Execution
Copy


 


SECURITIES
PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of April 3, 2018, (the “Effective
Date”) by and among JOSEPH KNIERIEM, ROBERT BAKER (each a “Seller,” and collectively the “Sellers”),
TRICO WELDING SUPPLIES, INC., a California corporation (the “Company”), MAGNEGAS CORPORATION,
a Delaware corporation (the “Purchaser”), and MagneGas Welding Supply,
LLC, a Delaware limited liability company and wholly owned subsidiary of Purchaser (the “Purchaser Designee”).


 


RECITALS:


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement the Sellers desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Sellers, securities of the Company, as more fully described in this Agreement.


 


WHEREAS,
the Purchaser has designated the Purchaser Designee as the entity that will receive the Securities (defined below).


 


AGREEMENT:


 


NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Sellers, Company and each Purchaser agree as follows:


 


1)
PURCHASE AND SALE OF SECURITIES.


 


a)
Purchase of Shares of Common Stock. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 7 and
8 below, the Sellers will sell to the Purchaser, and the Purchaser agrees to purchase from the Sellers, on the Closing Date (as
defined below) (i) such aggregate number of shares of Common Stock as are set forth opposite such Purchaser’s name in column
(3) on the Schedule of Purchasers (the “Securities”).


 


b)
Closing. The closing (the “Closing”) of the purchase of the Securities by the Purchaser shall occur
remotely through the electronic exchange of documents on the Effective Date (the “Closing Date”), subject to
the conditions to the Closing set forth in Sections 7 and 8 below having been satisfied or waived (or such other date as is mutually
agreed to by the Sellers and the Purchaser).


 


c)
Purchase Price. The aggregate purchase price for the Securities to be purchased by the Purchaser shall be the amount set
forth opposite such Purchaser’s name in column (3) on the Schedule of Purchasers. The purchase price for the Securities
will be US$2,000,000 (the “Purchase Price”) in cash and payable as set forth on the Schedule of Purchasers.
The Sellers acknowledge and confirm that the Purchaser made a US$1,000,000 deposit toward the Purchase Price on March 21, 2018.


 




    	1



    	 



    

 


Execution
Copy


 


d)
Form of Payment. On the Closing Date, (i) the Purchaser shall pay the balance of the Purchase Price by wire transfer of
immediately available funds and (ii) the Sellers shall deliver to the Purchaser stock certificates duly endorsed to effect the
transfer of the Securities to the Purchaser Designee.


 


2)
PURCHASER’S REPRESENTATIONS AND WARRANTIES.


 


The
Purchaser represents and warrants to each of the Sellers that, as of the date hereof and as of the Closing Date:


 


a)
Organization; Authority. The Purchaser is an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.


 


b)
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Purchaser
and shall constitute the legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance
with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.


 


c)
No Conflicts. The execution, delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser
of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the
Purchaser, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which the Purchaser is a party, or (iii) result in a violation of any order, judgment or decree applicable to
the Purchaser.


 


d)
Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is an “Accredited
Investor”) as defined in Rule 501(a) under the Securities Act of 1933, as amended (“Securities Act”).


 




    	2



    	 



    

 


Execution
Copy


 


e)
Purchasers Investment Experience. The Purchaser, together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.


 


f)
No General Solicitation. The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television
or radio or presented ay any seminar or any other general solicitation or general advertisement.


 


g)
Investment Intent. Purchaser is purchasing the Securities for Purchaser’s own account and not with a view to or for
sale in connection with any distribution of the Securities.


 


h)
Brokers. Any brokerage or finder’s fees or commissions owed by Purchaser to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction
Document will be paid in full at the time of the Closing.


 


i)
Effect of Purchaser Reps. The Sellers and the Company acknowledge and agree that the representations contained in this
Section 2 shall not modify, amend or affect such Purchaser’s right to rely on the Sellers’ or the Company’s
representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of
the transactions contemplated hereby.


 


3)
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
AND COMPANY.


 


The
Sellers and Company represent and warrant, joint and severally, to the Purchaser that, as of the date hereof and as of the Closing
Date:


 




    	3



    	 



    

 


Execution
Copy


 


a)
Organization and Qualification. The Company is an entity duly organized and validly existing and in good standing under
the laws of the jurisdiction in which it is formed, and has the requisite power and authority to own its property and to carry
on business as now being conducted and as presently proposed to be conducted. The Company is duly qualified as a foreign entity
to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing
would not reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, results of operations,
condition (financial or otherwise), individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the
other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii)
the authority or ability of the Company to enter into or perform any of its obligations under any of the Transaction Documents
(as defined below), and shall specifically not include (x) changes in laws, GAAP or enforcement or interpretation thereof, (y)
changes that generally affect the industries and markets, general economic conditions or political conditions, or (z) any action
taken or failed to be taken pursuant to or in accordance with this Agreement or at the request of, or consented to by, the Purchaser.
Other than the Persons (as defined below) set forth on Schedule 3), the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration
of such Person. As used in this Agreement, “actual
knowledge of the Sellers” or “actual knowledge of any Sellers” refers to the actual knowledge of
Joseph Knieriem and Robert Baker, both in the individual capacities and in their respective roles with the Company as of the Closing
Date.


 


b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents in accordance with the terms hereof and thereof. The execution and delivery
of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly consented to by the Company’s board of directors, and no further consent
or authorization is required by the Company, its board of directors or its stockholders. This Agreement has been, and the other
Transaction Documents to which it is a party will be prior to the Closing, duly executed and delivered by the
Company, and constitutes the legal, valid and binding obligations of the Company, enforceable
against each in accordance with its respective terms, except as the enforceability hereof may be subject to or limited by applicable
bankruptcy, insolvency, reorganization, or other similar laws affecting creditors’ rights generally and to general principles
of equity being applied at the discretion of the courts. “Transaction Documents” means, collectively, this
Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection
with the transactions contemplated hereby and thereby, as may be amended from time to time.


