Exhibit 10.5

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as of
June 26, 2013, is made by W270, Inc., a Nevada corporation (the “Company”), and
all of the Subsidiaries of the Company (such Subsidiaries, the “Guarantors”, and
together with the Company, the “Grantors”), in favor of the holders of the
Company’s 3.0% Senior Secured Convertible Notes issued or to be issued in the
original aggregate principal amount of up to $3,000,000 (the “Notes”) pursuant
to the Purchase Agreement (as defined below) (collectively, together with their
endorsees, transferees and assigns, the “Lenders”).

W I T N E S S E T H:

WHEREAS, the Company and the Lenders are party to that certain Securities
Purchase Agreement, dated on or about on or about June 26, 2013 (“Purchase
Agreement”), pursuant to which the Company issued or is issuing the Notes, among
other things;

WHEREAS, pursuant to that certain Subsidiary Guarantee, dated as of the date
hereof (“Guarantee”), the Guarantors have jointly and severally agreed to
guarantee and act as surety for payment of such Notes;

 

WHEREAS, contemporaneously herewith the Grantors are entering into a Security
Agreement (“Security Agreement”), pursuant to which each Grantor has granted a
security interest in its assets and properties to secure the satisfaction of the
Company’s obligations under the Notes and the Guarantor’s obligations under the
Guarantee, among other things; and

WHEREAS, the Grantors are obligated under the Security Agreement to take such
further actions as the collateral Agent (as defined therein) requests to further
perfect the Lenders’ security interest granted under the Security Agreement,
including without limitation with respect to intellectual property;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:

DEFINED TERMS.

(a)             Certain Defined Terms. As used in this Agreement, the following
terms shall have the meanings set forth below:

“Copyright” means copyrights and copyright registrations, including, without
limitation, the copyright registrations and recordings listed on Schedule I
attached hereto, if any, in which the Grantors have any right, title and
interest, and (i) all reissues, continuations, extensions or renewals thereof,
(ii) all income, royalties, damages and payments now and hereafter due and/or
payable under and with respect thereto, subject to payment to any co-owner of
its, his or her share thereof, including without limitation payments under all
licenses entered into in connection therewith and damages and payments for past
or future infringements thereof, (iii) the right to sue for past, present and
future infringements thereof, and (iv) all of the Grantors’ rights corresponding
thereto throughout the world.

“Intellectual Property Licenses” means rights under or interest in any patent,
trademark, copyright or other intellectual property, including software license
agreements with any other party, whether the Grantors are a licensee or licensor
under any such license agreement, and the right to use the foregoing in
connection with the enforcement of the Lenders’ rights pursuant to the Security
Agreement.

“Patent” means patents and patent applications, including, without limitation,
the patents and patent applications listed on Schedule I hereto and all
continuations, divisionals, provisionals, continuations in part, or reissues of
applications related to patents thereon, and (i) all renewals thereof, (ii) all
income, royalties, damages and payments now and hereafter due and/or payable
under and with respect thereto, subject to payment to any co-owner or inventor
of its, his or her share thereof, including without limitation payments under
all licenses entered into in connection therewith and damages and payments for
past or future infringements or dilutions thereof, (iii) the right to sue for
past, present and future infringements thereof, and (iv) all of the Grantors’
rights corresponding thereto throughout the world.

“Trademark” means trademarks, trade names, registered trademarks, trademark
applications, service marks, registered service marks and service mark
applications, including without limitation the registered trademarks listed on
Schedule I hereto, and (i) all renewals thereof, (ii) all income, royalties,
damages and payments now and hereafter due and/or payable under and with respect
thereto, subject to payment to any co-owner of its, his or her share thereof,
including without limitation payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iii) the right to sue for past, present and future
infringements and dilutions thereof, (iv) the goodwill of the Grantors’ business
symbolized by the foregoing and connected therewith, and (v) all of the
Grantors’ rights corresponding thereto throughout the world.

(b)            Terms Defined in the Purchase Agreement. Capitalized terms used
in this Agreement and not otherwise defined herein have the meanings ascribed to
them in the Purchase Agreement.

