INTELLECTUAL
PROPERTY SECURITY AGREEMENT


 


 


This
Intellectual Property Security Agreement (“IP Security Agreement”), is entered into this 8th day of June, 2016 (the
“IP Security Agreement”) by and between QUANTUMSPHERE, INC., a Nevada corporation with its address at 2905
Tech Center Dr., Santa Ana, CA 92705 (the “Borrower”) and FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware
limited liability company, with its address at 1040 First Avenue, Suite 190, New York, NY 10022 (“Collateral Agent”),
on behalf of each of the secured parties listed on the signature page hereto (collectively, the “Secured Parties”).


 


RECITALS


 


WHEREAS,
this IP Security Agreement is a supplement to that certain Security Agreement and Intercreditor and Collateral Agent Agreement,
dated as of even date herewith, by and between the Borrower and the Secured Parties (collectively, the “Agreement”);


 


WHEREAS,
all capitalized terms not defined herein shall have the definitions ascribed to them in the Agreement, and are incorporated herein
by reference. If there is a conflict between the definitions, terms or provisions of this IP Security Agreement and the Agreement,
the definitions, terms or provisions of the Agreement shall control; and


 


WHEREAS,
this IP Security Agreement is executed for the purpose of filing a short form security agreement in the United States Patent and
Trademark Office (the “USPTO”), which sets forth the Borrower’s pledge of its intellectual property as security
for the indebtedness, represented by the Secured Promissory Notes (collectively, “Notes”), issued by Borrower in favor
of the Secured Parties.


 


		1.	GRANT
                                         OF SECURITY INTEREST



 


The
Borrower hereby grants to the Lender a security interest in and lien on all of the intellectual property assets owned by the Borrower,
including without limitation all patents and trademarks set forth in Exhibit A, attached hereto and incorporated herein
by reference, wherever located and whether now owned or hereafter acquired, all goodwill of the business of the Borrower connected
with the use of, or otherwise symbolized by, such intellectual property, all rights to sue for infringement of such intellectual
property, and all parts, replacements, substitutions, profits, products, amendments, updates and cash and non-cash proceeds of
any of the foregoing (including insurance proceeds, of any kind, including those payable by reason of loss or damage thereto)
in any form and wherever located, and all written or electronically recorded books and records relating to any such assets and
other rights relating thereto, wherever located and whether now owned or hereafter acquired (collectively the “IP Collateral”).


 


		2.	REPRESENTATIONS,
                                         WARRANTIES, COVENANTS AND MISCELLANEOUS



 


All
other terms, conditions, agreements, obligations, representations, warranties, covenants, definitions, exhibits and miscellaneous
terms, conditions, agreements and obligations set forth in the Agreement are restated and incorporated herein by reference.


 


[Signatures
appear on the following page]


 




    	 



    	 



    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Intellectual Property Security Agreement to be duly executed as of the
day and year first above written.


 


	QUANTUMSPHERE,
    INC. (BORROWER)	 
	 	 	 
	By:	 	 
	 	Kevin
    Maloney	 
	 	Chief
    Executive Officer & President	 
	 	 	 
	FIRSTFIRE
    GLOBAL OPPORTUNITIES 	 
	FUND,
    LLC (COLLATERAL AGENT),	 
	on
    behalf of the Secured Parties listed below 	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:
    	 	 
	 	 	 
	SECURED
    PARTIES	 
	 	 	 
	FIRSTFIRE
    GLOBAL OPPORTUNITIES FUND, LLC	 
	 	 	 
	By:
    	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	PURITAN
    PARTNERS, LLC	 
	 	 	 
	By:
    	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	ROCKWELL
    CAPITAL PARTNERS, INC.	 
	 	 	 
