Document:

Exhibit 10.4

 

SECURITY AGREEMENT

 

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

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that
certain Securities Purchase Agreement dated on or about June 26, 2013 between the Company and the Secured Parties (the “Purchase
Agreement”), the Secured Parties have severally agreed to extend the loans to the Company evidenced by the Notes;

 

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

 

WHEREAS, in order to induce
the Secured Parties to extend the loans evidenced by the Notes, each Debtor has agreed to execute and deliver to the Secured Parties
this Agreement and to grant the Secured Parties a security interest in certain property of such Debtor to secure the prompt payment,
performance and discharge in full of all of the Company’s obligations under the Notes and other Transaction Documents and
the Guarantors’ obligations under the Guarantee; and

 

WHEREAS, the rights of each
Secured Party hereunder shall be pari passu with each other Secured Party and enforced through the agent for the Secured
Parties appointed pursuant to Section 18 hereunder.

 

NOW, THEREFORE, in consideration
of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.              
Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that
are defined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial tort claim”,
“deposit account”, “document”, “equipment”, “fixtures”, “general intangibles”,
“goods”, “instruments”, “inventory”, “investment property”, “letter-of-credit
rights”, “proceeds” and “supporting obligations”) shall have the respective meanings given such terms
in Article 9 of the UCC.

 

(a)            
“Collateral” means the collateral in which the Secured Parties are granted
a security interest by this Agreement and which shall include the following personal property of the Debtors, whether presently
owned or existing or hereafter acquired or coming into existence, wherever situated, and all additions and accessions thereto and
all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering the same and of any tort claims in connection therewith,
and all dividends, interest, cash, notes, securities, equity interest or other property at any time and from time to time acquired,
receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Securities (as defined below):

 

(i)         
All goods, including without limitation (A) all machinery, equipment, computers, motor vehicles,
trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other
equipment of every kind and nature and wherever situated, together with all documents of title and documents representing the same,
all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and
all other items used and useful in connection with any Debtor’s businesses and all improvements thereto; and (B) all inventory;

 

(ii)       
All contract rights and other general intangibles, including without limitation, all partnership
interests, membership interests, stock or other securities, rights under any of the Organizational Documents,
agreements related to the Pledged Securities, licenses, distribution and other agreements, computer software (whether “off-the-shelf”,
licensed from any third party or developed by any Debtor), computer software development rights, leases, franchises, customer lists,
quality control procedures, grants and rights, goodwill, trademarks, service marks, trade styles, trade names, patents, patent
applications, copyrights, and income tax refunds;

 

(iii)     
 All accounts, together with all instruments, all documents of
title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any
of the same may represent, and all right, title, security and guaranties with respect to each account, including any right of stoppage
in transit; 

 

(iv)      
All documents, letter-of-credit rights, instruments and chattel paper;

 

(v)        
All commercial tort claims;

 

(vi)      
All deposit accounts and all cash (whether or not deposited in such deposit accounts);

 

(vii)    
All investment property;

 

(viii)  
All supporting obligations; 

 

(ix)      
All files, records, books of account, business papers,
and computer programs, including without limitation and all
files, records, books, ledger cards, correspondence, computer programs, tapes, disks, digital storage media and related data processing
software that at any time evidence or contain information relating to any of the Collateral set forth in clauses (i)-(viii) above
or are otherwise necessary or helpful in the collection thereof or realization thereupon; and

 

(x)        
the products, profits and proceeds of all of the foregoing Collateral set forth in clauses
(i)-(ix) above, and all payments under insurance (whether or not the Secured Party is the loss payee thereof) or under any indemnity,
warranty or guaranty, payable by reason or loss or damage to, or otherwise with respect to, any of the foregoing Collateral set
forth in clauses (i)-(ix) above.

 

Without limiting
the generality of the foregoing, the “Collateral” shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each Guarantor, including, without limitation, the shares of capital stock
and the other equity interests listed on Schedule H hereto (as the same may be modified from time to time pursuant to the
terms hereof), and any other shares of capital stock and/or other equity interests of any other direct or indirect subsidiary of
any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity interests and, in
each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received, receivable
or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the Pledged
Securities, including, but not limited to, all dividends, interest and cash.

Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent
that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided,
however, that to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset
and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.

 

(b)           
“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise,
including, without limitation, (i) all copyrights arising under the laws of the United States, any other country or any political
subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings
thereof, and all applications in connection therewith, including without limitation all registrations, recordings and applications
in the United States Copyright Office, (ii) all letters patent of the United States, any other country or any political subdivision
thereof, all reissues and extensions thereof, and all applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof, (iii) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business
identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise,
and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other country
or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all
licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.

 

(c)            
“Majority in Interest” means, at any time of determination, at least a majority in interest (based on
then-outstanding principal amounts of Notes at the time of such determination) of the Secured Parties.

 

(d)           
“Necessary Endorsement” means undated stock powers endorsed in blank or other proper instruments
of assignment duly executed and such other instruments or documents as the Agent (as that term is defined below) may reasonably
request.

 

(e)            
“Obligations” means all of the liabilities
and obligations (primary, secondary, direct, contingent, sole, joint or several) due or to become due, or that are now or may be
hereafter contracted or acquired, or owing to, of any Debtor to the Secured Parties either (i) under
this Agreement, the Notes, the Guarantee, the other Transaction Documents and any other instruments, agreements or other documents
executed and/or delivered in connection herewith or therewith, or (ii) related to any other liabilities or obligations associated
with any indebtedness for borrowed money from any Secured Party to any Debtor, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from any of the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time to time. Without limiting the generality of the foregoing,
the term “Obligations” shall include, without limitation: (i) principal of and interest on the Notes and the loans
extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities of the Debtors from time
to time under or in connection with this Agreement, the Notes, the Guarantee, the other Transaction Documents and any other instruments,
agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but
not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations
to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding
involving any Debtor.

 

(f)            
“Organizational Documents” means with respect to any Debtor, the documents
by which such Debtor was organized (such as articles of incorporation, certificate of limited partnership or articles of organization,
and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and
which relate to the internal governance of such Debtor (such as bylaws, a partnership agreement or an operating, limited liability
or members agreement).

 

(g)           
“Pledged Securities” shall have the meaning ascribed to such term in Section
4(i).

 

(h)           
“Transaction Documents” shall have the meaning ascribed to such term in
the Purchase Agreement.

 

(i)             
“UCC” means the Uniform Commercial Code of the State of California and/or
any other applicable law of any state or states which has jurisdiction with respect to all, or any portion of, the Collateral or
this Agreement from time to time. It is the intent of the parties that defined terms in the UCC should be construed in their broadest
sense so that the term “Collateral” will be construed in its broadest sense. Accordingly if there are, from time to
time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions
in the UCC are broader than the amended definitions, the existing ones shall be controlling.