2.               GRANT OF SECURITY INTEREST IN INTELLECTUAL PROPERTY COLLATERAL.
Grantors hereby grant to Lenders a continuing first priority security interest
(as set forth in the Security Agreement) in all of Grantors’ right, title and
interest in, to and under all of Grantors’ Intellectual Property (as defined in
the Security Agreement), including, without limitation, the following, whether
presently existing or hereafter created or acquired (collectively, the
“Intellectual Property Collateral”):

(a)             all of Grantors’ Patents and Grantors’ rights under all Patent
Intellectual Property Licenses to which it is a party, including those patents
referred to on Schedule I hereto, including:

                                                          (i)                all
registrations and applications in respect of the foregoing, including
continuations, divisionals, provisionals, continuations in part, or reissues of
applications and patents issuing thereon; and

                                                        (ii)                all
products and proceeds of the foregoing, including, without limitation, any claim
by Grantors against third parties for past, present or future infringement of
any Patent or any Patent licensed under any Intellectual Property License;

(b)            all of Grantors’ Trademarks and Grantors’ rights under all
Trademark Intellectual Property Licenses to which it is a party, including those
trademarks referred to on Schedule I hereto, including:

                                                          (i)                all
registrations, applications, and renewals in respect of the foregoing;

                                                        (ii)                all
goodwill of the business connected with the use of, and symbolized by, each
Trademark and each Trademark licensed under an Intellectual Property License;
and

                                                      (iii)                all
products and proceeds of the foregoing, including without limitation any claim
by Grantor against third parties for past, present or future (A) infringement or
dilution of any Trademark or any Trademark licensed under any Intellectual
Property License or (B) injury to the goodwill associated with any Trademark or
any Trademark licensed under any Intellectual Property License; and

(c)             all of Grantors’ Copyrights and Grantors’ rights under all
Copyright Intellectual Property Licenses to which it is a party, including those
referred to on Schedule I hereto, including:

                                                      (i)                    all
registrations, applications, and renewals in respect of the foregoing; and

                                                    (ii)                    all
products and proceeds of the foregoing, including without limitation any claim
by Grantors against third parties for past, present or future infringement of
any Copyright or any Copyright licensed under any Intellectual Property License.

3.               SECURITY AGREEMENT. The security interests granted pursuant to
this Agreement are granted in conjunction with the security interests granted to
Lenders pursuant to the Security Agreement. Grantors hereby acknowledge and
affirm that the rights and remedies of Lenders with respect to the security
interest in the Intellectual Property Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein. Each
Lender acknowledges that the priorities set forth herein are subject to the
terms of the Intercreditor Agreement.

4.               AUTHORIZATION TO SUPPLEMENT. If Grantors shall obtain rights to
any new Intellectual Property (as defined in the Security Agreement), the
provisions of this Agreement shall automatically apply thereto. Grantors shall
give Lenders prompt written notice with respect to any such material new
Intellectual Property. Grantors represent that Schedule I is substantially
accurate and complete but reserve the right from time to time to correct
inaccuracies and/or omissions by giving Lenders written notice thereof. Without
limiting Grantors’ obligations under this Section 4, Grantors hereby authorize
Lenders unilaterally to modify this Agreement by amending Schedule I to include
any such corrections and other modifications and any such new Intellectual
Property of Grantors. Notwithstanding the foregoing, no failure to so modify
this Agreement or amend Schedule I shall in any way affect, invalidate or
detract from Lenders’ continuing security interest in all Intellectual Property
Collateral, whether or not listed on Schedule I.

5.               COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
In proving this Agreement in any judicial proceedings, it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought. Any signatures delivered by a party by
facsimile transmission or by e-mail transmission shall be deemed an original
signature hereto.

6. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed under the laws of the State of California applicable to contracts made
and to be performed entirely within the State of California. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the County of Los Angeles for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.

7. SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. A Lender may assign its rights hereunder in connection with
any private sale or transfer of its Notes, in which case the term “Lender” shall
be deemed to refer to such transferee as though such transferee were an original
signatory hereto. No Grantor may assign its rights or obligations under this
Agreement.

 

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, each of the Grantors have caused this Intellectual Property
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.

 

W270, INC.

 

 

By:__________________________________________

Name:

Title:

 

 

Saleen Automotive, Inc.

 

By:_________________________________

Name:

Title:

 

SMS Signature Cars

 

By:_________________________________

Name:

Title:

 

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

LENDER:

 

[NAME]

 

 

By:

Name:

Title:

 

 

 

SCHEDULE I
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT