Document:

Exhibit 10.6

NEITHER THIS SECURITY NOR
THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original Issue Date: June 26, 2013

Original Conversion Price (subject to adjustment
herein): $0.075

 

$____,000.00

 

W270, INC.

3.0% SENIOR SECURED CONVERTIBLE NOTE

 

THIS NOTE is one of a series
of duly authorized and validly issued 3.0% Senior Secured Convertible Notes of W270 Inc., a Nevada corporation (the “Company”),
having its principal place of business at 2735 Wardlow Road, Corona, CA 92882, designated as its 3.0% Senior Secured Convertible
Notes (this Note, the “Note” and, collectively with the other Notes of such series, the “Notes”).

 

FOR VALUE RECEIVED, the
Company promises to pay to ___________ or its registered assigns (the “Holder”), or shall have paid pursuant
to the terms hereunder, the principal sum of $____,000.00 on June 25, 2017 (the “Maturity Date”) or such earlier
date as this Note is required or permitted to be repaid as provided hereunder, or such later date as may be permitted by the Holder
as set forth in Section 2 hereof, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note in accordance with the provisions hereof.

 

The Company’s and
its Subsidiaries’ obligations under this Note and the other Transaction Documents are secured by the Collateral (as defined
in the Security Agreement, including, without limitation, all Intellectual Property Rights) pursuant to the terms of the Security
Documents and the obligations under this Note are guaranteed by the Subsidiaries pursuant to the Subsidiary Guarantee.

 

This Note is subject to
the following additional provisions:

 

Section 1.Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or
any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case
or proceeding that is not dismissed within sixty (60) days after commencement; (c) the Company or any Significant Subsidiary thereof
is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d)
the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment; (e) the Company or
any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Significant
Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its
debts; or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent
to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any
of the foregoing.

 

“Base
Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Business
Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United States
or any day on which banking institutions in the State of California are authorized or required by law or other governmental action
to close.

 

“Buy-In”
shall have the meaning set forth in Section 4(d)(v).

 

“Common
Stock Equivalents” means any securities of the Company or its subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issued or issuable upon conversion or redemption of this Note
in accordance with the terms hereof, including without limitation shares of Common Stock issued or issuable as interest hereunder
or as damages under the Transaction Documents.

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“Event
of Default” shall have the meaning set forth in Section 7(a).

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Fundamental
Transaction Cash Amount” means the sum of (a) the greater of (i) two hundred percent (200%) of the then outstanding principal
amount of this Note, plus one hundred percent (100%) of accrued and unpaid interest thereon, or (ii) the outstanding principal
amount of this Note, plus all accrued and unpaid interest hereon, divided by the Conversion Price immediately prior to the closing
of the Fundamental Transaction, multiplied by the VWAP on the last Trading Day prior to the closing of the Fundamental Transaction,
and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.

 

“Los
Angeles Courts” shall have the meaning set forth in Section 8(d).

 

“Mandatory
Default Amount” means the sum of (a) one hundred twenty percent (120%) of the then outstanding principal amount of this
Note, (b) plus one hundred percent (100%) of accrued and unpaid interest hereon, and (c) all other amounts, costs, expenses and
liquidated damages due in respect of this Note.

 

“Note
Register” shall have the meaning set forth in Section 2(c).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless
of the number of instruments which may be issued to evidence this Note.

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Notes, (b) the indebtedness existing on the initial Closing
Date and set forth on Schedule 3.1(z) attached to the Purchase Agreement, (c) lease obligations and purchase money indebtedness
incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets,
(d) loans previously provided to Saleen Automotive, Inc., SMS Signature Cars and/or Steve Saleen by the Small Business Administration
and (e) indebtedness that is expressly subordinate to the Notes pursuant to a written subordination agreement with the Purchasers
that is acceptable to each Purchaser in its sole and absolute discretion; provided that such Permitted Indebtedness shall not exceed
seventy-five percent (75%) of the aggregate principal amount of all Notes then outstanding.

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien;
and (c) Liens incurred in connection with Permitted Indebtedness.

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of June 26, 2013, among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“Registration
Statement” means an effective registration statement under the Securities Act that registers the resale of all Conversion
Shares of the Holder, names the Holder as a “selling stockholder” therein, and contains a current prospectus not subject
to any blackout, suspension or stop order.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(d)(ii).

 

“Subsidiary”
shall have the meaning set forth in the Purchase Agreement.

 

“Trading
Day” means a day on which the principal Trading Market is open for business.

 

“Trading
Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: NYSE Amex, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board.