 

2.              
Grant of Security Interest in Collateral. As an inducement
for the Secured Parties to extend the loans as evidenced by the Notes and to secure the complete and timely payment, performance
and discharge in full, as the case may be, of all of the Obligations, each Debtor hereby unconditionally and irrevocably pledges,
grants and hypothecates to the Secured Parties, subject to Permitted Liens (as defined in the Notes), a first priority security
interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever
kind and nature in and to, the Collateral (a “Security Interest” and, collectively, the “Security Interests”).

 

3.              
Delivery of Certain Collateral. Contemporaneously
or prior to the execution of this Agreement, each Debtor shall deliver or cause to be delivered to the Agent (a) any and all certificates
and other instruments representing or evidencing the Pledged Securities, together with all Necessary Endorsements, and (b) any
and all certificates and other instruments or documents representing any of the other Collateral, in each case, together with all
Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to the Agent, or have previously
delivered to the Agent, a true and correct copy of each Organizational Document governing any of the Pledged Securities.

 

4.              
Representations, Warranties, Covenants and Agreements of the Debtors.
Except as set forth under the corresponding section of the disclosure schedules delivered to the Secured Parties concurrently herewith
(the “Disclosure Schedules”), which Disclosure Schedules shall be deemed a part hereof, each Debtor represents
and warrants to, and covenants and agrees with, the Secured Parties as follows:

 

(a)            
Each Debtor has the requisite corporate, partnership, limited liability company or other power
and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance
by each Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the
part of such Debtor and no further action is required by such Debtor. This Agreement has been duly executed by each Debtor. This
Agreement constitutes the legal, valid and binding obligation of each Debtor, enforceable against each Debtor in accordance with
its terms.

 

(b)           
The Debtors have no place of business or offices where their respective books of account and
records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or
located, except as set forth on Schedule A attached hereto. Except as specifically set forth on Schedule A, each
Debtor is the record owner of the real property where such Collateral is located, and there exist no mortgages or other liens on
any such real property except for Permitted Liens. Except as disclosed on Schedule A, none of such Collateral is in the
possession of any consignee, bailee, warehouseman, agent or processor.

 

(c)            
Except for Permitted Liens and except as set forth on Schedule B attached hereto, the
Debtors are the sole owner of the Collateral, free and clear of any liens, security interests, encumbrances, rights or claims,
and are fully authorized to grant the Security Interests. Except as set forth on Schedule B attached hereto, there is not
on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that will be filed in favor of the Secured Parties
pursuant to this Agreement) covering or affecting any of the Collateral. Except as set forth on Schedule B attached hereto
and except pursuant to this Agreement, as long as this Agreement shall be in effect, the Debtors shall not execute and shall not
knowingly permit to be on file in any such office or agency any other financing statement or other document or instrument (except
to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement).

 

(d)           
Except as set forth on Schedule 4(d) hereto, no written claim has been received that any Collateral
or Debtor’s use of any Collateral violates the rights of any third party. There has been no adverse decision to any Debtor's
claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to any Debtor's right to keep and
maintain such Collateral in full force and effect, and there is no proceeding involving said rights pending or, to the best knowledge
of any Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental
authority.

 

(e)            
Each Debtor shall at all times maintain its books of account and records relating to the Collateral
at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not
relocate such books of account and records or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior
to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States)
and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded
and other steps have been taken to perfect the Security Interests to create in favor of the Secured Parties a valid, perfected
and continuing second priority lien in all the Collateral.

 

(f)            
This Agreement creates in favor of the Secured Parties a valid security interest in the Collateral,
subject only to Permitted Liens securing the payment and performance of the Obligations. Upon making the filings described in the
immediately following paragraph, all security interests created hereunder in any Collateral which may be perfected by filing Uniform
Commercial Code financing statements shall have been duly perfected. Except for the execution and delivery of this Agreement, the
filing of the Uniform Commercial Code financing statements referred to in the immediately following paragraph, the recordation
of the Intellectual Property Security Agreement (as defined below) with the United States Copyright Office or the United States
Patent and Trademark Office with respect to copyrights, patents and trademarks (and applications relating each of the foregoing)
as described in paragraph 4(mm), the execution and delivery of deposit account control agreements satisfying the requirements of
Section 9-104(a)(2) of the UCC with respect to each deposit account of the Debtors, and the delivery of the certificates and other
instruments provided in Section 3, no further action is necessary to create, perfect or protect the security interests created
hereunder. Without limiting the generality of the foregoing, except for the execution and delivery of this Agreement by all (100%)
of the Secured Parties, the filing of said financing statements, the recordation of said Intellectual Property Security Agreement,
and the execution and delivery of said deposit account control agreements, except as set forth on Schedule 4(f), no consent of
any third parties and no authorization, approval or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection
of the Security Interests created hereunder in the Collateral, or (iii) the enforcement of the rights of the Agent and the Secured
Parties hereunder (except that the Secured Parties shall have a second priority security interest with respect to the Collateral).

 

(g)           
Each Debtor hereby authorizes the Agent to file one or more financing statements under the
UCC, with respect to the Security Interests, with the proper filing and recording agencies in any jurisdiction deemed proper by
it.

 

(h)           
The execution, delivery and performance of this Agreement by the Debtors does not (i) violate
any of the provisions of any Organizational Documents of any Debtor or any judgment, decree, order or award of any court, governmental
body or arbitrator or any applicable law, rule or regulation applicable to any Debtor or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing any Debtor's debt or otherwise) or other understanding to which any Debtor is a party or by which
any property or asset of any Debtor is bound or affected. All required consents (including without limitation from stockholders
or creditors of any Debtor) necessary for any Debtor to enter into and perform its obligations hereunder have been obtained.

 

(i)             
The capital stock and other equity interests listed on Schedule H hereto (the “Pledged
Securities”) represent all of the capital stock and other equity interests of the Guarantors, and represent all capital
stock and other equity interests owned, directly or indirectly, by the Company. All of the Pledged Securities are validly issued,
fully paid and nonassessable, and the Company is the legal and beneficial owner of the Pledged Securities, free and clear of any
lien, security interest or other encumbrance except for the security interests created by this Agreement and other Permitted Liens.

 

(j)             
The ownership and other equity interests in partnerships and limited liability companies (if
any) included in the Collateral (the “Pledged Interests”) by their express terms do not provide that they are
securities governed by Article 8 of the UCC and are not held in a securities account or by any financial intermediary.

