or of any Preferred Shares or Common Shares or other securities upon the exercise
or exchange of the Rights. The Company and the Rights Agent shall not, however, be required to pay any transfer tax or charge
which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates or depositary receipts for the Preferred Shares or Common Shares or other securities, as
the case may be, in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for
exercise or exchange or to issue or deliver any certificates or depositary receipts for Preferred Shares or Common Shares or other
securities, as the case may be, upon the exercise or exchange of any Rights until any such tax or charge shall have been paid
(any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established
to the Company’s and the Rights Agent’s satisfaction that no such tax or charge is due.


 






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SECTION
10. Preferred Shares Record Date. Each Person in whose name any certificate for Preferred Shares or Common Shares or other
securities is issued upon the exercise or exchange of Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Shares or Common Shares or other securities, as the case may be, represented thereby on, and such certificate
shall be dated, the date on which the Right Certificate evidencing such Rights was duly surrendered and payment of any Purchase
Price (and any applicable transfer taxes) was made; provided, however, that, if the date of such surrender and payment
is a date upon which the transfer books of the Company for the Preferred Shares or Common Shares or other securities, as the case
may be, are closed, such Person shall be deemed to have become the record holder of such Preferred Shares or Common Shares or
other securities, as the case may be, on, and such certificate shall be dated, the next succeeding Business Day on which the transfer
books of the Company for the Preferred Shares or Common Shares or other securities, as the case may be, are open.


 


SECTION
11. Adjustments in Rights After There Is an Acquiring Person; Exchange of Rights for Shares; Business Combinations.


 


(a)
Subject to the other provisions of this Rights Agreement (including Section 7(e)), upon the occurrence of the Share Acquisition
Date, each holder of a Right shall thereafter have a right to receive, upon exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, such number of one one-thousandths (1/1,000ths) of a Preferred Share (as such fraction
may be adjusted as provided in this Rights Agreement) as shall equal the result obtained by multiplying the Purchase Price by
a fraction, the numerator of which is the number of one one-thousandths (1/1,000ths) of a Preferred Share (as such fraction may
be adjusted as provided in this Rights Agreement) for which such Right is then exercisable and the denominator of which is 50%
of the Market Value of the Common Shares on such Share Acquisition Date.


 


(b)
The Board may, at its option, at any time after the Share Acquisition Date, mandatorily exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that shall have become null and void and nontransferable pursuant to Section
7(e)) for consideration per Right consisting of either: (A) one-half of the Preferred Shares (or fractions thereof) that would
be issuable at such time upon the exercise of one Right in accordance with Section 11(a) or, if applicable, Section
9(b)(ii) or 9(b)(iii); or (B) cash, property, Preferred Shares (including fractions thereof), Common Shares (including
fractions thereof), or other equity or debt securities (or any combination of any of the foregoing) having an aggregate value
equal to one-half of the value of Preferred Shares (including fractions thereof) that would be issuable at such time upon the
exercise of one Right in respect of Common Stock in accordance with Section 11(a) which values shall be determined by a
nationally recognized investment banking firm selected by the Board of Directors of the Company (the consideration issuable per
Right pursuant to this Section 11(b)(i) being the “Exchange Consideration”). The Board may, at its option,
issue to the holders of Common Shares a number of Common Shares in lieu of each Preferred Share equal to the Formula Number (as
defined in the Certificate of Designation) if there are sufficient Common Shares issued but not outstanding or authorized but
unissued. If the Board elects to exchange all the Rights for Exchange Consideration pursuant to this Section 11(b)(i) prior
to the physical distribution of the Right Certificates, the Company may distribute the Exchange Consideration in lieu of distributing
Right Certificates, in which case for purposes of this Rights Agreement holders of Rights shall be deemed to have simultaneously
received and surrendered for exchange Right Certificates on the date of such distribution. Notwithstanding the foregoing, the
Board may not effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or any of its Subsidiaries or any Person holding Common Shares for or pursuant to the terms
of any such employee benefit or compensation plan), together with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of more than 50% of the Common Shares then outstanding.


 






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(i)
Any action of the Board ordering the exchange of any Rights pursuant to Section 11(b)(i) shall be irrevocable and, immediately
upon the taking of such action and without any further action and without any notice, the right to exercise any such Right so
exchanged pursuant to Section 11(a) shall terminate and the only right thereafter of a holder of such Right shall be to
receive the Exchange Consideration in exchange for each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or issued, to exercise any such Right pursuant to Section 11(c)(i). The Company shall promptly give
public notice of any such exchange (with prompt written notice thereof to the Rights Agent); provided, however,
that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall promptly
mail a notice of any such exchange to all holders of the Rights to be exchanged at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange shall state the method by which the exchange of the Rights for
the Exchange Consideration will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which shall have become null
and void and nontransferable pursuant to the provisions of Section 7(e)) held by each holder of Rights. If the Board elects
to exchange Rights for Exchange Consideration consisting all or in part of Preferred Shares or Common Shares, the Company may
elect to deposit such Preferred Shares or Common Shares with a depositary agent under a depositary arrangement, and, in such event
the Company shall cause the depositary agent to issue, in lieu of certificates for such Preferred Shares or Common Shares, depositary
receipts representing the number of such Preferred Shares (or fractions thereof) or Common Shares (or fractions thereof) to be
exchanged (in which case the certificates for such Preferred Shares or Common Shares to be represented by such receipts shall
be deposited by the transfer agent with the depositary agent). If the Board elects to mandatorily exchange any Rights under Section
11(b)(i), the Board may, at its option and without limiting any rights the Company may have under Section 26, cause
the Company to enter into such arrangements or implement such procedures as it deems necessary or appropriate, in its sole discretion,
for the purpose of ensuring that the Exchange Consideration is not received by holders of Rights that have become null and void
pursuant to Section 7(e), including entering into a Trust Agreement in such form and with such terms as the Board shall
then approve (the “Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement
and shall issue to the trust created by such agreement (the “Trust”) all or a portion (as designated by the
Board) of the Exchange Consideration distributable pursuant to the exchange, and all holders of Rights entitled to receive such
Exchange Consideration pursuant to the exchange shall be entitled to receive such Exchange Consideration (and any dividends paid
or distributions made with respect to any securities constituting such Exchange Consideration after the date on which such securities
are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust
Agreement. Prior to effecting an exchange and distributing such Exchange Consideration, the Company may require (or cause the
trustee of the Trust to require), as a condition thereof, that any holder of Rights provide evidence, including the identity of
the Beneficial Owners thereof and their Affiliates and Associates (or former Beneficial Owners thereof and their Affiliates and
Associates) as the Company shall reasonably request in order to determine if such Rights are null and void. If any Person shall
fail to comply with such request, the Company shall be entitled conclusively to deem the Rights formerly held by such Person to
be null and void pursuant to Section 7(e) hereof and not transferable, exercisable or exchangeable in connection herewith.


 






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(c)
In the event that, directly or indirectly, any transactions specified in the following clause (A), (B) or (C) of this Section
11(c)(i) (each such transaction being a “Business Combination”) shall be consummated:


 


(A)
the Company shall consolidate with, or merge with and into, or participate in a statutory share exchange with, or otherwise effect
any business combination or similar transaction with, any Acquiring Person or any Affiliate or Associate of an Acquiring Person;


 


(B)
any Acquiring Person or any Affiliate or Associate of an Acquiring Person shall merge with and into, or participate in a statutory
share exchange with, or otherwise effect any business combination or similar transaction with, the Company and, in connection
with such merger, statutory share exchange, business combination or similar transaction , all or part of the outstanding Common
Shares of the Company shall be changed into or exchanged for capital stock or other securities of the Company or of any Acquiring
Person or Affiliate or Associate of an Acquiring Person or cash or any other property; or


 


(C)
the Company shall sell, lease, license, exchange or otherwise transfer or dispose of (or one or more of its Subsidiaries shall
sell, lease, license, exchange or otherwise transfer or dispose of), in one or more transactions, the Major Part of the assets
of the Company and its Subsidiaries (taken as a whole) to any Acquiring Person or any Affiliate or Associate of an Acquiring Person,


 


then,
in each such case, proper provision shall be made so that each holder of a Right, except as provided in Section 7(e), shall
thereafter have the right to receive, upon the exercise thereof for the Purchase Price in accordance with the terms of this Rights
Agreement, the securities specified below (or, at such holder’s option, the securities specified in Section 11(a)
if the Company is the surviving corporation in such Business Combination):


 


(1)
if the Principal Party in such Business Combination has Registered Common Shares outstanding, each Right shall thereafter represent
the right to receive, upon the exercise thereof for the Purchase Price in accordance with the terms of this Rights Agreement,
such number of Registered Common Shares of such Principal Party, free and clear of all liens, encumbrances or other adverse claims,
as shall have an aggregate Market Value as of the time of exercise thereof equal to the result obtained by multiplying the Purchase
Price by two;


 






    	 	22	 



    	 



    

 





(2)
if the Principal Party in such Business Combination does not have Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase Price in accordance with the terms of this Rights Agreement,
at the election of the holder of such Right at the time of the exercise thereof, any of:


 


(i)
if the Principal Party in such Business Combination has Common Shares listed on or admitted to trading on any recognized foreign
stock exchange, such number of Common Shares of such Principal Party, free and clear of all liens, encumbrances or other adverse
claims, as shall have an aggregate Market Value as of the time of exercise thereof equal to the result obtained by multiplying
the Purchase Price by two;


 


(ii)
such number of Common Shares of the Surviving Person in such Business Combination (if the Principal Party is also the Surviving
Person in such Business Combination) as shall have an aggregate Book Value immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by two;


 


(iii)
such number of Common Shares of the Principal Party in such Business Combination (if the Principal Party is not also the Surviving
Person in such Business Combination) as shall have an aggregate Book Value immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by two; or


 


(iv)
if the Principal Party in such Business Combination is an Affiliate of one or more Persons that has Registered Common Shares outstanding,
such number of Registered Common Shares of whichever of such Affiliates of the Principal Party has Registered Common Shares with
the greatest aggregate Market Value on the date of consummation of such Business Combination as shall have an aggregate Market
Value on the date of such Business Combination equal to the result obtained by multiplying the Purchase Price by two.


