SECURITY
AGREEMENT


(Collateral
Assignment and Pledge of Ownership Interests in Subsidiaries)


 


THIS
SECURITY AGREEMENT (“Agreement” or “Security Agreement”) is entered into on November 15, 2017
(“Effective Date”) by and between MagneGas Corporation, a Delaware corporation (“Debtor”), as lessee,
assignor, pledgor and debtor, and Point Financial, Inc., an Arizona corporation (“Secured Party”), as lessor, assignee,
pledgee and secured party. Debtor and Secured Party sometimes may be referred to collectively as the “Parties” or
individually as a “Party.”


 


RECITALS:


 


	 	A.	Secured
    Party has provided financial accommodations to Debtor in the form of a lease of personalty evidenced by that Equipment Lease
    Agreement of even date herewith (the “Lease Agreement”) by and between Secured Party, as lessor, and Debtor, as
    lessee.
	 	 	 
	 	B.	To
    secure payment of the Lease Agreement and performance of all of Debtor’s promises and undertakings in connection therewith
    (collectively, the “Financing”), Secured Party has required that Debtor enter into this Security Agreement and
    thereby to encumber, collaterally assign and pledge certain stock holdings and other ownership interests to Secured Party
    as more fully described herein below.
	 	 	 
	 	C.	Upon
    the Effective Date of this Agreement, (i) payment obligations under the Financing will be due and owing to Secured Party,
    (ii) value will have been given to or on behalf of Debtor under or on account of the Financing, and (iii) Debtor will have
    rights in the Collateral described below.


 


NOW,
THEREFORE, in consideration of the following mutual agreements and other valuable consideration, the receipt and sufficiency of
which are acknowledged, and intending to be legally bound, the Parties agree as follows:


 


AGREEMENTS:


 


1.
Certain Defined Terms. “Collateral” collectively includes all items/categories set forth in paragraph 2, including
any particulars described in the attached Schedule 1. References to the “UCC” mean the provisions of the Uniform Commercial
Code in effect in Arizona (the “State”). Defined or referenced terms as identified by “*” have the meanings
defined in the UCC unless the specific context indicates differently. Other defined terms are as set forth elsewhere in this Agreement.


 


2.
Collateral Covered by Agreement. This Security Agreement pertains to “Collateral” defined as Debtor’s
interests in and rights to: (i) all ownership or other participation rights and interests held or otherwise controlled by Debtor
(collectively, the “Interest”) in those legal entities described on Schedule 1 hereto (each an “Entity and collectively
the “Entities”), the present and future rights of Debtor to receive payments, Money,* or other distributions in or
under the Interest or pursuant to any sale, transfer, or other disposition of the Interest by or on behalf or Debtor, and all
General Intangibles* derived from or related to such Interest; (ii) all Proceeds* therefrom, whether in Money, ownership interests
in any other entity, or other property or property interest, whether or not in the ordinary course of business or in connection
with any reorganization, merger, conversion, recapitalization, restructuring, reclassification, increase or reduction of capital,
liquidation or winding up; and (iii) all records, writings, papers, and data kept or relating to the Interest or any other part
or component of the Collateral, in all forms (written, photographic, microfilm, microfiche, electronic or otherwise, and the computer
software and other media, together with its related hardware and equipment, as may be required to utilize, create, maintain, process
and retrieve the same).


 




    	 



    	 



    

 


3.
Grant of Security Interest. For valuable consideration, Debtor grants, collaterally assigns, and pledges to Secured Party
a security interest in the Collateral to secure all Obligations.


 


4.
Obligations Secured. This Security Agreement and the security interests granted hereby secure all of the following: (i)
payment of all indebtedness, obligations and liabilities evidenced by or arising under the Lease Agreement and the other “Transaction
Documents” (as defined in the Lease Agreement), (ii) performance of all provisions, covenants, terms and conditions under
this Agreement or the other Transaction Documents, (iii) all rents, payments, fees, costs and expenses owed under the Lease Agreement,
or the Transaction Documents, and (iv) all extensions, renewals, modifications, amendments and replacements of the same (collectively,
“Obligations”).