 

(k)           
Except for Permitted Liens, until this Agreement and the Security Interest hereunder shall
be terminated pursuant to Section 14 hereof, each Debtor shall at all times maintain in favor of the Secured Parties the liens
and Security Interests provided for hereunder as valid and perfected first priority liens and security interests in all the Collateral.
Each Debtor hereby agrees to defend the same against the claims of any and all persons and entities. Each Debtor shall safeguard
and protect all Collateral for the account of the Secured Parties. At the request of the Agent, each Debtor will sign and deliver
to the Agent on behalf of the Secured Parties at any time or from time to time one or more financing statements pursuant to the
UCC in form reasonably satisfactory to the Agent and will pay the cost of filing the same in all public offices wherever filing
is, or is deemed by the Agent to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting
the generality of the foregoing, each Debtor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and
the Security Interests hereunder, and each Debtor shall obtain and furnish to the Agent from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interests hereunder.

 

(l)             
Except as listed on Schedule I, no Debtor will transfer, pledge, hypothecate, encumber,
license, sell or otherwise dispose of any of the Collateral (except for licenses granted by a Debtor in its ordinary course of
business and sales of inventory and other unused or outdated assets by a Debtor in its ordinary course of business) without the
prior written consent of a Majority in Interest.

 

(m)         
Each Debtor shall keep and preserve its equipment, inventory and other tangible Collateral
in good condition, repair and order and shall not operate or locate any such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.

 

(n)           
Each Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including
Collateral hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of
established reputation having similar properties similarly situated and in such amounts as are customarily carried under similar
circumstances by other such entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient
to cover the full replacement cost thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide,
and the insurer issuing such policy to certify to the Agent, that (i) the Agent will be named as lender loss payee and additional
insured under each such insurance policy; (ii) if such insurance be proposed to be cancelled or materially changed for any reason
whatsoever, such insurer will promptly notify the Agent and such cancellation or change shall not be effective as to the Agent
for at least thirty (30) days after receipt by the Agent of such notice, unless the effect of such change is to extend or increase
coverage under the policy; and (iii) the Agent will have the right (but no obligation) at its election to remedy any default in
the payment of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined
in the Notes) exists, loss payments in each instance will be applied by the applicable Debtor to the repair and/or replacement
of property with respect to which the loss was incurred to the extent reasonably feasible, and any loss payments or the balance
thereof remaining, to the extent not so applied, shall be payable to the applicable Debtor; provided, however, that
payments received by any Debtor after an Event of Default occurs and is continuing shall be paid to the Agent on behalf of the
Secured Parties and, if received by such Debtor, shall be held in trust for the Secured Parties and immediately paid over to the
Agent unless otherwise directed in writing by the Agent. Copies of such policies or the related certificates, in each case, naming
the Agent as lender loss payee and additional insured shall be delivered to the Agent at least annually and at the time any new
policy of insurance is issued.

 

(o)           
Each Debtor shall promptly, but no later than ten (10) days after obtaining knowledge thereof,
advise the Secured Parties, through the Agent, in sufficient detail of any change in the Collateral and of the occurrence of any
event which would have a material adverse effect on the value of the Collateral or on the Secured Parties’ security interest
therein.

 

(p)           
Each Debtor shall promptly execute and deliver to the Agent such further deeds, mortgages,
assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such
further action as the Agent may from time to time request and may in its sole discretion deem necessary to perfect, protect or
enforce the Secured Parties’ security interest in the Collateral including, without limitation, if applicable, the execution
and delivery of a separate security agreement with respect to each Debtor’s Intellectual Property (“Intellectual
Property Security Agreement”) in which the Secured Parties have been granted a security interest hereunder, substantially
in a form reasonably acceptable to the Agent, which Intellectual Property Security Agreement, other than as stated therein, shall
be subject to all of the terms and conditions hereof.

 

(q)           
Each Debtor shall permit the Agent and its representatives and agents to inspect the Collateral
during normal business hours and upon reasonable prior notice, and to make copies of records pertaining to the Collateral as may
be reasonably requested by the Agent from time to time.

 

(r)            
Each Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve,
enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral.

 

(s)            
Each Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware
of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received
by such Debtor that may materially affect the value of the Collateral, the Security Interests or the rights and remedies of the
Secured Parties hereunder.

 

(t)             
All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf
of any Debtor with respect to the Collateral is and will be accurate and complete in all material respects as of the date furnished.

 

(u)           
The Debtors shall at all times preserve and keep in full force and effect their respective
valid existence and good standing and any rights and franchises material to its business.

 

(v)           
No Debtor will change its name, type of organization, jurisdiction of organization, organizational
identification number (if it has one), legal or corporate structure, or identity, or add any new fictitious name unless it provides
at least thirty (30) days prior written notice to the Secured Parties of such change and, at the time of such written notification,
such Debtor provides any financing statements or fixture filings necessary to perfect and continue the perfection of the Security
Interests granted and evidenced by this Agreement.

 

(w)          
Except in the ordinary course of business, no Debtor may consign any of its inventory or sell
any of its inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent
of the Agent which shall not be unreasonably withheld.

 

(x)           
No Debtor may relocate its chief executive office to a new location without providing thirty
(30) days’ prior written notification thereof to the Secured Parties and so long as, at the time of such written notification,
such Debtor provides any financing statements or fixture filings necessary to perfect and continue the perfection of the Security
Interests granted and evidenced by this Agreement.

 

(y)           
Each Debtor was organized and remains organized solely under the laws of the state set forth
next to such Debtor’s name in Schedule D attached hereto, which Schedule D sets forth each Debtor’s organizational
identification number or, if any Debtor does not have one, states that one does not exist.

 

(z)            
(i) The actual name of each Debtor is the name set forth in Schedule D attached hereto;
(ii) no Debtor has any trade names except as set forth on Schedule E attached hereto; (iii) no Debtor has used any name
other than that stated in the preamble hereto or as set forth on Schedule E for the preceding five (5) years; and (iv) no
entity has merged into any Debtor or been acquired by any Debtor within the past five (5) years except as set forth on Schedule
E.

 

(aa)         
At any time and from time to time that any Collateral consists of instruments, certificated
securities or other items that require or permit possession by the secured party to perfect the Security Interest created hereby,
the applicable Debtor shall deliver such Collateral to the Agent.

 

(bb)        
Each Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of the Agent regarding
the Pledged Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by
Section 8-106 (or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement
(or one that would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.

(cc)         
Each Debtor shall cause all tangible chattel paper constituting Collateral to be delivered
to the Agent, or, if such delivery is not possible, then to cause such tangible chattel paper to contain a legend noting that it
is subject to the security interest created by this Agreement. To the extent that any Collateral consists of electronic chattel
paper, the applicable Debtor shall cause the underlying chattel paper to be “marked” within the meaning of Section
9-105 of the UCC (or successor section thereto).

