INTELLECTUAL
PROPERTY SECURITY AGREEMENT


 


This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Agreement”), entered into on December 2, 2015, as of October
12, 2015, is made by Saleen Automotive, 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 SM Funding Group, Inc., a Delaware corporation (the “Secured Party”), pursuant to the Purchase
Agreement.


 


W
I T N E S S E T H:


 


WHEREAS,
the Company and the Secured Party are party to that certain Securities Purchase Agreement, dated on or about the date hereof (“Purchase
Agreement”), pursuant to which the Secured Party has agreed to extend loans to the Company evidenced by the Company’s
12.0% Senior Secured Convertible Note (the “Note”);


 


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


 


WHEREAS,
the Company’s obligations under the Note and the Grantors’ obligations under this Agreement are senior to other obligations
of the Company and the Grantors pursuant to that certain Subordination Agreement, dated October 21, 2015, among W-Net Fund I,
L.P., other holders of Company’s secured debt, the Company and the Secured Party;


 


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 Note 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 Secured Party requests to further
perfect the Secured Party’s 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 Secured Party’s 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 the Secured Party a continuing 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”):


 




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(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.


 




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3.SECURITY
AGREEMENT. The security interests granted pursuant to this Agreement are granted in conjunction with the security interests
granted to the Secured Party pursuant to the Security Agreement. Grantors hereby acknowledge and affirm that the rights and remedies
of the Secured Party 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 Secured Party 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 the Secured Party 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 the Secured Party written
notice thereof. Without limiting Grantors’ obligations under this Section 4, Grantors hereby authorize the lender
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 Secured Party’s 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 Secured Party may assign its rights hereunder
in connection with any private sale or transfer of its Note, in which case the term “Secured Party” 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]


 




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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.


 


	SALEEN
    AUTOMOTIVE, INC.,	 
	a
    Nevada corporation	 
	 	 	 
	By:	/s/
    Steve Saleen	 
	Name:	Steve
    Saleen	 
	Title:	Chief
    Executive Officer	 


 


	SALEEN
    AUTOMOTIVE, INC.,	 
	a
    Florida corporation	 
	 	 	 
	By:	/s/
    Steve Saleen	 
	Name:	Steve
    Saleen	 
	Title:	Chief
    Executive Officer	 


 


	SALEEN
    SIGNATURE CARS,	 
	a
    California corporation	 
	 	 	 
	By:	/s/
    Steve Saleen	 
	Name:	Steve
    Saleen	 
	Title:	Chief
    Executive Officer	 


 


	SALEEN
    SALES CORPORATION,	 
	a
    California corporation	 
	 	 	 
	By:	/s/
    Steve Saleen	 
	Name:	Steve
    Saleen	 
	Title:	Chief
    Executive Officer	 


 






    	 



     

    

 


ACCEPTED
AND ACKNOWLEDGED BY:


 


SECURED
PARTY:


 


	SM
    FUNDING GROUP, INC.	 
	 	 	 
	By:	/s/
    David Bergstein	 
	Name:	David
    Bergstein	 
	Title:	CEO	 


 


[Signature
Page to Intellectual Property Security Agreement]


 




    	 



     

    

 


SCHEDULE
I


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INTELLECTUAL
PROPERTY SECURITY AGREEMENT