 






    	4



    	 



    




 


Execution
Copy


 


c)
Original Issuance of Securities. The Securities when originally issued were duly authorized, validly issued, fully paid
and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes,
rights of first refusal, encumbrances, security interests and other encumbrances (collectively “Liens”) with
respect to the issuance thereof. The original issuance by the Company of the Securities was effected pursuant to an exemption
from the registration requirements of Section 5 of the Securities Act.


 


d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Articles of Incorporation
(as defined below) (including, without limitation, any certificate of designations contained therein), Bylaws (as defined below)
or other organizational documents of the Company, or any capital stock or other securities of the Company, (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company is a party, or (iii) result in a violation of any order, judgment or decree (including, without limitation,
those relating to federal and state securities laws, rules and regulations) applicable to the Company or by which any property
or asset of the Company is bound or affected.


 


e)
Consents. The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration
with any Governmental Entity (as defined below) in order for it to execute, deliver or perform any of its respective obligations
under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have
been or will be obtained or effected on or prior to the Closing Date. “Governmental Entity” means any federal,
state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal,
foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch,
department, official, or entity and any court or other tribunal).


 


f)
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Sellers and Company acknowledge and agree that Purchaser
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that Purchaser is not (i) an officer or director of the Company, (ii) an “affiliate”
(as defined in Rule 144 promulgated under the Securities Act (or successor rule thereto) (collectively, “Rule 144”))
of the Company, or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares representing
the Securities (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)). The Sellers and Company further acknowledges that Purchaser is not acting as a financial advisor or fiduciary
of the Sellers or Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by the Purchaser or any of its representatives or agents in connection with this Agreement
and the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Purchaser’s
purchase of the Securities. The Sellers and Company further represent to the Purchaser that the Company’s decision to enter
into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Sellers, Company
and their respective representatives.


 




    	5



    	 



    

 


Execution
Copy


 


g)
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Sellers or Company to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents.


 


h)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary
action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison
pill (including, without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover
provision under its organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could
become applicable to Purchaser as a result of the transactions contemplated by this Agreement, including, without limitation,
Purchaser’s ownership of the Securities. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any stockholder rights agreement or similar arrangement relating to accumulations of beneficial
ownership of the Securities or a change in control of the Company.


 


i)
Financial Statements. The Company’s fiscal year end is June 30th. The Company has previously delivered to Purchaser
the following: un-audited balance sheet and statements of income, and cash flow of the Company as of and for the last three (3)
fiscal years (collectively the “Financial Statements”). The Financial Statements were prepared in accordance
with United States Generally Accepted Accounting Principles (“U.S. GAAP”) applied on a consistent basis throughout
the periods covered thereby, present fairly and accurately the financial condition of the Company as of such dates and the results
of operations for such periods and are correct and complete, and are consistent with the books and records of the Company. The
Company is not currently contemplating to amend or restate any of the Financial Statements (including, without limitation, any
notes or any letter of the independent accountants of the Company with respect thereto), nor is the Company currently aware of
facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order
for any of the Financials Statements to be in compliance with GAAP. The Company has not been informed by its accountants that
they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to
amend or restate any of the Financial Statements.


 




    	6



    	 



    

 


Execution
Copy


 


j)
Absence of Certain Changes. Since the date of the Company’s most recent financial statement provided to Purchaser,
there has been no Material Adverse Change in the business, assets, liabilities, properties, operations (including results thereof),
or condition (financial or otherwise) of the Company. Since the date of the Company’s most recent financial statement provided
to Purchaser, the Company has not (i) declared or paid any dividends (except for the purpose of redeeming certain shareholder
interests on or before the Closing Date and making other distributions at or immediately prior to the Closing which Buyer is aware
of), (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any capital
expenditures, individually or in the aggregate, outside of the ordinary course of business. The Company has not taken any steps
to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation
or winding up, nor does the Company have any knowledge or reason to believe that any of its respective creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company
is not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not
be Insolvent (as defined below). For purposes of this Section, “Insolvent” means, with respect to the Company,
on a consolidated basis: (i) the present fair saleable value of the Company’s assets is less than the amount required to
pay its respective total Indebtedness (as defined below), or (ii) the Company is unable to pay its respective debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured.


 


k)
No Undisclosed Events, Liabilities, Developments or Circumstances. To any Sellers’ actual knowledge, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company or
its respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial
or otherwise), that could have a Material Adverse Effect.


 


l)
Conduct of Business; Regulatory Permits. The Company is not in violation of any term of or in default under its organizational
documents, any certificate of designations, preferences or rights of any other outstanding series of preferred stock of the Company
or its articles of incorporation or bylaws, respectively. The Company is not in violation of any judgment, decree or order. To
any Seller’s actual knowledge, the Company is not in violation of any statute, ordinance, rule or regulation applicable
to the Company, except in all cases for possible violations which could not, individually or in the aggregate, have a Material
Adverse Effect. The Company possesses all certificates, authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct its business, except where the failure to possess such certificates, authorizations or permits would not
have, individually or in the aggregate, a Material Adverse Effect, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment,
judgment, injunction, order or decree binding upon the Company or to which the Company is a party which has or would reasonably
be expected to have the effect of prohibiting or materially impairing any business practice of the Company, any acquisition of
property by the Company or the conduct of business by the Company as currently conducted other than such effects, individually
or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company.


 




    	7



    	 



    

 


Execution
Copy


 


m)
Foreign Corrupt Practices. To the actual knowledge of any Seller, neither the Sellers, Company, or any director, officer,
agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company
Affiliate”) have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable
anti-bribery or anti-corruption laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment
of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or
any other person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any
candidate for political office (individually and collectively, a “Government Official”) or to any person under
circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing
of value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:


 


i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official
to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government
Official to influence or affect any act or decision of any Governmental Entity, or


 


ii)
assisting the Company in obtaining or retaining business for or with, or directing business to, the Company.