 

(dd)        
If there is any investment property or deposit account included as Collateral that can be
perfected by “control” through an account control agreement, the applicable Debtor shall, promptly upon written request
of the Agent following the occurrence of an Event of Default, cause such an account control agreement, in form and substance in
each case satisfactory to the Agent, to be entered into and delivered to the Agent for the benefit of the Secured Parties.

 

(ee)         
To the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor
shall, promptly upon written request of the Agent following the occurrence of an Event of Default, cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds thereof to the Secured Parties.

 

(ff)          
To the extent that any Collateral is in the possession of any third party, the applicable
Debtor shall join with the Agent in notifying such third party of the Secured Parties’ security interest in such Collateral
and shall use its best efforts to obtain an acknowledgement and agreement from such third party with respect to the Collateral,
in form and substance reasonably satisfactory to the Agent.

 

(gg)        
If any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall
promptly notify the Secured Parties in a writing signed by such Debtor of the particulars thereof and grant to the Secured Parties
in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing
to be in form and substance reasonably satisfactory to the Agent.

 

(hh)        
Each Debtor shall immediately provide written notice to the Secured Parties of any and all
accounts which arise out of contracts with any governmental authority and, to the extent necessary to perfect or continue the perfected
status of the Security Interests in such accounts and proceeds thereof, shall execute and deliver to the Agent an assignment of
claims for such accounts and cooperate with the Agent in taking any other steps required, in its judgment, under the Federal Assignment
of Claims Act or any similar federal, state or local statute or rule to perfect or continue the perfected status of the Security
Interests in such accounts and proceeds thereof.

 

(ii)           
Each Debtor shall cause each subsidiary of such Debtor to immediately become a party hereto
(an “Additional Debtor”), by executing and delivering an Additional Debtor Joinder in substantially the form
of Annex A attached hereto and comply with the provisions hereof applicable to the Debtors. Concurrent therewith, the Additional
Debtor shall deliver replacement schedules for, or supplements to all other Schedules to (or referred to in) this Agreement, as
applicable, which replacement schedules shall supersede, or supplements shall modify, the Schedules then in effect. The Additional
Debtor shall also deliver such authorizing resolutions, good standing certificates, incumbency certificates, organizational documents,
financing statements and other information and documentation as the Agent may reasonably request. Upon delivery of the foregoing
to the Agent, the Additional Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors,
for all purposes hereof as fully and to the same extent as if it were an original signatory hereto and shall be deemed to have
made the representations, warranties and covenants set forth herein as of the date of execution and delivery of such Additional
Debtor Joinder, and all references herein to the “Debtors” shall be deemed to include each Additional Debtor.

 

(jj)           
Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements
set forth herein and in the Notes.

 

(kk)        
Each Debtor shall register the pledge of the applicable Pledged Securities on the books of
such Debtor. Each Debtor shall notify each issuer of Pledged Securities to register the pledge of the applicable Pledged Securities
in the name of the Secured Parties on the books of such issuer. Further, except with respect to certificated securities delivered
to the Agent, the applicable Debtor shall deliver to the Agent an acknowledgement of pledge (which, where appropriate, shall comply
with the requirements of the relevant UCC with respect to perfection by registration) signed by the issuer of the applicable Pledged
Securities, which acknowledgement shall confirm that: (i) it has registered the pledge on its books and records; and (ii) at any
time directed by the Agent during the continuation of an Event of Default, such issuer will transfer the record ownership of such
Pledged Securities into the name of any designee of the Agent, will take such steps as may be necessary to effect the transfer,
and will comply with all other instructions of the Agent regarding such Pledged Securities without the further consent of the applicable
Debtor.

 

(ll)           
In the event that, upon an occurrence of an Event of Default, the Agent shall sell all or any of the Pledged Securities
to another party or parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged
Securities, each Debtor shall, to the extent applicable: (i) deliver to the Agent or the Transferee, as the case may be, the articles
of incorporation, bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences
of indebtedness, books of account, financial records and all other Organizational Documents and records of the Debtors and their
direct and indirect subsidiaries; (ii) use commercially reasonable efforts to obtain resignations of the persons then serving as
officers and directors of the Debtors and their direct and indirect subsidiaries, if so requested; and (iii) use its best efforts
to obtain any approvals that are required by any governmental or regulatory body in order to permit the sale of the Pledged Securities
to the Transferee or the purchase or retention of the Pledged Securities by the Agent and allow the Transferee or the Agent to
continue the business of the Debtors and their direct and indirect subsidiaries.

(mm)    
Without limiting the generality of the other obligations of the Debtors hereunder, each Debtor
shall promptly (i) cause to be registered at the United States Copyright Office all of its material copyrights, (ii) cause the
security interest contemplated hereby with respect to all Intellectual Property registered at the United States Copyright Office
or United States Patent and Trademark Office to be duly recorded at the applicable office, and (iii) give the Agent notice whenever
it acquires (whether absolutely or by license) or creates any additional material Intellectual Property.

 

(nn)        
Each Debtor will from time to time, at the joint and several expense of the Debtors, promptly
execute and deliver all such further instruments and documents, and take all such further action as may be necessary or desirable,
or as the Agent may reasonably request, in order to perfect and protect any security interest granted or purported to be granted
hereby or to enable the Secured Parties to exercise and enforce their rights and remedies hereunder and with respect to any Collateral
or to otherwise carry out the purposes of this Agreement.

 

(oo)        
Schedule F attached hereto lists all of the patents, patent applications, trademarks,
trademark applications, registered copyrights, and domain names owned by any of the Debtors as of the date hereof. Schedule
F lists all material licenses in favor of any Debtor for the use of any patents, trademarks, copyrights and domain names as
of the date hereof. All material patents and trademarks of the Debtors have been duly recorded at the United States Patent and
Trademark Office and all material copyrights of the Debtors have been duly recorded at the United States Copyright Office.

 

(pp)        
Except as set forth on Schedule G attached hereto, none of the account debtors or other
persons or entities obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims
Act or any similar federal, state or local statute or rule in respect of such Collateral.

 

5.              
Effect of Pledge on Certain Rights. If any
of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests (regardless of class, designation,
preference or rights) that may be converted into voting equity or ownership interests upon the occurrence of certain events (including,
without limitation, upon the transfer of all or any of the other stock or assets of the issuer), it is agreed that the pledge of
such equity or ownership interests pursuant to this Agreement or the enforcement of any of the Agent’s rights hereunder shall
not be deemed to be the type of event which would trigger such conversion rights notwithstanding any provisions in the Organizational
Documents or agreements to which any Debtor is subject or to which any Debtor is party.

