Document:

TAX
SHARING AGREEMENT

 

THIS
TAX SHARING AGREEMENT (this “Agreement”), dated as of December 2, 2019, is by and between TARONIS TECHNOLOGIES,
INC. (“Tech”), a Delaware corporation, and TARONIS FUELS, INC. (“Fuels”), Delaware corporation.
Each of Tech and Fuels is sometimes referred to herein as a “Party” and, collectively, as the “Parties.”

 

WHEREAS,
Tech is engaged, directly and indirectly, in the welding supply and gas distribution business and the manufacture and sale of
“MagneGas” and Venturi® Gasification systems used to create synthetic gases (“Fuels Business”)
as well as being engaged, directly and indirectly, in the technology business, generally, including an emphasis on water related
technologies (“Tech Business”);

 

WHEREAS,
the Board of Directors of Tech has determined that it is in the best interests of Tech and its shareholders to separate into two
publicly traded companies (“Separation”):

 

(a)
Tech, which will continue to conduct, directly and through its Subsidiaries, the Tech Business; and

 

(b)
Fuels, which will continue to conduct, directly and through its Subsidiaries the Fuels Business;

 

WHEREAS,
Tech has contributed to Fuels certain assets related to the Fuels Business in exchange for the assumption by Fuels of liabilities
associated with the Fuels Business (the “Contribution”);

 

WHEREAS,
on the Distribution Date and subject to the terms and conditions of this Agreement, Tech will distribute to the Record Holders
(as defined in the Master Distribution Agreement), on a pro rata basis, all the outstanding common shares, par value $0.000001,
of Fuels then owned by Tech (the “Distribution”), and the Board of Directors of Tech has approved such Distribution;

 

WHEREAS,
prior to consummation of the Separation and the Distribution, Tech will be the common parent corporation of an affiliated group
of corporations within the meaning of Section 1504 of the Code that includes Fuels; and

 

WHEREAS, the Parties wish to provide for the payment of Tax liabilities and entitlement to refunds thereof,
allocate responsibility for, and cooperation in, the filing of Tax Returns, and provide for certain other matters relating to Taxes.

 

NOW,
THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the Parties hereby agree as follows:

 

Article
I. Definitions.

 

As
used in this Agreement, the following terms shall have the following meanings: “Accounting Firm” means, or any other
nationally recognized accounting firm as mutually agreed by the Parties.

 

“Acting
Party” has the meaning set forth in Section 6.02(b).

 

“Adjustment”
means any change in the Tax liability of a taxpayer, determined issue- by-issue or transaction-by-transaction, as the case may
be.

 

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“Aggregate
Carryback Amount” has the meaning set forth in Section 4.02(c).

 

“Agreement”
has the meaning set forth in the preamble.

 

“Benefited
Party” has the meaning set forth in Section 4.01(b).

 

“Carryback
Amount” has the meaning set forth in Section 4.02(c).

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

“Controlling
Party” means Tech or any other member of the Tech Group with respect to any Mixed Business Tax Return and Single Business
Tax Return related to the Tech Business, and Fuels or any other member of the Fuels Group with respect to any Single Business
Tax Return related to the Fuels Business.

 

“Distribution”
has the meaning set forth in the preamble.

 

“Distribution
Agreement” means the Master Distribution Agreement, dated as of the date of this Agreement, between the Parties.

 

“Distribution
Date” means the date on which the Distribution occurs.

 

“Due
Date” means (i) with respect to a Tax Return, the date (taking into account all valid extensions) on which such Tax Return
is required to be filed under applicable Law and with respect to a payment of Taxes, the date on which such payment is required
to be made to avoid the incurrence of interest, penalties and/or additions to Tax.

 

“Final
Determination” means the final resolution of liability for any Tax for any taxable period, by or as a result of (i) a final
decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed; (ii) a final
settlement with the IRS, a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable
agreement under the Laws of other jurisdictions, which resolves the entire Tax liability for any taxable period; (iii) any allowance
of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund
or credit may be recovered by the jurisdiction imposing the Tax; or (iv) any other final resolution, including by reason of the
expiration of the applicable statute of limitations or the execution of a pre-filing agreement with the IRS or other Taxing Authority.

 

“Fuels”
has the meaning set forth in the preamble.

 

“Fuels
Allocable Portion” means, with respect to any Tax paid after the Distribution Date or any Adjustments to Tax after the Distribution
Date relating to a Mixed Business Tax Return, the amount of such Tax attributable to Fuels, any Fuels Entity, or the Fuels Business,
as determined taking into account historical practice (including historical methodologies for making corporate allocations), the
Code, Treasury Regulations, and any applicable state, local or foreign law. For purposes of determining the Fuels Allocable Portion
of any Tax related to a Pre-Closing Period or Straddle Period for which no Tax Return has been filed, the amount of the Fuels
Allocable Portion will be determined after subtracting the amount of the Tax (whether positive, or if a loss, negative) attributable
to Fuels, any Fuels Entity, or the Fuels Business as agreed to by the Parties with respect to the portion of the Tax year ending
on December 31, 2019.

 

“Fuels
Business” has the meaning set forth in the preamble and also means (i) the business and operations conducted by Tech and
its Subsidiaries prior to the Distribution comprising what is referred to in the Tech 10-K as the Fuels Business segments; (ii)
any other business (other than the Fuels Business) directly conducted by any member of the Tech Group as of or prior to the Distribution;
and (iii) any business operation or assets that, at the time they were discontinued or sold, were not part of the Fuels Business
as then reported in the Tech 10-K.

 

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“Fuels
Common Shares” means (i) all classes or series of outstanding common shares of Fuels for U.S. federal income tax purposes,
including common shares and all other instruments treated as outstanding equity in Fuels for U.S. federal income tax purposes,
and (ii) all options, warrants and other rights to acquire such stock.

 

“Fuels
Entity” means a member of the Fuels Group.

 

“Fuels
Group” has the meaning set forth in the Distribution Agreement.

 

“Fuels
Percentage” means the percentage determined by dividing (i) the average total value of the Fuels Common Shares for the five
business days following the Distribution Date, computed for each day by averaging the intraday high and intraday low trading price
of the Fuels Common Shares and multiplying such amount by the total number of shares of Fuels Common Shares outstanding on such
day, by (ii) the sum of (A) the amount determined in clause (i) and (B) the average total value of the Tech Common Shares for
the five business days following the Distribution Date, computed for each day by averaging the intraday high and intraday low
trading price of the Tech Common Shares and multiplying such amount by the total number of shares of Tech Common Shares outstanding
on such day.

 

“Fuels
Taxes” means, without duplication, (i) 50% of all Transfer Taxes, (ii) the Fuels Allocable Portion of any Taxes in
respect of a Mixed Business Tax Return, and (iii) any Taxes in respect of any Single Business Tax Return related to the
Fuels Business.

 

“Governmental
Authority” means any federal, state, local or foreign government (including any political or other subdivision or judicial,
legislative, executive or administrative branch, agency, commission, authority or other body of any of the foregoing).

 

“Governmental
Order” means any order, writ, judgment, injunction, decree or award entered by or with any Governmental Authority.

 

“Indemnifying
Party” means the Party from which the other Party is entitled to seek indemnification pursuant to the provisions of Article
3.

 

“Indemnified
Party” means the Party which is entitled to seek indemnification from the other Party pursuant to the provisions of Article
3.

 

“Information”
has the meaning set forth in Section 7.01(a).

 

“Information
Request” has the meaning set forth in Section 7.01(a).

 

“Interested
Party” means Tech or Fuels (including any successor and/or assign of any of the foregoing), as the case may be, to the extent
(i) such Person or a member of such Person’s group is not a Controlling Party with respect to a Tax Proceeding and (ii)
such Person or a member of such Person’s group is (A) an Indemnifying Party or (B) an Indemnified Party.

 

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“IRS”
means the U.S. Internal Revenue Service or any successor thereto, including its agents, representatives, and attorneys.

 

“Law”
means any statute, law, ordinance, regulation, rule, code or other requirement of a Governmental Authority or any Governmental
Order.

 

“Mixed
Business Tax Return” means any Tax Return including any consolidated, combined or unitary Tax Return, that relates to at
least one asset or activity that is part of the Tech Business, on the one hand, and at least one asset or activity that is part
of the Fuels Business, on the other hand.

 

“Non-Acting
Party” has the meaning set forth in Section 6.02(b).

 

“Ordinary
Course of Business” means an action taken by a Person only if such action is taken in the ordinary course of the normal
day-to-day operations of such Person.

 

“Party”
has the meaning set forth in the preamble.

 

“Person”
means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization,
including a Governmental Authority.

 

“Post-Closing
Period” means any taxable period (or portion thereof) beginning after the Distribution Date.

 

“Post-Distribution
Ruling” has the meaning set forth in Section 6.02(b).

 

“Pre-Closing
Period” means any taxable period (or portion thereof) ending on or before the Distribution Date.

 

“Refund”
means any refund (or credit in lieu thereof) of Taxes (including any overpayment of Taxes that can be refunded or, alternatively,
applied to other Taxes payable), including any interest paid on or with respect to such refund of Taxes, provided, however, that
for purposes of this Agreement, the amount of any Refund required to be paid to another Party shall be reduced by the net amount
of any income Taxes imposed on, related to, or attributable to, the receipt or accrual of such Refund.

 

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“Restriction
Period” means the period beginning at the effective time of the Distribution and ending on the two-year anniversary of the
day after the Distribution Date.

 

“Separation”
has the meaning set forth in the preamble.

 

“Separation
Agreement” means the Separation Agreement, dated December 2, 2019, between the Parties.

 

“Single
Business Tax Return” means any Tax Return including any consolidated, combined or unitary Tax Return, that includes assets
or activities relating only to the Tech Business, on the one hand, or the Fuels Business, on the other (but not both), whether
or not the Person charged by Law to file such Tax Return is engaged in the business to which the Tax Return relates.

 

“Straddle
Period” means any taxable period that begins on or before and ends after the Distribution Date.