 


5.
Performance under Transaction Documents and Perfection of Security Interest(s).


 


5.1
Debtor agrees to perform timely and fully all of its responsibilities under the Obligations and to keep all promises to and agreements
with Secured Party under all of the Transaction Documents. This is a continuing Security Agreement and all rights, powers and
remedies will apply to all Obligations and it will continue in full force and effect until all such Obligations have been paid
and performed in full regardless of any applicable statute of limitations pertaining to any Obligation, or until the same are
released by Secured Party.


 


5.2
Debtor irrevocably authorizes Secured Party to complete and file one or more financing statements or amendments thereto or continuations
thereof pursuant to the UCC and pertaining to all Collateral under this Security Agreement. Debtor will pay or reimburse the cost
of filing in all public offices whenever and wherever such filing is deemed necessary by Secured Party. Collateral may be described
in greater or lesser detail than as set forth in this Security Agreement, to the fullest extent permitted under the UCC. Debtor
will cooperate with and assist Secured Party in providing or obtaining written acknowledgments of Secured Party’s security
in and lien on the Collateral and the Interest. Debtor, upon request, will promptly furnish any information pertinent thereto
to Secured Party. Debtor will pledge and turn over immediately all tangible evidence, documents or certificates related to the
Interest, if any, for Secured Party to hold while this Agreement is in effect and the Obligations remain unsatisfied in whole
or in part; provided, however, it is not the desire of intent of the Secured Party that the Interest be evidenced by any certificate
separate and apart from the Formation Documents (as defined hereafter) of the Entities.


 




    	 



    	 



    

 


5.3
Debtor agrees, represents and warrants to Secured Party the following with respect to the Collateral:


 


5.3.1
Condition of Interest. Debtor has had, or has seen that, true, complete and correct copies of the organic documents of
the Entities (collectively, the “Formation Documents”) have been delivered to Secured Party. There are no other undisclosed
amendments, modifications, supplements or restatements of the Formation Documents. No default on the part of Debtor exists under
the Formation Documents or laws applicable to the formation, continuation or operation of any of the Entities. Debtor is the sole,
direct, legal and beneficial owner of the Interest. Debtor on account of the Interest has no present obligation to make further
capital or investment contributions in or to any of the Entities. Each of the Entities has been duly formed and created and is
in existence and good standing under the laws of the state of its formation, and any other jurisdictions where the respective
one of the Entities conducts business and is required to register or qualify. Except as may otherwise be stated in the Formation
Documents, the Lease Agreement or the Transaction Documents, there is no restriction upon the right of Debtor to grant a security
interest in, collaterally assign and pledge the Interest to Secured Party, nor are there any limitations on the ability of the
Secured Party to exercise all of its rights and remedies under this Security Agreement and applicable law as to the Interest.
The Interest has not been and will not be “certificated*.” Debtor has full power, right and authority to collaterally
assign, pledge and grant the security interest in the Interest to Secured Party. Debtor agrees that this Security Agreement constitutes
instructions from Secured Party to register as a transfer of the Interest the collateral assignment of the Interest and certifies
that, effective simultaneously with the effective date of this Security Agreement, Debtor has registered on the books of each
Entity the fact of the collateral assignment of the Interest under this Security Agreement, identifying Secured Party as a secured
party and that no other encumbrance is registered on such books with respect to the Interest. Debtor agrees that Secured Party
will have none of the obligations or liabilities of Debtor in the Interest solely by virtue of the grant of the security interest
in the Collateral. Secured Party may, in its sole discretion, become a substituted member in any Entity upon election of such
remedy by Secured Party under this Security Agreement after an non-cured Event of Default, and in that event Debtor consents to
the outright and absolute assignment of the Interest to Secured Party and, if Secured Party elects, to the admission of Secured
Party as a substituted member in the Entity, but Debtor agrees that Secured Party will not be liable for any of the responsibilities
or liabilities of Debtor under the Formation Documents unless and until so expressly assumed and agreed to in writing by Secured
Party.


