THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

SALEEN AUTOMOTIVE, INC.

 

COMMON STOCK PURCHASE WARRANT

 

 

October 8, 2013

 

 

This COMMON STOCK PURCHASE WARRANT certifies that Ascendiant Capital Markets,
LLC, having an address at 18881 Von Karman Avenue, 16th Floor, Irvine,
California 92612, or permitted assignees is the registered holder (the “Holder”)
of this Common Stock Purchase Warrant (the “Warrant”) to purchase shares of the
common stock, par value $0.001 per share (the “Common Stock”), of Saleen
Automotive, Inc., a Nevada corporation (the “Company”).

 

FOR VALUE RECEIVED, the Company hereby certifies that the Holder is entitled to
purchase from the Company forty thousand (40,000) duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (the “Warrant
Shares”) at a purchase price per share set forth in Section 3 below, and
otherwise subject to the terms, conditions and adjustments set forth below in
this Warrant. The Holder is the person or entity in whose name this Warrant is
registered on the records of the Company regarding registration and transfers of
this Warrant (the “Warrant Register”) and is the owner and holder thereof for
all purposes, except as described in Section 9 hereof.

 

1.                Exercise of Warrant. This Warrant will be exercisable at any
time, in the sole discretion of the Holder, commencing on the date hereof (the
“Commencement Date”).

 

2.                Expiration of Warrant. This Warrant shall expire on October 7,
2016, 5:00 p.m., Eastern Standard time (the “Expiration Date”).

 

3.                Warrant Price. At any time through the Expiration Date, all or
any portion of this Warrant may be exercised for Warrant Shares, in the Holder’s
sole discretion, at a price (the “Warrant Price”) equal to $0.15 per share, as
adjusted.

 

4.                Exercise of Warrant. This Warrant shall be exercisable as
follows:

 

4.1             Manner of Exercise. This Warrant may be exercised into shares of
Common Stock by the Holder hereof, in accordance with the terms and conditions
hereof, in whole or in part with respect to any portion of this Warrant and in
the discretion of the Holder, during the period beginning on the Commencement
Date and ending on the Expiration Date. Any exercise shall be undertaken during
normal business hours on any day other than a Saturday or a Sunday or a day on
which commercial banking institutions in Los Angeles, California are authorized
by law to be closed (a “Business Day”) on or prior to the Expiration Date with
respect to such portion of this Warrant, by surrender of this Warrant to the
Company at its office maintained pursuant to Section 9.2(a) hereof, accompanied
by an exercise notice in substantially the form attached to this Warrant as
Exhibit A duly executed by or on behalf of the Holder together with the payment
of the Warrant Price in cash by bank check or wire transfer of immediately
available funds.

 

4.2             When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company as
provided in Section 4.1 hereof (“Exercise Date”), and, at such time, the
corporation, association, partnership, organization, business, individual,
government or political subdivision thereof or a governmental agency (a “Person”
or the “Persons”) in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon exercise as provided herein shall
be deemed to have become the holder or holders of record thereof.

 

4.3             Delivery of Stock Certificates. As soon as practicable after
each exercise of this Warrant, in whole or in part, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to be
issued in the name of and delivered to the Holder hereof or, subject to Section
9 hereof, as the Holder (upon payment by the Holder of any applicable transfer
taxes) may direct:

 

(a)              a certificate or certificates (with appropriate restrictive
legends, as applicable) for the number of duly authorized, validly issued, fully
paid and nonassessable shares of Common Stock to which the Holder shall be
entitled upon exercise; and

 

(b)             in case exercise is in part only, a new Warrant of like tenor,
dated the date hereof and stating on the face thereof for the number of shares
of Common Stock equal to the number of shares called for on the face of this
Warrant minus the number of shares designated by the Holder upon exercise as
provided in Section 4.1 hereof (without giving effect to any adjustment
thereof).

 

4.4             Shares to be Fully Paid. The Company covenants and agrees that
all shares of Common Stock which may be issued upon the exercise of rights
presented by this Warrant will, upon issuance by the Company, be validly issued,
fully paid and nonassessable, and free from preemptive rights and free from all
taxes, liens and charges with respect thereto.