 






    	 	23	 



    	 



    

 


(ii)
The Company shall not consummate any Business Combination unless each issuer of Common Shares for which Rights may be exercised,
as set forth in this Section 11(c), shall have sufficient authorized Common Shares that have not been issued or reserved
for issuance (and which shall, when issued upon exercise thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of first refusal or any other restrictions or limitations on
the transfer of ownership thereof) to permit the exercise in full of the Rights in accordance with this Section 11(c) and
unless prior thereto:


 


(A)
a registration statement under the Securities Act on an appropriate form, with respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights, shall be effective under the Securities Act; and


 


(B)
the Company and each such issuer shall have:


 


(1)
executed and delivered to the Rights Agent a supplemental agreement providing for the assumption by such issuer of the obligations
set forth in this Section 11(c) (including the obligation of such issuer to issue Common Shares upon the exercise of Rights
in accordance with the terms set forth in Sections 11(c)(i) and 11(c)(iii)) and further providing that such issuer,
at its own expense, shall use its best efforts to:


 


(i)
cause a registration statement under the Securities Act on an appropriate form, with respect to the Rights and the Common Shares
of such issuer purchasable upon exercise of the Rights, to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Expiration Date;


 


(ii)
qualify or register the Rights and the Common Shares of such issuer purchasable upon exercise of the Rights under the blue sky
or securities laws of such jurisdictions as may be necessary or appropriate; and


 


(iii)
list the Rights and the Common Shares of such issuer purchasable upon exercise of the Rights on each national securities exchange
on which the Common Shares were listed prior to the consummation of the Business Combination or, if the Common Shares were not
listed on a national securities exchange prior to the consummation of the Business Combination, on a national securities exchange;


 


(2)
furnished to the Rights Agent a written opinion of independent counsel stating that such supplemental agreement is a valid, binding
and enforceable agreement of such issuer; and


 


(3)
filed with the Rights Agent a certificate of a nationally recognized firm of independent accountants setting forth the number
of Common Shares of such issuer that may be purchased upon the exercise of each Right after the consummation of such Business
Combination.


 






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(iii)
After consummation of any Business Combination and subject to the provisions of Section 11(c)(ii), (A) each issuer of Common
Shares for which Rights may be exercised as set forth in this Section 11(c) shall be liable for, and shall assume, by virtue
of such Business Combination, all the obligations and duties of the Company pursuant to this Rights Agreement, (B) the term “Company”
shall thereafter be deemed to refer to such issuer, (C) each such issuer shall take such steps in connection with such consummation
as may be necessary to assure that the provisions of this Rights Agreement (including Sections 11(a) and 11(c))
shall thereafter be applicable, as nearly as reasonably may be, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights, (D) the number of Common Shares of each such issuer thereafter receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions of Sections
11 and 12 and (E) the other provisions of this Rights Agreement (including Sections 7, 9 and 10)
with respect to the Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any such Common Shares.


 


(iv)
In case the issuer of Common Shares for which Rights may be exercised, as set forth in this Section 11(c), has a provision
in any of its authorized securities or in its certificate of incorporation or by-laws or other agreement or instrument governing
its affairs, or a provision in any rights, warrants or other instruments or securities outstanding, which provision would have
the effect of (A) causing such issuer to issue (other than to holders of Rights pursuant to this Section 11(c)), in connection
with, or as a consequence of, the consummation of a transaction referred to in this Section 11(c), Common Shares of such
issuer at less than the then Market Value per share thereof or securities exercisable for, or convertible into, Common Shares
of such issuer at less than such then Market Value, (B) providing for any special payment, tax or similar provision in connection
with the issuance of the Common Shares of such issuer pursuant to the provisions of Section 11(c), or (C) diminishing or
otherwise eliminating the benefits intended to be afforded by the Rights, then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such issuer shall
have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such issuer
shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction.


 


SECTION
12. Certain Adjustments.


 


(a)
To preserve the actual or potential economic value of the Rights, if at any time after the date of this Rights Agreement there
shall be any change in the Common Shares or the Preferred Shares, whether by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations,
other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription
rights, options or warrants to holders of Common Shares or Preferred Shares, as the case may be (other than distribution of the
Rights or regular quarterly cash dividends), or otherwise, then, in each such event the Board shall make such appropriate adjustments
in the number of Preferred Shares (or the number and kind of other securities) issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at such time and the number of Rights outstanding at such time (including the number of Rights
or fractional Rights associated with each Common Share) such that following such adjustment such event shall not have had the
effect of reducing or limiting the benefits the holders of the Rights would have had absent such event.


 






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(b)
If, as a result of an adjustment made pursuant to Section 12(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Shares, thereafter the number of such securities so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to
the provisions of Sections 11 and 12 and the other provisions of this Rights Agreement (including Sections 7,
9 and 10) with respect to the Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any
such other securities.


 


(c)
All Rights originally issued by the Company subsequent to any adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase Price, the adjusted number and kind of securities purchasable
from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided in this Rights Agreement.


 


(d)
Irrespective of any adjustment or change in the Purchase Price or the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the
terms that were expressed in the initial Right Certificates issued hereunder.


 


(e)
In any case in which action taken pursuant to Section 12(a) requires that an adjustment be made effective as of a record
date for a specified event, the Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the
occurrence of such event the issuing to the holder of any Right exercised after such record date the Preferred Shares and/or other
securities, if any, issuable upon such exercise over and above the Preferred Shares and/or other securities, if any, issuable
before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder’s right to receive such additional securities upon the occurrence
of the event requiring such adjustment.


 






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SECTION
13. Certificate of Adjustment. Whenever an adjustment is made or any event occurs affecting the Rights or their exercisability
(including an event which causes the Rights to become null and void) as provided in Section 11 or 12, the Company
shall (a) promptly prepare a certificate setting forth such adjustment or describing such event and a brief, reasonably detailed
statement of the facts, computations and methodology accounting for such adjustment, (b) promptly file with the Rights Agent and
with each transfer agent for the Preferred Shares, a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate (or, if prior to the Distribution Date, to each holder of Common Shares) in accordance with Section
25, provided that the failure to prepare, file or mail such certificate or summary shall not affect the validity of such adjustment.
The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained
and, subject to Section 21(c) shall have no duty or liability with respect to, and shall not be deemed to have knowledge
of, any adjustment or any such event unless it shall have received such a certificate. The Rights Agent shall not be obligated
or responsible for calculating any adjustment hereunder. Nor shall the Rights Agent be under any obligation to determine when
an adjustment event or any condition precedent thereto has occurred.







 


SECTION
14. Additional Covenants.


 


(a)
Notwithstanding any other provision of this Rights Agreement, no adjustment to the number of Preferred Shares (or fractions of
a share) or other securities for which a Right is exercisable or the number of Rights outstanding or associated with each Common
Share or any similar or other adjustment shall be made or be effective if such adjustment would have the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such adjustment, including the benefits under Sections
11 and 12, unless the terms of this Rights Agreement are amended so as to preserve such benefits.


 


(b)
The Company covenants and agrees that, after the Distribution Date, except as permitted by Section 26, it shall not take
(or permit any Subsidiary of the Company to take) any action if at the time such action is taken it is intended or reasonably
foreseeable that such action will reduce or otherwise limit the benefits the holders of Rights would have had absent such action,
including the benefits under Sections 11 and 12. Any action taken by the Company during any period after any Person
becomes an Acquiring Person but prior to the Distribution Date shall be null and void unless such action could be taken under
this Section 14(b) from and after the Distribution Date. The Company shall not consummate any Business Combination if (i)
any issuer of Common Shares for which Rights may be exercised after such Business Combination in accordance with Section 11(c)
shall have taken any action that reduces or otherwise limits the benefits the holders of Rights would have had absent such
action, including the benefits under Sections 11 and 12, (ii) at the time of or immediately after such consolidation,
merger, sale, transfer or other transaction there are any rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (iii)
prior to, simultaneously with or immediately after such consolidation, merger, sale, transfer or other transaction, the stockholders
of the Person who constitutes, or would constitute, the issuer for purposes of Section 11(c) hereof shall have received
a distribution of Rights previously owned by such Person or any of its Affiliates or Associates or (iv) the form or nature of
organization of the issuer would preclude or limit the exercisability of the Rights.


 


SECTION
15. Fractional Rights and Fractional Shares.


 


(a)
The Company may, but shall not be required to, issue fractions of Rights or distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, the Company may pay to the registered holders of the Right Certificates with regard
to which such fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 15(a), the current market value of a whole Right shall be the closing
price of the Rights (as determined pursuant to the second sentence of the definition of Market Value contained in Section 1)
for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.


 






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(b)
The Company may, but shall not be required to, issue fractions of Preferred Shares (other than one one-thousandths (1/1000ths)
of a Preferred Share (as such fraction may be adjusted as provided in this Rights Agreement) or any integral multiple thereof)
upon exercise of the Rights or distribute certificates that evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may elect to (i) utilize a depository arrangement as provided by the terms of the Preferred Shares or (ii)
in the case of a fraction of a Preferred Share (other than one one-thousandths (1/1,000ths) of a Preferred Share (as such fraction
may adjusted as provided in this Rights Agreement) or any integral multiple thereof), pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value
of one Preferred Share, if any are outstanding and publicly traded (or the same fraction of the current market value of one Common
Share times the Formula Number (as defined in the Certificate of Designation) if the Preferred Shares are not outstanding and
publicly traded). For purposes of this Section 15(b), the current market value of a Preferred Share (or Common Share) shall
be the closing price of a Preferred Share (or Common Share) (as determined pursuant to the second sentence of the definition of
Market Value contained in Section 1) for the Trading Day immediately prior to the date of such exercise. If, as a result
of an adjustment made pursuant to Section 12(a), the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, the provisions of this Section 15(b) shall apply, as nearly as reasonably
practicable, on like terms to such other securities.


 


(c)
The Company may, but shall not be required to, issue fractions of Common Shares upon exchange of Rights pursuant to Section
11(b), or to distribute certificates that evidence fractional Common Shares. In lieu of such fractional Common Shares, the
Company may pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current Market Value of one Common Share as of the date on which
a Person became an Acquiring Person.


 


(d)
Each holder of Rights by the acceptance of such Rights expressly waives such holder’s right to receive any fractional Rights
or any fractional shares upon exercise of a Right except as provided in this Section 15.


 


(e)
Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly
prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and
the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the
form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate
and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional
shares under any Section of this Rights Agreement relating to the payment of fractional Rights or fractional shares unless and
until the Rights Agent shall have received such a certificate and sufficient monies.


 


(f)
The Company shall provide an initial funding of one thousand dollars ($1,000) for the purpose of issuing cash in lieu of fractional
shares to the extent cash is required to be paid in lieu of fractional shares. From time to time thereafter, the Rights Agent
may request additional funding to cover fractional payments. The Rights Agent shall have no obligation to make fractional payments
unless the Company shall have provided the necessary funds to pay in full all amounts due and payable with respect thereto.


 






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SECTION
16. Rights of Action.


 


(a)
All rights of action in respect of this Rights Agreement, excepting the rights of action given to the Rights Agent under Sections
19 and 21, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Shares) may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect
of, such holder’s right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Rights Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Rights
Agreement and shall be entitled to specific performance of the obligations of any Person under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to, this Rights Agreement. Notwithstanding anything in
this Rights Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations under this Rights Agreement by reason of any preliminary
or permanent injunction or other order, judgment decree or ruling (whether interlocutory or final) issued by a court of competent
jurisdiction or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use reasonable efforts to have any such injunction, order, judgment,
decree or ruling lifted or otherwise overturned as soon as possible.


 


(b)
Subject to Section 21, any holder of Rights who prevails in an action to enforce the provisions of this Rights Agreement
shall be entitled to recover the reasonable costs and expenses, including attorneys’ fees, incurred in such action.


 


SECTION
17. Transfer and Ownership of Rights and Right Certificates.


 


(a)
Prior to the Distribution Date, the Rights shall be transferable only in connection with the transfer of the Common Shares and
the Right associated with each such Common Share shall be automatically transferred upon the transfer of each such Common Share.


 


(b)
After the Distribution Date, the Right Certificates shall be transferable, subject to Section 7(e), only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and, subject to the reasonable satisfaction of the Rights Agent and the
Company, certificates properly completed and duly executed.


 






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(c)
The Company and the Rights Agent may deem and treat the Person in whose name a Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates or the associated certificate for Common Shares
made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.


 


SECTION
18. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote or receive dividends or other distributions or be deemed, for any purpose, the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company, including any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders, or to receive dividends or other distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.


 


SECTION
19. Concerning the Rights Agent.


 


(a)
The Company shall pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation,
negotiation, delivery, amendment, administration and execution of this Rights Agreement and the exercise and performance of its
duties hereunder, including any taxes or governmental charges imposed as a result of the action taken by it hereunder (other than
any taxes on the fees payable to it). The provisions of this Section 19 and Section 21 below shall survive the termination
of this Rights Agreement, the exercise or expiration of the Rights and the resignation, replacement or removal of the Rights Agent.


 


(b)
The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by
it in connection with its acceptance and administration of this Rights Agreement and the exercise and performance of its duties
hereunder in reliance upon any Right Certificate or certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be signed, executed and, where expressly required hereunder,
verified or acknowledged, by the proper Person or Persons, or upon the written advice or opinion of counsel as set forth in Section
21. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof
hereunder and, subject to Section 21(c), the Rights Agent shall be fully protected and incur no liability for failing to
take action in connection therewith unless and until it has received such notice in writing.


 






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SECTION
20. Merger or Consolidation or Change of Name of Rights Agent.


 


(a)
Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any
Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or
any Person succeeding to the shareholder services or stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however, that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 22. In case, at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.


 


(b)
In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates
so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this Rights Agreement.


 


SECTION
21. Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations expressly imposed by
this Rights Agreement (and no implied duties and obligations) upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates (or, prior to the Distribution Date, of the Common Shares), by their acceptance thereof,
shall be bound:


 


(a)
The Rights Agent may consult with legal counsel (who may be legal counsel for the Company or legal counsel for the Rights Agent),
and the written advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent
and, subject to Section 21(c), the Rights Agent shall incur no liability for or in respect of any action taken, suffered
or omitted by it in accordance with such written advice or opinion.


 


(b)
Whenever in the performance of its duties under this Rights Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including the identity of any Acquiring Person and the determination of the current per share market price
of any security) be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer, the President, a Vice President (whether preceded by any additional title), the Treasurer or the Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization and protection
to the Rights Agent and, subject to Section 21(c), the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted by it in reliance upon such certificate.


 






    	 	31	 



    	 



    

 


(c)
The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable judgment
of a court of competent jurisdiction). In no event shall the Rights Agent be liable for special, punitive, indirect, consequential
or incidental loss or damage of any kind whatsoever arising out of any act or failure to act hereunder (including but not limited
to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage.


 


(d)
Subject to Section 21(c), the Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals
contained in this Rights Agreement or in the Right Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.


 


(e)
The Rights Agent shall not be under any responsibility in respect of the validity of this Rights Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof) and, subject to Section 21(c), shall have no liability therefor; nor
shall it be responsible for any breach by the Company of any covenant or condition contained in this Rights Agreement or in any
Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming
null and void pursuant to Section 7(e)) or any change or adjustment in the terms of Rights as required under the provisions
of Section 11 or 12 or responsible for the manner, method or amount of any such change or adjustment or the ascertaining
of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice of any such adjustment pursuant to Section 13); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when so issued, be validly authorized and issued, fully paid and nonassessable.


 


(f)
The Company agrees that it shall perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this Rights Agreement.


 


(g)
The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder
from any one of the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the President, a Vice President
(whether preceded by any additional title), the Secretary, Assistant Secretary or the Treasurer of the Company, in connection
with its duties and such instructions shall be full authorization and protection to the Rights Agent and, subject to Section
21(c), the Rights Agent shall not be liable for or in respect of any action taken, suffered or omitted by it in accordance
with any such instructions or for any delay in acting while waiting for such instructions. In the event of any conflict or inconsistency
between or among any such instructions, the later in time shall govern. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted
by the Rights Agent under this Rights Agreement and the date on and/or after which such action shall be taken or suffered or such
omission shall be effective. Subject to Section 21(c), the Rights Agent shall not be liable for any action taken or suffered
by, or omission of, the Rights Agent in accordance with a proposal included in any such application on or after the date specified
in such application.


 






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(h)
The Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company or its
Subsidiaries may be interested, or contract with or lend money to the Company or its Subsidiaries or otherwise act as fully and
freely as though it were not the Rights Agent under this Rights Agreement. Nothing herein shall preclude the Rights Agent or any
stockholder, affiliate, director, officer or employee from acting in any other capacity for the Company or for any other Person.


 


(i)
If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained
in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has either
not been properly completed or indicates an affirmative response to any clause thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first consulting with the Company.


 


(j)
The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder or by
or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or
misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final judgment of a court of competent
jurisdiction) in the selection and continued employment thereof.


 


(k)
The Company shall indemnify the Rights Agent for, and defend and hold the Rights Agent harmless against, any loss, liability,
damage, claim or expense (including reasonable fees and expenses of legal counsel) that the Rights Agent may incur resulting from
any action taken, suffered or omitted by the Rights Agent in connection with the acceptance, administration, exercise and performance
of its duties under this Rights Agreement and shall pay Rights Agent’s costs and expenses of defending against claims made
against Rights Agent in connection with the same, including its attorneys’ fees, as such costs and expenses are incurred;
provided, however, that the Rights Agent shall not be indemnified or held harmless with respect to any such loss,
liability, damage or expense incurred by the Rights Agent as a result of, or arising out of, its own gross negligence, bad faith
or willful misconduct. In the event the Rights Agent shall have notice of any such assertion of an action, proceeding, suit or
claim or have been served with the summons or other first legal process giving information as to the nature and basis of the action,
proceeding, suit or claim, the Rights Agent shall promptly notify the Company of the assertion of any action, proceeding, suit
or claim against the Rights Agent. The Rights Agent agrees not to settle any litigation in connection with any action, proceeding,
suit or claim with respect to which it may seek indemnification from the Company without the prior written consent of the Company,
which consent shall not be unreasonably withheld. If a final, non-appealable judgment of a court of competent jurisdiction shall
be issued in favor of the Rights Agent in respect of an action by the Rights Agent to enforce the indemnification provisions of
this Section 21(k), then the Company shall reimburse the Rights Agent’s for all reasonable costs and expenses in
enforcing such indemnification provisions and its rights to reimbursement hereunder.


 




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(l)
No provision of this Rights Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise of its rights if it believes that repayment of
such funds or adequate indemnification against such risk or liability is not reasonably assured to it.


 


(m)
Notwithstanding anything contained herein to the contrary, the Rights Agent’s aggregate liability during any term of this
Rights Agreement with respect to, arising from, or arising in connection with this Rights Agreement, or from all services provided
or omitted to be provided under this Rights Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall
not exceed, the amounts paid hereunder by the Company to Rights Agent as fees and charges, but not including reimbursable expenses,
during the twelve (12) months immediately preceding the event for which recovery from Rights Agent is being sought.


 


(n)
The Rights Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder with
respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility
to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.


 


(o)
The Rights Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating
to any registration statement filed with the Securities and Exchange Commission or this Rights Agreement, including without limitation
obligations under applicable regulation or law.


 


(p)
The Rights Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the express
provisions hereof (and no duties or obligations shall be inferred or implied). The Rights Agent shall not assume any obligations
or relationship of agency or trust with any of the owners or holders of the Rights.


 


(q)
The Rights Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature
by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion
Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution
for, the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation
may thereafter have been altered, changed, amended or repealed.