 


n)
Transactions With Affiliates. Except as set forth on Schedule 3(n) attached hereto, no current employee, director,
officer or stockholder (direct or indirect) of the Company, or, to the actual knowledge of any Seller, any affiliate of any thereof,
or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently, or has ever been,
(i) a party to any transaction with the Company (including any contract, agreement or other arrangement providing for the furnishing
of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer or
stockholder or such associate or affiliate or relative (other than for ordinary course services as employees, officers or directors
of the Company)) or (ii) the direct or indirect owner of an interest in any corporation, firm, association or business organization
which is a competitor, supplier or customer of the Company, nor does any such Person receive income from any source other than
the Company which relates to the business of the Company or should properly accrue to the Company. Except as set forth on Schedule
3(n) attached hereto, no employee, officer, stockholder or director of the Company, or to the actual knowledge of any Seller
any member of his or her immediate family, is indebted to the Company, nor is the Company indebted (or committed to make loans
or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement
for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available
to all employees or executives of a similar employment level (including stock option agreements outstanding under any stock option
plan approved by the Board of Directors of the Company).


 




    	8



    	 



    

 


Execution
Copy


 


o)
Equity Capitalization. 


 


i)
Definition. “Common Stock” means (i) the Company’s shares of common stock, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common
stock.


 


ii)
Authorized and Outstanding Capital Stock. As of the Effective Date hereof, the authorized capital stock of the Company
consists of 10,000 shares of Common Stock, of which, 6,000 are issued and outstanding. All of the share of Common Stock outstanding
are owned, collectively, by the Sellers.


 


iii)
Valid Issuance; Available Shares. All of such outstanding shares are duly authorized and have been validly issued and are
fully paid and non-assessable. Schedule 3(o)(iii) sets forth the number of shares of Common Stock that are reserved for
issuance pursuant to warrants, options, convertible securities or other similar instruments.


 


iv)
Existing Securities; Obligations. Except as disclosed on Schedule 3(o)(iii), (A) none of the Company’s shares,
interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company;
(B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock
of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue
additional shares, interests or capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company; (C) there are no agreements or arrangements under which the Company is obligated to
register the sale of any of their securities under the Securities Act; (D) there are no outstanding securities or instruments
of the Company which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem a security of the Company; (E) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the issuance of the securities; and (F) the Company does
not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.


 




    	9



    	 



    

 


Execution
Copy


 


v)
Organizational Documents. The Sellers and the Company have furnished to the Purchasers true, correct and complete copies
of the Company’s Articles of Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”),
and the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”).


 


p)
Indebtedness and Other Contracts. The Company, except as disclosed on Schedule 3(p), does not have any outstanding
debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments, other than in the
ordinary course of business, evidencing Indebtedness of the Company or by which the Company is or may become bound, including
the guaranty of any debt of another Person.


 


q)
Litigation. There is no action, suit, arbitration, proceeding, or to the actual knowledge of any Seller, inquiry or investigation
before or by any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the actual
knowledge of any Seller, threatened against or affecting the Sellers, the Company, the Securities or any of the Company’s
officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in
Schedule 3(q). No director, officer or employee of the Company has willfully violated 18 U.S.C. §1519 or engaged in
spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and to the actual
knowledge of any Seller, there is not pending or contemplated, any investigation by the U.S Securities and Exchange Commission
(“SEC”) involving the Sellers, Company, or any current or former director or officer of the Company. The SEC
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under
the Securities Act or the Exchange Act. The Company is not subject to any order, writ, judgment, injunction, decree, determination
or award of any Governmental Entity, except as set forth on Schedule 3(q).


 


r)
Insurance. The Company has not been refused any insurance coverage sought or applied for, and the Company has no any reason
to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
The Company has followed the advice of its insurance agent, DCD insurance services, in selecting insurers, losses and risks to
be insured against, and coverage amounts.


 




    	10



    	 



    

 


Execution
Copy


 


s)
Employee Relations. The Company is not a party to any collective bargaining agreement or employs any member of a union.
To the actual knowledge of any Seller, no executive officer or other key employee of the Company has notified the Company that
such officer intends to leave the Company or otherwise terminate such officer’s employment with the Company. To the actual
knowledge of any Seller, no executive officer or other key employee of the Company is, or is now expected to be, in material violation
of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive
officer or other key employee (as the case may be) does not subject the Company to any liability with respect to any of the foregoing
matters. To the actual knowledge of Sellers’, the Company is in material compliance with all federal, state, local and foreign
laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and
wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.


 


t)
Title.


 


i)
Real Property. The Company holds good title to all real property, leases in real property, facilities or other interests
in real property owned or held by the Company (the “Real Property”) (as applicable). The Real Property is free
and clear of all Liens and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations,
or limitations of any nature except for (a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions
that do not impair the present or anticipated use of the property subject thereto. Any Real Property held under lease by the Company
is held by it under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the Company.


 


ii)
Fixtures and Equipment. The Company (as applicable) has good title to, or a valid leasehold interest in, the tangible personal
property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by the Company in connection
with the conduct of its business (the “Fixtures and Equipment”). The Company owns all of its Fixtures and Equipment
free and clear of all Liens except for (a) liens for current taxes not yet due and (b) zoning laws and other land use restrictions
that do not impair the present or anticipated use of the property subject thereto.


 


iii)
Intellectual Property Rights. Each patent owned by the Company is listed on Schedule 3(t)(iii). The Company has
not received notice of any infringement of the Intellectual Property Rights of others. There is no claim, action or proceeding
being made or brought, or to the actual knowledge of any Seller, being threatened, against the Company regarding any trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, trade secrets and other intellectual property rights and all applications and registrations therefor (“Intellectual
Property Rights”) necessary to conduct its business as now conducted and presently proposed to be conducted. To the
actual knowledge of the Sellers, there are no facts or circumstances which might give rise to any of the foregoing infringements
or claims, actions or proceedings.


 




    	11



    	 



    

 


Execution
Copy


 


u)
Environmental Laws.