 

“Subsidiary”
of any Person means another Person (a) in which the first Person owns, directly or indirectly, an amount of the voting securities,
voting partnership interests or other voting ownership sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting securities, interests or ownership, a majority of the equity interests in such
other Person), or (b) of which the first Person otherwise has the power to direct the management and policies. A Subsidiary may
be owned directly or indirectly by such first Person or by another Subsidiary of such first Person.

 

“Tax”
means (i) all taxes, charges, fees, duties, levies, imposts, or other similar assessments, imposed by any U.S. federal, state
or local or foreign governmental authority, including income, gross receipts, excise, property, sales, use, license, common shares,
transfer, franchise, payroll, withholding, social security, value added, goods and services, consumption, and other taxes, (ii)
any interest, penalties or additions attributable thereto and all liabilities in respect of any items described in clauses (i)
or (ii) payable by reason of assumption, transferee or successor liability, operation of Law or Treasury Regulation Section 1.1502-6(a)
(or any predecessor or successor thereof or any analogous or similar provision under Law).

 

“Tax
Attribute” means a net operating loss, net capital loss, tax credit, earnings and profits, overall foreign loss, separate
limitation loss, previously taxed income, or any item of income, gain, loss, deduction, credit, recapture or other item that may
have the effect of increasing or decreasing any income Tax paid or payable.

 

“Tax
Benefit” has the meaning set forth in Section 3.04.

 

“Tax
Materials” has the meaning set forth in Section 6.01(a).

 

“Tax
Matter” has the meaning set forth in Section 7.01(a)(i).

 

“Tax
Package” means all relevant Tax-related information relating to the operations of the Tech Business or the Fuels Business,
as applicable, that is reasonably necessary to prepare and file the applicable Tax Return.

 

“Tax
Proceeding” means any audit, assessment of Taxes, pre-filing agreement, other examination by any Taxing Authority, proceeding,
appeal of a proceeding or litigation relating to Taxes, whether administrative or judicial, including proceedings relating to
competent authority determinations.

 

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“Tax
Return” means any return, report, certificate, form or similar statement or document (including any related or supporting
information or schedule attached thereto and any information return, or declaration of estimated Tax) required to be supplied
to, or filed with, a Taxing Authority in connection with the payment, determination, assessment or collection of any Tax or the
administration of any Laws relating to any Tax and any amended Tax return or claim for refund.

 

“Taxing
Authority” means any governmental authority or any subdivision, agency, commission or entity thereof or any quasi-governmental
or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).

 

“Tech”
has the meaning set forth in the preamble.

 

“Tech
10-K” means Tech’s Annual Report on Form 10-K, including for the fiscal year ended December 31, 2018, and all prior
fiscal years.

 

“Tech
Allocable Portion” means, with respect to any Tax paid after the Distribution Date relating to a Mixed Business Tax Return,
the amount of any such Tax less the Fuels Allocable Portion.

 

“Tech
Business” has the meaning set forth in the preamble and also means (i) the business and operations conducted by Tech and
its Subsidiaries prior to the Distribution comprising what is referred to in the Tech 10-K as the use of the Company’s proprietary
plasma arc technology for water sterilization, among other things; (ii) The Water Pilot business, (iii) any other business (other
than the Fuels Business) directly conducted by any member of the Tech Group as of or prior to the Distribution; and (iv) any business
operation or assets that, at the time they were discontinued or sold, were not part of the Fuels Business as then reported in
the Tech 10-K.

 

“Tech
Common Shares” means (i) all classes or series of outstanding common shares of Tech for U.S. federal income tax purposes,
including common stock and all other instruments treated as outstanding equity in Tech for U.S. federal income tax purposes, and
(ii) all options, warrants and other rights to acquire such stock.

 

“Tech
Entity” means a member of the Tech Group.

 

“Tech
Group” means Tech and each of its direct or indirect Subsidiaries that is not a member of the Fuels Group, and each Person
that is or becomes a member of the Tech Group after the Distribution, including any Person that is or was merged into Tech or
any direct or indirect Subsidiary that is not a member of the Fuels Group.

 

“Tech
Percentage” 100% minus the Fuels Percentage.

 

“Tech
Taxes” means, without duplication, (i) 50% of all Transfer Taxes, (ii) the Tech Allocable Portion of any Taxes in
respect of a Mixed Business Tax Return, and (iii) any Taxes in respect of any Single Business Tax Return related to the
Tech Business.

 

“Transfer
Taxes” means all sales, use, transfer, real property transfer, intangible, recordation, registration, documentary, stamp
or similar Taxes imposed on the Separation or the Distribution, and paid after the Distribution Date.

 

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“Treasury
Regulations” means the final and temporary (but not proposed) Tax regulations promulgated under the Code, as such regulations
may be amended from time to time (including corresponding provisions of succeeding regulations).

 

“U.S.”
means the United States of America.

 

Article
II. Preparation, Filing and Payment of Taxes

 

Section
2.01 Responsibility of Parties to Prepare Tax Returns and Pay Taxing Authority.

 

(a)
Tech Tax Returns. Tech shall prepare and file (or cause a Tech Entity to prepare and file) all (i) Single Business Tax
Returns relating to the Tech Business and (ii) all Mixed Business Tax Returns, and shall pay (or cause such Tech Entity to pay)
all Taxes shown to be due and payable on such Tax Returns.

 

(b)
Fuels Tax Returns. Fuels shall prepare and file (or cause a Fuels Entity to prepare and file) all Single Business Tax Returns
relating to the Fuels Business, and shall pay (or cause such Fuels Entity to pay) all Taxes shown to be due and payable on such
Tax Returns.

 

Section
2.02 Tax Return Procedures for Mixed Business Tax Returns.

 

(a)
Tech shall prepare all, if any, Mixed Business Tax Returns consistent with historical practice and the Tax Representation
Letter unless otherwise required by Law or agreed to in writing by Fuels. In the event that there is no historical practice for
reporting a particular item or matter, Tech shall determine the reporting of such item or matter provided that such determination
is, in the reasonable opinion of Tech, at least more likely than not to be sustained. In connection with the preparation of any
Mixed Business Tax Return, Fuels will assist and cooperate with Tech with respect to Tech’s preparation of any such Mixed
Business Tax Return, including assisting Tech in the preparation of a pro forma Tax Return for Fuels and any Fuels Entity to be
used in determining the Fuels Allocable Portion with respect to such Mixed Business Tax Return.

 

(b)
In connection with any Mixed Business Tax Return, no later than 30 days prior to the Due Date of each such Tax Return, Tech shall
make available or cause to be made available drafts of such Tax Return (together with all related work papers) and a document
determining the Fuels Allocable Portion of Taxes with respect to such Mixed Business Tax Return to Fuels. The failure of Tech
to make available any such materials described in the preceding sentence to Fuels within the time frame described in the preceding
sentence shall not relieve Fuels of any obligation which it may have to Tech under this Agreement except to the extent that Fuels
is actually prejudiced by such failure. Fuels shall have access to any and all data and information necessary for the preparation
of any such Mixed Business Tax Returns and the Parties shall cooperate fully in the preparation and review of such Tax Returns.
Subject to the preceding sentence, no later than 15 days after receipt of such Mixed Business Tax Returns (and related documents),
Fuels shall have a right to object to such Mixed Business Tax Return (or items with respect thereto, including the Fuels Allocable
Portion with respect to such Mixed Business Tax Return) by written notice to Tech; such written notice shall contain such disputed
item (or items) and the basis for its objection. Fuels shall pay to Tech no later than five days prior to the Due Date of each
such Tax Return the Fuels Allocable Portion of Taxes shown as due and payable on such Mixed Business Tax Return (net of any prepayment
made against such amount).

 

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(c)
With respect to a Mixed Business Tax Return delivered by Tech to Fuels pursuant to Section 2.02(b), if Fuels does not object by
proper written notice described in Section 2.02(b), such Mixed Business Tax Return and the calculation of the Fuels Allocable
Portion with respect thereto shall be deemed to have been accepted and agreed upon, and to be final and conclusive, for purposes
of this Section 2.02 (c). If Fuels does object by proper written notice described in Section 2.02(b), Tech and Fuels shall act
in good faith to resolve any such dispute as promptly as practicable; provided, however, that, notwithstanding anything
to the contrary contained herein, if Tech and Fuels have not resolved the disputed item or items by the day five days prior to
the Due Date of such Mixed Business Tax Return, such Tax Return shall be filed as prepared pursuant to this Section 2.02(a) (revised
to reflect all initially disputed items that Tech and Fuels have agreed upon prior to such date). In the event that a Mixed Business
Tax Return is filed that includes any disputed item for which proper notice was given pursuant to Section 2.02(b) that was not
finally resolved and agreed upon, such disputed item (or items) shall be resolved in accordance with Section 8.01 (interpreted
without regard to the requirement that the Accounting Firm render a determination no later than the Due Date of the Tax Return
at issue). In the event that the resolution of such disputed item (or items) in accordance with Section 8.01 with respect to a
Mixed Business Tax Return is inconsistent with such Mixed Business Tax Return as filed, Tech (with cooperation from Fuels, if
necessary) shall, as promptly as practicable, amend such Tax Return to properly reflect the final resolution of the disputed item
(or items). In the event that the amount of Taxes shown to be due and owing on a Mixed Business Tax Return is adjusted as a result
of a resolution pursuant to this Section 2.02(c), proper adjustment shall be made to the amounts previously paid or required to
be paid in a manner that reflects such resolution.

 

Section
2.03 Expenses. Except as provided otherwise herein or in the Distribution Agreement, each Party shall bear its own expenses
incurred in connection with this Article 2.

 

Section
2.04 Coordination with Article 4. This Article 2 shall not apply to any amended Tax Returns, other than such Tax Returns required
to be amended under Section 2.02(c), all other such amended Tax Returns governed by Article 4.

 

Article
III. Payment of Taxes and Indemnification.