 

4.5             Company to Reaffirm Obligations. The Company will, at the time
of each exercise of this Warrant, upon the written request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to the Holder all
rights (including without limitation any rights to registration of the shares of
Common Stock issued upon exercise) to which the Holder shall continue to be
entitled after exercise in accordance with the terms of this Warrant; provided,
however, that if the Holder shall fail to make a request, the failure shall not
affect the continuing obligation of the Company to afford the rights to such
Holder.

 

5.                Adjustments.

 

5.1             Splits, Subdivisions, etc. In the event that the Company should
at any time or from time to time, after the date first referenced above, fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock, or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive directly or indirectly additional shares of Common
Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of
any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend, distribution, split or subdivision if no record date
is fixed), the Warrant Price shall be appropriately decreased so that the number
of shares of Common Stock issuable on exercise of this Warrant shall be
increased in proportion to such increase in the aggregate number of shares of
the Common Stock outstanding.

 

5.2             Combinations. If the number of shares of Common Stock
outstanding at any time after the date first referenced above is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Warrant Price shall be appropriately
increased and the number of shares of Common Stock issuable upon exercise of
this Warrant shall be decreased in proportion to such decrease in outstanding
shares.

 

5.3             Replacement of Securities upon Reorganizations, etc. If after
the date hereof any capital reorganization or reclassification of the Common
Stock, or consolidation or merger of the Company with another corporation, or
the sale of all or substantially all of its assets to another corporation or
other similar event (each, a “Fundamental Transaction”) shall be effected, then,
as a condition of such Fundamental Transaction, lawful and fair provision shall
be made whereby the Holder of this Warrant shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in this Warrant and in lieu of the shares of Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented thereby, such shares of stock, securities, or assets as may
be issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by this Warrant, had such Fundamental Transaction not
taken place and in such event appropriate provision shall be made with respect
to the rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Warrant Price and of the number of shares purchasable upon the exercise of
this Warrant) shall thereafter be applicable, as nearly as may be in relation to
any share of stock, securities, or assets thereafter deliverable upon the
exercise hereof. The Company shall not effect any such Fundamental Transaction
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such Fundamental Transaction, or the
corporation purchasing such assets in a Fundamental Transaction, shall assume by
written instrument executed and delivered to the Holder of this Warrant the
obligation to deliver to the Holder of this Warrant such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase.

 

5.4             Notice of Adjustments. Upon any adjustment of the terms of this
Warrant pursuant to this Section 5, then and in each such case the Company shall
promptly deliver a notice to the registered Holder of this Warrant, which notice
shall state the Warrant Price resulting from such adjustment and the changes, if
any, in the number of Warrant Shares or kind of securities or other property
purchasable at such price upon the exercise hereof, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based.

 

5.5             Adjustment in Number of Securities. Upon each adjustment of the
Warrant Price pursuant to the provisions of this Section 5, the number of
securities issuable upon the exercise of each Warrant shall be adjusted to the
nearest full amount by multiplying a number equal to the Warrant Price in effect
immediately prior to such adjustment by the number of Warrant Shares issuable
upon exercise of the Warrants immediately prior to such adjustment and dividing
the product so obtained by the adjusted Warrant Price.

 

5.6             No Fractional Shares. No fractional shares shall be issuable
upon exercise of this Warrant and the number of Warrant Shares to be issued
shall be rounded down to the nearest whole share.

 

6.                Reservation of Shares. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
free from all taxes, liens and charges with respect to the issue thereof, and
not subject to preemptive rights or other similar rights of stockholders of the
Company, solely for the purpose of issuing the shares of Common Stock underlying
this Warrant, such number of its shares of Common Stock as shall from time to
time be sufficient to effect the issuance or exercise thereof, and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to issue the Common Stock and effect the exercise of this Warrant, in
addition to such other remedies as shall be available to Holder, the Company
shall take such corporate action as may, in the opinion of its counsel, be
necessary to increase the number of authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes,
including without limitation, using its best efforts to obtain the requisite
stockholder approval necessary to increase the number of authorized shares of
the Company’s Common Stock. All shares of Common Stock issuable upon exercise of
this Warrant shall be duly authorized and, when issued upon exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable and free
from preemptive rights and free from taxes, liens and charges with respect
thereto.