 


(r)
In the event the Rights Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction,
request or other communication, paper or document received by the Rights Agent in connection with the performance of its duties
hereunder, the Rights Agent shall notify the Company of such ambiguity or uncertainty and, may, in its sole discretion, refrain
from taking any action, and shall be fully protected and shall not be liable in any way to Company, the holder of any Right Certificate
or any other person or entity for refraining from taking such action, unless the Right Agent receives written instructions signed
by the Company which eliminates such ambiguity or uncertainty to the reasonable satisfaction of Rights Agent. To the extent such
ambiguity or uncertainty remains unresolved to the satisfaction of the Rights Agent, the Rights Agent may seek to have the matter
resolved by judicial decree in a declaratory judgment or interpleader action, as is appropriate, at the Rights Agent’s discretion
and the Company agree to indemnify, defend and hold harmless the Rights Agent in connection with such action consistent with the
requirements of Section 20(k) above.


 




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SECTION
22. Change of Rights Agent. Subject to Section 25, the Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Rights Agreement upon 10 days’ notice (consistent with the Transfer Agent and Registrar
agreement between the Company and Rights Agent) in writing mailed to the Company and, in the event the Rights Agent or one of
its Affiliates is not the transfer agent to the Company, to each transfer agent of the Common Shares and the Preferred Shares
known to the Rights Agent. The Company shall notify the holders of the Right Certificates (or, prior to the Distribution Date,
of the Common Shares) by first-class mail. In the event any transfer agency relationship in effect between the Company and the
Rights Agent or any of its Affiliates terminates, the Rights Agent will be deemed to have resigned automatically and be discharged
from its duties as Rights Agent under this Rights Agreement as of the effective date of such termination, and the Company shall
be responsible for distributing any required notice to other Persons. The Company may remove the Rights Agent or any successor
Rights Agent upon 10 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be,
and in the event the Rights Agent or any one of its Affiliates is not the transfer agent to the Company, to each transfer agent
of the Common Shares and the Preferred Shares by registered or certified mail, and to the holders of the Right Certificates (or,
prior to the Distribution Date, of the Common Shares) by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (or,
prior to the Distribution Date, of the Common Shares) (who shall, with such notice, submit such holder’s Right Certificate
or, prior to the Distribution Date, the certificate representing such holder’s Common Shares, for inspection by the Company),
then the registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares) may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a Person organized and doing business under the laws of the United States, in good standing,
which is authorized under such laws to exercise stock transfer or corporate trust powers and is subject to supervision or examination
by Federal or state authority and which has at the time of its appointment as Rights Agent a combined capital (with its direct
or indirect parents and Subsidiaries) and surplus of at least $50,000,000; provided, however, that the principal
transfer agent for the Common Shares shall in any event be qualified to be the Rights Agent. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any reasonable further assurance, conveyance, act or deed necessary
for the purpose, without limiting any of its rights or remedies hereunder. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares
and the Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates (or, prior
to the Distribution Date, of the Common Shares). Failure to give any notice provided for in this Section 22, however, or
any defect therein shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.


 




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SECTION
23. Issuance of Additional Rights and Right Certificates. Notwithstanding any of the provisions of this Rights Agreement
or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board to reflect any adjustment or change made in accordance with the provisions of this Rights Agreement.
In addition, in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the earlier
of the Redemption Date and the Expiration Date, the Company (a) shall, with respect to Common Shares so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement, or upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue
Right Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Right
Certificate would be issued, (ii) no such Right Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof and (iii) no such Right Certificate shall be issued to an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.


 


SECTION
24. Redemption and Termination.


 


(a)
The Board may, at its option, at any time prior to the earlier of (i) the Distribution Date and (ii) the Expiration Date, order
the redemption of all, but not fewer than all, the then outstanding Rights at the Redemption Price (the date of such redemption
being the “Redemption Date”), and the Company, at its option, may pay the Redemption Price either in cash or
Common Shares or other securities of the Company deemed by the Board, in the exercise of its sole discretion, to be at least equivalent
in value to the Redemption Price.


 


(b)
Immediately upon the action of the Board ordering the redemption of the Rights (or at such later time as the Board may establish
for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Each such notice of redemption shall state the method by which payment of the Redemption Price will be
made. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or
not the holder of Rights receives such notice. In any case, failure to give such notice by mail, or any defect in the notice,
to any particular holder of Rights shall not affect the sufficiency of the notice to other holders of Rights. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner except
as specifically set forth in this Section or in Section 11(b) or in connection with the purchase of Common Shares prior
to the Distribution Date.


 




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SECTION
25. Notices. Notices or demands authorized by this Rights Agreement to be given or made by the Rights Agent or by the holder
of a Right Certificate (or, prior to the Distribution Date, of the Common Shares) to or on the Company shall be sufficiently given
or made in writing and when sent by first-class mail, postage-prepaid, or a nationally recognized overnight courier, addressed
(until another address is filed in writing with the Rights Agent) as follows:


 


Taronis
Fuels, Inc.

24980 North 83rd Avenue, Suite 100

Peoria, AZ 85383

Attention: General Counsel


 


Subject
to the provisions of Section 22, any notice or demand authorized by this Rights Agreement to be given or made by the Company
or by the holder of a Right Certificate (or, prior to the Distribution Date, of the Common Shares) to or on the Rights Agent shall
be sufficiently given or made in writing and when sent by first-class mail, postage-prepaid, or nationally recognized overnight
courier addressed (until another address is filed in writing with the Company) as follows:


 


Nevada
Agency and Transfer Company


50
West Liberty Street, Suite 880


Reno,
NV 89501


Attention:
Amanda Cardinalli


 


Notices
or demands authorized by this Rights Agreement to be given or made by the Company or the Rights Agent to any holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) shall be sufficiently given or made in writing and sent
by first-class mail, postage-prepaid, or nationally recognized overnight courier, addressed to such holder at the address of such
holder as shown on the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the Common Shares.


 




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SECTION
26. Supplements and Amendments. At any time prior to the Distribution Date, and subject to the last sentence of this Section
26, the Company may, and the Rights Agent shall if the Company so directs, supplement or amend any provision of this Rights
Agreement in any manner which the Company may deem necessary or desirable (including the date on which the Distribution Date or
Expiration Date shall occur, the amount of the Purchase Price, the definition of “Acquiring Person” or the time during
which the Rights may be redeemed pursuant to Section 24) without the approval of any holder of the Rights, with the exception
that the provisions of Sections 19 and 21 may only be amended by mutual consent of the Company and the Rights Agent.
From and after the Distribution Date, and subject to applicable law, the Company may, and the Rights Agent shall if the Company
so directs, amend this Rights Agreement without the approval of any holders of Right Certificates (a) to cure any ambiguity or
to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision of this
Rights Agreement or (b) to otherwise change or supplement any other provisions in this Rights Agreement in any matter which the
Company may deem necessary or desirable and which does not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), any such supplement or amendment to be evidenced
in writing. Any supplement or amendment adopted during any period after any Person has become an Acquiring Person but prior to
the Distribution Date shall be null and void unless such supplement or amendment could have been adopted under the prior sentence
from and after the Distribution Date. All supplements and amendments shall be in writing and must be authorized by the Board.
Upon delivery of a certificate from an appropriate officer of the Company that states that the proposed supplement or amendment
complies with this Section 26, the Rights Agent shall execute such supplement or amendment. Notwithstanding anything to
the contrary contained in this Rights Agreement, the Rights Agent may, but shall not be obligated to, enter into any supplement
or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Rights Agreement.
Time shall be of the essence of this Rights Agreement, including as to entering into any amendments or supplements pursuant to
this Section 26. In addition, notwithstanding anything to the contrary contained in this Rights Agreement, no supplement
or amendment to this Rights Agreement shall be made which extends the date on which the Expiration Date shall occur or reduces
the Redemption Price (except as required by Section 12(a)).


 


SECTION
27. Successors. All the covenants and provisions of this Rights Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.


 


SECTION
28. Benefits of Rights Agreement; Determinations and Actions by the Board, etc..


 


(a)
Nothing in this Rights Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, of the Common Shares) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, of the Common Shares).


 


(b)
Except as explicitly otherwise provided in this Rights Agreement, the Board shall have the exclusive power and authority to administer
this Rights Agreement and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be
necessary or advisable, in the administration of this Rights Agreement, including the right and power to (i) interpret the provisions
of this Rights Agreement and (ii) make all determinations deemed necessary or advisable for the administration of this Rights
Agreement (including a determination to redeem or not redeem the Rights or to amend this Rights Agreement and a determination
of whether there is an Acquiring Person). For all purposes of this Rights Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, will be made in accordance with, as the Board deems to be applicable, the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act or the provisions of Section
382. All such actions, calculations, interpretations and determinations that are done or made by the Board in good faith shall
be final, conclusive and binding on the Company, the Rights Agent (except with respect to rights, duties, obligations and immunities
of the Rights Agent hereunder) and the holders of Rights, as such, and all other Persons. The Rights Agent shall always be entitled
to assume that the Board acted in good faith and shall be fully protected and incur no liability in reliance thereon. For all
purposes of this Rights Agreement, any calculation of the number of Common Shares outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding Common Shares of which any Person is the Beneficial
Owner, will be made in accordance with, as the Board deems to be applicable, the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act or the provisions of Section 382.


 




    	 	38	 



    	 



    

 


(c)
Nothing contained in this Rights Agreement shall be deemed to be in derogation of the obligation of the Board to exercise its
fiduciary duty. Without limiting the foregoing, nothing contained herein shall be construed to suggest or imply that the Board
shall not be entitled to reject any tender offer or other acquisition proposal, or to recommend that holders of Common Shares
reject any tender offer, or to take any other action (including the commencement, prosecution, defense or settlement of any litigation
and the submission of additional or alternative offers or other proposals) with respect to any tender offer or other acquisition
proposal that the Board believes is necessary or appropriate in the exercise of such fiduciary duty.


 


SECTION
29. Severability. If any term, provision, covenant or restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions
of this Rights Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided,
however, that if the absence of such excluded provision shall, in the reasonable judgment of the Rights Agent, materially
and adversely its rights, immunities, duties or obligations under this Rights Agreement, the Rights Agent shall be entitled to
resign on the next Business Day.