 

Section
3.01 Payment and Indemnification by Tech. Tech shall pay, and shall indemnify and hold the Fuels Group harmless from and against,
without duplication, all Tech Taxes, (b) all Taxes incurred by Fuels or any Fuels Entity by reason of the breach by Tech of any
of its representations, warranties or covenants hereunder, and (c) any external costs and expenses related to the foregoing (including
reasonable attorneys’ fees and expenses but excluding any expenses described in Section 2.03).

 

Section
3.02 Payment and Indemnification by Fuels. Fuels shall pay, and shall indemnify and hold the Tech Group harmless from and
against, without duplication, (a) all Fuels Taxes, (b) all Taxes incurred by Tech or any Tech Entity by reason of the breach by
Fuels of any of its representations, warranties or covenants hereunder, and (c) any external costs and expenses related to the
foregoing (including reasonable attorneys’ fees and expenses but excluding any expenses described in Section 2.03).

 

Section
3.03 Timing of Tax Payments. Unless otherwise provided in this Agreement, in the event that a Party (the “Indemnifying
Party”) is required to make a payment to another Party (the “Indemnified Party”) pursuant to this
Article 3, the Indemnified Party shall deliver written notice of the payments to the Indemnifying Party, including proof of payment
to the Taxing Authority, in accordance with Section 8.19 on the last day of the calendar quarter in which the obligation giving
rise to the indemnification payment must be satisfied, and the Indemnifying Party shall be required to make payment to the Indemnified
Party within 10 days after notice of such payment is delivered to the Indemnifying Party.

 

Section
3.04 Characterization of and Adjustments to Payments. For all Tax purposes, Tech and Fuels agree to treat (a) any payment
required by this Agreement or any indemnity payments required by the Separation Agreement or Distribution Agreement (other than
payments pursuant to Section 8.03) as either a contribution by Tech to Fuels or a distribution by Fuels to Tech, as the case may
be, occurring immediately prior to the Distribution Date. Except as otherwise provided, any payment under this Agreement shall
be decreased to take into account any reduction in taxable income of the Indemnified Party arising from the payment by the Indemnified
Party of such indemnified liability and increased to take into account any inclusion in taxable income of the Indemnified Party
arising from the receipt of such indemnity payment if there is any such increase notwithstanding the first sentence of this Section
3.04 (collectively, “Tax Benefits”). Any Tax Benefit shall be determined (i) using the flat U.S. federal corporate
income tax rate (or, the highest applicable marginal U.S. federal corporate income tax rate in effect at the time of the determination,
if different, and excluding any state income tax effect of such inclusion or reduction) and assuming that the Indemnified Party
will be liable for Taxes at such rate, the Indemnified Party has sufficient taxable income to use any tax deduction, and has no
other relevant Tax Attributes at the time of the determination.

 

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Article
IV. Refunds, Carrybacks, Amendments and Tax Attributes.

 

Section
4.01 Refunds.

 

(a)
Except as provided in Section 4.02, Tech shall be entitled to all Refunds of Taxes with respect to which Tech would be liable
for payment under Article 3 if such Taxes were paid after the Distribution Date, and Fuels shall be entitled to all Refunds of
Taxes with respect to which Fuels would be liable for payment under Article 3 if such Taxes were paid after the Distribution Date.
A Party receiving a Refund to which the other Party is entitled pursuant to this Agreement shall pay to the other Party the amount
to which such other Party is entitled within 10 days after the receipt of the Refund.

 

(b)
Notwithstanding Section 4.01(a), to the extent that a Party applies or causes to be applied an overpayment of Taxes as a credit
toward or a reduction in Taxes otherwise payable by such Party (or a Taxing Authority requires such application in lieu of a Refund)
and such overpayment of Taxes, if received as a Refund, would have been payable by such Party to the other Party pursuant to this
Section 4.01, such Party shall pay such amount to the other Party no later than the Due Date of the Tax Return for which such
overpayment is applied to reduce Taxes otherwise payable.

 

(c)
In the event of an Adjustment relating to Taxes for which one Party is or may be liable pursuant to Article 3 would have given
rise to a Refund but for an offset against the Taxes for which the other Party is or may be liable pursuant to Article 3 (the
“Benefited Party”), then the Benefited Party shall pay to the other Party within 10 days of the Final Determination
of such Adjustment an amount equal to the lesser of (a) the amount of such hypothetical Refund or (b) the amount of such reduction
in the Taxes of the Benefited Party, in each case plus interest at the rate set forth in Section 6621(a)(1) of the Code on such
amount for the period from the filing date of the Tax Return that would have given rise to such Refund to the payment date to
the other Party.

 

(d)
To the extent that the amount of any Refund under this Section 4.01 is later reduced by a Taxing Authority or as the result of
a Tax Proceeding, such reduction shall be allocated to the Party that was entitled to such Refund pursuant to this Section 4.01
and an appropriate adjusting payment shall be made by such Party to the other Party if the other Party originally paid the Refund
to such Party. For the avoidance of doubt, this Section 4.01(d) is intended to make whole the other Party that was not entitled
to the Refund.

 

Section
4.02 Carrybacks.

 

(a)
Subject to Tech’s discretion to file an amended Tax return under Section 4.03, each Party is permitted (but not required)
to carry back (or to cause its Subsidiaries to carry back) a loss, credit, or other Tax Attribute realized in a Post-Closing Period
or a Straddle Period to a Pre-Closing Period or a Straddle Period; provided, however, that if such carryback would reasonably
be expected to adversely impact the other Party (including through an increase in Taxes or a loss or reduction in the utilization
of a loss, credit, or other Tax Attribute regardless of whether or when such loss, credit, or other Tax Attribute otherwise would
have been used), such carryback shall not be permitted without first obtaining the prior written consent of such other Party,
which consent shall not be unreasonably withheld or delayed.

 

(b)
(i) Refunds for Carrybacks. Subject to Sections 4.02(c) and 4.02(d), in the event that any member of the Fuels Group chooses
to (or is required to under applicable Law), and is permitted to under Sections 4.02(a) and 4.03, carry back a loss, credit, or
other Tax Attribute to a Mixed Business Tax Return, Tech shall cooperate with Fuels and such member in seeking from the appropriate
Taxing Authority any Refund that reasonably would result from a permitted carryback (including by filing an amended Tax Return
at Fuels’ cost and expense). Fuels (or such member) shall be entitled to any Refund realized by any member of the Tech Group
or Fuels Group as a result of the carryback.

 

(ii)
Subject to Sections 4.02(c) and 4.02(d), in the event that any member of the Tech Group chooses to (or is required to under applicable
Law), and is permitted to under Sections 4.02(a) and 4.03, carry back a loss, credit, or other Tax Attribute to a Mixed Business
Tax Return, Fuels shall cooperate with Tech and such member in seeking from the appropriate Taxing Authority any Refund that reasonably
would result from a permitted carryback (including by filing an amended Tax Return at Tech’s cost and expense). Tech shall
be entitled to any Refund realized by any member of the Fuels Group or Tech Group as a result of the carryback.

 

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(c)
Except as otherwise provided by applicable Law, if any loss, credit or other Tax Attribute of the Tech Business and the Fuels
Business both would be eligible to be carried back or carried forward to the same Pre-Closing Period or Straddle Period (had such
carryback been the only carryback to such taxable period) (such amount for each of the Tech Business and the Fuels Business separately
referred to as the “Carryback Amount” and the sum of both amounts returned to as the “Aggregate Carryback
Amount”), any Refund resulting therefrom shall be allocated between Tech and Fuels proportionately based on the ratio
of the Tech Business Carryback Amount to the Aggregate Carryback Amount and the Fuels Business Carryback Amount to the Aggregate
Carryback Amount, respectively. Appropriate adjustments to the allocation of any Refund under the preceding sentence shall be
made if the carryback results in any additional Tax Attributes being allocated to the Tech Group or the Fuels Group (for example,
under the regulations applicable to U.S. federal consolidated income tax returns) to the extent necessary to cause the Tech Group,
on the one hand, and the Fuels Group, on the other hand, to proportionately benefit from such carryback.

 

(d)
To the extent the amount of any Refund under this Section 4.02 is later reduced by a Taxing Authority or a Tax Proceeding, such
reduction shall be allocated to the Party to which such Refund was allocated pursuant to this Section 4.02.

 

Section
4.03 Amended Tax Returns.

 

(a)
Mixed Business Tax Returns. Tech shall, in its sole discretion, be permitted to amend, or to cause Fuels or any Fuels Entity
to amend (and Fuels shall, if Tech so chooses, amend or cause the applicable Fuels Entity to amend), any Mixed Business Tax Return;
provided, however, that unless otherwise required by a Final Determination, Tech shall not be permitted to so amend any
such Mixed Business Tax Return to the extent that any such amendment or filing (i) would reasonably be expected to materially
adversely impact Fuels (including through an increase in Taxes or a loss or reduction of a Tax Attribute regardless of whether
or when such Tax Attribute otherwise would have been used), (ii) would be inconsistent with historical practice, or (iii) would
be inconsistent with the Tax Representation Letter, in each case without the prior written consent of Fuels, which
consent shall not be unreasonably withheld or delayed. If requested in writing by Fuels at least 60 days prior to the expiration
of the applicable statute of limitations, Tech shall amend any Mixed Business Tax Return to reflect changes proposed by Fuels;
provided, however, that Fuels shall reimburse Tech for all reasonable out-of-pocket costs and expenses incurred by Tech
in amending such Mixed Business Tax Return; provided, further, that unless otherwise required by a Final Determination,
Tech shall not be required to so amend any such Mixed Business Tax Return to the extent that any such amendment (A) would reasonably
be expected to materially adversely impact Tech (including through an increase in Taxes or a loss or reduction of a Tax Attribute
regardless of whether or when such Tax Attribute otherwise would have been used), (B) would be inconsistent with historical practice,
or (C) would be inconsistent with the Tax Representation Letter.

 

(b)
Single Business Tax Returns.