 


i)
The Company (A) is, to the actual knowledge of the Sellers, in compliance with any and all Environmental Laws (as defined below),
(B) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses
and (C) is in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. No governmental inspection concerning Environmental Laws has resulted in a finding of any violations of Environmental
Laws by the Company. The term “Environmental Laws” means all federal, state, or local laws relating to pollution
or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 


ii)
To the actual knowledge of the Sellers, no Hazardous Materials:


 


(1)
have been disposed of or otherwise released from any Real Property of the Company in violation of any Environmental Laws; or


 


(2)
are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation
of any Environmental Laws. No prior use by the Company of any Real Property has occurred that violates any Environmental Laws,
which violation would have a material adverse effect on the business of the Company


 


iii)
The Company does not know of any other person who or entity which has stored, treated, recycled, disposed of or otherwise located
on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and polychlorinated biphenyls.


 


iv)
No Real Property is on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related
Liens.


 




    	12



    	 



    

 


Execution
Copy


 


v)
Tax Status. The Company (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”).


 


w)
Illegal or Unauthorized Payments; Political Contributions. Neither the Sellers, nor the Company, nor to each Seller’s
actual knowledge any of the officers, directors, employees, agents or other representatives of the Company or any other business
entity or enterprise with which the Sellers or Company is or has been affiliated or associated, has, directly or indirectly, made
or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable
law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective
or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the
Company.


 


x)
Money Laundering. The Sellers and the Company are in compliance with, and have not previously violated, the USA Patriot
Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation,
the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations
contained in 31 CFR, Subtitle B, Chapter V.


 


aa)
Management. Except as set forth in Schedule 3(aa) hereto, during the past five (5) year period, no current or former
officer or director or, to the actual knowledge of any Seller, no current ten percent (10%) or greater stockholder of the Company
has been the subject of:


 


i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal
agent or similar officer for such Person, or any partnership in which such person was a general partner at or within two (2) years
before the filing of such petition or such appointment, or any corporation or business association of which such person was an
executive officer at or within two (2) years before the time of the filing of such petition or such appointment;


 


ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do
not relate to driving while intoxicated or driving under the influence);


 


iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:


 




    	13



    	 



    

 


Execution
Copy


 


(1)
acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in
or continuing any conduct or practice in connection with such activity;


 


(2)
engaging in any particular type of business practice; or


 


(3)
engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation
of securities laws or commodities laws;


 


iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise
limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub-paragraph,
or to be associated with persons engaged in any such activity;


 


v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or


 


vi)
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.


 


bb)
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.


 


cc)
Registration Rights. No holder of Securities of the Company has rights to the registration of any securities of the Company.


 


dd)
Disclosure. The Sellers and Company understand and confirm that the Purchaser will rely on the foregoing representations
in effecting transactions in Securities of the Company. All disclosure provided to the Purchaser regarding the Sellers and the
Company, their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or
on behalf of the Sellers and the Company is true and correct and does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Sellers and the
Company to the Purchaser pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole,
will be true and correct in all material respects as of the date on which such information is so provided and will not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The Sellers and Company acknowledge and agree that the
Purchaser does not make or has not made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section Error! Reference source not found..


 




    	14



    	 



    

 


Execution
Copy


 


ee)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 2,
no registration under the Securities Act is required for the offer and sale of the Securities.


 


ff)
No General Solicitation. Neither the Sellers, the Company nor any person acting on behalf of the Sellers or Company has
offered or sold any of the Securities by any form of general solicitation or general advertising.


 


gg)
Material Contracts; Customers; Suppliers.


 


i)
Schedule 3(gg)(i) attached hereto lists and briefly describes all Material Contracts as of the Closing Date. As used herein,
the term “Material Contract” shall mean a contract, agreement, instrument, arrangement, understanding, lease,
or rental agreement, whether written or verbal, to which the Company is a party, which (i) provides for aggregate payments by
or to the Company of U.S. $25,000.00 or more, or (ii) by its terms extends for a period ending (or is not otherwise terminable
for a period of) more than one year after the Closing Date. To the actual knowledge of any Seller, each such contract is enforceable
pursuant to its terms and the Company has not received any notice alleging that it is in material breach or violation of, or in
default under, any provision of such Material Contracts. To the actual knowledge of the Sellers, with respect to any specific
Material Contract, the Closing of the transactions contemplated by this Agreement do not require prior notice to or consent from
the counterparty to any Material Contract.


 


ii)
Schedule 3(gg)(ii) sets forth a list of customers of the Company, who have generated at least U.S. $25,000.00 or more in
sales for the Company during each of the fiscal years ending 2015 and 2016. Unless otherwise listed under Material Contracts in
Schedule 3(gg)(i), these customers are not subject to any contract with the Company that currently extends more than one
(1) year after the Closing Date.


 


iii)
Schedule 3(gg)(iii) sets forth a list of vendors or suppliers to the Company, based on the value of purchases in excess
of U.S. $25,000.00 or more made from such suppliers during the 2016 and 2017 fiscal years. Unless otherwise listed under Material
Contracts in Schedule 3(gg)(i), these vendors and suppliers are not subject to any contract with the Company that currently
extends more than one (1) year after the Closing Date.


 




    	15



    	 



    

 


Execution
Copy


 


hh)
Employee Benefits. Schedule 3(hh) lists each non-qualified deferred compensation plan, qualified defined contribution
retirement plan, qualified defined benefit retirement plan or other material fringe benefit plan or program that the Company maintains
or to which the Company contributes with regard to any individual employed with the Company (“Employee Benefit Plans”).
With respect to any Employee Benefit Plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974 (“ERISA”), which is subject to ERISA and which is sponsored, maintained or contributed to, or has been
sponsored, maintained or contributed to, since December 31, 2013, by the Company or any person deemed to be affiliated or aggregated
with the Company under Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986 (the “Code”) or
Section 4001(a)(14) of ERISA: (a) no unsatisfied withdrawal liability or obligation, within the meaning of Section 4201 of ERISA,
has been incurred, (b) no unsatisfied liability or obligation to the Pension Benefit Guaranty Corporation has been incurred by
the Corporation or any ERISA Affiliate, (c) no accumulated funding deficiency, whether or not waived, within the meaning of Section
302 of ERISA or Section 412 of the Code has been incurred, and (d) all contributions (including installments) to such plan required
by Section 302 of ERISA and Section 412 of the Code have been timely made. With respect to any Employee Benefit Plan, such plan
has been funded and maintained in compliance with all laws applicable thereto and the requirements of such plan’s governing
documents.