 


5.3.2
Maintenance of “Opt-out” Status under Formation Documents. Debtor and each respective Entity have each agreed
that as long as this Security Agreement is in effect, that neither of them shall take any action whatsoever to “opt-in”
to UCC Article or Chapter 8 pursuant to A.R.S. § 47-8103(C) as to the Formation Documents or otherwise, so that the Interest
is deemed to be and is a strictly a “general intangible*” governed exclusively by UCC Article/Chapter 9, and therefore
is not and cannot be characterized as a “security*” or any form of “investment property*.” At the request
of Secured Party, Debtor and each Entity will modify and amend the appropriate Formation Documents to provide expressly that there
has been, or will there be, no “opt-in” to UCC Article/Chapter 8 pursuant to § 47-8103 or otherwise. In this
regard, Debtor will execute and deliver to Secured Party its Irrevocable Proxy Agreement in the form attached hereto as Schedule
2.


 




    	 



    	 



    

 


5.3.3
Other Actions as to Collateral. Debtor agrees with Secured Party to take or permit any other action requested by Secured
Party to insure the attachment, perfection and first lien priority status of, and the unhindered ability of Secured Party to enforce
the security interests, rights and remedies in any of the Collateral pursuant to this Agreement or applicable law (collectively,
“Enforcement”), including (i) completing, executing, delivering and filing, where appropriate, financing statements,
amendments thereto and continuations thereof to the extent deemed necessary or advisable by Secured Party, (ii) complying in all
material respects with any applicable provision of any law, rule, regulation or any treaty of the United States as to any Collateral
if such compliance is a condition to Enforcement, (iii) obtaining any necessary governmental or third-party consents and approvals,
(iv) obtaining waivers from other secured parties in form acceptable to Secured Party, (v) taking any and all actions required
by earlier version of the Uniform Commercial Code or by any other applicable law of the State, any other state, the federal government
or any foreign government, and (vi) Debtor waives any claim of marshalling other collateral for the Obligations.


 


6.
Voting or Actions. Unless and until any Event of Default exists non-cured under this Agreement, Debtor will have the right
to vote the Interest without any notice to or consent of Secured Party; provided, however, that Debtor may not without notice
to and consent of Secured Party, agree to permit or join in doing any of the following:


 


6.1
Issue any more interests in any Entity that would diminish the value of the security interest granted to Secured Party.


 


6.2
Merge or consolidate any Entity with any other person or entity or liquidate, wind-up, dissolve or suffer any liquidation or dissolution
(in whole or in part) of the same, discontinue the business of any Entity or convey, lease, sell, transfer or otherwise dispose
of, in one transaction or series of transactions, all or a substantial party of any Entity’s assets, whether now or hereafter
acquired, without prior written notice to Secured Party.


 


6.3
Make, incur, assume or suffer to exist, directly or indirectly, outside the ordinary course of business, (i) any indebtedness
other than indebtedness permitted by the Transaction Documents or Lease Agreement, or (ii) any lien or encumbrance on any of any
Entity’s assets or properties other than liens permitted by the Transaction Documents or Lease Agreement.


 


6.4
Amend, alter, modify or change any of the terms of any Entity’s Formation Documents.


 


6.5
Admit any additional members or ownership interest holders to any Entity.


 


6.6
Transfer of any of Debtor’s interest in any Entity.


 


6.7
Undertake, authorize or permit any event that would result in a termination or dissolution of any Entity, impairment of the validity
or perfection of the security interest granted herein, take any action that would or could be construed to “opt-in”
to UCC Article/Chapter 8, or create or permit any Event of Default.


 




    	 



    	 



    

 


7.
Distributions. Debtor has and retains the right to receive all distributions or payment with respect to the Interest, except
as follows:


 


7.1
Any liquidating distribution, any distribution or payment as a result of the sale of the business of any Entity or substantially
all of its assets and any distribution or payment as a result of the refinancing of any Obligations, must be paid to Secured Party,
to be applied first to the Obligations then due, the remainder if any to be returned to Debtor and any others entitled thereto.