 

“Transaction
Documents” shall have the meaning set forth in the Purchase Agreement.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)); (b)  if the OTC Bulletin Board is
not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Holder and reasonably acceptable to the Company.

 

Section 2.Interest; No Prepayment.

 

a)              
Interest Rate. Interest shall accrue daily on the outstanding principal amount of this
Note at a rate per annum equal to 3.0%, subject to Section 2(d) below.

 

b)              
Payment of Interest. On the Maturity Date, the Company shall pay to the Holder any
accrued but unpaid and unconverted interest hereunder on the aggregate unconverted and then outstanding principal amount of this
Note, and on each Conversion Date the Company shall pay to the Holder any accrued but unpaid and unconverted interest hereunder
on that portion of the principal amount then being converted. The amount of interest payable on each Conversion Date and the Maturity
Date (“Interest Amount”) may be added to and included with the principal amount being so converted or redeemed
on such date. 

 

c)              
Interest Calculations. Interest shall be calculated on the basis of a three hundred
sixty (360)-day year, consisting of twelve (12) thirty (30) calendar day periods, and shall accrue daily commencing on the Original
Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages
and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this
Note is registered on the records of the Company regarding registration and transfers of this Note (the “Note Register”).
Except as otherwise provided herein, if at any time the Company pays interest partially in cash and partially in shares of Common
Stock to the holders of the Notes, then such payment of cash shall be distributed ratably among the holders of the then-outstanding
Notes based on their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement.

 

d)              
Default Interest. After the occurrence and during the continuance of any Event of Default,
the interest rate on this Note shall accrue at an interest rate equal to the lesser of twelve percent (12%) per annum, compounded
daily, or the maximum rate permitted under applicable law. 

 

e)              
Prepayment. This Note may not be prepaid. 

 

Section 3.Registration
of Transfers and Exchanges.

 

a)              
Different Denominations. This Note is exchangeable for an equal aggregate principal
amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will
be payable for such exchange.

 

b)              
Investment Representations. This Note has been issued subject to certain investment
representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance
with the Purchase Agreement and applicable federal and state securities laws and regulations. 

 

c)              
Reliance on Note Register. Prior to due presentment for transfer to the Company of
this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note
Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not
this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

d)              
Transfer Restrictions. Any transfer of this Note
shall also be subject to the applicable restrictions and requirements of Sections 3.2 and 4.1 of the Purchase Agreement and other
provisions of the Transaction Documents.

 

Section 4.Conversion.

 

a)              
Voluntary Conversion. At any time after the Original Issue Date until this Note is
no longer outstanding, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder,
at any time and from time to time (subject to the conversion limitations set forth in Section 4(c) hereof). The Holder shall
effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A
(a “Notice of Conversion”), specifying therein the principal amount of this Note and any accrued but unpaid
interest thereon to be converted and the future date (which may be the same date as the date such notice is deemed effective pursuant
to Section 8(a)) on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion
Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless
the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder
shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion.
The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s).
In the event of any dispute or discrepancy, the records of the Company shall be controlling and determinative in the absence of
manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may
be less than the amount stated on the face hereof.

 

b)              
Conversion Price. The conversion price shall be equal to $0.075, subject to
adjustment herein (the “Conversion Price”).

 

c)              
Conversion Limitations. 

 

                                                        
i.                   
Holder’s Restriction on Conversion. The Company shall not effect any conversion
of this Note, and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect
to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and
any other person or entity acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock
issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (A) conversion of the remaining, unconverted principal amount of this Note beneficially
owned by the Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other
securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including,
without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the
preceding sentence, for purposes of this Section 4(c), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this paragraph
applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with
any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the
submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted
(in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible,
in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed
to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions
set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this paragraph, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number
of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Company’s most recent periodic
or annual report, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent notice by the
Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written
or oral request of a Holder, the Company shall within three (3) Trading Days confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be four and nine-tenths percent (4.9%) of the number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. By written notice to the Company,
the Holder may at any time and from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage
specified in such notice (or specify that the Beneficial Ownership Limitation shall no longer be applicable), provided, however,
that (A) any such increase (or inapplicability) shall not be effective until the sixty-first (61st) day after such notice is delivered
to the Company, and (B) any such increase or decrease shall apply only to the Holder and not to any other holder of Notes. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Note.

 

                                                      
ii.                   
Unless otherwise approved in writing by the Company, any individual conversion under Section
4(a) must be for at least 10,000 Conversion Shares (such number to be appropriately adjusted for any stock
splits, stock dividends and similar events).

 

		d)	Mechanics of Conversion.

 

                                                        
i.                   
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion
Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (a) the outstanding principal
amount of this Note to be converted plus any accrued but unpaid interest thereon, by (b) the Conversion Price.