	By:
    	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	 	 	 
	By:
    TOMER COHEN	 
	 	 
	 	 	 
	By:
    FRANCIS POLI	 


 




    	 



    	 



    

 


EXHIBIT
A


 


QUANTUMSPHERE,
INC. - IP PORTFOLIO


 


	IP	 	Case
    No.	 	Title
    of Invention	 	Document
    No.	 	Document
    Date	 	Inventors	 	Status
	 	 	 	 	 	 	 	 	 	 	 	 	 
	PATENT	 	QSINC.002A	 	METHOD
    AND APPARATUS FOR FORMING NANO-PARTICLES	 	App.
    No. 10/840409

    Patent No. 7,282,167	 	Filed:
    5/06/04

    Patented: 10/16/07	 	Carpenter	 	Issued
	PATENT	 	QSINC.003A	 	NANO-MATERIAL
    CATALYST DEVICE	 	App.
    No. 10/983993 Patent No. 7,897,294	 	Filed:
    11/8/2004 Patented: 3/1/2011	 	Carpenter	 	Issued
	PATENT	 	QSINC.007A	 	METHOD
    AND APPARATUS FOR FORMING NANO-PARTICLES	 	App.
    No. 11/591787 Patent No. 7,803,295	 	Filed:
    11/2/2006 Patented: 9/28/2010 	 	Carpenter	 	Issued
	PATENT	 	QSINC.007C1	 	 	App.
    No. 12/924136 Patent No. 8,500,427	 	Filed:
    09/21/2010 Patented: 08/06/13	 	Carpenter	 	Issued
	PATENT	 	QSINC.011CP1	 	COMPOSITIONS
    OF NANOMETAL PARTICLES CONTAINING A METAL OR ALLOY AND PLATINUM PARTICLES FOR USE IN FUEL CELLS	 	App.
    No. 11/781909 Patent No. 7,955,755	 	Filed:
    07/23/2007 Patented:06/07/2011	 	McGrath,
    Carpenter	 	Issued
	PATENT	 	QSINC.011CP1C1	 	 	App.
    No. 13/110841 Patent No. 8,211,594	 	Filed:
    05/18/2011 Patented: 07/3/2012	 	McGrath,
    Carpenter	 	Issued
	PATENT	 	QSINC.013A	 	APPARATUS
    FOR UNIFORM FEEDING OF POWDERS	 	App.
    No. 11/254627 Patent No. 7,713,043 	 	Filed:
    10/20/2005 Patented:05/11/2010	 	Dopp,
    Nettleton	 	Issued
	PATENT	 	QSINC.018A	 	ELECTRO-CATALYTIC
    RECHARGING COMPOSITION	 	App.
    No. 11/745957 Patent No. 7,709,127 	 	Filed:
    5/8/2007 Patented: 5/4/2010 	 	Maloney,
    Dopp	 	Issued
	PATENT	 	QSINC.024P2C4	 	SYSTEM
    AND METHOD FOR AMMONIA SYNTHESIS	 	App.
    No. 14/085,500 Patent No. 9,272,920	 	Filed:
    11/20/2013 Patented:03/01/2016	 	Carpenter,
    Maloney	 	Issued
	PATENT	 	QSINC.036A	 	A
    METAL HYDRIDE FUEL CELL CARTRIDGE AND ELECTROLYZER ELECTRODE	 	App.
    No. 12/624,864 Patent No. 7,700,214	 	Filed:
    11/24/2009 Patented:04/20/2010 	 	Iyer,
    Canuso	 	Issued
	PATENT	 	QSINC.044PR	 	IMPROVED
    CHEMICAL SYNTHESIS USING HIGHLY REACTIVE, NANO-SIZED, CATALYTIC MATERIALS	 	App.
    No. 62343749 	 	Filed:
    05/31/2016 	 	Maloney,
    Griffith, Rodriguez	 	Pending
	TRADEMARK	 	QSINC.003T	 	QSI-NANO	 	App.
    No. 78/476053 Reg. No. 3160151	 	Filed:
                                         8/30/2004 Registered:

        10/17/2006
	 	N/A	 	Registered
	TRADEMARK	 	QSINC.004T	 	QUANTUMSPHERE	 	App.
    No. 78/476063 Reg. No. 3072883	 	Filed:
    8/30/2004 Registered: 3/28/2006	 	N/A	 	Registered
	TRADEMARK	 	QSINC.005T	 	QUANTUMSPHERE

        (stylized
        C3with design)
	 	App.
    No. 78/476060 Reg. No. 3072882	 	Filed:
    8/30/2004 Registered: 3/28/06	 	N/A	 	Registered
	TRADEMARK	 	QSINC.041T	 	METAIR	 	App.
    No. 85/659,672 Reg. No. 4,429,611	 	Filed:
    06/22/2012 Registered: 11/05/2013	 	N/A	 	Registered