 


7.2
Any distribution or payment in property that under Section 7.1 is to be paid to Secured Party shall be held by Secured Party as
additional security for the Obligations, to be returned to Debtor upon discharge of the Obligations. To effectuate the provisions
of this paragraph, Debtor will direct that all such liquidating and partially-liquidating distributions and property distributions
or payment with respect to the Collateral will be paid to Secured Party. Upon receipt of any notice from Secured Party that an
Event of Default exists non-cured, Debtor will deliver to Secured Party all distributions and payments to which Debtor otherwise
would be entitled.


 


8.
No Withdrawal. Debtor will, as otherwise permitted herein, perform and observe all terms of the Formation Documents and
will not withdraw from any Entity as a member, except in connection with any disposition of the Interest upon and after a non-cured
Event of Default under this Security Agreement.


 


9.
Special Notifications. Debtor will notify Secured Party promptly of the occurrence of: (i) any event which will require
amendment of the Formation Documents under applicable law; (ii) any additional future capital contributions required to be made
by Debtor or any other person under the Formation Documents or otherwise; (iii) any default on the part of Debtor or of any other
member under the Formation Documents; and (iv) the occurrence of any Event of Default hereunder. Debtor will promptly transmit
to Secured Party all notices, claims or communications received from any governmental authority, stock exchange, issuer, underwriter
or brokerage house with respect to the Collateral.


 


10.
No Waivers by Debtor. Debtor will not, without Secured Party’s prior written consent, waive any rights, performance
of obligations or default under the Formation Documents by any person, or otherwise release or discharge any person who is a party
to the Formation Documents, either in whole or in part, and will not consent to the reduction of any distribution or payment required
to be made to Debtor by any Entity.


 


11.
Relation to Other Transaction Documents. The Obligations are or may be secured by other pledges, security interests and
liens. Nothing in those other Transaction Documents will derogate from or diminish any of the rights and remedies of Secured Party
in this Agreement. Any default or non-cured “Event of Default” under any other Transaction Document will, at Secured
Party’s election, constitute an actionable non-cured Event of Default under this Security Agreement.


 




    	 



    	 



    

 


12.
Warranties and Covenants of Debtor. Debtor expressly warrants and covenants:


 


12.1
Except for the security interests granted in this Security Agreement and for Permitted Liens (as that term is defined on Schedule
2 to the Security Agreement (PFI General - All-Inclusive Security Interest Covering Personal Property) executed of even date herewith
between Debtor and Secured Party), Debtor owns, or to the extent that this Security Agreement extends to Collateral acquired after
the Effective Date will own, or has or will have rights in the Collateral free from any adverse lien, pledge, security interest
or other encumbrance. Debtor will defend the Collateral against all claims and demands of all persons at any time claiming the
same or any interest therein.


 


12.2
Debtor’s full and correct legal name is that used in this Agreement. Debtor is organized as a corporation under the laws
of the State of Delaware, and if a “registered organization*” its registration/identification number is 4074115. Debtor’s
current address for notices and principal place of business, or if Debtor has more than one place of business, its chief executive
office, is that stated below for Notices.


 


12.3
Debtor will not change its legal name, its place(s) of business, its chief executive office location, its address for notice or
its registered organization number without first (i) notifying Secured Party at least fifteen (15) days in advance of any such
proposed change, and (ii) confirming any such change upon occurrence by notice to Secured Party. Debtor may not change its type
of organization, jurisdiction of organization or organization legal structure unless (a) Debtor has provided at least five (5)
days’ prior written notice to Secured Party or (b) such change is in connection with Borrower’s initial public offering
of common stock.


 


12.4
Debtor may not, outside the ordinary course of business, sell, pledge, re-pledge, further encumber, destroy or otherwise deal
with any Collateral without prior notice to and the written consent of Secured Party (except with respect to Permitted Liens and
as otherwise may be permitted in the Lease Agreement or Transaction Documents).


 


12.5
Debtor will pay timely any taxes and assessments which may be levied or assessed against the Collateral before delinquency; provided
that the failure to make any such payments shall not constitute a breach of this covenant unless the aggregate amount of such
payments could reasonably be expected to exceed $100,000.


 


12.6
Except for Permitted Liens, Debtor will not permit or allow any other lien, pledge, security interest or encumbrance whatsoever
upon the Collateral and will not permit the Collateral to be attached or replevied.


 


12.7
Secured Party may, at any reasonable time during normal business hours, inspect or verify records pertaining to any of the Interest,
any other part of the Collateral, or business of each respective Entity.


 




    	 



    	 



    

 


12.8
Any income, gain, expense and loss recognized in any Collateral will be reported to taxing authorities under Debtor’s name
and taxpayer identification number, unless Collateral is received and applied to reduce any Obligation by or on behalf of Secured
Party.


 


12.9
Except with respect to Permitted Liens, no third-party financing statement covering the Collateral is on file in any public office.


 


12.10
Neither Debtor nor any Entity will take any action(s) whatsoever that might be deemed to be any sort of “opt-in” to
UCC Article/Chapter 8 as to the Formation Documents.


 


13.
Performance by Secured Party. At its option, Secured Party may discharge taxes, levies, liens or other encumbrances at
any time placed on the Collateral, and pay for the maintenance and preservation of the Collateral should Debtor fail to do so.
Debtor agrees to reimburse Secured Party on demand for any payment so made and until such reimbursement the amount paid by Secured
Party will be added to the Obligations and bear interest at the rate of 15% per annum until paid. Secured Party has no responsibility
or liability as to any matter pertaining to the Collateral, and has no duty to protect or realize upon the Collateral except for
those responsibilities imposed upon it by the UCC. As to all Collateral actually pledged to and held by Secured Party, Secured
Party will take such care as Secured Party gives to the safekeeping of property of a like kind owned by Secured Party, and that
will constitute reasonable care of such Collateral when in Secured Party’s possession. Debtor releases Secured Party from
any liability for any act or omission relating to the Collateral, except for failure to exercise good faith and the above-specified
reasonable care, or from willful misconduct or gross negligence.


 


14.
Default and Remedies. Except as otherwise stated herein, a non-cured “Event of Default” under this Security
Agreement will exist upon the occurrence and during the continuance of (a) a non-cured Event of Default under the Lease Agreement,
(ii) sale or encumbrance of or to the Collateral, (iii) dissolution, termination of existence, insolvency, business failure, appointment
of a receiver of any part of the Collateral, assignment for the benefit of creditors by or the commencement of any proceedings
under any bankruptcy or insolvency law by or against Debtor, or (iv) any default in the performance of any obligation under this
Security Agreement or any other Transaction Document which continues for a period of thirty (30) days after the receipt by Debtor
of written notice from Secured Party; provided, that, if such default is curable and does not involve either the payment of money
or the delivery of any report, information, or tangible item to Secured Party, then, so long as Debtor is diligently pursuing
such cure, Debtor shall have an additional thirty (30) days within which to effect such cure (not to exceed sixty (60) days, in
the aggregate for such cure period) (collectively, “Event(s) of Default”); then, upon any such non-cured Event of
Default Secured Party may, at its election, declare the entire amount of the Obligations then outstanding due and payable at once,
and Secured Party will have the rights and remedies of a secured party under the UCC, including the right to take possession of
the Collateral. Debtor agrees, upon request of the Secured Party following the occurrence and during the continuance of a non-cured
Event of Default, to relinquish and grant exclusive control of any Collateral to Secured Party upon demand. Any requirement of
reasonable notice of any disposition of the Collateral will be satisfied if such notice is mailed to the address of the Debtor
designated above at least ten (10) business days before the time of such disposition. Secured Party may dispose of Collateral
without giving any warranty, express or implied, and warranties of title or otherwise may be disclaimed in any such disposition.
In any disposition upon credit, Debtor will receive the benefit only of payments actually made by a purchaser and received by
Secured Party. Secured Party may acquire Collateral by credit bid(s) at any disposition permitted under the UCC. Secured Party
may, but has no duty to, notify and collect from any other Obligors under the Obligations. Debtor recognizes that Secured Party
may be unable to effect a public sale of all or a part of the Interest by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the “Act”) and/or the securities laws of various states (the “Blue Sky Laws”),
but may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire the Interest for their own account, for investment and without a view to the distribution, payment
or resale thereof. Debtor understands that private sales so made may be at prices and on other terms less favorable than if the
Interest were sold at public sales, and agrees that Secured Party has no obligation to delay the sale of the Interest for the
period of time necessary to permit Debtor (even if Debtor agrees) to register such securities for sale under the Act or the Blue
Sky Laws. Debtor agrees that private dispositions made under the foregoing circumstances will be deemed to have been made in commercially
reasonable manner. Without prior notice to Debtor, upon any non-cured Event of Default Secured Party may exercise all voting rights
in connection with any action to be taken by any Entity pursuant to or on account of the Interest, and exercise any and all rights
of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Interest as if it were the
absolute owner thereof, including, without limitation, the right to exchange, at its discretion, any and all of the Interest upon
the merger, consolidation, reorganization, recapitalization or other similar transaction of Debtor.