 


ii)
Receivables. The Company’s receivables, including all contracts in transit, manufacturer’s warranty receivables,
notes receivable, accounts receivable, trade account receivables, and insurance proceeds receivable (“Receivables”)
relate to the business of the Company, represent bona fide transactions, arose in the Company’s ordinary course of business
and are properly reflected on the Company’s books and records. No customer or supplier of the Company is entitled to any
payment terms other than terms in the Company’s ordinary course of business. To the actual knowledge of Sellers, except
as set forth on Schedule 3(ii), all of the Receivables are expected to be good and collectible receivables, collectible
in accordance with past practice and the terms of such Receivables without any right to setoff or counterclaim.


 


4)
REPRESENTATIONS AND WARRANTIES OF SELLERS.


 


a)
Ownership of Securities and Capacity to Sell. Each Seller identified on the Schedule of Purchasers beneficially and of
record owns the amount and type of Securities set forth next to each respective Seller’s name, and each Seller has the full
legal right, power, and authority to sell, convey, assign, and transfer such Seller’s respective Securities to the Purchaser
pursuant to this Agreement free and clear of any Lien, claim, charge, encumbrance, or restriction whatsoever, so that upon delivery
of such Securities to the Purchaser, good, and valid title to such Securities will vest in Purchaser free and clear of any lien,
claim, charge, encumbrance, or restriction whatsoever.


 




    	16



    	 



    

 


Execution
Copy


 


b)
Authorization. Each Seller that is a natural person has full right, capacity and authority to enter into this Agreement
and the Transaction Documents (defined below) and to sell, assign, transfer and deliver the Securities to be sold by such Seller
hereunder and to perform its other obligations under this Agreement and each Transaction Document to which Seller is a party.
Upon proper execution and delivery by such Seller, this Agreement constitutes the valid and binding obligation of the Sellers,
enforceable in accordance with its terms, except as the enforceability hereof may be subject to or limited by applicable bankruptcy,
insolvency, reorganization, or other similar laws affecting creditors’ rights generally and to general principles of equity
being applied at the discretion of the courts.


 


c)
Consents and Approvals. Neither the execution and delivery by any Seller of this Agreement, nor the consummation by any
Seller of the transactions contemplated hereby, nor compliance by any Seller with any of the provisions hereof will: (i) conflict
with or result in a breach of any provision of the Articles or Certificate of Incorporation or Bylaws or other governing document
of the Company; (ii) violate any order, writ, injunction, decree, judgment, ruling, law, rule or regulation of any court or governmental
authority, applicable to such Seller, or such Seller’s shares in Company; (ii) require any consent, approval, or authorization
of, or notice to, or declaration, filing, or registration with, any governmental or regulatory authority; or (iii) violate or
conflict with, or result in a breach of, or constitute a default under, or require consents from any other party to, or result
in a right of termination or cancellation of, or result in acceleration of any right or creation of any lien under, any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement, or other instrument or commitment
or obligation relating to which any Seller is or was a party or by which they or any of their respective properties or assets
may be or was bound or affected. The Securities constitute all of the Sellers’ equity ownership interests in the Corporation.


 


5)
PRE-CLOSING COVENANTS.


 


a)
At all times during the period between the execution of this Agreement and the Closing, each Seller and the Company shall do (or
refrain from doing) the following:


 


i)
continue to operate the Company’s business in the same manner as the business was operated prior to the date of this Agreement,
and the Sellers who are employees of the Company shall devote One Hundred Percent (100%) of their working time and attention to
the conduct of the business;


 




    	17



    	 



    

 


Execution
Copy


 


ii)
not start any new business, or accept or undertake any employment or provide any services related to any business of any other
person or entity (other than in the Company’s ordinary course of business);


 


iii)
not remove, sell or otherwise dispose of any assets, property or equipment of any nature of the Company used in the business,
except for the sale of its products, inventory and equipment and the payment of payables and other obligations in the ordinary
course of business consistent with past custom and practice;


 


iv)
not allow any unlawful activity known to Sellers to be conducted on or about the premises upon which the business is conducted
or at any other place where business activity is being conducted by the Company;


 


v)
maintain its general liability and property insurance carried as of the date hereof;


 


vi)
not change, alter or revise its employee manual (if any) for the employees of the Company;


 


vii)
not purchase any equipment out of the ordinary course of business consistent with past custom and practice;


 


viii)
not grant any options or warrants in Common Stock of the Company, nor issue any additional Common Stock or Preferred Stock of
the Company;


 


ix)
not make any distributions of cash, property or other dividends to the Sellers;


 


x)
pay the attorneys and accountants or other consultants fees for their reasonable work in connection with this Agreement and the
related transactions described herein; and


 




    	18



    	 



    

 


Execution
Copy


 


xi)
continue to make payments to third parties in the normal course of business consistent with past custom and practice, including,
without limitation, to suppliers, on leases, and the payment of employee wages and payroll type taxes and estimated or final payments
with respect to federal and state income or franchise and sales taxes, including establishing an escrow for taxes due with respect
to periods prior to the Closing.


 


b)
Termination of Incentive Equity Plans. During the period between the execution of this
Agreement and the Closing, the Sellers and the Company shall take all necessary action to terminate all incentive equity plans
of the Company, such termination to be effective concurrently with the Closing.


 


6)
COVENANTS.


 


a)
Best Efforts. The Purchaser shall use its best efforts to timely satisfy each of the covenants hereunder and conditions
to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each
of the Pre-Closing Covenants, the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.