 


SECTION
30. Governing Law. This Rights Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made
under the law of the State of Delaware and for all purposes shall be governed by and construed in accordance with the law of such
State applicable to contracts to be made and performed entirely within such State. The Company and each holder hereby irrevocably
submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if such court will lack subject matter
jurisdiction, the United States District Court for the District of Delaware, over any suit, action or proceeding arising out of
or relating to this Rights Agreement. In addition, the Company and each holder hereby irrevocably submits to the exclusive jurisdiction
of the state courts located in Washoe County, State of Nevada, or, if such courts will lack subject matter jurisdiction, the United
States District Court for the Northern District of Nevada, over any suit, action or proceeding arising out of or relating to the
duties, rights, obligation or conduct of the Rights Agent. The Company and each holder acknowledge that the forum designated by
this Section 30 has a reasonable relation to this Rights Agreement and to such Persons’ relationship with one another.
The Company and each holder hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter
have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding brought in any court referred to
in this Section 30. The Company and each holder undertake not to commence any action subject to this Rights Agreement in
any forum other than the forum described in this Section 30. The Company and each holder agree that, to the fullest extent
permitted by applicable law, a final and non-appealable judgment in any such suit, action or proceeding brought in any such court
will be conclusive and binding upon such Persons.


 




    	 	39	 



    	 



    

 


SECTION
31. Counterparts; Effectiveness. This Rights Agreement may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
A signature to this Rights Agreement transmitted electronically shall have the same authority, effect and enforceability as an
original signature. This Rights Agreement shall be effective as of the Close of Business on the date hereof.


 


SECTION
32. Descriptive Headings. Descriptive headings of the several Sections of this Rights Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the provisions of this Rights Agreement.


 


SECTION
33. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for
any delays or failures in performance resulting from acts beyond its reasonable control including acts of God, terrorist acts,
shortage of supply, breakdowns or malfunctions, interruptions or malfunctions of computer facilities, or loss of data due to power
failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war or civil unrest.


 


SECTION
34. Process to Seek Exemption. Any Person who desires to effect any acquisition of securities that would, if consummated,
result in such Person becoming an Acquiring Person (a “Requesting Person”) may, prior to such time and in accordance
with this Section 34, request that the Board grant an exemption with respect to such acquisition under this Rights Agreement
so that such Person would be deemed to be an “Exempt Person” as defined in Section 1 for purposes of this Rights
Agreement (an “Exemption Request”). An Exemption Request shall be in proper form and shall be delivered by
overnight delivery service or first-class mail, postage-prepaid, to the Secretary of the Company at the principal executive office
of the Company. The Exemption Request shall be deemed made upon receipt by the Secretary of the Company. To be in proper form,
an Exemption Request shall set forth (a) the name and address of the Requesting Person, (b) the number and percentage of Common
Shares then Beneficially Owned by the Requesting Person, together with all Affiliates and Associates of the Requesting Person,
and (c) a reasonably detailed description of the transaction or transactions by which the Requesting Person would propose to become
an Acquiring Person and the maximum number and percentage of Common Shares that the Requesting Person proposes to acquire. The
Board, or a duly constituted committee of Independent Directors, shall make a determination whether to grant an exemption in response
to an Exemption Request as promptly as practicable (and, in any event, within ten Business Days) after receipt thereof; provided
that the failure of the Board (or any such committee) to make a determination within such period shall be deemed to constitute
the denial by the Board of the Exemption Request. The Requesting Person shall respond promptly to reasonable and appropriate requests
for additional information from the Board and its advisors to assist the Board in making its determination. The Board, or a duly
constituted committee of Independent Directors, shall only grant an exemption in response to an Exemption Request if the Board
determines in its sole discretion, or such committee determines in its sole discretion, that the acquisition of Beneficial Ownership
of Common Shares by the Requesting Person, considered alone or with other transactions (including past transactions or contemplated
transactions), (i) will not jeopardize or endanger the availability to the Company of its NOLs or other Tax Benefits, taking into
account such facts and circumstances as the Board (or any such committee) reasonably deems relevant or (ii) is otherwise in the
best interests of the Company. Any exemption granted hereunder may be granted in whole or in part, and may be subject to limitations
or conditions (including a requirement that the Requesting Person agree that it will not acquire Beneficial Ownership of Common
Shares in excess of the maximum number and percentage of shares approved by the Board), in each case as and to the extent the
Board, or a duly constituted committee of Independent Directors, shall determine necessary or desirable to provide for the protection
of the NOLs and other Tax Benefits or as is otherwise in the best interests of the Company. Any Exemption Request may be submitted
on a confidential basis and, except to the extent required by applicable law, the Company shall maintain the confidentiality of
such Exemption Request and the Board’s (or any such committee’s) determination with respect thereto, unless the information
contained in the Exemption Request or the Board’s determination with respect thereto otherwise becomes publicly available.
The Exemption Request shall be considered and evaluated by the Board, or a duly constituted committee of Independent Directors,
and the action of a majority of such directors (or such committee) shall be deemed to be the determination of the Board for purposes
of such Exemption Request.


 




    	 	40	 



    	 



    

 


SECTION
35. Tax Benefits Review. In addition to the review and evaluation otherwise contemplated by this Rights Agreement, the
Board, or a duly constituted committee of Independent Directors, shall review the calculation for determining whether an ownership
change has occurred under Section 382 once per year (or with such greater frequency as the Board (or any such committee), in its
sole discretion, shall determine is advisable). The Board (or any such committee) shall determine after such review whether maintenance
of this Rights Agreement continues to be advisable in order to preserve the value of the NOLs and other Tax Benefits, taking into
account such facts and circumstances as the Board (or any such committee) reasonably deems relevant.


 


SECTION
36. Bank Account(s). All funds received by the Rights Agent under this Rights Agreement that are to be distributed or applied
by the Rights Agent in the performance of services hereunder (the “Funds”) shall be held by the Rights Agent
as agent for the Company and deposited in one or more bank accounts to be maintained by the Rights Agent in its name as agent
for the Company. Until paid pursuant to the terms of this Rights Agreement, the Rights Agent will hold the Funds through such
accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment
grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default
Rating) (each as reported by Bloomberg Finance L.P.). The Rights Agent shall have no responsibility or liability for any diminution
of the Funds that may result from any deposit made by the Rights Agent in accordance with this paragraph, including any losses
resulting from a default by any bank, financial institution or other third party.


 


SECTION
37. Confidentiality. The Rights Agent and the Company agree that all books, records, information and data pertaining to
the business of the other party, including inter alia, personal, non-public rights holder information, which are exchanged or
received pursuant to the negotiation or the carrying out of this Rights Agreement, including the fees for services set forth in
the attached schedule, shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be
required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities.


 


SECTION
38. Customer Identification Program. The Company acknowledges that the Rights Agent is subject to the customer identification
program (“Customer Identification Program”) requirements under the USA PATRIOT Act and its implementing regulations,
and that the Rights Agent must obtain, verify and record information that allows the Rights Agent to identify the Company. Accordingly,
prior to accepting an appointment hereunder, the Rights Agent may request information from the Company that will help the Rights
Agent to identify the Company, including without limitation the Company’s physical address, tax identification number, organizational
documents, certificate of good standing, license to do business, or any other information that the Rights Agent deems necessary.
The Company agrees that the Rights Agent cannot accept an appointment hereunder unless and until the Rights Agent verifies the
Company’s identity in accordance with the Customer Identification Program requirements.


 




    	 	41	 



    	 



    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed as of the day and year first above
written.


 


	 	TARONIS
    FUELS, INC.
	 	 	 
	 	By:	/s/ Scott Mahoney
	 	Name:
    	Scott
    Mahoney
	 	Title:
    	Chief
    Executive Officer
	 	 	 
	 	NEVADA
    AGENCY AND TRANSFER COMPANY,
	 	as Rights Agent
	 	 	 
	 	By:
    	/s/
    Amanda Cardinalli
	 	Name:	Amanda Cardinalli
	 	Title:
    	President


 


[Signature
Page to Section 382 Rights Agreement]


 




    	 	 	 



    	 



    

 


EXHIBIT
A


 


CERTIFICATE
OF THE VOTING POWERS,

DESIGNATIONS, PREFERENCES AND RELATIVE

PARTICIPATING, OPTIONAL AND OTHER SPECIAL

RIGHTS AND QUALIFICATIONS, LIMITATIONS

OR RESTRICTIONS OF SERIES A Participating Cumulative

PREFERRED STOCK OF

TARONIS FUELS, INC.


 


Pursuant
to Section 151 of the General Corporation Law of the State of Delaware, TARONIS FUELS, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY
CERTIFY:


 


That,
pursuant to the authority conferred upon the Board of Directors (the “Board”) of TARONIS FUELS, INC. (the “Company”)
by Article IV of the Amended and Restated Certificate of Incorporation of the Company, the Board on March 3, 2021, adopted the
following resolution designating a new series of preferred stock as Series A Participating Cumulative Preferred Stock:


 


NOW,
THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in the Board in accordance with the provisions of the Certificate
of Incorporation and the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, a series of preferred
stock of the Corporation is hereby authorized, and the designation and number of shares thereof, and the voting powers, preferences
and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, shall
be as follows:


 


SECTION
1. Designation and Number of Shares. The shares of such series shall be designated as “Series A Participating
Cumulative Preferred Stock” (the “Series A Preferred Stock”). The number of shares initially constituting
the Series A Participating Cumulative Preferred Stock shall be 2,000,000; provided, however, that, if more than
a total of 2,000,000 shares of Series A Preferred Stock shall be issuable upon the exercise of Rights (the “Rights”)
issued pursuant to the Section 382 Rights Agreement dated as of March 3, 2021, between the Company and Nevada Agency and Transfer
Company ( the “Rights Agreement”), the Board, pursuant to Section 151(g) of the General Corporation Law of
the State of Delaware, shall direct by resolution or resolutions that a certificate be properly executed, acknowledged, filed
and recorded, in accordance with the provisions of Section 103 thereof, providing for the total number of shares of Series A Preferred
Stock authorized to be issued to be increased (to the extent that the Certificate then permits) to the largest number of whole
shares (rounded up to the nearest whole number) issuable upon exercise of such Rights.


