Exhibit
10.5


 


GUARANTY
AND SECURITY AGREEMENT


 


This
Guaranty and Security Agreement (the “Guaranty”) is made and entered into on July 31, 2018, by and between
Pro-Tech Hardbanding Services, Inc., an Oklahoma corporation (the “Guarantor”),
and Kodak Brothers Real Estate Cash Flow Fund, LLC, a Texas limited liability
company (the “Lender”).


 


BACKGROUND


 


A. Concurrently
herewith the Guarantor’s parent company, Victory Oilfield Tech, Inc., a Nevada corporation (the “Borrower”),
is entering into a loan agreement (the “Loan Agreement”) issuing to the Lender a Secured Convertible Promissory
Note in the principal amount of Three Hundred Seventy-Five Thousand ($375,000) (the “Note”) in consideration
of a loan or other extension of credit under the Loan Agreement in like amount (the “Loan”). Capitalized terms
used and not otherwise defined herein have the meanings set forth in the Loan Agreement or the Note (collectively, the “Loan
Documents”), as applicable.


 


B. The
Guarantor is the owner of certain assets used in the operation of its business and is granting to the Lender a security interest
in such assets pursuant to this Agreement.


 


C. The
Lender is unwilling to enter make the Loan to the Borrower unless the Guarantor enters into this guaranty and grants the security
interest provided for hereunder.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


 


1. Guaranty;
Guarantied Obligations. In order to induce the Lender to make the Loan to the Borrower, the Guarantor hereby unconditionally,
absolutely and irrevocably guarantees and promises to pay to the Lender, on demand and without offset, in lawful money of the
United States, any and all present or future indebtedness and/or obligations of the Borrower owing to the Lender under the Loan
Documents and any amendments thereto, including, but not limited to, the repayment to the Lender of all sums which are presently
due and owing or which may in the future become due and owing by the Borrower under the Loan Documents or otherwise (the “Guarantied
Obligations”). The Guarantor hereby acknowledges that it derives substantial benefit from the Loan and the Loan Documents.


 






    


     


    

 


2. Grant
of Security Interest.


 


(a) As
security for the prompt payment of the Guarantied Obligations and the timely performance of the Guarantor’s obligations
under this Guaranty, the Guarantor hereby grants to the Lender a second-priority security interest (subject to the first priority
security interest of Stewart Matheson as more fully described in that certain Intercreditor Agreement, dated on or about the date
hereof (the “Intercreditor Agreement”), among the Borrower, the Guarantor, the Lender, Stewart Matheson and
Visionary Private Equity Group I LP) in all of the following property of the Guarantor (collectively the “Collateral”):


 


(i) All
accounts, accounts receivable, contract rights, general intangibles related to or arising from any account, debit balances, note,
documents, chattel paper, instruments, acceptances, drafts or other forms of obligations and receivables of the Guarantor arising
from the sale or lease of inventory or rendition of services by the Guarantor, or on behalf of the Guarantor, in the ordinary
course of its business or otherwise (all of the foregoing being herein collectively called “Accounts”), whether
or not the same are listed on any schedules, assignments or reports furnished to the Lender from time to time, whether such Accounts
are now existing or are created at any time hereafter, and all proceeds therefrom including without limitation, proceeds of insurance
thereon and all guaranties, securities, and liens which the Guarantor may hold for the payment of any Accounts, including without
limitation, all rights of stoppage in transit, replevin and reclamation and all other rights and remedies of unpaid vendor or
lienor, and any liens held by the Guarantor as a mechanic, contractor, subcontractor, processor, materialman, machinist, manufacturer,
artisan, or otherwise.


 


(ii) All
documents, instruments, documents of title, policies and certificates of insurance, guaranties, securities, chattel paper, deposits,
proceeds of insurance, cash, liens or other property relating to Accounts and owned by the Guarantor or in which the Guarantor
has an interest, which are now or may hereafter be in the possession of the Guarantor or as to which the Guarantor may now or
hereafter control possession by documents of title or otherwise.


 


(iii) All
books records, customer lists, supplier lists, ledgers, evidences of shipping invoices, purchase orders, sales orders, computer
records, lists, software, programs, and all other such evidences of the Guarantor’s business records related to the Accounts,
including all cabinets, drawers, etc. that may hold same, all whether now existing or hereafter arising or acquired.