 


b)
Blue Sky. To the extent applicable, the Sellers shall, on or before the Closing Date, take such action as the Sellers shall
reasonably determine is necessary in order to obtain or claim an exemption for, or to, qualify the Securities for sale to the
Purchaser at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of
the United States (or to obtain an exemption from such qualification).


 


c)
None of the covenants to take actions or not take actions set forth in this Section 6 shall survive Closing.


 


7)
CONDITIONS TO THE SELLERS OBLIGATION TO SELL.


 


a)
The obligation of the Sellers hereunder to sell the Securities to the Purchaser at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Sellers’
sole benefit and may be waived by the Sellers at any time in its sole discretion by providing Purchaser with written notice thereof:


 


i)
The Purchaser shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the
Sellers and the Company, as applicable.


 




    	19



    	 



    

 


Execution
Copy


 


ii)
The Purchaser shall have delivered to the Sellers the Purchase Price for the Securities being purchased by such Purchaser at the
Closing by wire transfer of immediately available funds.


 


iii)
The representations and warranties of the Purchaser shall be true and correct as of the date when made and true and correct in
all material respects as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specific date, and except for representations and
warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct in all
respects), and such Purchaser shall have performed, satisfied and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.


 


iv)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.


 


v)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or
result in a Material Adverse Effect.


 


vi)
The Purchaser shall have delivered to the Sellers or the Company (as applicable) such other documents, instruments or certificates
relating to the transactions contemplated by this Agreement as Seller or the Company or their counsel may reasonably request.


 


8)
CONDITIONS TO PURCHASER’S OBLIGATION TO PURCHASE.


 


a)
The obligation of the Purchaser hereunder to purchase the Securities at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for the Purchaser’s sole benefit
and may be waived by the Purchaser at any time in its sole discretion by providing the Sellers or the Company (as applicable)
with written notice thereof:


 




    	20



    	 



    

 


Execution
Copy


 


i)
The Sellers and the Company shall have duly executed and delivered to the Purchaser each of the Transaction Documents to which
it is a party and the Sellers shall have duly executed and delivered to the Purchaser the aggregate number of Securities set forth
on the Schedule of Purchasers, being purchased by the Purchaser at the Closing pursuant to this Agreement.


 


ii)
The Company shall have delivered to the Purchaser a certificate evidencing the formation and good
standing of the Company in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office)
of such jurisdiction of formation as of a date within fifteen (15) days of the Closing Date.


 


iii)
The Company shall have delivered to such Purchaser a copy of its Articles of Incorporation (including any Certificate of Designations).


 


iv)
The Company shall have delivered to the Purchaser a certificate, in form and substance reasonably acceptable to such Purchaser,
executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b)
as adopted by the Company’s board of directors in form and substance reasonably acceptable to such Purchaser, (ii) the Articles
of Incorporation of the Company and (iii) the Bylaws of the Company, each as in effect at the Closing.


 


v)
Each and every representation and warranty of the Sellers and the Company shall be true and correct as of the date when made and
true and correct in all material respects as of the Closing Date as though originally made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct as of such specific date, and except for representations
and warranties that are qualified by materiality, in which case such representations and warranties shall be true and correct
in all respects) and the Sellers and the Company shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required to be performed, satisfied or complied with by the Sellers and Company at or prior
to the Closing Date. Such Purchaser shall have received a certificate, duly executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Purchaser
in form and substance reasonably acceptable to such Purchaser.


 


vi)
The Sellers shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the
sale of the Securities, if any.


 


vii)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.


 




    	21



    	 



    

 


Execution
Copy


 


viii)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or
result in a Material Adverse Effect.


 


ix)
The Company shall have delivered to such Purchaser such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as such Purchaser or its counsel may reasonably request.


 


9)
TERMINATION.


 


a)
This Agreement may be terminated at any time prior to the Closing:


 


i)
By mutual consent of Purchaser and Sellers; or


 


ii)
By either the Sellers, or Purchaser if, without fault of the terminating party, the Closing shall not have occurred by [April
30, 2018], which date may be extended only by mutual agreement of Purchaser and Sellers.


 


iii)
The date on which this Agreement is terminated pursuant to this Section is herein referred to as the “Termination Date.”


 


b)
Effect of Termination. Except for the obligations contained in Section 9(c) and Section 9(d) below, all obligations of
the parties hereto under this Agreement shall terminate as of the Termination Date, and there shall be no liability, except liability
for any breach of this Agreement prior to such termination, of any party to another party.


 


c)
Expenses on Termination. Each party hereto shall bear its own costs and expenses incurred by it in connection with the
termination of this Agreement in the event this Agreement is terminated.


 




    	22



    	 



    

 


Execution
Copy


 


d)
Confidentiality. Upon termination of this Agreement without Closing, the Purchaser, Sellers and Company will, and will
cause each of their respective affiliates, and their directors, officers, employees, agents, representatives and similarly situated
persons to: (a) treat and hold as confidential, and not use or disclose, all of the information concerning the Sellers, the Company
and the business, the negotiation or existence and terms of this Agreement (“Confidential Information”), and
(b) deliver promptly to the Company or destroy, at the option and request of Sellers, all tangible embodiments (and all copies)
of the Confidential Information which are in such Purchaser’s or Purchaser affiliated persons’ possession. If the
Purchaser is ever requested or required (by oral question or request for information or documents) to disclose any Confidential
Information, such Purchaser will notify the Sellers and the Company promptly of the request or requirement so that the Sellers
or the Company may seek an appropriate protective order from a court with competent jurisdiction or waive compliance with this
9(d).


 


10)
MISCELLANEOUS.


 


a)
Governing Law; Jurisdiction; Jury Trial; Venue. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Delaware. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY. The parties agree to submit to the exclusive jurisdiction over all disputer hereunder to the federal and state courts
in the State of California located in Sacramento or Yolo Counties.


 


b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document
format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original
thereof.