 

(i)
Tech. Tech shall, in its sole discretion, be permitted to amend (or cause or permit to be amended) any Single Business
Tax Return relating to the Tech Business.

 

(ii)
Fuels. Fuels shall, in its sole discretion, be permitted to amend (or cause or permit to be amended) any Single Business
Tax Return relating to the Fuels Business.

 

Section
4.04 Tax Attributes.

 

(a)
Tax Attributes arising in a Pre-Closing Period will be allocated to (and the benefits and burdens of such Tax Attribute will inure
to) the Tech Group and the Fuels Group in accordance with historical practice (including historical methodologies for making corporate
allocations), the Code, Treasury Regulations, and any applicable state, local and foreign Law. Tech and Fuels shall jointly determine
the allocation of such Tax Attributes arising in Pre-Closing Periods as soon as reasonably practicable following the Distribution
Date, and shall compute all Taxes for a Post-Closing Period and Straddle Period consistently with that determination unless otherwise
required by a Final Determination.

 

    	10

    	 

    

 

(b)
Except as otherwise provided herein, to the extent that the amount of any Tax Attribute is later reduced or increased by a Taxing
Authority or as a result of a Tax Proceeding, such reduction or increase shall be allocated to the Party to which such Tax Attribute
was allocated pursuant to Section 4.04(a).

 

(c)
Notwithstanding anything to the contrary in this Agreement, Tech shall at all times be entitled to any Tax deduction or credit,
as the case may be, relating to the exercise of Tech Common Shares compensatory stock options, (ii) restricted stock that has
vested (in whole or in part) on or prior to the Distribution Date, or (iii) restricted stock with respect to Tech Common Shares.
Fuels shall be entitled to any Tax deduction or credit, as the case may be, relating to (A) the exercise of Fuels Common Shares
compensatory stock options or (B) restricted stock with respect to Fuels Common Shares. To the extent any Tax deduction that is
described in either of the first two sentences of this Section 4.04(c) and claimed by the Party to whom the deduction is allocated
under this section 4.04(c) is disallowed to such Party and a Taxing Authority makes a determination that the other Party is entitled
to such deduction, the Party denied such deduction shall notify the other Party of the receipt of such determination, promptly
after receipt thereof, and the Party for which the determination allows the Tax deduction shall pay to the other Party the amount
of the Tax Benefit arising therefrom.

 

Article
V. Tax Proceedings

 

Section
5.01 Notification of Tax Proceedings. Within 10 days after a Controlling Party (or its Subsidiary) becomes aware of the commencement
of a Tax Proceeding that may give rise to Taxes for which an Interested Party is responsible pursuant to Article 3, such Controlling
Party shall provide notice to the Interested Party of such Tax Proceeding, and thereafter shall promptly forward or make available
to the Interested Party copies of notices and communications relating to such Tax Proceeding. The failure of the Controlling Party
to provide notice to the Interested Party of the commencement of any such Tax Proceeding within such 10-day period or promptly
forward any further notices or communications shall not relieve the Interested Party of any obligation which it may have to the
Controlling Party under this Agreement except to the extent that the Interested Party is actually prejudiced by such failure.

 

Section
5.02 Tax Proceeding Procedures. The Controlling Party, in its sole discretion, and at its own expense, shall be entitled to
control, administer, contest, litigate, compromise and settle any Adjustment proposed, asserted or assessed pursuant to any Tax
Proceeding and any such actions taken by the Controlling Party shall be made diligently and in good faith; provided that the Controlling
Party shall (a) keep the Interested Party informed in a timely manner of all actions proposed to be taken by the Controlling Party
and shall permit the Interested Party to comment in advance on the Controlling Party’s oral or written submissions with
respect to such Tax Proceeding, (b) prepare all correspondence or filings to be submitted to any Taxing Authority or judicial
authority in a manner consistent with the Tax Return, which is the subject of such Adjustment, as filed and timely provide the
Interested Party with copies of any such correspondence or filings for the Interested Party’s prior review and comment and
(c) provide the Interested Party with written notice reasonably in advance of, and the Interested Party shall have the right to
attend and participate in, any formally scheduled meetings with any Taxing Authority or hearings or proceedings before any judicial
authority with respect to such Adjustment. Furthermore, the Controlling Party may not settle or otherwise resolve a Tax Proceeding
with respect to an Adjustment that would reasonably be expected to impact the Tax liability of an Interested Party without the
consent of such Interested Party, such consent not to be unreasonably withheld; provided that the Controlling Party shall be permitted
to settle or otherwise resolve a Tax Proceeding if and when the only unsettled issue of such Tax Proceeding relates to an Adjustment
for which an Interested Party has consent rights pursuant to the previous clause, but has not consented to settlement.

 

Section
5.03 Tax Proceeding Cooperation. Each Party shall act in good faith and use its reasonable best efforts to cooperate fully
with the other Party (and its Subsidiaries) in connection with such Tax Proceeding and shall provide or cause its Subsidiaries
to provide such information to each other as may be necessary or useful with respect to such Tax Proceeding in a timely manner,
identify and provide access to potential witnesses, and other persons with knowledge and other information within its control
and reasonably necessary to the resolution of the Tax Proceeding.

 

    	11

    	 

    

 

Article
VI. Reserved. 

 

    	12

    	 

    

 

Article
VII. Cooperation

 

Section
7.01 General Cooperation.

 

(a)
The Parties shall each cooperate fully (and each shall cause its respective Subsidiaries to cooperate fully) with all reasonable
requests in writing (“Information Request”) from another Party hereto, or from an agent, representative or
advisor to such Party, in connection with the preparation and filing of Tax Returns (including the preparation of Tax Packages),
claims for Refunds, Tax Proceedings, and calculations of amounts required to be paid pursuant to this Agreement, in each case,
related or attributable to or arising in connection with Taxes of any of the Parties or their respective Subsidiaries covered
by this Agreement and the establishment of any reserve required in connection with any financial reporting (a “Tax Matter”).
Such cooperation shall include the provision of any information reasonably necessary or helpful in connection with a Tax Matter
(“Information”) and shall include, without limitation, at each Party’s own cost:

 

(i)
the provision of any Tax Returns of the Parties and their respective Subsidiaries, books, records (including information regarding
ownership and Tax basis of property), documentation and other information relating to such Tax Returns, including accompanying
schedules, related work papers, and documents relating to rulings or other determinations by Taxing Authorities;

 

(ii)
the execution of any document (including any power of attorney) in connection with any Tax Proceedings of any of the Parties or
their respective Subsidiaries, or the filing of a Tax Return or a Refund claim of the Parties or any of their respective Subsidiaries;

 

(ii)
the use of the Party’s reasonable best efforts to obtain any documentation in connection with a Tax Matter; and (iv) the
use of the Party’s reasonable best efforts to obtain any Tax Returns (including accompanying schedules, related work papers,
and documents), documents, books, records or other information in connection with the filing of any Tax Returns of any of the
Parties or their Subsidiaries.

 

(b)
Each Party shall make its employees, advisors, and facilities available, without charge, on a reasonable and mutually convenient
basis in connection with the foregoing matters.

 

Section
7.02 Retention of Records. Tech and Fuels shall retain or cause to be retained all Tax Returns, schedules and workpapers,
and all material records or other documents relating thereto in their possession, until 60 days after the expiration of the applicable
statute of limitations (including any waivers or extensions thereof) of the taxable periods to which such Tax Returns and other
documents relate or until the expiration of any additional period that any Party reasonably requests, in writing, with respect
to specific material records or documents. A Party intending to destroy any material records or documents shall provide the other
Party with reasonable advance notice and the opportunity to copy or take possession of such records and documents. The Parties
hereto will provide notice to each other in writing of any waivers or extensions of the applicable statute of limitations that
may affect the period for which the foregoing records or other documents must be retained.

 

Article
VIII. Miscellaneous

 

Section
8.01 Dispute Resolution.

 

(a)
Except as otherwise provided herein, in the event of any dispute between the Parties as to any matter covered by this Agreement,
the dispute shall be governed exclusively by the procedures set forth in Section 8.01(b).

 

(b)
With respect to any dispute governed by this Section 8.01(b), the Parties shall appoint an appropriately credentialed independent
public accounting firm (the “Accounting Firm”) to resolve such dispute. In this regard, the Accounting Firm
shall make determinations with respect to the disputed items based solely on representations made by Tech and Fuels and their
respective representatives, and not by independent review, and shall function only as an expert and not as an arbitrator and shall
be required to make a determination in favor of one Party only. The Parties shall require the Accounting Firm to resolve all disputes
no later than 45 days after the submission of such dispute to the Accounting Firm, but in no event later than the Due Date for
the payment of Taxes or the filing of the applicable Tax Return, if applicable, and agree that all decisions by the Accounting
Firm with respect thereto shall be final and conclusive and binding on the Parties. The Accounting Firm shall resolve all disputes
in a manner consistent with this Agreement and, to the extent not inconsistent with this Agreement, in a manner consistent with
the historical practices of Tech and its Subsidiaries, except as otherwise required by applicable Law. The Parties shall require
the Accounting Firm to render all determinations in writing and to set forth, in reasonable detail, the basis for such determination.
The fees and expenses of the Accounting Firm shall be paid by the non-prevailing Party.

 

    	13

    	 

    

 

Section
8.02 Tax Sharing Agreements. Any Tax sharing, indemnification and similar agreements, written or unwritten, as between Tech,
on the one hand, and Fuels or a Fuels Entity, on the other (other than this Agreement), shall be or shall have been terminated
no later than the effective time of the Distribution and, after the effective time of the Distribution, none of Tech, Fuels or
a Fuels Entity shall have any further rights or obligations under any such Tax sharing, indemnification or similar agreement.

 

Section
8.03 Interest on Late Payments. With respect to any payment between the Parties pursuant to this Agreement not made by the
due date set forth in this Agreement for such payment, the outstanding amount will accrue interest at a rate equal to the rate
of interest from time to time announced publicly by The Wall Street Journal as its prime rate, calculated on the basis of a year
of 365 days and the number of days elapsed.