 


(iv) All
of the Guarantor’s tangible property of whatever nature or description, whether real or personal, now or hereafter used,
owned, held or leases, including without limitation all furniture, fixtures, equipment, inventory and supplies.


 


(v) All
of the Guarantor’s intangible property of whatever nature or description, including without limitation, all intellectual
property, trade names, trademarks, service marks, computer programs (including source code and object code), patents and copyrights
now owned or hereafter acquired.


 


(vi) All
renewals, substitutions, replacements, additions, accessions, proceeds, and products of any and all the foregoing.


 


(b) The
Guarantor’s grant of such security interests to the Lender shall secure the payment and performance of the Guaranteed Obligations
to the Lender of, and all legal and other professional fees incurred in connection with any of the foregoing. The security interest
granted to the Lender hereunder shall be prior to all other interests in the Collateral except as otherwise specified in the Intercreditor
Agreement.


 






    2


     


    

 


(c) Lender
acknowledges that the security interests in all Collateral are second priority to the first priority security interests granted
by Guarantor to Stewart Matheson in connection with the Pro-Tech Acquisition (as defined in the Intercreditor Agreement).


 


(d) The
Guarantor hereby agrees that the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial
Code as in effect from time to time in the State of Oklahoma. The Guarantor agrees that at any time, and from time to time, at
the request of the Lender, the Guarantor shall execute and deliver (or cause to be executed and delivered) any and all such further
instruments and/or documents (including without limitation, UCC-1 financing statements) as the Lender may consider reasonably
necessary or desirable in order to effectuate, complete, perfect or preserve and maintain the lien created hereby. Upon any failure
by the Guarantor to do so, the Lender may make, execute, record, file, re-record or refile any and all such instruments and documents
for and in the name of the Guarantor; the Guarantor hereby irrevocably appoints the Lender as the agent and attorney-in-fact of
the Guarantor to do so; and the Guarantor shall reimburse the Lender, on demand, for all costs and expenses incurred by the Lender
in connection therewith, such amount being added to the indebtedness arising under the Loan Documents.


 


(e) The
security interest created hereunder shall terminate upon the payment in full by the Borrower to the Lender of any and all indebtedness,
obligations and liabilities arising from, or in any way related to, the Note.


 


3. Events
of Default; Acceleration of Maturity. Subject to the terms of the Intercreditor Agreement, if an Event of Default (as defined
in the Note) shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any governmental authority), then, in addition to the remedies provided for elsewhere in Loan Documents and this
Agreement and without limitation thereof, at the option of the Lender exercised by written notice to the Guarantor, the Lender
may (A) foreclose the liens and security interests created under this Guaranty or under any other agreement relating to the Collateral,
by any available judicial process, (B) enter any premises where any of the Collateral may be located for the purpose of taking
possession or removing the same, and (C) sell, assign, lease or otherwise dispose of the Collateral or any part thereof, either
at public or private sale or at any broker’s board, in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such terms as shall be acceptable to the Lender, all at the sole option of the Lender
and as the Lender, in its sole discretion, may deem advisable and to the extent permitted by law, the Lender may bid or become
a purchaser at any such sale, and the Lender shall have the right, at its option, to apply or be credited with the amount of all
or any part of the obligations owing by the Guarantor to the Lender under this Note, against the purchase price bid by the Lender
at any such sale. Subject to the terms of the Intercreditor Agreement, the net cash proceeds resulting from the collection, liquidation,
sale, lease or other disposition of the Collateral (including, without limitation a sale where the Lender is the purchaser) shall
be applied first to the expenses (including reasonable attorneys’ and other professional fees) of retaking, holding, storing,
processing and preparing the Collateral for sale, selling, collecting, liquidating and the like, and then to the satisfaction
of all such obligations, application as to particular obligations or against principal or any interest to be in the sole discretion
of the Lender. The Lender shall give the Guarantor at least five (5) Business Days prior written notice of the time and place
of any public sale of Collateral.


 






    3


     


    

 


4. Suits
for Enforcement. In case any one or more of the Events of Default shall have occurred and be continuing, the Lender may proceed
to protect and enforce rights of the Lender either by suit in equity or by action at law, or both, whether for the specific performance
of any covenant or agreement in this Note or in aid of the exercise of any power granted in this Note, including without limitation,
possession or foreclosure on the Collateral securing the Note, or the Lender may proceed to enforce the payment of the Note or
to enforce any other legal or equitable right of the Lender.