 


c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to
include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement
instead of just the provision in which they are found.


 




    	23



    	 



    

 


Execution
Copy


 


d)
Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred
upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).


 


e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto
and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the
Purchaser, the Sellers, the Company, their affiliates and Persons acting on their behalf, including, without limitation, any transactions
by any Purchaser with respect to the Securities, and the other matters contained herein and therein, and this Agreement, the other
Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein
contain the entire understanding of the parties solely with respect to the matters covered herein and therein. Except as specifically
set forth herein or therein, neither the Sellers, the Company nor any Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of
this Agreement may be amended or waived other than by an instrument in writing signed by the Sellers or Company and the Purchaser,
and any amendment or waiver to any provision of this Agreement made in conformity with the provisions of this Section 10(e) shall
be binding on the Purchaser and holders of Securities, as applicable. The Company has not, directly or indirectly, made any agreements
with the Purchaser relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as
set forth in the Transaction Documents.


 




    	24



    	 



    

 


Execution
Copy


 


f)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) if a
facsimile number or email address is provided for below, upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending party) or electronic mail; or (iii) one (1) Business
Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the
party to receive the same. As used herein “Business Day” means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required by law to remain closed. The addresses, facsimile
numbers and e-mail addresses for such communications shall be:


 


If
to the Company:


 


TriCo
Welding Supplies, Inc.


1590
East Kentucky Avenue


Woodland,
CA 95776


Attention:
Mr. Joseph Knieriem


 


If
to the Sellers:


 


Joseph
Knieriem


6151
Quincewood Circle


Citrus
Heights, CA 95621


 


Robert
Baker


9737
Dynasty Way


Elk
Grove, CA 95624


 


If
to the Purchaser:


 


MagneGas
Corporation


11885
44th Street North


Clearwater,
FL 33762


Attention:
Legal Department


 


or
to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party
has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number and, with respect
to each facsimile transmission, an image of the first page of such transmission or (C) provided by an overnight courier service
shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.


 




    	25



    	 



    

 


Execution
Copy


 


g)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns. The parties shall not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other parties.


 


h)
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 10(k).


 


i)
Survival. Except as specifically provided herein, the representations, warranties, agreements and covenants shall survive
the Closing and shall remain in full force and effect until the date that is twelve (12) months from the Closing Date. Notwithstanding
the foregoing, any claims asserted in good faith with specificity and in writing by notice from the non-breaching party to the
breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration
of the relevant representation or warrant and such claims shall survive until finally resolved.


 


j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.


 


k)
Indemnification.


 


i)
Sellers and Company shall defend, protect, indemnify and hold harmless the Purchaser and each holder of any Securities and all
of their stockholders, partners, members, officers, directors, employees and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Purchaser Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether
any such person seeking indemnification hereunder is a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any
Purchaser Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Sellers and Company in any of the Transaction Documents, or (ii) any breach of any covenant, agreement
or obligation of the Sellers or Company contained in any of the Transaction Documents (in the case of the Company, only for such
breaches occurring prior to the Closing).


 




    	26



    	 



    

 


Execution
Copy


 


ii)
Purchaser shall defend, protect, indemnify and hold harmless each of the Sellers and the Company, and each of the forgoing’s
stockholders, partners, members, officers, directors, and employees and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Seller Indemnitees”) from and against any and all Indemnified Liabilities, incurred by any Seller Indemnitee
as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by
the Purchaser in any of the Transaction Documents, or (ii) any breach of any covenant, agreement or obligation of the Purchaser
contained in any of the Transaction Documents (in the case of the Company, only for such breaches occurring prior to the Closing).


 


iii)
Promptly after receipt by a Purchaser Indemnitee or Seller Indemnitee under this Section 10(k) (in either case, an “Indemnitee”)
of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified
Liability, such Indemnitee shall, if a claim in respect thereof is to be made against the Sellers, the Company or Purchaser under
this Section 10(k) (an “Indemnitor” as applicable), deliver to such Indemnitor a written notice of the commencement
thereof, and Indemnitor shall have the right to participate in, and, to the extent Indemnitor so desires, to assume control of
the defense thereof with counsel mutually satisfactory to the Indemnitor and Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by Indemnitor if: (A) the
Indemnitor has agreed in writing to pay such fees and expenses; (B) the Indemnitor shall have failed promptly to assume the defense
of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability;
or (C) the named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and
Indemnitor, and such Indemnitee shall have been advised by counsel that a conflict of interest exists if the same counsel were
to represent such Indemnitee and the Indemnitor (in which case, if such Indemnitee notifies the Indemnitor in writing that it
elects to employ separate counsel at the expense of the Indemnitor, then the Indemnitor shall not have the right to assume the
defense thereof and such counsel shall be at the expense of the Indemnitor), provided further, that in the case of clause (C)
above the Indemnitor shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel
for the Indemnitees. The Indemnitee shall reasonably cooperate with the Indemnitor in connection with any negotiation or defense
of any such action or Indemnified Liability by the Indemnitor and shall furnish to the Indemnitor all information reasonably available
to the Indemnitee which relates to such action or Indemnified Liability. The Indemnitor shall keep the Indemnitee reasonably apprised
at all times as to the status of the defense or any settlement negotiations with respect thereto. The Indemnitor shall not be
liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that
the Indemnitor shall not unreasonably withhold, delay or condition its consent. The Indemnitor shall not, without the prior written
consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in
respect to such Indemnified Liability or litigation, and such settlement shall not include any admission as to fault on the part
of the Indemnitee. Following indemnification as provided for hereunder, the Indemnitor shall be subrogated to all rights of the
Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the Indemnitor within a reasonable time of the commencement of any such action
shall not relieve the Indemnitor of any liability to the Indemnitee under this Section 10(k), except to the extent that Indemnitor
is prejudiced in its ability to defend such action.


 




    	27



    	 



    

 


Execution
Copy


 


iv)
The indemnification required by this Section 10(k) shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.