 

Section
8.04 Survival of Covenants. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties
contained in this Agreement shall survive the Distribution Date and remain in full force and effect in accordance with their applicable
terms, provided, however, that the representations and warranties and all indemnification for Taxes shall survive until
90 days following the expiration of the applicable statute of limitations (taking into account all extensions thereof), if any,
of the Tax that gave rise to the indemnification, provided, further, that, in the event that notice for indemnification
has been given within the applicable survival period, such indemnification shall survive until such time as such claim is finally
resolved.

 

Section
8.05 Termination. Notwithstanding any provision to the contrary, this Agreement may be terminated by the board of directors
of Tech, in its sole and absolute discretion, at any time prior to the Distribution. In the event of any termination of this Agreement
prior to the Distribution, neither Party (nor any member of its Group or any of its respective directors or officers) will have
any liability or further obligation to the other Party (or member of its Group) with respect to this Agreement. After the Distribution
Date, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties.

 

Section
8.06 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
or portion of any provision had never been contained in this Agreement.

 

Section
8.07 Entire Agreement. Except as otherwise expressly provided in this Agreement, this Agreement and any annexes, exhibits,
schedules and appendices hereto constitute the entire agreement, and supersede all prior written agreements, arrangements, communications
and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between
the Parties with respect to the subject matter of this Agreement. This Agreement will not be deemed to contain or imply any restriction,
covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated hereby
other than those expressly set forth in this Agreement or in any document required to be delivered hereunder. Notwithstanding
any oral agreement or course of action of the Parties or their representatives to the contrary, no Party to this Agreement will
be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement and
the Distribution Agreement and Separation Agreement, as applicable, will have been executed and delivered by each of the Parties.
Except as specifically set forth in the Distribution Agreement and/or Separation Agreement, and except as provided in Section
8.15, all matters related to Taxes or Tax Returns of the Parties and their respective Subsidiaries shall be governed exclusively
by this Agreement.

 

Except
as provided in Section 8.15, in the event of a conflict between this Agreement and the Distribution Agreement with respect to
such matters, this Agreement shall govern and control.

 

    	14

    	 

    

 

Section
8.08 Assignment. Except as expressly provided in this Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any Party without
the prior written consent of the other Party, and any such assignment or delegation without such prior written consent will be
null and void. If any Party to this Agreement (or any of its successors or permitted assigns) (a) will consolidate with or merge
into any other Person and will not be the continuing or surviving corporation or entity of such consolidation or merger or (b)
will transfer all or substantially all of its properties and/or assets to any Person, then, and in each such case, the Party (or
its successors or permitted assigns, as applicable) will ensure that such Person assumes all of the obligations of such Party
(or its successors or permitted assigns, as applicable) under this Agreement, in which case the consent described in the previous
sentence will not be required.

 

Section
8.09 No Third-Party Beneficiaries. Except as provided in Article 3 with respect to the Fuels Group and the Tech Group, nothing
in this Agreement, express or implied, is intended to or will confer upon any Person other than the Parties and their respective
Subsidiaries and their respective successors and permitted assigns and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature under or by reason of this
Agreement.

 

Section
8.10 Specific Performance. Subject to the provisions of Section 8.01, in the event of any actual or threatened default in,
or breach of, any of the terms, conditions and provisions of this Agreement, the Party who is or is to be thereby aggrieved shall
have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) of its rights
under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies
shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages,
may be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would
be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by the Parties.

 

Section
8.11 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course
of conduct or otherwise, except by an instrument in writing expressly designated as an amendment hereto, signed on behalf of each
Party hereto.

 

Section
8.12 Waiver. No failure or delay of either Party (or the applicable member of its Group) in exercising any right or remedy
under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further
exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties (and the other members of
their respective Groups) under this Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise
have hereunder. Any agreement on the part of any Party to any such waiver will be valid only if set forth in a written instrument
executed and delivered by a duly authorized officer on behalf of such Party.

 

Section
8.13 Rules of Construction. Interpretation of this Agreement shall be governed by the following rules of construction: (a)
words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires; (b) references to the terms Article, Section, paragraph, clause, Exhibit and Schedule are
references to the Articles, Sections, paragraphs, clauses, exhibits and schedules of this Agreement unless otherwise specified;
(c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar
words refer to this entire Agreement, including any Schedules or Exhibits hereto; (d) references to “$” shall mean
U.S. dollars; (e) the word “including” and words of similar import when used in this Agreement shall mean “including
without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) references to
“written” or “in writing” include in electronic form; (h) provisions shall apply, when appropriate, to
successive events and transactions; (i) the headings contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement; (j) Tech and Fuels have each participated in the negotiation
and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening either Party by virtue
of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; and (k) a reference to any
Person includes such Person’s successors and permitted assigns.

 

Section
8.14 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts,
each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format
(PDF) shall be as effective as delivery of a manually executed counterpart of any such Agreement.

 

    	15

    	 

    

 

Section
8.15 Coordination with the Separation Agreement and Distribution Agreement. To the extent any conflict arises between this
Agreement and the Separation Agreement or Distribution Agreement, this Agreement shall control with regard to the content hereof.

 

Section
8.16 Effective Date. This Agreement shall become effective only upon the occurrence of the Distribution and Separation.

 

Section
8.17 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions
contemplated hereby will be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to
the conflicts of law rules thereof.

 

Section
8.18 Force Majeure. Neither Party hereto (nor any Person acting on its behalf) shall have any liability or responsibility
for failure to fulfill any obligation (other than a payment obligation) under this Agreement so long as and to the extent to which
the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure.
A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event,
(a) notify the other Party of the nature and extent of any such Force Majeure condition and (b) undertake with commercially reasonable
efforts to remove any such causes and resume performance under this Agreement as soon as feasible.

 

Section
8.19 Notices. All notices and other communications under this Agreement will be in writing and will be deemed duly given (a)
on the date of delivery if delivered personally, or if by facsimile or electronic transmission, upon written confirmation of receipt
by facsimile, e-mail or otherwise, (b) on the first business day following the date of dispatch if delivered utilizing a next-day
service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth business day following the date
of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder will
be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party
to receive such notice:

 

If
to Tech:

Taronis
Technologies, Inc.

Attention:
General Counsel

300
W. Clarendon Ave., #230

Phoenix,
AZ 85013

 

If
to Fuels:

Taronis
Fuels, Inc.

300
W. Clarendon Ave. #230

Phoenix,
AZ 85013

Attention:
General Counsel

 

Section
8.20 No Circumvention. Each Party agrees not to directly or indirectly take any actions, act in concert with any Person who
takes any action, or cause or allow any of its Subsidiaries to take any actions (including the failure to take any reasonable
action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement
(including adversely affecting the rights or ability of any Party to successfully pursue indemnification or payment pursuant to
the provisions of this Agreement).

 

Section
8.21 No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer or impose upon any Party a duplicative
right, entitlement, obligation, or recovery with respect to any matter arising out of the same facts and circumstances.

 

[This
space intentionally blank.]

 

    	16

    	 

    

 

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

 

	 	TECH:
	 	Taronis
    Technologies, Inc., a Delaware corporation
	 	   
	 	By:	 /s/
    Scott Mahoney 
	 	Name:
    	Scott
    Mahoney
	 	Title:	Chief
Executive Officer 
	 	   
	 	FUELS:
	 	Taronis
    Fuels, Inc., a Delaware corporation
	 	   
	 	By:	 /s/
    Scott     Mahoney 
	 	Name:	Scott
Mahoney
	 	Title:	Chief
Executive Officer 

 

    	17TRANSITION
SERVICES AGREEMENT

 

THIS
TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of December 2, 2019 (the “Effective Date”),
is made and entered into by and between Taronis Technologies, Inc., a Delaware corporation (“Tech”), and Taronis
Fuels, Inc., a Delaware corporation and wholly owned subsidiary of Tech (“Fuels”). Each of Tech and Fuels may
be referred to herein individually as a “Party” and collectively as the “Parties.” For purposes
of this Agreement, capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to such
terms in the Master Distribution Agreement (as defined below).

 

RECITALS

 

WHEREAS,
Tech is engaged, directly and indirectly, in the welding supply and gas distribution business and the manufacture and sale of
“MagneGas” and Venturi® Gasification systems used to create synthetic gases (“Fuels Business”)
as well as being engaged, directly and indirectly, in the water technology business (“Tech Business”);

 

WHEREAS,
the Board of Directors of Tech (the “Tech Board”) has determined that it is advisable and in the best interests
of Tech and Tech’s stockholders to separate Fuels’ businesses from that of Tech standing along, creating two independent
publicly traded companies (the “Distribution”);

 

WHEREAS,
to effectuate the Distribution, Tech and Fuels have entered into a Master Distribution Agreement, dated as of December 2, 2019
(the “Master Distribution Agreement”); and

 

WHEREAS,
to facilitate and provide for an orderly transition in connection with the Distribution, the Parties desire to enter into this
Agreement to set forth the terms pursuant to which each of the Parties shall provide Services to the other Party for a transitional
period;

 

NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally
bound, hereby agree as follows:

 

Article
I. Services

 

Section
1.01 Services.

 

	 	(a)	With
    respect to each applicable service set forth on Schedule 1 hereto (the “Services”), the Party identified
    on Schedule 1 hereto as the “Provider” of such Service agrees to provide, or to cause one or more members of its
    Group to provide, such Service to the other Party (the “Recipient”), or any members of the Recipient’s
    Group, in each case for the period commencing on the Effective Date and ending on the earlier of (i) the date that a Party
    terminates the provision of such Service pursuant to Section 4.02 and (ii) the date set forth on Schedule 1 with respect to
    such Service (the “Service Period”). The Parties acknowledge and agree that the “Service” as
    described on Schedule 1 may be amended or modified, or added to with greater specificity, by the Parties following the Effective
    Date, via a revision of such Schedule 1 duly executed by an authorized officer of each of the Parties.
	 	 	 