 

6.              
Defaults. The following events shall be “Events
of Default”:

 

(a)            
The occurrence of an Event of Default (as defined in the Notes) under the Notes;

 

(b)           
Any representation or warranty of any Debtor in this Agreement shall prove to have been incorrect
in any material respect when made;

 

(c)            
The failure by any Debtor to observe or perform any of its obligations hereunder for five
(5) business days after delivery to such Debtor of notice of such failure by or on behalf of a Secured Party unless such default
is capable of cure but cannot be cured within such time frame and such Debtor is using best efforts to cure same in a timely fashion;
or

 

(d)           
If any material provision of this Agreement shall at any time for any reason be declared to
be null and void, or the validity or enforceability thereof shall be contested by any Debtor, or a proceeding shall be commenced
by any Debtor, or by any governmental authority having jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability
thereof, or any Debtor shall deny that any Debtor has any material liability or obligation purported to be created under this Agreement.

 

7.              
Duty to Hold in Trust. 

 

(a)            
Upon the occurrence and continuation of any Event of Default, each Debtor shall, upon receipt
of any revenue, income, dividend, interest or other sums subject to the Security Interests, whether payable pursuant to the Notes
or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum,
hold the same in trust for the Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both,
to the Secured Parties, pro-rata in proportion to their respective then-currently outstanding principal amount of Notes for application
to the satisfaction of the Obligations. 

 

(b)           
If any Debtor shall become entitled to receive or shall receive any securities or other property
(including, without limitation, shares of Pledged Securities or instruments representing Pledged Securities acquired after the
date hereof, or any options, warrants, rights or other similar property or certificates representing a dividend, or any distribution
in connection with any recapitalization, reclassification or increase or reduction of capital, or issued in connection with any
reorganization of such Debtor or any of its direct or indirect subsidiaries) in respect of the Pledged Securities (whether as an
addition to, in substitution of, or in exchange for, such Pledged Securities or otherwise), such Debtor agrees to (i) accept the
same as the agent of the Secured Parties; (ii) hold the same in trust on behalf of and for the benefit of the Secured Parties;
and (iii) deliver any and all certificates or instruments evidencing the same to the Agent on or before the close of business on
the fifth business day following the receipt thereof by such Debtor, in the exact form received together with the Necessary Endorsements,
to be held by the Agent subject to the terms of this Agreement as Collateral.

 

8.              
Rights and Remedies Upon Default. 

 

(a)            
Upon the occurrence of any Event of Default and at any time thereafter, the Secured Parties,
acting through the Agent, shall have the right to exercise all of the remedies conferred hereunder and under the Notes and other
Transaction Documents, and the Secured Parties, acting through the Agent, shall have all the rights and remedies of a secured party
under the UCC. Without limitation, the Agent, for the benefit of the Secured Parties, shall have the following rights and powers:

 

(i)         
The Agent shall have the right to take possession of the Collateral and, for that purpose,
enter, with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and
remove the same, and each Debtor shall assemble the Collateral and make it available to the Agent at places which the Agent shall
reasonably select, whether at such Debtor's premises or elsewhere, and make available to the Agent, without rent, all of such Debtor’s
respective premises and facilities for the purpose of the Agent taking possession of, removing or putting the Collateral in saleable
or disposable form.

 

(ii)       
Upon notice to the Debtors by the Agent, all rights of each Debtor to exercise the voting
and other consensual rights which it would otherwise be entitled to exercise and all rights of each Debtor to receive the dividends
and interest which it would otherwise be authorized to receive and retain, shall cease. Upon such notice, the Agent shall have
the right to receive, for the benefit of the Secured Parties, any interest, cash dividends or other payments on the Collateral
and, at the option of the Agent, to exercise in such Agent’s discretion all voting rights pertaining thereto. Without limiting
the generality of the foregoing, the Agent shall have the right (but not the obligation) to exercise all rights with respect to
the Collateral as it were the sole and absolute owner thereof, including without limitation to vote and/or to exchange, at its
sole discretion, any or all of the Collateral in connection with a merger, reorganization, consolidation, recapitalization or other
readjustment concerning or involving the Collateral or any Debtor or any of its direct or indirect subsidiaries.

 

(iii)     
The Agent shall have the right to assign, sell, lease or otherwise dispose of and deliver
all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations,
for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places,
and upon such terms and conditions as the Agent may deem commercially reasonable, all without (except as shall be required by applicable
statute and cannot be waived) advertisement or demand upon or notice to any Debtor or right of redemption of a Debtor, which are
hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Agent, for the benefit of
the Secured Parties, may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral
being sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived
and released.

 

(iv)      
The Agent shall have the right (but not the obligation) to notify any account debtors and
any obligors under instruments or accounts to make payments directly to the Agent, on behalf of the Secured Parties, and to enforce
the Debtors’ rights against such account debtors and obligors.

 

(v)        
The Agent, for the benefit of the Secured Parties, may (but is not obligated to) direct any
financial intermediary or any other person or entity holding any investment property to transfer the same to the Agent, on behalf
of the Secured Parties, or its designee.

 

(vi)      
The Agent may (but is not obligated to) transfer any or all Intellectual Property registered
in the name of any Debtor at the United States Patent and Trademark Office and/or Copyright Office into the name of the Secured
Parties or any designee or any purchaser of any Collateral.

 

(b)           
The Agent shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not
be considered adversely to affect the commercial reasonableness of any sale of the Collateral. The Agent may sell the Collateral
without giving any warranties and may specifically disclaim such warranties. If the Agent sells any of the Collateral on credit,
the Debtors will only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights
that it may have to a judicial hearing in advance of the enforcement of any of the Agent’s rights and remedies hereunder,
including without limitation the Agent’s right following an Event of Default to take immediate possession of the Collateral
and to exercise its rights and remedies with respect thereto.

(c)            
For the purpose of enabling the Agent to further exercise rights and remedies under this Section
8 or elsewhere provided by agreement or applicable law, each Debtor hereby grants to the Agent, for the benefit of the Agent and
the Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such
Debtor) to use, license or sublicense following an Event of Default, any Intellectual Property now owned or hereafter acquired
by such Debtor, and wherever the same may be located, and including in such license access to all media in which any of the licensed
items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

 

9.              
Inter Secured Party Rights; Transaction/Applications of Proceeds.

 