 

7.               

 

8.                Restrictions on Transfer.

 

8.1 Restrictive Legends. This Warrant and each Warrant issued upon transfer or
in substitution for this Warrant pursuant to Section 9, each certificate for
Common Stock issued upon the exercise of any Warrant and each certificate issued
upon the transfer of any such Common Stock shall be transferable only upon
satisfaction of the conditions specified in this Section 8. Subject to the
provisions of this Section 8, each of the foregoing securities shall be stamped
or otherwise imprinted with a legend reflecting the restrictions on transfer set
forth in this Warrant and any restrictions required under the Securities Act of
1933, as amended (the “Securities Act”).

 

8.2 Notice of Proposed Transfer; Opinion of Counsel. Prior to any transfer of
any securities which are not registered under an effective registration
statement under the Securities Act (“Restricted Securities”), the Holder will
give written notice to the Company of the Holder's intention to affect a
transfer and to comply in all other respects with this Section 8.2. Each notice:
(i) shall describe the manner and basic circumstances of the proposed transfer,
and (ii) shall designate counsel for the Holder. The Holder giving notice will
submit a copy thereof to the counsel designated in the notice. The following
provisions shall then apply:

 

(a)              If in the opinion of counsel for the Holder, which is
reasonably satisfactory to the Company, the proposed transfer may be effected
without registration of Restricted Securities under the Securities Act, the
Holder shall thereupon be entitled to transfer the Restricted Securities in
accordance with the terms of the notice delivered by the Holder to the Company.
Each certificate representing the Restricted Securities issued upon or in
connection with any transfer shall bear the restrictive legends required by
Section 8.1 hereof.

 

(b)             If the opinion called for in (a) above is not delivered, the
Holder shall not be entitled to transfer the Restricted Securities until either:
(i) receipt by the Company of a further notice from such Holder pursuant to the
foregoing provisions of this Section 8.2 and fulfillment of the provisions of
clause (a) above, or (ii) such Restricted Securities have been effectively
registered under the Securities Act.

 

8.3 Termination of Restrictions. The restrictions imposed by this Section 8 upon
the transferability of Restricted Securities shall cease and terminate as to any
particular Restricted Securities: (a) which Restricted Securities shall have
been effectively registered under the Securities Act, or (b) when, in the
opinion of counsel for the Holder, which is reasonably acceptable to the
Company, or, alternatively, in the opinion of counsel to the Company, such
restrictions are no longer required in order to insure compliance with the Act
or Section 8 hereof. Whenever such restrictions shall cease and terminate as to
any Restricted Securities, the Holder thereof shall be entitled to receive from
the Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
8.1 hereof.

 

9.                Ownership, Transfer and Substitution of Warrant.

 

 

9.1             Ownership of Warrant. The Company may treat the person in whose
name this Warrant is registered in the Warrant Register maintained pursuant to
Section 9.2(b) hereof as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, except that, if and when any Warrant
is properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer thereof as the owner of such Warrant for all purposes,
notwithstanding any notice to the contrary. Subject to Section 8 hereof, this
Warrant, if properly assigned, may be exercised by a new holder without a new
Warrant first having been issued.

 

9.2Office; Transfer and Exchange of Warrant.

 

(a)              The Company will maintain its principal offices as the office
where notices, presentations and demands in respect of this Warrant may be made
upon it until the Company notifies the holder of this Warrant of any change of
location of the office.

 

(b)             The Company shall cause to be kept at its office maintained
pursuant to Section 9.2(a) hereof a Warrant Register for the registration and
transfer of this Warrant. The names and addresses of holders of this Warrant,
the transfers thereof and the names and addresses of transferees of this Warrant
shall be registered in such Warrant Register. The Person in whose name any
Warrant shall be so registered shall be deemed and treated as the owner and
holder thereof for all purposes of this Warrant, and the Company shall not be
affected by any notice or knowledge to the contrary.

 

(c)              Upon the surrender of this Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company maintained
pursuant to Section 9.2(a) hereof, the Company at its expense will (subject to
compliance with Section 8 hereof, if applicable) execute and deliver to or upon
the order of the Holder thereof a new Warrant of like tenor, in the name of such
holder or as such holder (upon payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face thereof for the number
of shares of Common Stock called for on the face of this Warrant so surrendered.