 




    	 



    	 



    

 


As
an additional and express remedy and right of Secured Party, upon any non-cured Event of Default, Secured Party may seek the appointment
in any court of general jurisdiction of a receiver (pursuant to Rules 1 and 66 of the Arizona or federal Rules of Civil Procedure,
and pursuant to A.R.S. § 12-1241, as an independent judicial remedy and proceeding) over and to the Interest. The appointment
may be sought without notice to Debtor and without regard to the adequacy of the Collateral as security for the Obligations and
without regard to the solvency of the Debtor. Such receiver shall have the power and authority to (i) manage and operate the Interest
and exercise all of the rights of Debtor pursuant to the Formation Documents, and (ii) cause to be conducted the business and
affairs of the respective Entity including, without limitation, making expenditures, paying taxes, use of assets of the respective
Entity, execution, negotiation and performance of such contracts, conveyances and other instruments as the receiver deems proper
in its sole discretion, payment of expenses, maintenance of insurance, acquisition and disposition of assets, the commencement
and prosecution of actions at law or in equity or otherwise engaging in the conduct of the affairs and business of the respective
Entity, the receiver to have such powers, rights and duties as are set forth in the Secured Party’s requested order of appointment
of such receiver.


 


15.
Nonexclusive Remedies. The remedies conferred by this Agreement are nonexclusive and cumulative of any other remedies now
available or subsequently existing at law, in equity or by statute, regulation, rule or otherwise, all of which are reserved by
and to Secured Party.


 


16.
Reservation of Rights. No delay or forbearance by or on behalf of Secured Party in exercising any right, remedy, power
or privilege under this Security Agreement (“Lender’s Rights”) will operate as a waiver of any such Lender’s
Rights, nor shall any exercise or non-exercise of any particular Lender’s Right preclude any other or further exercise of
Lender’s Rights pertaining to any current or subsequent default by Debtor. The taking of this Security Agreement will not
waive or impair any other security that Secured Party may have or hereafter acquire for the payment of the Obligations nor will
the taking of any such additional security waive or impair this Security Agreement. Secured Party may resort to any security it
may have and apply proceeds of the Collateral in any order it may deem proper.


 




    	 



    	 



    

 


17.
Expenses, Fees and Costs. If any Event of Default occurs, or Secured Party otherwise acts to protect its security interest
in the Collateral, Debtor promises to pay all of the following costs and fees if incurred by or on behalf of Secured Party: (i)
all expenses of recovering, holding, preparing for sale and selling of the Collateral, (ii) reasonable attorneys’ fees,
(iii) all costs and expenses of collection, enforcement, interpretation or any foreclosure, whether or not suit is filed, and
(iv) all costs of suit, each of which are to be determined by a court and not by a jury. “Suit” includes proceedings
in courts of original, appellate and bankruptcy jurisdiction.