 

                                                      
ii.                   
Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after
each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the
Holder a certificate or certificates representing the Conversion Shares which, on or after the Legend Removal Date, shall be free
of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing
the number of Conversion Shares being acquired upon the conversion of this Note. On or after the date which is six (6) months following
the Original Issue Date on which this Note is issued, the Company shall use commercially reasonable efforts to deliver any certificate(s)
or shares required to be delivered by the Company under this Section 4 electronically through the Depository Trust Company or another
established clearing corporation performing similar functions.

 

                                                    
iii.                   
Failure to Deliver Certificates. If in the case of any Notice of Conversion such certificate(s)
or shares are not delivered to or as directed by the applicable Holder by the second (2nd) Trading Day after the Conversion
Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate
or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered
to the Company and the Holder shall promptly return to the Company the Common Stock certificates representing the principal amount
of this Note unsuccessfully tendered for conversion to the Company. 

 

                                                    
iv.                   
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to
issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation
or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided,
however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against
the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof,
the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has
been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder,
restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts
a surety bond for the benefit of the Holder in the amount of one hundred percent (100%) of the outstanding principal amount of
this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence
of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the
Company fails for any reason to deliver to the Holder such certificate(s) or shares pursuant to Section 4(d)(ii) by the third (3rd)
Trading Day after the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty,
for each $1,000 of principal amount being converted, $7.00 per Trading Day (increasing to $13.00 per Trading Day on the fifth (5th)
Trading Day after such liquidated damages begin to accrue) for each Trading Day after such third (3rd) Trading Day after
the Share Delivery Date until such certificates are delivered. Nothing herein shall limit a Holder’s right to pursue actual
damages or declare an Event of Default pursuant to Section 7 hereof for the Company’s failure to deliver Conversion Shares
within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such
rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
Notwithstanding any portion of the foregoing to the contrary, if the Company fails to deliver to the Holder such certificate(s)
or shares by the Share Delivery Date pursuant to Section 4(d)(ii) because (A) the conversion by the Holder is delivered in connection
with a proposed sale by the Holder of the Conversion Shares under Rule 144 promulgated under the Securities Act, and (B) in connection
with such sale, the Holder has failed to deliver customary representation letters, as prepared by the brokerage firm of Holder
in the ordinary course of its business, appropriate to evidence compliance with such rule, then the liquidated damages provisions
herein shall not begin to accrue until the Trading Day immediately following the date that the Holder has delivered such representation
letters.

 

                                                      
v.                   
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion.
In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate(s)
or shares by the Share Delivery Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required
by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise
purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder
was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company
shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount by which
(x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y)
the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at
issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including
any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount
equal to the principal amount of the attempted conversion or deliver to the Holder the number of shares of Common Stock that would
have been issued if the Company had timely complied with its delivery requirements under Section 4(d)(ii). For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion
of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving
rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall
be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof. 

 

                                                    
vi.                   
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will
at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance
upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any
other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement)
be issuable (taking into account the adjustments of Section 5) upon the conversion of the outstanding principal amount of this
Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall,
upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective
under the Securities Act, shall be registered for public sale in accordance with such Registration Statement.

 

                                                  
vii.                   
Fractional Shares. No fractional shares or scrip representing fractional shares shall
be issued upon the conversion of this Note. As to any fraction of a share which Holder would otherwise be entitled to purchase
upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

 

                                                
viii.                   
Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion
of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, provided that the Company shall not be required to pay any tax that may
be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other
than that of the Holder of this Note and the Company shall not be required to issue or deliver such certificates unless or until
the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.

 

Section 5.Certain Adjustments.

 

a)              
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common
Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon conversion of, or payment of interest on, the Notes); (ii) subdivides outstanding shares of Common Stock into a larger
number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller
number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock
of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)              
Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company
or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise
disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common
Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the
then Conversion Price (such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock
or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than
the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance), then and in such event, the Conversion Price shall be reduced, concurrently with such issue, to the lowest price per
share for which any one such share of Common Stock or Common Stock Equivalent has been issued. For purposes of this paragraph,
the “lowest price per share for which any one such share of Common Stock or Common Stock Equivalent has been issued”
shall be equal to the sum of the lowest amount of consideration (but not less than $.01) received or receivable by the Company
with respect to any such share (the “Base Conversion Price”). Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made
under this Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than
five (5) Business Days following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating
therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides
a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled
to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless
of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

c)              
Subsequent Rights Offerings. The Company shall not, at any time while the Note is outstanding,
issue rights, options or warrants to all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the VWAP at the record date mentioned below.