 

9.3             Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, upon delivery of indemnity reasonably satisfactory to the Company in
form and amount or, in the case of any mutilation, upon surrender of this
Warrant for cancellation at the office of the Company maintained pursuant to
Section 9.2(a) hereof, the Company at its expense will execute and deliver, in
lieu thereof, a new Warrant of like tenor and dated the date hereof.

 

10.             No Rights or Liabilities as Stockholder. No Holder shall be
entitled to vote or receive dividends or be deemed the holder of any shares of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the shares of Common Stock purchasable
upon the exercise hereof shall have become deliverable, as provided herein. The
Holder will not be entitled to share in the assets of the Company in the event
of a liquidation, dissolution or the winding up of the Company.

 

11.             Notices of Record Date, etc. In case the Company shall take a
record of the holders of its Common Stock (or other stock or securities at the
time deliverable upon the exercise of this Warrant) for the purpose of entitling
or enabling them to receive any dividend or other distribution, or to receive
any right to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right; or of any capital
reorganization of the Company, any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
surviving entity), or any transfer of all or substantially all of the assets of
the Company; or of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will mail or
cause to be mailed to the registered holder of this Warrant a notice specifying,
as the case may be: (i) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the record date or effective date for the event specified in such
notice unless such prior notice is waived by the registered holder of this
Warrant.

 

12.             Notices. Any notice or other communication in connection with
this Warrant shall be deemed to be given if in writing (or in the form of a
facsimile) addressed as hereinafter provided and actually delivered at said
address: (a) if to any Holder, at the registered address of such holder as set
forth in the Warrant Register kept at the office of the Company maintained
pursuant to Section 8.2(a) hereof, or (b) if to the Company, to the attention of
its Chief Executive Officer at its office maintained pursuant to Section 9.2(a)
hereof; provided, however, that the exercise of any Warrant shall be effective
in the manner provided in Section 4 hereof.

 

13.             Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of shares of Common Stock underlying this
Warrant upon exercise of this Warrant; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificate for shares of Common Stock
underlying this Warrant in a name other that of the Holder. The Holder is
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving shares of Common Stock underlying this
Warrant upon exercise hereof.

 

14.             Governing Law; Jurisdiction; Waiver of Jury Trial.

 

(a)              This Warrant shall be governed by, and construed in accordance
with, the internal laws of the State of Nevada without regard to the choice of
law principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the federal courts and the courts of the State of
Nevada located in Clark County for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Warrant and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Warrant. Each
of the parties hereto irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such court.
Each party hereto irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

 

(b)             EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL
BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT
COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

15.             Miscellaneous. Any provision of this Warrant and the observance
of any term hereof may be amended, waived or modified (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and the Holder. If one or more provisions of this
Warrant are held to be unenforceable under applicable law, such provisions shall
be excluded from this Warrant, and the balance of this Warrant shall be
interpreted as if such provisions were so excluded and shall be enforceable in
accordance with its terms. The section headings in this Warrant are for purposes
of convenience only and shall not constitute a part hereof.

 

 

[Remainder of page intentionally left blank; signature pages follow.]

 

 

IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant to
be duly executed as of the date first above written.

 

SALEEN AUTOMOTIVE, INC.

 

 

By: _________________________

Name:

Title:

 

 

 

EXHIBIT A

 

PURCHASE FORM

 

To: Saleen Automotive, Inc.

 

Dated:____________

 

 

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No. ___), hereby elects to[check applicable subsection]:

 

 

________Purchase ____________ shares of ________________ of Saleen Automotive,
Inc. pursuant to the terms of the attached Warrant and payment of the Warrant
Price per share required under such Warrant accompanies this notice;

 

Please issue a certificate or certificates representing said shares of Saleen
Automotive, Inc. the name of the undersigned or in such other name as is
specified below:

 

 

________________________________________

Print or Type Name

 

________________________________________

(Signature must conform in all respects to name of holder as specified on the
face of Warrant)

 

________________________________________

(Street Address)

 

________________________________________

(City) (State) (Zip Code)