(a)            
All Obligations owed to the Secured Parties shall rank
in the order of priority pari passu and pro-rata in proportion to each Secured Party’s outstanding
principal amount of Notes at any given time that a determination needs to be made of pro-rata holdings. If
an Event of Default occurs and any party hereto collects proceeds pursuant to its rights under any Obligations, the Agent shall
be immediately notified and such payment shall be shared with all of the other Secured Parties as set forth above. Notwithstanding
anything to the contrary contained in the Purchase Agreement or any document executed in connection with the Obligations and irrespective
of: (i) the time, order or method of attachment or perfection of the security interests created in favor of Secured Parties; (ii)
the time or order of filing or recording of financing statements or other documents filed or recorded to perfect security interests
in any Collateral; (iii) anything contained in any filing or agreement to which any Secured Party now or hereafter may be a party;
and (iv) the rules for determining perfection or priority under the Uniform Commercial Code or any other law governing the relative
priorities of secured creditors, each of the Secured Parties acknowledges that (x) all other Secured Parties have a valid security
interest in the Collateral and (y) the security interests of the Secured Parties in any Collateral pursuant to any outstanding
Obligations shall be pari passu with each other and enforced pursuant to the terms of this Agreement through the
Agent.  Each Secured Party, severally and not jointly with the other
Secured Parties, shall indemnify, defend, and hold harmless the other Secured Parties against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties,
and reasonable professional and attorneys’ fees, including those arising from settlement negotiations, that the other Secured
Parties shall incur or suffer, which arise, result from, or relate to a breach of, or failure by such Secured Party to perform
under this Agreement. 

 

(b)           
The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from
payments made on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and the like (including without limitation any taxes,
fees and other costs incurred in connection therewith) of the Collateral, then to the reasonable attorneys’ fees and expenses
incurred by the Agent in enforcing the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing
of the Collateral, then to satisfaction of the Obligations pro rata among the Secured Parties (based on then-outstanding principal
amounts of Notes at the time of any such determination), and then to the payment of any other amounts required by applicable law.
If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to
which the Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest thereon,
at the rate of twelve percent (12%) per annum or the lesser amount permitted by applicable law (the “Default Rate”),
and the reasonable fees of any attorneys employed by the Secured Parties to collect such deficiency. To the extent permitted by
applicable law, each Debtor waives all claims, damages and demands against the Secured Parties arising out of the repossession,
removal, retention or sale of the Collateral, unless due solely to the gross negligence or willful misconduct of the Secured Parties
as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction.

 

10.           
Securities Law Provision. Each Debtor recognizes that the Agent may be limited in its ability to effect a sale to the
public of all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or
other federal or state securities laws (collectively, the “Securities Laws”), and may be compelled to resort
to one or more sales to a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their
own account, for investment and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may
be at prices and on terms less favorable than if the Pledged Securities were sold to the public and that the Agent has no obligation
to delay the sale of any Pledged Securities for the period of time necessary to register the Pledged Securities for sale to the
public under the Securities Laws. Each Debtor shall cooperate with the Agent in its attempt to satisfy any requirements under the
Securities Laws applicable to the sale of the Pledged Securities by the Agent.

11.           
Costs and Expenses. Each Debtor agrees to pay all
reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing required hereunder, including, without
limitation, any financing statements pursuant to the UCC, continuation statements, partial releases and/or termination statements
related thereto or any expenses of any searches reasonably required by the Agent. The Debtors shall also pay all other claims and
charges which in the reasonable opinion of the Agent is reasonably likely to prejudice, imperil or otherwise affect the Collateral
or the Security Interests therein. The Debtors will also, upon demand, pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and agents, which the Agent, for the benefit of the
Secured Parties, may incur in connection with (a) the enforcement of this Agreement, (b) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Collateral, or (c) the exercise or enforcement of any of the rights
of the Secured Parties under the Notes. Until so paid, any fees payable hereunder shall be added to the principal amount of the
Notes and shall bear interest at the Default Rate.

 

12.           
Responsibility for Collateral. The Debtors assume
all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished
by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason. Without limiting
the generality of the foregoing, (a) neither the Agent nor any Secured Party (i) has any duty (either before or after an Event
of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to the Collateral, or (ii) has
any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain obligated and liable
under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder. Neither the
Agent nor any Secured Party shall have any obligation or liability under any such contract or agreement by reason of or arising
out of this Agreement or the receipt by the Agent or any Secured Party of any payment relating to any of the Collateral, nor shall
the Agent or any Secured Party be obligated in any manner to perform any of the obligations of any Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received by the Agent or any Secured
Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement,
to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may
have been assigned to the Agent or to which the Agent or any Secured Party may be entitled at any time or times.

 

13.           
Security Interests Absolute. All rights of the Secured
Parties and all obligations of the Debtors hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity
or enforceability of this Agreement, the Notes, any other Transaction Documents or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in
any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the
Notes, any other Transaction Documents or any other agreement entered into in connection with the foregoing; (c) any exchange,
release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other
collateral for, or any guarantee, or any other security, for all or any of the Obligations; (d) any action by the Secured Parties
to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with
the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to a Debtor,
or a discharge of all or any part of the Security Interests granted hereby. Until the Obligations shall have been paid and performed
in full, the rights of the Secured Parties shall continue even if the Obligations are barred for any reason, including without
limitation the running of the statute of limitations or bankruptcy. Each Debtor expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral
or any payment received by the Secured Parties hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall
be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, each Debtor’s obligations
hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions
hereof. Each Debtor waives all right to require the Secured Parties to proceed against any other person or entity or to apply any
Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy. Each Debtor waives
any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

 

14.           
Term of Agreement. This Agreement and the Security
Interests shall terminate, automatically and without any action on the part of the Agent or Secured Parties, on the date on which
all payments under the Notes have been indefeasibly paid or otherwise discharged in full and all other Obligations have been paid
or discharged; provided, however, that all indemnities of the parties hereto contained in this Agreement (including, without limitation,
Annex B hereto) shall survive and remain operative and in full force and effect regardless of the termination of this Agreement.
The Agent and Secured Parties shall, at Debtor’s request and expense, take any and all action required to discharge any and
all security interests and release to Debtor any and all Collateral in the Agent’s or Secured Parties’ possession or
control. The Secured Parties hereby agree that the Debtor shall have the right, and the Debtor is hereby authorized, to take all
necessary action to cause the termination and release of all security interests granted hereunder upon termination of this Agreement,
including the filing of one or more UCC termination statements or amendments relating to the Collateral.