 


18.
Waivers. No waiver under this Agreement is valid unless it is in writing and signed by the Party giving the waiver. A waiver
of a particular matter or remedy does not waive a subsequent or similar matter or remedy. No waiver will excuse a Party from payment
or the performance of its other obligations under this Agreement.


 


19.
Choice of Law. This Security Agreement is governed by the laws of the State, except to the extent under the UCC the laws
pertaining to any Entity must control instead of the laws of the State. The parties consent and submit to the nonexclusive jurisdiction
of the courts of the State and the United States District Court for the District of Arizona, to be venued in Maricopa County,
Arizona, concerning any action arising under this Security Agreement.


 


20.
Construction. Captions and headings are for convenience and reference only and do not define, limit or affect the contents
of this Security Agreement. References to “paragraphs” or “sections” refer to this Security Agreement
unless stated otherwise. The terms “include” or “including” mean “without limitation by reason of
enumeration.” All grammatical usage will be deemed to refer to the masculine, feminine, neuter, singular or plural as the
context and identity of any person(s) may require.


 


21.
Severability and Interpretation. The invalidity or unenforceability of any provision of this Security Agreement does not
affect the other remaining provisions. This Security Agreement will be construed as if it excluded any invalid or unenforceable
provision, which will be severed from this Security Agreement. Whenever possible, this Security Agreement will be interpreted
so as to be valid under applicable law, and will not be construed strictly in favor of or against any particular party, including
any party who drafted or prepared this Security Agreement, but instead according to its plain meaning to give effect to its intended
purposes.


 


22
..Notices. Except as otherwise required by law, all notices under this Agreement will be in writing. Notices are deemed
given and received (a) when personally delivered, (b) when received by facsimile or by overnight courier service, or (c) on the
fourth Business Day after mailing by certified/registered U.S. Mail, return receipt requested. Notices will be addressed as follows:


 




    	 



    	 



    

 





	To
    Debtor:	 	MagneGas
    Corporation
	 	 	Attn:
    Chief Financial Officer
	 	 	11885
    44th Street North
	 	 	Clearwater,
    Florida 33762
	 	 	 
	To
    Secured Party:	 	Point
    Financial, Inc.
	 	 	Attn:
    President
	 	 	3318
    East Kachina Drive
	 	 	Phoenix,
    AZ 85044


 


(or
at any other address designated in a notice given by a Party to change its address). Rejection or refusal to accept, or the inability
to deliver because of change in address as to which no notification has been given, will be deemed to constitute receipt if given
as provided above.


 


23.Waiver
of Jury Trial. Any lawsuit concerning this Agreement will be tried by the court, AND THE PARTIES EACH IRREVOCABLY AND EXPRESSLY
WAIVE ALL RIGHTS TO ANY TRIAL BY A JURY (ADVISORY OR OTHERWISE).


 


24.
Modification. This Agreement may be amended only by a written document signed by all the Parties.


 


25.
Time. TIME IS OF THE ESSENCE FOR THE PERFORMANCE OF EACH PROVISION OF THIS AGREEMENT. If this Agreement requires any action
to be performed on a date which is not a “Business Day” (a Saturday, Sunday or a state or federal legal holiday),
such action will be validly performed on the next succeeding Business Day.


 


26.
Parties Bound. “Debtor” means the undersigned (individually or collectively) and all successors, assigns and
personal or legal representatives, jointly and severally. “Secured Party” means such Party and its successors and
assigns. Neither Party may assign this Security Agreement or any other Transaction Document except in connection with an assignment
of the Lease Agreement, and as provided in the Lease Agreement.


 


27.
No Third Party Beneficiary. This Agreement is solely for the benefit of the Parties (and any successors and permitted assigns)
and does not confer any rights or remedies on any other persons.


 


28.
Counterparts. This Agreement may be executed in identical counterparts, each of which upon execution shall be deemed an
original, but all of which together will constitute one document. Partially executed signature or acknowledgment pages of any
one counterpart may be combined with any other partially executed counterpart to constitute a fully executed original Agreement.
Facsimiles of executed signature pages are effective as original signatures.