 




    	 	1	 



    	 



    

 


SECTION
2. Dividends or Distributions. Subject to the superior rights of the holders of shares of any other series of Preferred
Stock or other class of capital stock of the Company ranking superior to the shares of Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board,
out of the assets of the Company legally available therefor, (1) quarterly dividends payable in cash on the last day of each fiscal
quarter in each year, or such other dates as the Board shall approve (each such date being referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share
or a fraction of a share of Series A Preferred Stock, in the amount of $1.00 per whole share (rounded to the nearest cent) less
the amount of all cash dividends declared on the Series A Preferred Stock pursuant to the following clause (2) since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock (the total of which shall not, in any event, be less than zero)
and (2) dividends payable in cash on the payment date for each cash dividend declared on the shares of Common Stock, par value
$0.000001 per share, of the Company (the “Common Stock”) in an amount per whole share (rounded to the nearest
cent) equal to the Formula Number (as hereinafter defined) then in effect times the cash dividends then to be paid on each share
of Common Stock. In addition, if the Company shall pay any dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or distributions solely in shares of Common Stock), then,
in each such case, the Company shall simultaneously pay or make on each outstanding whole share of Series A Preferred Stock a
dividend or distribution in like kind equal to the Formula Number then in effect times such dividend or distribution on each share
of Common Stock. As used herein, the “Formula Number” shall be 1,000; provided, however, that,
if at any time after March 3, 2021, the Company shall (i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in shares of Common Stock, (ii) subdivide (by a stock split or otherwise)
the outstanding shares of Common Stock into a larger number of shares of Common Stock or (iii) combine (by a reverse stock split
or otherwise) the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then in each such event
the Formula Number shall be adjusted to a number determined by multiplying the Formula Number in effect immediately prior to such
event by a fraction, the numerator of which is the number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided further that, if at any time after March 3, 2021, the
Company shall issue any shares of its capital stock in a merger, reclassification, or change of the outstanding shares of Common
Stock, then in each such event the Formula Number shall be appropriately adjusted to reflect such merger, reclassification or
change so that each share of Preferred Stock continues to be the economic equivalent of a Formula Number of shares of Common Stock
prior to such merger, reclassification or change.


 


(a)
The Company shall declare a cash dividend on the Series A Preferred Stock as provided in Section 2(a) immediately prior
to or at the same time it declares a cash dividend on the Common Stock; provided, however, that, in the event no
cash dividend shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, during the period
between the first issuance of any share or fraction of a share of Series A Preferred Stock, a dividend of $0.000001 per whole
share on the Series A Preferred Stock shall nevertheless accrue on such subsequent Quarterly Dividend Payment Date or the first
Quarterly Dividend Payment Date, as the case may be. The Board may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a dividend or distribution declared thereon, which record date shall be the same
as the record date for any corresponding dividend or distribution on the Common Stock.


 




    	 	2	 



    	 



    

 


(b)
Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue and be
cumulative from and after the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be
cumulative from and after such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.


 


(c)
So long as any shares of Series A Preferred Stock are outstanding, no dividends or other distributions shall be declared, paid
or distributed, or set aside for payment or distribution, on the Common Stock unless the dividend required by this Section
2 to be declared on the Series A Preferred Stock shall have been declared and set aside.


 


(d)
The holders of shares of Series A Preferred Stock shall not be entitled to receive any dividends or other distributions except
as herein provided.


 


SECTION
3. Voting Rights. The holders of shares of Series A Preferred Stock, in addition to the voting rights provided by law,
shall have the following voting rights:


 


(a)
Each holder of Series A Preferred Stock shall be entitled to a number of votes equal to the Formula Number then in effect, for
each share of Series A Preferred Stock held of record, multiplied by the maximum number of votes per share which any holder of
Common Stock or stockholders generally then have with respect to such matter (assuming any holding period or other requirement
to vote a greater number of shares is satisfied).


 


(b)
Except as otherwise herein provided or by the Certificate or applicable law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock shall vote together as one class for the election of directors of the Company and on
all other matters submitted to a vote of the holders of Common Stock of the Company.


 




    	 	3	 



    	 



    

 


(c)
If, at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any share or shares of Series A Preferred Stock are in default, the number of directors
constituting the Board shall be increased by two. In addition to voting together with the holders of Common Stock for the election
of other directors of the Company, the holders of record of the Series A Preferred Stock, voting separately as a class to the
exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent annual meeting
of stockholders), unless all dividends in arrears have been paid or declared and set apart for payment prior thereto, to vote
for the election of two directors of the Company, the holders of any Series A Preferred Stock being entitled to cast a number
of votes per share of Series A Preferred Stock equal to the Formula Number. Until the default in payments of all dividends which
permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the next
preceding sentence may be removed at any time, without cause, only by the affirmative vote of the holders of the shares of Series
A Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such
holders. If and when such default shall cease to exist, the holders of the Series A Preferred Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board shall be
reduced by two. The voting rights granted by this Section 3(d) shall be in addition to any other voting rights granted
to the holders of the Series A Preferred Stock in this Section.


 


(d)
Except as provided herein or by the Certificate or applicable law, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required for authorizing or taking any corporate action.


 


SECTION
4. Certain Restrictions. Whenever quarterly dividends or other dividends or distributions on the Series A Preferred Stock
as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall not


 


(i)
declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;


 


(ii)
declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;


 


(iii)
redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock; provided, however, that the Company may
at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Company
ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or


 


(iv)
purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined
by the Board) to all holders of such shares upon such terms as the Board, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.


 




    	 	4	 



    	 



    

 


(b)
The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under Section 4(a), purchase or otherwise acquire such shares at such time and
in such manner.


 


SECTION
5. Liquidation Rights. Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary,
no distribution shall be made (1) to the holders of any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred
Stock shall have received an amount equal to the accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, plus an amount equal to the greater of (x) $1.00 per whole share or (y) an aggregate amount per share
equal to the Formula Number then in effect times the aggregate amount to be distributed per share to holders of Common Stock or
(2) to the holders of any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all other such parity
stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution
or winding up; provided that no holder of any Series A Preferred Stock shall be authorized or entitled to receive upon
involuntary liquidation of the Company an amount in excess of $1.00 per share of Series A Preferred Stock. Neither the merger
or consolidation of the Company into or with another entity nor the merger or consolidation of any other entity into or with the
Company shall be deemed to be a liquidation, dissolution or winding up of the Company within the meaning of this Section 5.


 


SECTION
6. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then
in any such case the then outstanding shares of Series A Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share equal to the Formula Number then in effect times the aggregate amount of stock, securities, cash or any
other property (payable in kind), as the case may be, into which or for which each share of Common Stock is exchanged or changed.
In the event both this Section 6 and Section 2 appear to apply to a transaction, this Section 6 will control.


 


SECTION
7. No Redemption; No Sinking Fund; No Conversion. The shares of Series A Preferred Stock shall not be subject to redemption
by the Company or at the option of any holder of Series A Preferred Stock; provided, however, that, subject to Section
4(a)(iv), the Company may purchase or otherwise acquire outstanding shares of Series A Preferred Stock in the open market
or by offer to any holder or holders of shares of Series A Preferred Stock.


 


(a)
The shares of Series A Preferred Stock shall not (i) be subject to or entitled to the operation of a retirement, sinking fund
or purchase fund or (ii) be convertible into or exchangeable for shares of any other class or series.


 




    	 	5	 



    	 



    

 


SECTION
8. Ranking. The Series A Preferred Stock shall rank junior to all other series of Preferred Stock of the Company unless
the Board shall specifically determine otherwise in fixing the powers, preferences and relative, participating, optional and other
special rights of the shares of such series and the qualifications, limitations and restrictions thereof.


 


SECTION
9. Fractional Shares. The Series A Preferred Stock shall be issuable upon exercise of the Rights issued pursuant to the
Rights Agreement in whole shares or in any fraction of a share that is one one-thousandth of a share (as such fraction may be
adjusted as provided in the Rights Agreement) or any integral multiple of such fraction which shall entitle the holder, in proportion
to such holder’s fractional shares, to receive dividends, exercise voting rights, participate in distributions and to have
the benefit of all other rights of holders of Series A Preferred Stock. In lieu of fractional shares, the Company, prior to the
first issuance of a share or a fraction of a share of Series A Preferred Stock, may elect (a) to make a cash payment as provided
in the Rights Agreement for fractions of a share other than one one-thousandths of a share (as such fraction may be adjusted as
provided in the Rights Agreement) or any integral multiple thereof or (b) to issue depository receipts evidencing such authorized
fraction of a share of Series A Preferred Stock pursuant to an appropriate agreement between the Company and a depository selected
by the Company; provided, however, that such agreement shall provide that the holders of such depository receipts
shall have all the rights, privileges and preferences to which they are entitled as holders of the Series A Preferred Stock.


 


SECTION
10. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock, without designation as to series until such shares are once more designated
as part of a particular series by the Board pursuant to the provisions of the Certificate.


 


SECTION
11. Amendment. So long as any shares of Series A Preferred Stock shall be outstanding, (i) none of the powers, preferences
and relative, participating, optional and other special rights of the Series A Preferred Stock as herein provided shall be amended
in any manner which would alter or change the powers, preferences, rights or privileges of the holders of Series A Preferred Stock
so as to affect them adversely and (ii) no amendment, alteration or repeal of the Certificate or of the By-laws of the Company
shall be effected so as to affect adversely any of such powers, preferences, rights or privileges, in each case without the affirmative
vote of the holders of at least 66-2/3% of the outstanding shares of Series A Preferred Stock, voting as a separate class; provided,
however, that no such amendment, alteration or repeal approved by the holders of at least 66-2/3% of the outstanding shares
of Series A Preferred Stock shall be deemed to apply to the powers, preferences, rights or privileges of any holder of shares
of Series A Preferred Stock originally issued upon exercise of the Rights after the time of such approval without the approval
of such holder.


 




    	 	6	 



    	 



    

 


IN
WITNESS WHEREOF, the Company has caused this Certificate to be duly executed in its corporate name on this 3rd day of March,
2021.


 


	 	TARONIS
    FUELS, INC.
	 	 	        
	 	By:
    	 
	 	Name:	 
	 	Title:	 


 







    	 	7	 



    	 



    

 


EXHIBIT
B


 


[Form
of Right Certificate]


 


	Certificate
    No. [R]-	___________
    Rights


 


NOT
EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT (AS DEFINED BELOW)), OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.0001 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.