	 	(b)	At
    any time during the term of this Agreement, either Party may request that the other Party provide or cause its Group to provide
    additional services hereunder (the “Additional Services”) by providing written notice of such request,
    it being understood that the Party that receives such request may in its sole discretion decline to provide such requested
    Additional Services. If a Provider agrees to undertake to provide the Additional Services, upon the mutual written agreement
    as to the nature, cost, duration and scope of such Additional Services, Tech and Fuels shall supplement in writing the Services
    set forth on Schedule 1 to include such Additional Services. Except where the context otherwise indicates or requires, any
    such Additional Services specified on Schedule 1 or so agreed upon in writing by the Parties shall be deemed to be “Services”
    under this Agreement.

 

    	 	 	1

    	 

    

 

Section
1.02 Performance of Services.

 

	 	(a)	The
    Provider shall perform, or shall cause one or more members of its Group to perform, all Services to be provided by the Provider
    in a manner that is based on its past practice and that is substantially similar in all material respects to such Services
    (or analogous services) provided by or on behalf of Tech or any of its Subsidiaries with respect to the Fuels Business or
    Tech Business, as applicable, during the twelve (12) months prior to the Effective Date (collectively referred to as the “Level
    of Service”).
	 	 	 
	 	(b)	Nothing
    in this Agreement shall require the Provider to perform or cause to be performed any Service to the extent that the manner
    of such performance would constitute a violation of any applicable Law or any existing contract or agreement with a Third
    Party. As between the Parties, the Provider shall be the party that determines, in its sole discretion, whether to communicate
    with and shall be the party that communicates with Third Parties in connection with any necessary Third Party consents required
    under any existing contract or agreement with a Third Party to allow the Provider to perform, or cause to be performed, Services
    to be provided to the Recipient hereunder, with any such communications to be in the sole discretion of Provider. Unless otherwise
    agreed in writing by the Parties, all reasonable and documented out-of-pocket costs and expenses (if any) incurred by any
    Party or any member of its Group in connection with obtaining any Third Party consent that is required to allow the Provider
    to perform or cause to be performed any Services hereunder shall be paid for by the Recipient. If, with respect to a Service,
    a required Third-Party consent has not been obtained, or the performance of a Service by or on behalf of the Provider would
    constitute a violation of any applicable Law, the Provider shall have no obligation to perform or cause to be performed such
    Service.
	 	 	 
	 	(c)	The
    Provider shall not be obligated to perform or to cause to be performed any Service in a manner that is materially more burdensome
    (with respect to service quality, service quantity, or allocation of personnel or resources) than such services (or analogous
    services) provided by or on behalf of Tech or any of its Subsidiaries with respect to the Fuels Business or Tech Business,
    as applicable, during the 12-month period prior to the Effective Date. Without limiting the generality of the foregoing, the
    Provider shall not be required to maintain the employment of any specific employee(s), hire additional employees or third-party
    service providers or purchase, lease or license any additional equipment, software or other assets or properties in order
    the provide the Services hereunder. If the Recipient requests that the Provider perform or cause to be performed any Service
    in a manner that exceeds the Level of Service, then the Parties shall reasonably cooperate and act in good faith to determine
    whether the Provider will be required to provide such requested higher Level of Service. If the Parties determine that the
    Provider shall provide the requested higher Level of Service, then such higher Level of Service shall be documented in a written
    agreement signed by the Parties, which may be an amendment or addendum to this Agreement.

 

	 	(d)	Neither
    the Provider nor any member of its Group shall be required to perform or to cause to be performed any of the Services for
    the benefit of any Third Party or any other Person other than the Recipient and the members of its Group. EXCEPT AS EXPRESSLY
    PROVIDED IN THIS Section 1.02 OR Section 6.04, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL SERVICES ARE PROVIDED ON AN “AS-IS”
    BASIS, THAT THE RECIPIENT ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES,
    AND THAT THE PROVIDER MAKES NO OTHER REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION
    OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE SERVICES. EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER
    WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE
    OR PURPOSE OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
	 	 	 
	 	(e)	Each
    Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement.
    No Party shall knowingly take any action in violation of any such applicable Law.

 

    	 	 	2

    	 

    

 

Section
1.03 Determination of Allocated Costs; Dispute Resolution; Payment.

 

	 	(a)	From
    and after the Effective Date and during the Service Period, the actual costs to applicable Provider of providing the Services
    to the Recipient, including, without limitation, the salaries, employment taxes and benefits applicable to the employees of
    the Provider actually engaged in providing the Services, based on the percentage of time spent by such employees in providing
    such services relative to the time spent by such employees on matters not relating to such services, plus applicable allocated
    overhead and other expenses incurred, in each case without mark-up (the “Allocated Costs”), will be determined
    and allocated in good faith by the Parties jointly, on a monthly basis, commencing as of the end of the first (1st)
    calendar month following the Effective Date and continuing thereafter as of the end of each succeeding one (1) calendar month
    period. The Allocated Costs so determined by the Parties shall be subject to quarterly review (“Review Period”)
    and approval by the Audit Committee of each Party, or such other committee as determined by the Board of Directors of each
    Party (the “Audit Committees”).
	 	 	 
	 	(b)	In
    the event of a dispute between the Parties or their applicable Audit Committees, concerning the proposed Allocated Costs in
    respect of any month(s) comprising a Review Period, then the Parties shall mutually select and engage a recognized certified
    public accountant acceptable to each of the them to review disputed items and to determine the Allocated Costs for the month(s)
    comprising the Review Period in question; provided, however, if such Parties cannot agree on a mutually acceptable certified
    public accountant, each Party or such party’s Audit Committee, each shall name a recognized certified public accountant
    and those two certified public accountants shall select a third recognized certified public accountant which shall be used
    for the purposes of this Section 1.03(b). The selected certified public accountant’s opinion concerning the Allocated
    Costs for the quarterly period in question shall be final and binding on all Parties. The expenses of the certified public
    accountant will be borne by each Party in the same proportion by which their respective positions as initially presented to
    the certified public accountant differs from the final resolution as determined by the certified public accountant.

 

	 	(c)	The
    Allocated Costs for each month comprising a Review Period during the Service Period, as finally determined pursuant to Section
    1.03(a) or Section 1.03(b), as applicable, will be invoiced, in arrears, by the applicable Provider to the applicable Recipient
    as set forth in Article III. Together with any invoice for Allocated Costs, the Provider shall provide the Recipient with
    reasonable documentation, including any additional documentation reasonably requested by the Recipient to the extent that
    such documentation is in the Provider’s or its Group’s possession or control, to confirm the calculation of the
    Allocated Costs.

 

Section
1.04 Changes in the Performance of Services. Subject to the performance Level of Service, the Provider may make changes from
time to time in the manner of performing the Services if the Provider is making similar changes in performing analogous services
for itself or its Group and if the Provider furnishes to the Recipient reasonable prior written notice of such changes. No such
change shall materially adversely affect the timeliness or quality of the applicable Service.

 

Section
1.05 Transitional Nature of Services. The Parties acknowledge the transitional nature of the Services and agree to reasonably
cooperate and to use commercially reasonable efforts to effectuate a smooth transition of the Services from the Provider to the
Recipient (or its designee).

 

Section
1.06 Subcontracting. A Provider may hire or engage one or more Third Parties to perform any or all of its obligations under
this Agreement; provided, however, that (a) such Provider shall use the same degree of care (but at least reasonable care) in
selecting each such Third Party as it would if such Third Party was being retained to provide similar services to the Provider
or its Group and (b) such Provider shall in all cases remain primarily responsible for all of its obligations under this Agreement
with respect to the Services.

 

    	 	 	3

    	 

    

 

Article
II. OTHER ARRANGEMENTS

 

Section
2.01 Access. The Recipient shall, and shall cause the members of its Group to, allow the Provider and the members of its Group
and their respective Representatives reasonable access to the facilities of the Recipient and the members of its Group that is
necessary for the Provider to fulfill its obligations under this Agreement. In addition to the foregoing right of access, the
Recipient shall, and shall cause the members of its Group to, afford the Provider and the members of its Group and their respective
Representatives, upon reasonable advance written notice, reasonable access during normal business hours to the facilities, Information,
systems, infrastructure and personnel of the Recipient and the members of its Group as reasonably necessary for the Provider to
verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed
in connection with the Services being provided by the Provider or the members of the Provider Group, including in connection with
verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably
interfere with any of the business or operations of the Recipient or any member of its Group and (ii) in the event that the Recipient
determines that providing such access could be commercially detrimental, violate any applicable Law or agreement or waive any
attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit such access in a manner that avoids
such harm and consequence. The Provider agrees that all of its and its Group’s employees shall, and that it shall use commercially
reasonable efforts to cause its Representatives’ employees to, when on the property of the Recipient or a member of the
Recipient’s Group, or when given access to any facilities, Information, systems, infrastructure or personnel of the Recipient
or a member of the Recipient’s Group, conform to the policies and procedures of the Recipient and the members of the Recipient’s
Group, as applicable, concerning health, safety, conduct and security which are made known or provided to the Provider from time
to time.

 

Section
2.02 Audit Assistance. Each of the Parties and the members of their respective Groups are or may be subject to regulation
and audit by a Governmental Authority (including a Governmental Authority with respect to Taxes) or parties to contracts with
such Parties or the members of their Groups. If such a Third Party exercises its right to examine or audit such Party’s
or a member of its Group’s books, records, documents or accounting practices and procedures pursuant to such applicable
Law or contract provisions, and such examination or audit relates to the Services, then the other Party shall provide, at the
sole cost and expense of the requesting Party (except if related to the Recipient’s receipt of Services, in which case such
cost and expense shall be the Recipient’s responsibility), all assistance reasonably requested by the Party that is subject
to the examination or audit in responding to such examination or audits or requests for Information, to the extent that such assistance
or Information is within the reasonable control of the cooperating Party and is related to the Services. The requesting Party
shall consult and cooperate with the cooperating Party to limit the scope of any such examination or audit to the extent reasonably
possible.