d)              
Pro Rata Distributions. The Company shall not, at any time while this Note is outstanding,
distribute to all holders of Common Stock (and not to Holders of the Notes) evidences of its indebtedness or assets (including
cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock.

e)              
Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company
effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially
all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each,
a “Fundamental Transaction”), then upon any subsequent conversion of this Note, the Holder shall have the right
to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder
of one share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions,
any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new Note consistent
with the foregoing provisions and evidencing the Holder’s right to convert such Note into Alternate Consideration. The terms
of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this Section 5(e) and insuring that this Note (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. In the event of a Fundamental Transaction
the Holder may elect, by giving written notice of such election to the Company at least five (5) Trading Days before the closing
of such Fundamental Transaction, to sell this Note to the Company or its designated assignee, concurrently with such closing, for
a cash payment equal to the Fundamental Transaction Cash Amount at the time of the closing. Notice of any such proposed Fundamental
Transaction and of such election shall be given to the Holder at least fifteen (15) calendar days before such closing. In connection
with such purchase, the Holder shall assign this Note to the Company or its assignee, free and clear of any liens, claims or encumbrances
other than transfer restrictions under applicable securities laws.

 

f)               
Calculations. All calculations under this Section 5 shall be made to the nearest cent
or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares,
if any) issued and outstanding.

 

g)              
Notice to the Holder.

 

                                                        
i.                   
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant
to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 

 

                                                      
ii.                   
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or
any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend
on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights
or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders
of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each
case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall
cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar
days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record
is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights
or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of
record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or
any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in
such notice. The Holder is entitled to convert this Note during the twenty (20)-day period commencing on the date of such notice
through the effective date of the event triggering such notice. 

 

Section 6.Negative
Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least a majority in principal
amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit
any of its subsidiaries (whether or not a Subsidiary on any Closing Date) to, directly or indirectly:

 

a)               
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness
for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

b)              
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with
respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

c)              
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de
minimis number of shares of its Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares as permitted
or required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing employees
of the Company, provided that such repurchases shall not exceed an aggregate of $150,000 for all employees during the term of this
Note; 

 

d)              
pay cash dividends or distributions on Common Stock of the Company;

 

e)              
enter into any transaction with any Affiliate of the Company which would be required to be
disclosed in any public filing with the Commission, unless such transaction is expressly approved by a majority of the disinterested
directors of the Company (even if less than a quorum otherwise required for board approval); or

 

f)               
enter into any agreement with respect to any of the foregoing.

 

For the avoidance of doubt, subject to the
express provisions of the Transaction Documents, the Company shall be entitled to seek and obtain additional debt or equity financing
from parties other than the purchasers of the Notes, as approved by its board of directors.

 

Section 7.Events of Default.

 

a)              
“Event of Default” means, wherever used herein, any of the following events
(whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or
pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental
body), provided that an event specified in item i, ii, iii, or viii below will not become an Event of Default unless and until
it is not cured, if possible to cure, within the earlier to occur of (i) five (5) Trading Days after
notice of such failure sent by the Holder or by any other Holder and (ii) ten (10) Trading Days after the Company has become or
should have become aware of such failure:

 

                                                        
i.                   
any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other
amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity
Date or by acceleration or otherwise);

 

                                                      
ii.                   
the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a
breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed
in clause (xi) below);

 

                                                    
iii.                   
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document
or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument
to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 

                                                    
iv.                   
any representation or warranty made in this Note, any other Transaction Documents, any written
statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or
any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;

 

                                                      
v.                   
the Company or any Significant Subsidiary shall be subject to a Bankruptcy Event;

 

                                                    
vi.                   
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured
or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (A) involves
an obligation greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (B) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

                                                  
vii.                   
if the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible
to resume listing or quotation for trading thereon within ten (10) Trading Days;

 

                                                
viii.                   
if at any time after three (3) months following the Closing Date the Company is not subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act or has failed to file all reports required to be filed
thereunder during the then preceding twelve (12) months (or such shorter period that the Company was required to file such reports);

 

                                                    
ix.                   
if any of the Security Documents or Subsidiary Guaranties ceases to be in full force and effect
(including failure to create, to the extent reasonably feasible, a valid and perfected first priority lien (subject to the Permitted
Liens) on and security interest in all the Collateral (as defined in the Security Agreement) and Intellectual Property Rights of
the Company and its Subsidiaries) at any time for any reason;

 