 


5. Notice
of Action of Claimed Defaults. If a Lender of other obligations of the Guarantor shall give any notice of a claimed default
or event of default (as those terms may be defined in the relevant documentation) or shall take any other action with respect
to a claimed default or event of default, immediately upon obtaining knowledge thereof, the Guarantor shall give the Lender written
notice specifying such action and the nature and status of the claimed default or event of default.


 


6. Miscellaneous.


 


(a) Each
of the rights, powers and remedies of the Lender provided in this Guaranty or now or hereafter existing at law or in equity shall
be cumulative and concurrent, and the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude
the Lender’s simultaneous or later exercise of any or all such other rights, powers, or remedies. No failure or delay on
the part of the Lender to exercise any right, power or remedy shall operate as a waiver thereof, and no notice or demand which
may be given or made upon the Guarantor by the Lender shall limit or impair the Lender’s right to take any action or to
exercise any right, power or remedy without notice or demand.


 


(b) This
Guaranty shall continue and remain in full force and effect until the Guarantied Obligations, together with all accrued interest
and costs of collection, have been paid in full and satisfied.


 


(c) This
Guaranty contains the entire understanding of the parties with respect to its subject matter and supersedes all prior agreements,
negotiations and understandings, written or oral, with respect to such subject matter. No provision of this Guaranty shall be
waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.


 


(d) This
Guaranty shall be governed by and construed in accordance with the laws of the state of Oklahoma without regard to the principles
of conflict of laws.


 


(e) This
Guaranty may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement.


 






    4


     


    

 


(f) Any
notices required or permitted to be given under the terms of this Agreement shall be in writing and sent by U. S. Mail or delivered
personally or by overnight courier or via facsimile or e-mail (if via facsimile or e-mail, to be followed within one (1) business
day by an original of the notice document via overnight courier) and shall be effective (i) five (5) days after being placed in
the mail, if sent by registered mail, return receipt requested, (ii) upon receipt, if delivered personally, (iii) upon delivery
by facsimile or e-mail (if received between 8:00 a.m. and 5:00 p.m. Central Time; otherwise delivery shall be considered effective
the following day) or (iv) one (1) day after delivery to a courier service for overnight delivery, in each case properly addressed
to the party to receive the same. The addresses for such communications shall be as set forth on the signature pages hereto. Each
party shall provide written notice to the other party of any change in address.


 


(g) The
headings of this Guaranty are for convenience of reference and shall not form a part of, or affect the interpretation of this
Guaranty. No uncertainty or ambiguity herein shall be construed or resolved against the Guarantor or the Lender, whether under
any rule of construction or otherwise. This Guaranty shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of the parties.


 


(h) If
any provision of this Guaranty shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Guaranty in that jurisdiction or the validity or enforceability
of any provision of this Guaranty in any other jurisdiction.


 


(i) No
party shall assign this Guaranty or any rights or obligations hereunder without the prior written consent of the other parties
hereto.


 


(j) This
Guaranty is intended for the benefit of the parties hereto and their respective successors and permitted assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other individual or entity.


 


(k) Each
party shall do and perform, or cause to be done and performed, at his or its expense (subject to any contrary provision in the
Note), all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Guaranty
and the consummation of the transactions contemplated hereby.


 


(l) THE
PARTIES EACH WAIVE, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY.



 


(m) Upon
payment of the Guarantied Obligations in full the security interests provided for under this Guaranty shall be terminated and
of no further force and effect.


 


[signature
page follows]


 




    5


     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Guaranty to be duly executed by their respective authorized persons on the
date first written above.


 





	GUARANTOR	 
	 	 	 
	Pro-Tech
    Hardbanding Services, Inc.	 
	 	 	 
	By:	/s/
    Kenneth Hill	 
	 	Name:
    Kenneth Hill	 
	 	Title:
    President	 




 


Address:
_______________________________


______________________________________


______________________________________


email:
__________________________________


Fax:
___________________________________


 


LENDER


 


Kodak
Brothers Real Estate Cash Flow Fund, LLC


By:
Kodak Brothers Capital Management, LLC, its manager


 





	By:	/s/
    Scott C. Kodak	 
	 	Name:
    Scott C. Kodak	 
	 	Title:
    Manager	 




 





Address:
_______________________________


______________________________________


______________________________________


email:
__________________________________


Fax:
___________________________________


 


 


6