 

Section
2.03 Title to Intellectual Property. Except as otherwise expressly provided for under this Agreement, the Master Distribution
Agreement, or another Ancillary Agreement, the Recipient acknowledges that it shall acquire no right, title or interest (including
any license rights or rights of use) in any intellectual property which is owned or licensed by the Provider, by reason of the
provision of the Services hereunder (other than the receipt and use of the Services by the Recipient during the term of this Agreement
as contemplated hereunder). The Recipient shall not remove or alter any copyright, trademark, confidentiality or other proprietary
notices that appear on any intellectual property owned or licensed by the Provider, and the Recipient shall reproduce any such
notices on any and all copies thereof. The Recipient shall not attempt to decompile, translate, reverse engineer or make excessive
copies of any intellectual property owned or licensed by the Provider, and the Recipient shall promptly notify the Provider of
any such attempt, regardless of whether by the Recipient or any Third Party, of which the Recipient becomes aware.

 

Article
III. BILLING; TAXES

 

Section
3.01 Procedure. Allocated Costs for the Services as well as any Covered Taxes (as defined below) (collectively, the “Charges”)
due and owing in accordance with this Agreement, shall be charged to and payable by the Recipient. Amounts payable pursuant to
this Agreement shall be paid by wire transfer (or such other method of payment as may be agreed between the Parties from time
to time) to the Provider (as directed by the Provider), on a monthly basis, which amounts shall be due within thirty (30) days
after the Recipient’s receipt of each such invoice, including reasonable documentation pursuant to Section 1.02(e). All
amounts due and payable hereunder shall be invoiced and paid in U.S. dollars.

 

Section
3.02 Late Payments. Charges not paid when due pursuant to this Agreement (and any amounts billed or otherwise invoiced or
demanded and properly payable that are not paid within thirty (30) days of the receipt of such bill, invoice or other demand)
shall accrue interest at a rate per annum equal to the Prime Rate plus one percent (1%) or the maximum rate under applicable Law,
whichever is lower.

 

    	 	 	4

    	 

    

 

Section
3.03 Taxes.

 

	 	(a)	Without
    limiting any provisions of this Agreement, the Charges shall be exclusive of all sales, use, value-added, goods and services,
    services, excise, consumption, transfer or similar taxes, and any related penalties and interest, arising from the payment
    of such Charges to the Provider under this Agreement (other than any taxes measured by or imposed on the Provider’s
    gross or net income, or franchise or other similar taxes of the Provider) (“Covered Taxes”).
	 	 	 
	 	(b)	The
    Recipient shall pay, or reimburse the Provider for, any and all Covered Taxes.
	 	 	 
	 	(c)	Where
    required by applicable Law, the Recipient shall pay any Covered Taxes directly to the relevant Governmental Authority in compliance
    with applicable Law. If any Covered Taxes are assessed on the receipt of Charges by the Provider under this Agreement, the
    Provider shall notify the Recipient, pay such Covered Taxes directly to the applicable Governmental Authority and promptly
    provide the Recipient with an official receipt showing such payment, and the Recipient shall (without duplication) reimburse
    the Provider for such Covered Taxes.
	 	 	 
	 	(d)	In
    the event that applicable Law requires any Covered Taxes to be withheld from a payment of Charges by a Recipient to a Provider
    under this Agreement, the Recipient shall make such required withholding, pay such withheld amounts over to the applicable
    Governmental Authority in compliance with applicable Law, and increase the amount payable to the Provider as necessary so
    that, after the Recipient has withheld such amounts, the Provider receives an amount equal to the amount the Provider would
    have received had no such withholding been required.
	 	 	 
	 	(e)	The
    Recipient and the Provider shall use reasonable efforts, and shall cooperate with each other in good faith, to secure (and
    to enable the Recipient to claim) any exemption from, or otherwise to minimize, any Covered Taxes or to claim a tax refund
    therefor or tax credit in respect thereof, and the Recipient shall not be responsible for any Covered Taxes to the extent
    that such Covered Taxes would not have been imposed if (i) the Provider was eligible to claim an exemption from or reduction
    of such Covered Taxes, (ii) the Recipient used commercially reasonable efforts to notify the Provider of such eligibility
    reasonably in advance and (iii) the Provider failed to claim such exemption or reduction. If the Provider receives a refund
    with respect to any Covered Taxes paid or borne by the Recipient under this Agreement, the Provider shall promptly pay such
    refund to the Recipient net of costs and expenses (including any additional taxes) incurred by the Provider in connection
    with the receipt of such refund or the payment of such refund to the Recipient net of costs and expenses (including any additional
    taxes) incurred by the Provider in connection with the receipt of such refund or the payment of such refund to the Recipient.
	 	 	 
	 	(f)	Except
    as mutually agreed to in writing by Tech and Fuels, no Party or any member of its Group shall have any right of set-off or
    other similar rights with respect to (a) any amounts received pursuant to this Agreement or (b) any other amounts claimed
    to be owed to the other Party or any of member of its Group arising out of this Agreement.

 

Article
IV. TERM AND TERMINATION

 

Section
4.01 Term. This Agreement shall commence upon the Effective Date and shall terminate upon the earlier to occur of: (a) the
last date on which either Party is obligated to provide any Service to the other Party in accordance with the terms of this Agreement;
(b) the mutual written agreement of the Parties to terminate this Agreement in its entirety; and (c) 11:59 p.m., Arizona time
on January 31, 2021. Unless otherwise terminated pursuant to Section 4.02, this Agreement shall terminate with respect
to each Service as of the close of business on the last day of the Service Period for such Service.

 

Section
4.02 Early Termination.

 

	 	(a)	Without
    prejudice to the Recipient’s rights with respect to Force Majeure, the Recipient may from time to time terminate this
    Agreement with respect to the entirety of any individual Service:

 

	 	(i)	for
    any reason or no reason, at least thirty (30) days following written request to the Provider to terminate such Service, if
    the Provider agrees in writing to such termination; provided, however, that any such termination (x) may only be effective
    as of the date agreed to in writing by the Parties, (y) shall not result in a reduction of Charges with respect to calendar
    year 2019 or 2020, and (z) shall result in a reduction of Charges following calendar year 2019 or 2020 only if and to the
    extent expressly set forth in Schedule 1; or

 

    	 	 	5

    	 

    

 

	 	(ii)	if
    the Provider of such Service has failed to perform any of its material obligations under this Agreement with respect to such
    Service, and such failure shall continue to be uncured for a period of thirty (30) days (or ninety (90) days if Provider is
    using good-faith efforts to so cure during such thirty (30) day period and thereafter) after receipt by the Provider of written
    notice of such failure from the Recipient; provided, however, that any such termination may only be effective as of the last
    day of a month; provided, further, that the Recipient shall not be entitled to terminate this Agreement with respect to the
    applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties (undertaken in
    accordance with the terms of Section 7.02) as to whether the Provider has cured the applicable breach.

 

	 	(b)	The
    Provider may terminate this Agreement with respect to any individual Service, but not a portion thereof, at any time upon
    prior written notice to the Recipient if the Recipient has failed to perform any of its material obligations under this Agreement
    relating to such Service, including making payment of Charges for such Service when due, and such failure shall continue to
    be uncured for a period of thirty (30) days (or ninety (90) days if Recipient is using good-faith efforts to so cure during
    such thirty (30) day period and thereafter) after receipt by the Recipient of a written notice of such failure from the Provider;
    provided, however, that any such termination may only be effective as of the last day of a month; provided, further, that
    the Provider shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of
    such period, there remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Section 7.02)
    as to whether the Recipient has cured the applicable breach.

 

Section
4.03 Interdependencies. The Parties acknowledge and agree that: (a) there may be interdependencies among the Services being
provided under this Agreement; (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine
whether (i) any such interdependencies exist with respect to the particular Service that a Party is seeking to terminate pursuant
to Section 4.02 and (ii) in the case of such termination, the Provider’s ability to provide a particular Service in accordance
with this Agreement would be materially and adversely affected by such termination of another Service; and (c) in the event that
the Parties have determined that such interdependencies exist (and, in the case of such termination that the Provider’s
ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination),
the Parties shall negotiate in good faith to amend Schedule 1 with respect to such termination of such impacted Service, which
amendment shall be consistent with the terms of comparable Services. To the extent that the Provider’s ability to provide
a Service is dependent on the continuation of a specified Service, the Provider’s obligation to provide such dependent Service
shall terminate automatically with the termination of such supporting Service.

 

Section
4.04 Effect of Termination. Upon the termination of any Service pursuant to this Agreement, the Provider of the terminated
Service shall have no further obligation to provide the terminated Service.

 

Section
4.05 Information Transmission. The Provider, on behalf of itself and the members of its Group, shall use commercially reasonable
efforts to provide or make available, or cause to be provided or made available, to the Recipient, in accordance with the Master
Distribution Agreement, any Information received or computed by the Provider for the benefit of the Recipient concerning the relevant
Service during the Service Period; provided, however, that, except as otherwise agreed to in writing by the Parties (a) the Provider
shall not have any obligation to provide, or cause to be provided, Information in any nonstandard format, (b) the Provider and
the members of its Group shall be reimbursed for their reasonable costs in accordance with the Master Distribution Agreement for
creating, gathering, copying, transporting and otherwise providing such Information, and (c) the Provider shall use commercially
reasonable efforts to maintain any such Information in accordance with the Master Distribution Agreement.