                                                      
x.                   
if Steve Saleen ceases to serve full time as the President and Chief Executive Officer of the Company and perform the duties
consistent with such positions for similarly situated companies, provided that if such cessation is due to Steve Saleen’s
death, permanent disability, voluntary termination or termination by the Company for cause, then (A) an Event of Default shall
not be deemed to have occurred unless and until the Company shall have failed to retain a full-time replacement reasonably acceptable
to the Holder within ninety (90) days following such death, permanent disability, voluntary termination or termination by the Company
for cause, and (B) following any such acceptable replacement this clause shall apply to such replacement in lieu of Steve Saleen;

 

                                                    
xi.                   
the Company shall fail for any reason to deliver certificates to a Holder prior to the tenth (10th) Trading Day
after a Conversion Date or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof; or

 

                                                  
xii.                   
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any
of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain
unvacated, unbonded or unstayed for a period of forty-five (45) calendar days; provided, however, that any judgment which is covered
by insurance or an indemnity from a creditworthy party (such creditworthiness as reasonably determined by the Holder) shall not
be included in calculating the amount of such judgment, writ or final process so long as the Company provides the Holder a written
statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the
effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or
indemnity within forty-five (45) calendar days of the issuance of such judgment.

 

b)              
Acceleration Upon Event of Default. If any Event of Default occurs, the outstanding
principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof
through the date of acceleration, shall become, at the Holder’s election (which the Holder shall not make more than the later
of thirty (30) calendar days after the date (a) such Event of Default is cured or otherwise resolved and (b) the Holder is aware
of such cure or resolution), immediately due and payable in cash at the Mandatory Default Amount. After the occurrence and during
the continuance of any Event of Default, the interest rate on this Note shall accrue as set forth in Section 2(d). If there is
such an acceleration, then upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note
to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have
all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b).
No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. 

 

Section 8.Miscellaneous.

 

a)              
Notices. Any and all notices or other communications or deliveries to be provided by
the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by
facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above,
or such other facsimile number or address as the Company may specify for such purpose by notice to the Holder delivered in accordance
with this Section 8. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be
in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each
Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or
address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall
be deemed given and effective on the earliest of (i) the date of transmission or delivery, if such notice or communication is delivered
via facsimile at the facsimile number, or delivered by such courier service to the address, specified in this Section 8 prior to
5:30 p.m. (New York City time), (ii) the date immediately following the date of transmission or delivery, if such notice or communication
is delivered via facsimile at the facsimile number, or delivered by such courier to the address, specified in this Section 8 between
5:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, or (iii) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached to the Purchase Agreement.

 

b)              
Absolute Obligation. Except as expressly provided herein, no provision of this Note
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages
and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.
This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter
issued under the terms set forth herein.

 

c)              
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed,
the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of
or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen
or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably
satisfactory to the Company.

 

d)              
Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning
the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced
in the state and federal courts sitting in the County of Los Angeles (the “Los Angeles Courts”). Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the Los Angeles Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), 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 such Los Angeles Courts, or such Los Angeles Courts are improper
or inconvenient venue for such proceeding. 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 via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Note 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 other manner permitted by applicable law. Each party hereto hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce
any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for
its attorney’s fees and other costs and expenses reasonably incurred in the investigation, preparation and prosecution of
such action or proceeding.

 

e)              
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this
Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision
of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more
occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that
term or any other term of this Note. Any waiver by the Company or the Holder must be in writing.

 

f)               
Severability. If any provision of this Note is invalid, illegal or unenforceable, the
balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless
remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest
due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of
the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which
may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded
the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.

 

g)              
Next Business Day. Whenever any payment or other obligation hereunder shall be due
on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

h)              
Headings. The headings contained herein are for convenience only, do not constitute
a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

 

i)               
Assumption.  Any successor to the Company or any surviving entity in a Fundamental
Transaction shall (i) assume, prior to such Fundamental Transaction, all of the obligations of the Company under this Note and
the other Transaction Documents pursuant to written agreements in form and substance satisfactory to the Holder (such approval
not to be unreasonably withheld or delayed) and (ii) issue to the Holder a new Note of such successor entity evidenced by a written
instrument substantially similar in form and substance to this Note, including, without limitation, having a principal amount and
interest rate equal to the principal amount and the interest rate of this Note and having similar ranking to this Note, which shall
be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed).  The provisions of this Section
8(i) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations
of this Note.

 

j)               
Usury. This Note shall be subject to the anti-usury limitations contained in the Purchase
Agreement.

 

*********************

    	 

    	 

    

IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

 

	
        W270, INC.