 


29.
Incorporation of Recitals and Exhibits. The Recitals and all attached Schedules are incorporated as part of this Agreement.


 




    	 



    	 



    

 


30.
Effective Date. This Security Agreement is executed and effective as of November 13, 2017 (“Effective Date”).


 


[The
Remainder of This Page is Intentionally Blank]


 


	DEBTOR:
    	 	SECURED
    PARTY:
	 	 	 
	MagneGas
    Corporation,	 	Point
    Financial, Inc.,
	a
    Delaware corporation	 	an
    Arizona corporation
	 	 	 
		 	
	Ermanno
    Santilli, CEO	 	Michael
    J. O’Malley, President


 


**Signature
Page to Subsidiary Pledge Agreement**


 




    	 



    	 



    

 


SCHEDULE
1 TO SECURITY AGREEMENT


 


Further
or More Specific Description of the Entities and the Interest:


 


	Pledged
    Entity 	 	State
    of Organization	 	Percent
    of Ownership


 




    	 



    	 



    

 


SCHEDULE
2 TO SECURITY AGREEMENT


IRREVOCABLE
PROXY AGREEMENT


 


This
Irrevocable Proxy Agreement is made this 15th day of November, 2017, by and among MagneGas Corporation, a Delaware
corporation (“Debtor”) [ ] (“Companies”) and Point Financial, Inc., an Arizona corporation (“Secured
Party”), with reference to that certain Security Agreement and Pledge of the 100% of the Interest(s) in Companies owned
by Debtor to Secured Party, of even date herewith.


 


Pursuant
to the promises and agreements of Debtor in such Security Agreement, Debtor hereby irrevocably grants and appoints Secured Party,
from the date of this Irrevocable Proxy Agreement until the termination of the Security Agreement in accordance with its terms
and provisions, as Debtor’s true and lawful proxy, for and in Debtor’s name, place and stead, to vote the Interest(s)
in the Company with respect to any change, modification or amendment to the Formation Documents (including without limitation
the Operating Agreement of the Company) that pertains to or purports to effect in any way the Company’s “opt-out”
status under UCC Article/Chapter 8, including any attempt to “opt-in” to Article/Chapter 8 in any way.


 


Upon
the occurrence of a non-cured Event of Default (as defined in the Transaction Document”), this proxy to Secured Party will
also be deemed to include the right to sign Debtor’s name (as a member or manager or both of the Companies) to any consent,
certificate or other document relating to the Companies that applicable law or the Companies’ Formation Documents may permit
or require, to cause the Debtor’s Interest(s) in the Companies (membership, management or both) to be voted in accordance
with the direction and wishes of the Secured Party, so as to maintain and retain the Companies’ status as having remained
unaffected by (opted out of) UCC Article/Chapter 8. Debtor hereby revokes all other voting or other proxies and powers of attorney
with respect to the Debtor’s Interest(s) in the Companies, or if there are no such outstanding proxies and powers of attorney,
Debtor hereby represents and warrants to Secured Party and the Companies that there are no outstanding proxies or powers of attorney
except for this Irrevocable Proxy Agreement to Secured Party. Further, Debtor will give no subsequent proxy or power of attorney
to any other person without the prior knowledge of and consent thereto from Secured Party. Any action by Debtor inconsistent with
or in violation of any term or condition of this Irrevocable Proxy Agreement is null, void and without any force or effect.


 


THE
PROXIES AND POWERS GRANTED BY DEBTOR TO SECURED PARTY PURSUANT TO THE FOREGOING ARE GIVEN IN CONSIDERATION OF THE SECURITY AGREEMENT
AND THE OBLIGATIONS SECURED THEREBY.


 


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Remainder of This Page is Intentionally Blank]


 




    	 



    	 



    

 


DATED:
NOVEMBER 15, 2017.


 


	DEBTOR:
    MAGNEGAS CORPORATION	 
	 	 
			 
	Name:
    	Ermanno
    Santilli	 
	Title:
    	Chief
    Executive Officer	 


 


**Signature
Page to Schedule 2 of Security Agreement -


Irrevocable
Proxy Agreement**