 


v)
Subject to Section 10(m), the parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims
(other than claims arising from fraud on the part of a party hereto in connection with the transaction contemplated by this Agreement)
for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the
subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Section 10(k).


 


vi)
Each Sellers’ aggregate liability for indemnification hereunder, shall be limited in total to such Sellers’ portion
of the Purchase Price (the “Indemnity Cap”); provided, however, that the Indemnity Cap shall not apply to the
breaches of the representations contained in Sections 3(a), 3(b), 3(c), 3(d), 3(g), 3(u), 3(v), 4(a), 4(b), or 4(c), or to claims
for indemnification to the extent based on fraud by a Seller.


 


l)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall
limit the generality or applicability of a more general representation or warranty.


 




    	28



    	 



    

 


Execution
Copy


 


m)
Remedies. The Purchaser and in the event of an assignment by Purchaser of its rights and obligations hereunder, each holder
of Securities, shall have all rights and remedies set forth in the Transaction Documents. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security).Furthermore,
the Sellers and the Company recognize that in the event that they fail to perform, observe, or discharge any or all of their obligations
under the Transaction Documents, any remedy at law would inadequate relief to one or more of the other parties for which monetary
damages would not be an adequate remedy the Purchaser. The Sellers and the Company therefore agree that the Purchaser shall be
entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court
of competent jurisdiction, in any such case without the necessity of proving actual damages and without posting a bond or other
security.


 


n)
Cumulative Remedies. The rights and remedies provided in this Agreement and the other Transaction Documents shall be cumulative.


 


o)
Payment Set Aside; Currency. To the extent that the Sellers or the Company makes a payment or payments to the Purchaser
hereunder or pursuant to any of the other Transaction Documents or the Purchaser enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded,
repaid or otherwise restored to the Sellers or the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent
of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or setoff had not occurred. Unless otherwise expressly
indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S.
Dollars”), and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars.


 


p)
Fees and Expenses. Except as otherwise expressly provided in this Agreement, each party will bear its own costs and expenses
incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereunder,
including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.


 


q)
Confidentiality. The Sellers and the Company will, and will cause each of their respective affiliates, and its and their
directors, officers, employees, agents, representatives and similarly situated persons to: (a) treat and hold as confidential,
and not use or disclose, all of the information concerning the negotiation or existence and terms of this Agreement and the confidential
and non-public business affairs of the Purchaser (“Confidential Information”), except for disclosures to their
respective professional advisors, and (b) deliver promptly to the Sellers or the Company or the Purchasers, as appropriate or
destroy, at the option and request of Purchaser, all tangible embodiments (and all copies) of the Confidential Information which
are in the Sellers’, the Company’s, or its affiliates, agents, representatives and similarly situated persons’
possession. If the Sellers or their respective affiliates, agents, representative and similarly situated persons is ever required
(by oral question or request for information or documents) to disclose any Confidential Information, such Seller will first notify
the Purchaser promptly of the request or requirement so that the Purchaser may seek an appropriate protective order from a court
with competent jurisdiction or waive compliance with this Section ‎10(p).


 


[Signature
Pages Follow]


 


[The
Remainder of This Page is Intentionally Blank]


 




    	29



    	 



    

 


Execution
Copy


 


IN
WITNESS WHEREOF, each Sellers, Purchaser and the Company have caused their respective signature page to this Agreement to
be duly executed as of the date first written above.





 


	 	COMPANY:
	 	 
	 	TRICO
    WELDING SUPPLIES, INC. 
	 	 
	 	By:	/s/
    Robert Baker
	 	Name:	Robert
    Baker
	 	Title:	President


 




    	30



    	 



    

 


Execution
Copy


 


IN
WITNESS WHEREOF, each Sellers, Purchaser and the Company have caused their respective signature page to this Agreement to
be duly executed as of the date first written above.


 


	 	SELLER:
    
	 	 
	 	JOSEPH
    KNIERIEM
	 	 	 
	 	By:	/s/
    Joseph Knieriem
	 	Name:	Joseph
    Knieriem
	 	Title:	Authorized
                                         Signatory



 




    	31



    	 



    

 


Execution
Copy


 


IN
WITNESS WHEREOF, each Sellers, Purchaser and the Company have caused their respective signature page to this Agreement to
be duly executed as of the date first written above.


 


	 	SELLER:
    
	 	 	 
	 	ROBERT
    BAKER
	 	 	 
	 	By:
    	/s/
    Robert Baker
	 	Name:	Robert
    Baker
	 	Title:	Authorized
    Signatory 


 




    	32



    	 



    

 


Execution
Copy


 


IN
WITNESS WHEREOF, each Sellers, Purchaser and the Company have caused their respective signature page to this Agreement to
be duly executed as of the date first written above.


 


	 	PURCHASER:
    
	 	 	 
	 	MAGNEGAS
    CORPORATION
	 	 	 
	 	By:	/s/
    Ermanno Santilli
	 	Name:	Ermanno
    Santilli
	 	Title:	Chief
    Executive Officer 


 




    	33



    	 



    

 


Execution
Copy


 


SCHEDULE
OF PURCHASERS


 


	(1)	 	(2)	 	(3)	 	(4)	 	 
	 	 	 	 	 	 	 	 	 
	Purchaser	 	Seller
    	 	Aggregate
    Number of Securities	 	Purchase
    Price	 	 
	 

                                                         MagneGas
        Corporation

         

        Purchaser
        Designee:

         

        MagneGas
        Welding Supply, LLC
	 	 

        Joseph
        Knieriem
	 	 

                                                         3,000

         
	 	 

                                                         $1,000,000

         
	 	 
	 

                                                         MagneGas
        Corporation

         

        Purchaser
        Designee:

         

        MagneGas
        Welding Supply, LLC
	 	 

        Robert
        Baker
	 	 

                                                         3,000

         
	 	 

                                                         $1,000,000

         
	 	 
	TOTAL	 	 	 	6,000	 	$2,000,000	 	 










 







    	34