         

         

	
        By:__________________________________________

        Name:

        Title:

        Facsimile No. for delivery of Notices:

	 
	 

 

    	 

    	 

    

ANNEX
A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal
under the 3.0% Senior Secured Convertible Note due June 25, 2017 of W270, Inc., a Nevada corporation (the Company”),
into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the
date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer
taxes, if any.

 

By the delivery
of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does
not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

The undersigned
agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer
of the aforesaid shares of Common Stock pursuant to any prospectus.

 

Conversion calculations:

Date to Effect
Conversion: 

 

Principal Amount of Note
to be Converted: 

 

Interest Accrued
on Account

of Conversion at Issue: 

Number of shares of Common
Stock to be issued (not less than 10,000 shares): 

Signature: 

Name: 

Address for Delivery
of Common Stock Certificates: 

 

Or

 

DWAC Instructions:

 

Broker No:

Account No:EMPLOYMENT AGREEMENT

 

 

This Employment Agreement
(“Agreement”) is entered into on last date written below, and is between Saleen Automotive Electric, Inc., a Florida
a corporation (“Company”), and Steve Saleen (“Executive”).

 

RECITALS

 

WHEREAS, the Company
and its wholly owned subsidiary SMS Signatures Cars are in the business of designing, engineering, manufacturing, marketing and
distributing electric vehicles, high performance lifestyle vehicles, and high performance lifestyle vehicle parts;

 

WHEREAS, the Executive
has experience in the automotive industry that is complementary to the business of the Company, and the Company wishes to hire
the Executive on the terms set forth herein.

 

AGREEMENT

 

1.Employment. In consideration
of their mutual covenants and other valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged,
the Company agrees to hire Executive, and Executive agrees to remain in the employ of the Company, upon the terms and conditions
herein provided.

 

1.1.Position
and Responsibilities. Executive will serve as the Chief Executive Officer of the Company, responsible for promoting,
guiding and overseeing the operations of the Company and any existing or later-acquired wholly owned subsidiaries. Executive agrees
to perform services consistent with his position, as outlined in the Company’s Bylaws, and as may be assigned from time to
time by the Board of Directors of the Company; however, the Company is disallowed from changing the title of Executive’s
position or from diminishing Executive’s responsibilities of overseeing the operations of the Company. Executive will perform
all duties in a professional, ethical and businesslike manner.

 

1.2.Dedication and Time.
During the term of this Agreement, Executive will devote his professional time and attention to faithfully serving the Company
in such a manner so as to satisfactorily perform the duties as described herein. Notwithstanding the foregoing, Executive may devote
time and attention to other business, civic, charitable or social organizations and endeavors, so long as such activities do not
interfere with the performance of Executive’s duties and obligations to the Company.

 

1.3.Term.
The term of this Agreement will commence on the date first referenced above, and will continue, unless sooner terminated, for a
period of 8 years, and it will automatically continue thereafter for successive twelve month periods unless and until either party
gives the other party written notice of termination prior to the end of a term.

   

2. Compensation.

 

2.1Salary.
For services rendered by Executive hereunder, including services as a member of the Board of Directors if so elected by the shareholders,
the Company will pay Executive a salary in the following amounts, which shall not be decreased:

 

		i.	$6,250 per month, beginning on
the commencement of this Agreement through termination. 

 

		ii.	In the event the Company is successful
in raising a cumulative gross amount of $1 million in capital, whether such investment is in the form of equity, debt or
a convertible instrument, the Company will pay Executive a salary of $10,000 per month from the date of the investment through
the termination of this Agreement. 

 

		iii.	In the event the Company is successful
in raising a cumulative gross amount of $2.5 million in capital, whether such investment is in the form of equity, debt
or a convertible instrument, the Company will pay Executive a salary of $20,000 per month from the date of the investment
through the termination of this Agreement. 

 

		iv.	In the event the Company is successful
in raising a cumulative gross amount of $5 million in capital, whether such investment is in the form of equity, debt or
a convertible instrument, the Company will pay Executive a salary of $27,500 per month from the date of the investment through
the termination of this Agreement.

 

		v.	In the event the Company is successful
in raising a cumulative gross amount of $7.5 million in capital, whether such investment is in the form of equity, debt
or a convertible instrument, the Company will pay Executive a salary of $32,500 per month from the date of the investment
through the termination of this Agreement.

 

		vi.	In the event the Company is successful
in raising a cumulative gross amount of $10 million in capital, whether such investment is in the form of equity, debt or
a convertible instrument, the Company will pay Executive a salary of $37,500 per month from the date of the investment through
the termination of this Agreement. 