 

    	 	 	6

    	 

    

 

Article
V. CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

 

Section
5.01 Tech and Fuels Obligations. Subject to Section 5.04, until the five (5)-year anniversary of the Effective Date, each
of Tech and Fuels, on behalf of itself and each member of its Group, agrees to hold, and to cause its respective Representatives
to hold, in confidence, with at least the same degree of care that applies to Tech’s proprietary and confidential Information
pursuant to policies in effect as of the Effective Date, all proprietary or confidential Information concerning the other Party
or the members of its Group or their respective businesses (“Confidential Information”) that is either in its
possession (including Confidential Information in its possession prior to the Effective Date) or furnished by such other Party
or such other Party’s Group members or their respective Representatives at any time pursuant to this Agreement, and shall
not use any such Confidential Information other than for such purposes as may be expressly permitted hereunder, except, in each
case, to the extent that such Confidential Information has been (a) in the public domain or generally available to the public,
other than as a result of a disclosure by such Party or any member of its Group or any of their respective Representatives in
violation of this Agreement; (b) later lawfully acquired from other sources by such Party or any of member of its Group, which
sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality
with respect to such Confidential Information; or (c) independently developed or generated without reference to or use of the
Confidential Information of the other Party or any member of its Group, in each case other than as may be required by applicable
law or order of a Governmental Authority. If any Confidential Information of a Party or any member of its Group is disclosed to
the other Party or any member of its Group in connection with providing the Services, then such disclosed Confidential Information
shall be used only as required to perform such Services.

 

Section
5.02 No Release; Return or Destruction. Other than as may be required by law or order of a Governmental Authority, each Party
agrees (a) not to release or disclose, or permit to be released or disclosed, any Confidential Information of the other Party
addressed in Section 5.01 to any other Person, except its Representatives who need to know such Confidential Information in their
capacities as such (whom shall be advised of their obligations hereunder with respect to such Confidential Information) and except
in compliance with Section 5.04, and (b) to use commercially reasonable efforts to maintain such Confidential Information in accordance
with the Master Distribution Agreement. Without limiting the foregoing, when any such Confidential Information is no longer needed
for the purposes contemplated by the Master Distribution Agreement, this Agreement or any other Ancillary Agreements, each Party
will promptly after request of the other Party either return to the other Party all such Confidential Information in a tangible
form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that
it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon).

 

Section
5.03 Privacy and Data Protection Laws. Each Party shall comply with all applicable state, federal and foreign privacy and
data protection Laws that are or that may in the future be applicable to the provision of the Services under this Agreement.

 

Section
5.04 Protective Arrangements. In the event that a Party or any member of its Group either determines on the advice of its
counsel that it is required to disclose any Confidential Information of the other Party pursuant to applicable Law or receives
any request or demand under lawful process or from any Governmental Authority to disclose or provide Confidential Information
of the other Party (or any member of its Group) that is subject to the confidentiality provisions hereof, such Party shall notify
the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing
such Information and shall reasonably cooperate, at the expense of the other Party, in seeking any appropriate protective order
requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely
manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such Information
shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter
disclose or provide such Information to the extent required by such Law (as so advised by its counsel) or by lawful process or
such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the Information so
disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such Information was disclosed,
in each case to the extent legally permitted.

 

    	 	 	7

    	 

    

 

Article
VI. LIMITED LIABILITY AND INDEMNIFICATION

 

Section
6.01 Limitations on Liability.

 

	 	(a)	THE
    LIABILITIES OF THE PROVIDER AND ITS GROUP MEMBERS AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS AGREEMENT
    FOR ANY AND ALL ACTS OR FAILURES TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR
    FROM THE SALE, DELIVERY, PROVISION OR USE OF ANY AND ALL SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS AGREEMENT, WHETHER
    IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT IN THE AGGREGATE EXCEED FIFTY (50%)
    PERCENT OF THE CHARGES PAID AND PAYABLE TO PROVIDER BY THE RECIPIENT PURSUANT TO THIS AGREEMENT.
	 	 	 
	 	(b)	The
    limitations in Section 6.01(a) shall not apply in respect of any Liability to the extent arising out of or in connection with
    the gross negligence, willful misconduct or fraud of or by the Party (or a member of its Group) to be charged.
	 	 	 
	 	(c)	IN
    NO EVENT SHALL EITHER PARTY, THE MEMBERS OF ITS GROUP OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY FOR
    ANY INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY
    IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT (OTHER THAN ANY SUCH LIABILITY AS PERMITTED BY THE MASTER DISTRIBUTION
    AGREEMENT) AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELF, THE MEMBERS OF ITS GROUP AND ITS REPRESENTATIVES ANY CLAIM FOR
    SUCH DAMAGES, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE.

 

Section
6.02 Obligation to Re-Perform. In the event of any breach of this Agreement by the Provider with respect to the provision
of any Services which the Provider can reasonably be expected to re-perform in a commercially reasonable manner, the Provider
shall promptly correct in all material respects such error, defect or breach or re-perform in all material respects such Services
at the request of the Recipient and at the sole cost and expense of the Provider. Any request for re-performance in accordance
with this Section 6.02 by the Recipient must be in writing and specify in reasonable detail the particular error, defect or breach,
and such request must be made no more than one month from the later of (x) the date on which such breach occurred and (y) the
date on which such breach was reasonably discovered by the Recipient.

 

Section
6.03 Recipient Indemnity. In addition to (but not in duplication of) its other indemnification obligations (if any) under
the Master Distribution Agreement, this Agreement or any other Ancillary Agreement, but subject to the limitations set forth in
Section 6.01, the Recipient shall indemnify, defend and hold harmless the Provider, the members of the Provider’s Group
and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the
“Provider Indemnitees”), from and against any and all claims of Third Parties to the extent relating to, arising
out of or resulting from the Provider’s furnishing or failing to furnish the Services provided for in this Agreement, other
than Third Party Claims to the extent arising out of the gross negligence, willful misconduct or fraud of Provider or a member
of Provider’s Group.

 

Section
6.04 Provider Indemnity. In addition to (but not in duplication of) its other indemnification obligations (if any) under the
Master Distribution Agreement, this Agreement or any other Ancillary Agreement, but subject to the limitations set forth in Section
6.01, the Provider shall indemnify, defend and hold harmless the Recipient, the members of the Recipient’s Group and each
of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Recipient
Indemnitees”), from and against any and all Liabilities to the extent relating to, arising out of or resulting from
the sale, delivery, provision or use of any Services provided by such Provider hereunder, but only to the extent that such Liability
relates to, arises out of or results from the gross negligence, willful misconduct or fraud of Provider or a member of Provider’s
Group.

 

Section
6.05 Indemnification Procedures. The procedures for indemnification set forth in Master Distribution Agreement shall govern
claims for indemnification under this Agreement, mutatis mutandis.

 

Article
VII. MISCELLANEOUS

 

Section
7.01 Independent Contractors. The Parties each acknowledge and agree that they are separate entities, each of which has entered
into this Agreement for independent business reasons. The relationships of the Parties hereunder are those of independent contractors
and nothing contained herein shall be deemed to create a joint venture, partnership or any other relationship between the Parties
or the respective members of its Group. Employees performing Services hereunder do so on behalf of, under the direction of, and
as employees of, the Provider, and the Recipient shall have no right, power or authority to direct such employees.

 

Section
7.02 Dispute Resolution. In the event of any controversy, dispute or claim (a “Dispute”) arising out of
or relating to any Party’s rights or obligations under this Agreement (whether arising in contract, tort or otherwise),
calculation or allocation of the costs of any Service or otherwise arising out of or relating in any way to this Agreement (including
the interpretation or validity of this Agreement), such Dispute shall be resolved in accordance with the dispute resolution process
referred to in the Master Distribution Agreement.

 

Section
7.03 Incorporation by Reference. The provisions of Article IX of the Master Distribution Agreement (Miscellaneous) are incorporated
herein by reference and shall apply to this Agreement as though fully set forth herein, including the representations and warranties
of the Parties as set forth therein, provided that any reference therein to the “Agreement” shall be deemed a reference
to this Agreement.

 

[Signatures
appear on following page]

 

    	 	 	8

    	 

    

 

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective
Date.

 

	 	Taronis
    Technologies, Inc.
	 	 	 
	 	By:	 /s/
    Scott Mahoney 
	 	Name:	Scott
    Mahoney
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	Taronis
    Fuels, Inc.
	 	 	 
	 	By:	 /s/
    Scott Mahoney 
	 	Name:	Scott
    Mahoney
	 	Title:	Chief
    Executive Officer

 

    	 	 	9

    	 

    

 

Schedule
1

 

Services;
Service Period; Additional Notes

 

	Item
    or Service	 	Provider
    (Tech or Fuels or Both)	 	Service
    Period	 	Additional
    Notes
	Executive
    Office:	 	Fuels	 	13
    months	 	Subject
    to extension
	Finance:	 	Both	 	13
    months	 	Subject
    to extension
	Taxation:	 	Both	 	13
    months	 	Subject
    to extension
	Legal/Compliance:	 	Both	 	13
    months	 	Subject
    to extension
	Government
    Relations/Public Relations:	 	Both	 	13
    months	 	Subject
    to extension
	Risk:	 	Both	 	13
    months	 	Subject
    to extension
	Information
    Technology: 	 	Fuels	 	13
    months	 	Subject
    to extension
	Marketing
    & Product Management:	 	Fuels	 	13
    months	 	Subject
    to extension
	Operations:	 	None	 	13
    months 	 	Subject
    to extension
	Human
    Resources:	 	Fuels	 	13
    months	 	Subject
    to extension
	Payroll:	 	Fuels	 	13
    months	 	Subject
    to extension
	Back
    Office/Computers/Communications:	 	Fuels	 	13
    months	 	Subject
    to extension
	Websites
    and Domains:	 	Fuels	 	13
    months	 	Subject
    to extension
	Software:	 	Fuels	 	13
    months	 	Subject
    to extension
	Regulatory:	 	Both	 	13
    months	 	Subject
    to extension
	SEC
    and OTC Compliance:	 	Both	 	13
    months	 	Subject
    to extension
	Asset
    maintenance:	 	Fuels	 	13
    months	 	Subject
    to extension
	Advertising:	 	Fuels	 	13
    months	 	Subject
    to extension
	Real
    Estate:	 	Fuels	 	13
    months	 	Subject
    to extension

 

    	 	 	10

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