 


Right
Certificate


 


TARONIS
FUELS, INC.


 


This
certifies that                     ,
or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Section 382 Rights Agreement dated as of March 3, 2021 as it may be amended
from time to time (the “Rights Agreement”), between TARONIS FUELS, INC., a Delaware corporation (the “Company”),
and NEVADA AGENCY AND TRANSFER COMPANY (the “Rights Agent”), unless the Rights evidenced hereby shall have
been previously redeemed or exchanged by the Company, to purchase from the Company at any time after the Distribution Date (as
defined in the Rights Agreement) and at or prior to the earlier of (i) the Final Expiration Date (as defined in the Rights Agreement),
(ii) the Redemption Date (as defined in the Rights Agreement), (iii) the Close of Business (as defined in the Rights Agreement)
on the effective date of the repeal of Section 382 or any successor statute if the Board of the Directors of the Company determines
that the Rights Agreement is no longer necessary or desirable for the preservation of NOLs (as defined in the Rights Agreement)
or other Tax Benefits (as defined in the Rights Agreement), (iv) the Close of Business on the first day of a taxable year of the
Company to which the Board of Directors of the Company determines that no NOLs or other Tax Benefits may be carried forward, or
(v) the Close of Business on the 364th Day Date (as defined in the Rights Agreement) (the “Expiration Date”),
at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-thousandth
(1/1,000th) of a fully paid, nonassessable share of Series A Participating Cumulative Preferred Stock, par value $0.000001 per
share, of the Company (the “Preferred Shares”), at a purchase price per one one-thousandth (1/1,000th) of a
share equal to $25.00 (the “Purchase Price”) payable in cash, upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.


 


The
Purchase Price and the number and kind of shares which may be purchased upon exercise of each Right evidenced by this Right Certificate,
as set forth above, are the Purchase Price and the number and kind of shares which may be so purchased as of March 3, 2021. As
provided in the Rights Agreement, the Purchase Price and the number and kind of shares which may be purchased upon the exercise
of each Right evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.


 




    	 	1	 



    	 



    

 


If
the Rights evidenced by this Right Certificate are at any time beneficially owned by an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the Rights Agreement), such Rights shall be null and void and nontransferable
and the holder of any such Right (including any purported transferee or subsequent holder) shall not have any right to exercise
or transfer any such Right.


 


This
Right Certificate is subject to all the terms, provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof and to which reference to the Rights Agreement is
hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available from the Company upon written request.


 


This
Right Certificate, with or without other Right Certificates, upon surrender at the office of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling
the holder to purchase a like aggregate number and kind of shares as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not
exercised.


 


Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Right Certificate may be redeemed by the Company at its
option at a redemption price (in cash or shares of Common Stock, par value $0.000001 per share, of the Company or other securities
of the Company deemed by the Board of Directors of the Company to be at least equivalent in value) of $0.0001 per Right (which
amount shall be subject to adjustment as provided in the Rights Agreement) at any time prior to the earlier of (i) the Distribution
Date and (ii) the Expiration Date.


 


The
Company may, but shall not be required to, issue fractions of Preferred Shares or distribute certificates which evidence fractions
of Preferred Shares upon the exercise of any Right or Rights evidenced hereby, in each case other than fractions constituting
one one-thousandth (1/1,000th) of a share (as such fraction may be adjusted as provided in the Rights Agreement). In lieu of issuing
fractional shares, the Company may elect to make a cash payment as provided in the Rights Agreement for fractions of a share other
than one one-thousandth (1/1,000th) of a share (as such fraction may be adjusted as provided in the Rights Agreement) or any integral
multiple thereof or to issue certificates or utilize a depository arrangement as provided in the terms of the Rights Agreement
and the Preferred Shares.


 


No
holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company, including, without limitation, any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in accordance with the provisions of the Rights Agreement.


 


This
Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by an authorized signatory
of the Rights Agent.


 




    	 	2	 



    	 



    

 





WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal.


 


Dated
as of:


 


	 	TARONIS
    FUELS, INC.
	 	 	        
	 	By:
    	 
	 	Name:	 
	 	Title:	 


 


	Attest:	 
	 	 
	Name:	 
	Title:	 


 




    	 	3	 



    	 



    

 


Date
of countersignature:


 


Countersigned:


 


	NEVADA AGENCY AND TRANSFER COMPANY,
	as Rights Agent
	 	         	 
	By:		 
	Name:		 
	Title:		 


 




    	 	4	 



    	 



    

 


[On
Reverse Side of Right Certificate]


 


FORM
OF ELECTION TO PURCHASE


 


(To
be executed by the registered holder if

such holder desires to exercise the Rights

represented by this Right Certificate.)


 


To
the Rights Agent:


 


The
undersigned hereby irrevocably elects to exercise_______Rights represented by this Right Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such Rights and requests that certificates for such shares be issued in the name
of:


 


Please
insert social security or other identifying number


 


 





 



(Please
print name and address)


 


If
such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to:


 


Please
insert social security or other identifying number


 


 





 



(Please
print name and address)


 


Dated:
____________,


 





	 	 
	 	Signature


 


Signature
Guaranteed:


 


Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory
Authority, or a commercial bank or trust company having an office or correspondent in the United States.


 


The
undersigned hereby certifies that (1) the Rights evidenced by this Right Certificate are not being exercised by or on behalf of
a person who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement),
(2) this Right Certificate is not being sold, assigned or transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement) and (3) after due inquiry and to the
best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate from any person
who is or was an Acquiring Person or an Affiliate or Associate thereof.


 




    	 	5	 



    	 



    

 


Dated:
___________,


 





	 	 
	 	Signature


 


Signature
Guaranteed:


 


Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory
Authority, or a commercial bank or trust company having an office or correspondent in the United States.


 




    	 	 	 



    	 



    

 


FORM
OF ASSIGNMENT


 


(To
be executed by the registered holder if such

holder desires to transfer the Right Certificate.)


 


FOR
VALUE RECEIVED ____________ hereby sells, assigns and transfer unto_____________________


 


 





 



(Please
print name and address of transferee)


 


 





 



 


this
Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ________Attorney,
to transfer the within Right Certificate on the books of the within-named Corporation, with full power of substitution.


 


Dated:
____________, ____


 





	 	 
	Signature	 


 


Signature
Guaranteed:


 


Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory
Authority, or a commercial bank or trust company having an office or correspondent in the United States.


 


The
undersigned hereby certifies that (1) the Rights evidenced by this Right Certificate are not being sold, assigned or transferred
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), (2) this Right Certificate is not being sold, assigned or transferred to or on behalf of any such Acquiring
Person, Affiliate or Associate and (3) after inquiry and to the best knowledge of the undersigned, the undersigned did not acquire
the Rights evidenced by this Right Certificate from any Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).


 





	 	 
	Signature	 


 




    	 	 	 



    	 



    

 


NOTICE


 


The
signature on the foregoing Form of Election to Purchase or Form of Assignment must correspond to the name as written upon the
face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.


 




    	 	 	 



    	 



    

 


EXHIBIT
C


 


RIGHTS
BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS OR THEIR





AFFILIATES
OR ASSOCIATES AND BY ANY SUBSEQUENT HOLDER OF SUCH





RIGHTS
ARE NULL AND VOID AND NONTRANSFERABLE.


 


SUMMARY
OF RIGHTS TO PURCHASE





SERIES
A PARTICIPATING CUMULATIVE PREFERRED STOCK





OF
TARONIS FUELS, INC.


 


On
March 3, 2021, the Board of Directors (the “Board”) of TARONIS FUELS, INC., a Delaware corporation (the “Company”),
adopted a Section 382 Rights Agreement (as may be amended from time to time, the “Rights Agreement”), between
the Company and Nevada Agency and Transfer Company (the “Rights Agent”) in an effort to protect shareholder
value by, among other things, protecting against a possible limitation on the Company’s ability to use its net operating
loss carryforwards (the “NOLs”) and other tax benefits to reduce potential future United States Federal income
tax obligations (“Tax Benefits”). The Company has experienced substantial operating losses, and under the Internal
Revenue Code of 1986, as amended (the “Code”), and rules promulgated thereunder, the Company may “carry
forward” these NOLs and other tax benefits in certain circumstances to offset any current and future earnings and thus reduce
the Company’s federal income tax liability, subject to certain requirements and restrictions. To the extent that the NOLs
and other tax benefits do not otherwise become limited, the Company believes that it will be able to carry forward a significant
amount of NOLs and other tax benefits arising in the future, and therefore these NOLs and other tax benefits could be a substantial
asset to the Company. However, if the Company experiences an “ownership change,” as defined in Section 382 of the
Code, its ability to use the NOLs and other tax benefits will be substantially limited, including that the timing of the usage
of the NOLs and other tax benefits could be substantially delayed, which could therefore significantly impair the value of those
assets. The description and terms of the Rights are set forth in the Rights Agreement.


 


On
March 3, 2021, the Board declared a dividend of one right (the “Rights”) for each outstanding share Common
Stock, par value $0.000001 per share, of the Company (the “Common Shares”). The Rights will be issued to the
holders of record of Common Shares outstanding at March 3, 2021 (the “Record Date”) and with respect to Common
Shares issued thereafter until the Distribution Date (as defined below). Each Right, when it becomes exercisable as described
below, will entitle the registered holder to purchase from the Company one one-thousandth (1/1,000th) of a share of Series A Participating
Cumulative Preferred Stock, par value $0.000001 per share, of the Company (the “Preferred Shares”) at a price
of $25.00 (the “Purchase Price”).