 

2.2 Bonus.
The Company agrees that it will establish and maintain a bonus program for Executive that will compensate Executive in amounts
up to Executive’s annual base salary, and which will be based on objective criteria, such as Company earnings, stock price,
market capitalization, market penetration, and like. The Company and Executive agree to negotiate in good faith to develop and
implement a bonus program that is consistent with this provision, and to have such program in place on or before September 30,
2012.

 

2.3 Benefits.
Executive will be entitled to participate in other benefit programs that the Company may establish from time to time, such as group
health, vision and dental insurance, life insurance, disability insurance and a retirement plan.

 

2.4Vacation
and Holidays. Executive shall also be entitled to four weeks’ vacation, leave for illnesses and so forth as now or
hereafter granted by Company’s personnel policies. Executive will also be entitled to all major holidays as are defined by
the Company’s personnel policies.

 

2.5Company Car. The Company
will provide Executive with a Saleen or SMS branded company car, and will be responsible for all ordinary maintenance and repairs
on the car, and automobile insurance.

 

3.Expenses. Executive
will be reimbursed for business-related expenses reasonably and necessarily incurred and advanced by the Executive in performing
his duties for Company, subject to review by the Board of Directors and in accordance with Company’s policy. Executive will
maintain records and written receipt as required by Company policy and reasonably requested by the Board of Directors to substantiate
such expenses.

 

4.Insurance.

 

4.1Directors and Officers Insurance.
At all times during the term of this Agreement, the Company agrees to procure and maintain a Directors and Officers Insurance policy
with limits of at least $1 million per occurrence and which names Executive as an Additional Insured. Such policy shall be with
an insurance carrier that is admitted in California and that carries a Standard and Poor’s Rating of AA or better.

 

 4.2Key-Man Life Insurance.
The Company may, at its sole discretion and expense, apply for and procure life insurance and disability insurance on Executive
in any amount determined in the sole judgment of the Company, and place the Company as the sole beneficiary of such policies. Executive
agrees to cooperate in any medical or other examination, supply information reasonably requested by the insurance companies, and
execute such applications as may be reasonably necessary to obtain and procure such insurance.

 

5.Termination
and Rights Thereafter.

 

5.1Termination by Executive.
Executive is entitled to terminate this Agreement at any time, with or without cause. In the event Executive terminates this Agreement,
Executive will be entitled to the compensation, vacation and benefits earned through the last date of his employment.

 

5.2Termination by Company for
Cause. The Company is entitled to terminate this Agreement for cause, which is defined as: i) Executive’s gross and
willful misconduct which is injurious to the Company; ii) Executive’s engaging in fraudulent conduct with respect to the
Company’s business; iii) Executive’s conduct of a criminal nature that may have an adverse impact on the Company’s
standing and reputation; iv) the continued and unjustified refusal by Executive to perform the duties required of him by this Agreement;
v) Executive’s use of illicit drugs or alcohol in violation of then current Company policy; or vi) conviction of a crime
involving moral turpitude or a felony involving physical violence. In the event the company terminates this Agreement for cause,
Executive will be entitled to the compensation, vacation and benefits earned through the last date of his employment.

 

 5.3Termination by Company
without Cause. In the event the Company terminates this Agreement for without cause, or otherwise materially breaches
this Agreement and such material breach remains uncured after 15 days’ written notice, Executive will be entitled to a severance
payment of 1.5 times his then-current annual salary plus $2 million, payable in cash or cash-equivalent within 30 days of the date
of termination.

 

 5.4Termination by Company
because of Death or Disability. The Company is entitled to terminate this Agreement in the event of Executive’s
death or total mental or physical disability. In the event the company terminates this Agreement for death or disability, Executive
will be entitled to the compensation, vacation and benefits earned through the last date of his employment.

 

6.Company Property.

 

 6.1Confidential Information.
Executive shall not disclose, during the terms of this Agreement or at any time after its termination, any of Company’s proprietary
information, account information, customer lists, customer information, policies, pricing, strategy, codes, strategic plan, plans
for expansion or business development or other information of a confidential nature (hereinafter referred to as “Confidential
Information”), whatsoever regarding Company without prior written consent. Upon termination of this Agreement, Executive
promises to promptly return to Company all Confidential Information and other property in his possession, custody or control. Executive
covenants to not take, keep, or record copies, duplications or reproductions of the Confidential Information or other property
subject to this Agreement after termination of this Agreement.

 

 6.2Inventions.
All copyrightable material, notes, records, drawings, designs, inventions, improvements, developments, discoveries, trade secrets
or other intellectual property (collectively, “Inventions”) conceived, discovered, developed or reduced to practice
by Executive, solely or in collaboration with others, during the performance of the services under this Agreement are the sole
property of the Company. Executive agrees to assist the Company in having any Inventions created by Executive during the term of
this Agreement assigned to the Company, at the Company’s expense.