 

15.           
Power of Attorney; Further Assurances.

 

(a)            
Each Debtor authorizes the Agent, and does hereby make, constitute and appoint the Agent and
its officers, agents, successors or assigns with full power of substitution, as such Debtor’s true and lawful attorney-in-fact,
with power, in the name of the Agent or such Debtor, to, after the occurrence and during the continuance of an Event of Default,
(i) endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect
of any policy of insurance) in respect of the Collateral that may come into possession of the Agent; (ii) sign and endorse any
financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the
Collateral; (iii) pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) demand, collect, receive, compromise, settle and sue for monies due in respect of the Collateral;
(v) transfer any Intellectual Property or provide licenses respecting any Intellectual Property; and (vi) generally, at the option
of the Agent, and at the expense of the Debtors, at any time, or from time to time, execute and deliver any and all documents and
instruments and do all acts and things which the Agent deems necessary to protect, preserve and realize upon the Collateral and
the Security Interests granted therein in order to effect the intent of this Agreement, the Notes and other Transaction Documents
all as fully and effectually as the Debtors might or could do; and each Debtor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term
of this Agreement. The designation set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational
Documents or other documents or agreements to which any Debtor is subject or to which any Debtor is a party. Without limiting the
generality of the foregoing, after the occurrence and during the continuance of an Event of Default, each Secured Party is specifically
authorized to execute and file any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights
or other Intellectual Property with the United States Patent and Trademark Office and the United States Copyright Office.

 

(b)           
On a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record,
as the case may be, with the proper filing and recording agencies in any jurisdiction, including without limitation the jurisdictions
indicated on Schedule C attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary
or advisable, or as reasonably requested by the Agent, to perfect the Security Interests granted hereunder and otherwise to carry
out the intent and purposes of this Agreement, or for assuring and confirming to the Agent the grant or perfection of a perfected
security interest in all the Collateral under the UCC.

 

(c)            
Each Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact,
with full authority in the place and instead of such Debtor and in the name of such Debtor, from time to time in the Agent’s
discretion, to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including the filing, in its sole discretion, of one or more financing or continuation statements and
amendments thereto, relative to any of the Collateral without the signature of such Debtor where permitted by law, which financing
statements may (but need not) describe the Collateral as “all assets” or “all personal property” or words
of like import, and ratifies all such actions taken by the Agent. This power of attorney is coupled with an interest and shall
be irrevocable for the term of this Agreement.

 

16.           
Notices. All notices, requests, demands and other
communications hereunder shall be subject to the notice provision of the Purchase Agreement.

 

17.           
Other Security. To the extent that the Obligations
are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other person,
firm, corporation or other entity, then the Agent shall have the right, in its sole discretion, to pursue, relinquish, subordinate,
modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Parties’
rights and remedies hereunder.

 

18.           
Appointment of Agent. The Secured Parties hereby
appoint W-Net Fund I, L.P. or its appointed agent to act as their agent (“Agent”) for purposes of exercising
any and all rights and remedies of the Secured Parties hereunder. Such appointment shall continue until revoked in writing by a
Majority in Interest, at which time a Majority in Interest shall appoint a new Agent. The Agent shall have the rights, responsibilities
and immunities set forth in Annex B hereto. The Debtors shall be entitled to rely, without independent verification and
irrespective of contrary instructions from any Secured Party, on any action or decision of the Agent as the act or decision of
the Secured Parties.

 

19.           
Miscellaneous.

 

(a)            
No course of dealing between the Debtors and the Secured Parties, nor any failure to exercise,
nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder or under the Notes shall
operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

(b)           
All of the rights and remedies of the Secured Parties with respect to the Collateral, whether
established hereby or by the Notes or by any other agreements, instruments or documents or by law, shall be cumulative and may
be exercised singly or concurrently.

 

(c)            
This Agreement, together with the exhibits
and schedules hereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged
into this Agreement and the exhibits and schedules hereto. No provision of this Agreement may
be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Debtors
and a Majority in Interest or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.

 

(d)           
If any term, provision, covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions
set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to
be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

(e)            
No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.

 

(f)            
This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company and the Guarantors may not assign this Agreement or any rights or obligations hereunder without
the prior written consent of each Secured Party (other than by merger). Any Secured Party may assign any or all of its rights under
this Agreement to any Person to whom such Secured Party assigns or transfers any Securities, provided such transferee agrees in
writing to be bound, with respect to the transferred Securities, by the provisions of this Agreement that apply to the “Secured
Parties.”

 

(g)           
Each party shall take such further action and execute and deliver such further documents as
may be necessary or appropriate in order to carry out the provisions and purposes of this Agreement.

 

(h)           
All questions concerning the construction, validity, enforcement and interpretation of this
Agreement 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 conflicts of law thereof. Each Debtor agrees that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and the Notes (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the County of Los Angeles. Each Debtor 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 or discussed herein, and hereby irrevocably waives, and agrees not to assert
in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court or that such proceeding is
improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such
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 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. 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 Agreement or the transactions contemplated
hereby. If any party shall commence a proceeding to enforce any provisions of this Agreement, then the prevailing party in such
proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such proceeding.

 

(i)             
This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile transmission or e-mail
transmission, such signature shall create a valid binding obligation of the party executing the same (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile signature were the original thereof.

 

(j)             
All Debtors shall be jointly and severally be liable for the obligations of each Debtor to
the Secured Parties hereunder.

 

(k)           
Each Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured Parties
and their respective partners, members, shareholders, officers, directors, employees and agents (and any other persons with other
titles that have similar functions) (collectively, “Indemnitees”) from and against any and all losses, claims,
liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating
and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising
from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities, damages, penalties,
suits, costs and expenses which result from any violation of the terms or provisions of this Agreement or the agreements underlying
the Obligations or the negligence or willful misconduct of the Indemnitee. This indemnification provision is in addition to, and
not in limitation of, any other indemnification provision in the Notes, the Purchase Agreement or any other agreement, instrument
or other document executed or delivered in connection herewith or therewith.

 

(l)             
Nothing in this Agreement shall be construed to subject the Agent or any Secured Party to
liability as a partner or member in or of any Debtor or any of its direct or indirect subsidiaries, nor shall the Agent or any
Secured Party be deemed to have assumed any obligations under any partnership agreement or limited liability company agreement,
as applicable, of any such Debtor or any of its direct or indirect subsidiaries or otherwise, unless and until any such Secured
Party exercises its right to be substituted for such Debtor as a partner or member, as applicable, pursuant hereto.

 

(m)         
To the extent that the grant of the security interest in the Collateral and the enforcement
of the terms hereof require the consent, approval or action of any partner or member, as applicable, of any Debtor or any direct
or indirect subsidiary of any Debtor or compliance with any provisions of any of the Organizational Documents, the Debtors hereby
grant such consent and approval and waive any such noncompliance with the terms of said documents.

 

 

    	 

    	 

    

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

 

 

	
        W270, INC.

         

         

	
        By:__________________________________________

        Name:

        Title:

         

         

        SALEEN AUTOMOTIVE, INC.

         

        By:_________________________________

        Name:

        Title:

         

        SMS SIGNATURE CARS

         

        By:_________________________________

        Name:

        Title:

         

        

         

	 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

    	 

    	 

    

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

 

 

Independently and as Agent:

W-NET FUND I, L.P.