 




    	 	 	 



    	 



    

 


Until
the earlier of (i) such time as the Company learns that a person or group (including any affiliate or associate of such person
or group) has acquired, or obtained the right to acquire, beneficial ownership of 4.99% or more of the outstanding Common Shares
(any such person or group being called an “Acquiring Person”) and (ii) such date, if any, as may be designated
by the Board following the commencement of, or first public disclosure of an intention to commence, a tender or exchange offer
for outstanding Common Shares which could result in such person or group becoming the beneficial owner of 4.99% or more of the
outstanding Common Shares, (the earlier of such dates being called the “Distribution Date”), the Rights will
be evidenced by certificates for Common Shares registered in the names of the holders thereof, or, in the case of Common Shares
held in uncertificated form, by the transaction statement or other record of ownership of such Common Shares, and not by separate
Right Certificates. Generally, the Rights Agreement provides that any person or group (including any affiliate or associate of
such person or group) (a “Grandfathered Person”) which beneficially owned (as disclosed in public filings with
the Securities and Exchange Commission) 4.99% or more of the outstanding Common Shares as of the close of business on the date
of the Rights Agreement (the percentage of such ownership, the “Grandfathered Percentage”) will not be deemed
an “Acquiring Person” unless such Grandfathered Person exceeds its Grandfathered Percentage by 0.5% or more of the
outstanding shares of Common Stock. If any Grandfathered Person shall sell, transfer or otherwise dispose of any outstanding Common
Shares after the close of business on the date of the Rights Agreement, the related Grandfathered Percentage shall then mean the
lesser of (a) the Grandfathered Percentage as in effect immediately prior to such sale, transfer or disposition and (b) the percentage
of outstanding Common Shares of the Company that such Grandfathered Person beneficially owns immediately following such sale,
transfer or disposition; provided, however, if at any time after the close of business on the date of the Rights
Agreement, such Grandfathered Person is the beneficial owner of less than 4.99% of the outstanding Common Shares, then such person
or group (including any affiliate or associate of such person or group) will cease to be a Grandfathered Person. Additionally,
the Rights Agreement includes procedures whereby the Board, or a duly constituted committee of Independent Directors, will consider
requests to exempt (a) any person or group (including any affiliate or associate of such person or group) (an “Exempt
Person”) that would otherwise be an “Acquiring Person”, or (b) any transaction (an “Exempt Transaction”)
resulting in the beneficial ownership of Common Shares, prior to the consummation of such transaction, from the Acquiring Person
trigger, in each case if the Board, or a duly constituted committee of Independent Directors, determines in its sole discretion
either that such person or group (including any affiliate or associate of such person or group) or such transaction (i) will not
jeopardize or endanger the availability of the NOLs or other tax benefits to the Company or (ii) is otherwise in the best interest
of the Company; provided that, (A) in the case of an Exempt Person, if the Board, or a duly constituted committee of Independent
Directors, later makes a contrary determination with respect to the effect of such person or group’s (including any affiliate
or associate of such person or group) beneficial ownership with respect to the availability to the Company of its NOLs or other
tax benefits, such person or group (including any affiliate or associate of such person or group) shall cease to be an Exempt
Person and (B) in the case of an Exempt Person or Exempt Transaction, the Board, or a duly constituted committee of Independent
Directors, may require the applicable person or group (including any affiliate or associate of such person or group) to make certain
representations or undertakings, the violation or attempted violation of which will be subject to such consequences as the Board,
or a duly constituted committee of Independent Directors, may determine it its sole discretion, including that such person or
group (including any affiliate or associate of such person or group) shall become an “Acquiring Person”.


 


With
respect to any Common Shares outstanding as of the Record Date, until the earliest of the Distribution Date, the Redemption Date
or the Expiration Date, (i) in the case of certificated shares, the Rights associated with the Common Shares represented by a
certificate shall be evidenced by such certificate along with a copy of this Summary of Rights, and the surrender for transfer
of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares represented thereby,
and (ii) in the case of Common Shares held in uncertificated form, the Rights associated with the Common Shares shall be evidenced
by the balances indicated in the book-entry account system of the transfer agent for the Common Shares, and the transfer of any
Common Shares in the book-entry account system of the transfer agent for such Common Shares shall also constitute the transfer
of the Rights associated with such Common Shares. Therefore, until the Distribution Date, the Rights will be transferred with
and only with the underlying Common Shares.


 




    	 	 	 



    	 



    

 


As
soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”)
will be mailed to holders of record of the Common Shares as of the close of business on the Distribution Date, and such separate
Right Certificates alone will thereafter evidence the Rights.


 


The
Rights are not exercisable until the Distribution Date and will expire upon the earlier of (i) the close of business on March
2, 2024 (ii) the Redemption Date, (iii) the close of business on the effective date of the repeal of Section 382 or any successor
statute if the Board determines that the Rights Agreement is no longer necessary or desirable for the preservation of NOLs or
other Tax Benefits, (iv) the close of business on the first day of a taxable year of the Company to which the Board determines
that no NOLs or other Tax Benefits may be carried forward, or (v) the Close of Business on the 364th Day Date (as defined
in the Rights Agreement) (the earliest of the events described in clauses (i), (iii), (iv) or (v) being herein referred to as
the “Expiration Date”).


 


The
number of Preferred Shares or other securities issuable upon exercise of the Rights is subject to adjustment by the Board in the
event of any change in the Common Shares or Preferred Shares, whether by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations,
other similar changes in capitalization, any distribution or issuance of assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares or otherwise. The Purchase Price and the number of Preferred
Shares or other securities issuable upon exercise of the Rights are subject to adjustment from time to time in the event of the
declaration of a stock dividend on the Common Shares payable in Common Shares or a subdivision or combination of the Common Shares
prior to the Distribution Date.


 


The
Preferred Shares are authorized to be issued in fractions which are an integral multiple of one one-thousandth (1/1,000th) of
a Preferred Share. The Company may, but is not required to, issue fractions of shares upon the exercise of Rights (other than
one one-thousandths (1/1000ths) of a Preferred Share (as such fraction may be adjusted as provided in the Rights Agreement) or
any integral multiple thereof), and in lieu of fractional shares, the Company may make a cash payment based on the market price
of such shares on the first trading date prior to the date of exercise or utilize a depositary arrangement as provided by the
terms of the Preferred Shares.


 


Subject
to the right of the Board to redeem or exchange the Rights as described below, on the first date of public announcement by the
Company or any Acquiring Person that a Person has become an Acquiring Person, or such earlier date as a majority of the Board
shall become aware of the existing of an Acquiring Person, the holder of each Right will thereafter have the right to receive,
upon exercise thereof, for the Purchase Price, that number of one one-thousandths (1/1,000ths) of a Preferred Share equal to the
number of Common Shares which at the time of such transaction would have a market value of twice the Purchase Price. Any Rights
that are or were beneficially owned by an Acquiring Person on or after the Distribution Date will become null and void and will
not be subject to the “flip-in” provision.


 


In
the event the Company is acquired in a merger or other business combination by an Acquiring Person that is a publicly traded corporation
or 50% or more of the Company’s assets or assets representing 50% or more of the Company’s earning power are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to an Acquiring Person that is a publicly traded corporation,
proper provision must be made so that each Right will entitle its holder to purchase, for the Purchase Price, that number of common
shares of such corporation which at the time of the transaction would have a market value of twice the Purchase Price. In the
event the Company is acquired in a merger or other business combination by an Acquiring Person that is not a publicly traded entity
or 50% or more of the Company’s assets or assets representing 50% or more of the earning power of the Company are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to an Acquiring Person that is not a publicly traded
entity, proper provision must be made so that each Right will entitle its holder to purchase, for the Purchase Price, at such
holder’s option, (i) that number of shares of the surviving corporation in the transaction with such entity which at the
time of the transaction would have a book value of twice the Purchase Price or (ii) that number of shares of such entity which
at the time of the transaction would have a book value of twice the Purchase Price or (iii) if such entity has an affiliate which
has publicly traded common shares, that number of common shares of such affiliate which at the time of the transaction would have
a market value of twice the Purchase Price. The “flip-over” provision only applies to a merger or similar business
combination with an Acquiring Person.


 




    	 	 	 



    	 



    

 


ANY
RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE AN ACQUIRING PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (OR A TRANSFEREE THEREOF) WILL BECOME NULL AND VOID AND ANY HOLDER
OF ANY SUCH RIGHT (INCLUDING ANY SUBSEQUENT HOLDER) WILL BE UNABLE TO EXERCISE ANY SUCH RIGHT.


 


The
Rights are redeemable by the Board at a redemption price of $0.0001 per Right (the “Redemption Price”) any
time prior to the earlier of (i) the Distribution Date and (ii) the Expiration Date (the date of such redemption being the “Redemption
Date”). Immediately upon the action of the Board electing to redeem the Rights, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the
Redemption Price.


 


After
there is an Acquiring Person the Board may elect to exchange each Right (other than Rights owned by an Acquiring Person) for consideration
per Right consisting of (i) one-half of the securities that would be issuable at such time upon the exercise of one Right pursuant
to the terms of the Rights Agreement or (ii) cash, Preferred Shares (including fractions thereof), Common Shares, in the case
of holders of Common Shares (including fractions thereof) or other equity or debt securities (or any combination of any of the
foregoing) having an aggregate value equal to one-half of the value of Preferred Shares (including fractions thereof) that would
be issuable at such time upon the exercise of one Right pursuant to the terms of the Rights Agreement. Notwithstanding the foregoing,
the Board is not empowered to effect such exchange at any time after any person (other than the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any such subsidiary, or any entity holding Common Shares for or pursuant
to the terms of any such plan), together with all affiliates and associates of such person, becomes the beneficial owner of 50%
or more of the Common Shares then outstanding.


 


If
the Board elects to mandatorily exchange any Rights, the Board may, at its option and without limiting any rights the Company
may have under the Rights Agreement, cause the Company to enter into one or more arrangements it deems necessary or appropriate
to implement and give effect to such mandatory exchange in the manner contemplated by the Rights Agreement, including by establishing
one or more trusts or other mechanisms for the proper and orderly distribution of the securities and/or cash to be exchanged therefor.


 


At
any time prior to the date the Company learns that a person or group (including any affiliate or associate of such person or group)
has become an Acquisition Person (subject to exceptions), the Company may, without the approval of any holder of the Rights, supplement
or amend any provision of the Rights Agreement (including the date on which the Distribution Date will occur, the amount of the
Purchase Price or the definition of “Acquiring Person”), except that no supplement or amendment may be made that extends
the Expiration Date or reduces the Redemption Price.


 


Until
a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.


 


A
copy of the Rights Agreement, including the terms of the Preferred Shares, will be filed with the Securities and Exchange Commission
as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights Agreement is available free of charge from the Company
upon written request. This summary description of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated herein by reference.