 

7 Indemnification. The
Company shall defend and indemnify Executive against any and all expenses, including amounts paid upon judgments, attorneys’
fees and amounts paid in settlement (before or after suit is commenced), incurred by the Executive in connection with his defense
or settlement of any claim, action, suit or proceeding in which he is made a party or which may be asserted against him by reason
of his employment or the performance of duties in this Agreement.

 

8.Miscellaneous.

 

8.1Integration.
This Agreement contains the entire understanding between the Parties concerning the subjects addressed herein. Any and all
prior negotiations that are not contained in this Agreement are superseded and of no force and effect.
This Agreement may be modified or amended only by a written agreement executed by all Parties.

 

8.2 Headings.
All section headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement, and
shall not in any way affect the meaning or interpretation of this Agreement.

 

8.3 Authority.
The undersigned individuals execute this Agreement on behalf of the respective Parties and represent that they are authorized to
enter into and execute this Agreement on behalf of such Parties.

 

8.4 Counterparts
and Signatures. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered,
shall be deemed an original and all of which together shall constitute one and the same agreement. Signatures obtained by facsimile
or email in PDF format shall be deemed to be original signatures.

 

8.5
Further Assurances. The Parties agree to execute all instruments
and documents of further assurance and will do any and all such acts as may be reasonably required to carry out their obligations
and to consummate the transactions contemplated by this Agreement. The Parties further agree to support this Agreement in all material
ways, including in its application and enforcement against any and all persons or entities seeking to avoid or limit the applicability
or scope of the Agreement in any manner.

 

8.6 Binding Effect.
This Agreement is binding upon and shall inure to the benefit of the parties and each of the party’s respective successors,
predecessors, assigns, heirs, personal representatives, and affiliates, without time limitation.

 

8.7 No Implied Waiver. No action or failure to act shall constitute a waiver of any right or duty
afforded under this Agreement, nor shall any action or failure to act constitute an approval of, or acquiescence in, any breach,
except as may be specifically agreed in writing.  Waiver of any one provision herein shall
not be deemed to be a waiver of any other provision herein.

 

8.8 Governing Law.
This Agreement will be construed, interpreted, and enforced in accordance with, and governed by, the laws of the State of California
without regard to conflicts of laws provisions thereof. The parties agree that any action or proceeding brought to enforce or declare
rights arising out of or relating to this Agreement will be brought exclusively in the State or Federal Courts in Orange County,
California, and the parties further consent to the jurisdiction of said Courts and waive any claims of forum non conveniens or
any other claims relating to venue.

 

8.9 Interpretation.
 This Agreement shall be treated as jointly drafted and will not be construed against any Party as drafter. Furthermore,
in the event of any ambiguity in or dispute regarding the interpretation of this Agreement, the interpretation will not be resolved
by any rule of interpretation providing for interpretation against the party who causes the uncertainty to exist or against the
draftsman.

 

 8.10Attorneys’
Fees. If any legal action or other proceeding is brought to enforce the provisions of this Agreement, the prevailing Party
shall be entitled to recover reasonable attorneys’ fees and other costs incurred in the action or proceeding, in addition
to any other relief which the prevailing Party may be entitled.

 

 8.11 Severability.
In the event that any term or provision of this Agreement is determined to be invalid, illegal, or unenforceable in any
respect, all other provisions of the Agreement which are not affected by such invalidity, illegality or unenforceability shall
remain in full force and effect and this Agreement shall be construed as if such invalid, illegal, or unenforceable term or provision
had never been contained herein.

 

8.12
Time is of the Essence. All times stated herein are of the essence.

 

8.13Cumulative Rights
and Remedies. The rights and remedies in this Agreement will be cumulative, and in addition to, any duties, obligations,
rights and remedies otherwise provided by law.

 

8.14Advice
of Counsel. Each party acknowledges and agrees that it has given mature and careful thought to this Agreement and that
it has been given the opportunity to independently review this Agreement with its own independent legal counsel.

 

8.15Assignment.
This Agreement and any rights hereunder are not assignable by either party without the prior written consent of the other party
except as otherwise specifically provided for herein.

 

IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date written below.

 

SALEEN AUTOMOTIVE ELECTRIC,
INC.

 

 

Dated: 8/1/2011____By:____/s/
Tony Lanham_____________

Tony Lanham, President

 

 

STEVE SALEEN 

 

 

Dated: __8/1/2011___ By:___Steve
Saleen___________________

Steve Saleen

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