 

By: W-Net Fund GP I LLC

Title: General Partner

 

By:

Name: David Weiner

Title: Manager

    	 

    	 

    

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

 

SECURED PARTY:

 

[NAME]

 

 

By:

Name:

Title:

 

 

    	 

    	 

    

SCHEDULE A

 

Principal Place of Business of Debtors:

 

2735 Wardlow Road

Corona, CA 92882

 

Locations Where Collateral is Located or Stored:

 

2735 Wardlow Road

Corona, CA 92882

 

SCHEDULE B

Exceptions

 

None.

 

SCHEDULE C

Recording Jurisdictions

 

California

Florida

 

SCHEDULE D

Legal Names, Organizational Jurisdictions
and Identification Numbers

 

NameJurisdiction ID NumberAddress

 

W270, Inc.NevadaNV201114228522735
Wardlow Road

Corona, CA 92882

 

Saleen Automotive, Inc.FloridaP110000659632735 Wardlow
Road

Corona, CA 92882

SCHEDULE E

Names; Mergers and Acquisitions

 

On June 26, 2013, Saleen California Merger Corporation was merged
with and into SMS Signature Cars, and Saleen Florida Merger Corporation was merged with and into Saleen Automotive, Inc.

 

SCHEDULE F

Intellectual Property

 

	Mark	No.	Owner
	 	 	 
	 	 	 
	Registered Trademarks
	 	 	 
	Saleen	2407911	Steve Saleen
	[Stylized "S"]	2007476	Steve Saleen
	Saleen	2005539	Steve Saleen
	Speedlab	3593081	Steve Saleen
	Supershaker	3706317	Steve Saleen
	 	 	 
	 	 	 
	Trademarks - Applications Pending
	 	 	 
	SMS Supercars	85551574	SMS Signature Cars, Inc.
	SMS Supercars	85551743	SMS Signature Cars, Inc.
	SMS Supercars	85551715	SMS Signature Cars, Inc.
	Power in the Hands of a Few	85551696	Saleen Automotive, Inc.
	Power in the Hands of a Few	85551645	Saleen Automotive, Inc.
	 	 	 
	 	 	 
	Trademarks - Common Law
	 	 	 
	Saleen Performance Vehicles	n/a	SMS Signature Cars, Inc.
	The Science of Speed	n/a	SMS Signature Cars, Inc.
	Speed Science Style	n/a	SMS Signature Cars, Inc.
	SMS Limited	n/a	SMS Signature Cars, Inc.
	Racecraft	n/a	SMS Signature Cars, Inc.
	Powerflash	n/a	SMS Signature Cars, Inc.

 

    	 

    	 

    

 

	No.	Description	Owner
	 	 	 
	Patents - Issued
	 	 	 
	 	 	 
	D399,465	Side skirt for customized automobile body 	Steve Saleen
	D418,468	Vehicle sideskirt set 	Steve Saleen, Phil Frank
	D437,271	Mustang car brake and/or clutch pedal 	Saleen Inc.*
	D443,570	Mustang car brake/clutch pedal 	Saleen Inc.*
	D444,114	Pair of car pillar inserts 	Saleen Inc.*
	D444,436	Vehicle brake pedal 	Saleen Inc.*
	D444,435	Set of pedals for vehicle 	Saleen Inc.*
	D447,102	Vehicle gas pedal 	Saleen Inc.*
	D472,861	Automobile side skirt 	Saleen Inc.*
	D472,855	Automobile front bumper 	Saleen Inc.*
	D473,831	Automobile wing 	Saleen Inc.*
	D476,605	Automobile rear bumper 	Saleen Inc.*
	D482,995	Automobile flares 	Saleen Inc.*
	D483,312	Automobile front flares 	Saleen Inc.*
	7,597,088	Apparatus for boosting engine performance 	MJ Acquisitions*
	 	 	 
	 	 	 
	Patents - Applications Pending
	 	 	 
	463864	Transparent Vehicle Roof	Saleen Inc.*
	384838	Intercooler cartridge assembly 	SMS Signature Cars, Inc.

 

Domains

 

saleen.com

 

Licenses

 

February 15, 2012 License Agreement between Steve Saleen and Roadwire,
LLC (for the manufacture of Saleen seats)

 

February 7, 2011 License Agreement between Steve Saleen and Molly
Saleen (for t-shirts and hats)

 

    	 

    	 

    

SCHEDULE G

Government Account Debtors

 

None.

 

SCHEDULE H

Pledged Securities

 

SMS Signature Cars100 shares of Common Stock

Saleen Automotive, Inc.100 shares of Common Stock

SMS Retail – Corona1,000,000 shares of Common Stock

Saleen Automotive Show Cars, Inc.100,000 shares of Common Stock

 

SCHEDULE I

Permitted Licenses and Dispositions

 

None.

 

    	 

    	 

    

ANNEX A

to

SECURITY AGREEMENT

 

FORM OF ADDITIONAL
DEBTOR JOINDER

 

Security Agreement dated as of June 26, 2013
made by

W270, Inc.

and its subsidiaries party thereto from time
to time, as Debtors

to and in favor of

the Secured Parties identified therein (the
“Security Agreement”)

 

Reference is made to the
Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings given
to such terms in, or by reference in, the Security Agreement.

 

The undersigned hereby
agrees that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above (or the Agent on their behalf),
the undersigned shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of the
Debtors under the Security Agreement as fully and to the same extent as if the undersigned was an original signatory thereto, and
(c) be deemed to have made the representations and warranties set forth therein as of the date of execution and delivery of this
Additional Debtor Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED
PARTIES A SECURITY INTEREST IN THE COLLATERAL OWNED BY IT AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND
AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.

 

Attached hereto are supplemental
and/or replacement Schedules to the Security Agreement, as applicable. An executed copy of this Joinder shall be delivered to the
Secured Parties (or the Agent on their behalf), and the Secured Parties may rely on the matters set forth herein on or after the
date hereof. This Joinder shall not be modified, amended or terminated without the prior written consent of the Secured Parties.

 

IN WITNESS WHEREOF, the
undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.

 

			[Name of Additional Debtor]

 

By: ________________________

			Name:

			Title:

			Address:

Dated:

    	 

    	 

    

ANNEX B

to

SECURITY AGREEMENT

 

THE AGENT

 

1. Appointment.
The Secured Parties (all capitalized terms used herein and not otherwise defined shall have the respective meanings provided
in the Security Agreement to which this Annex B is attached (the “Agreement”)), by their acceptance of the benefits
of the Agreement, hereby designate W-Net Fund I, L.P. (“Agent”) as the Agent to act as specified herein and
in the Agreement. Each Secured Party shall be deemed irrevocably to authorize the Agent to take such action on its behalf under
the provisions of the Agreement and any other Transaction Document (as such term is defined in the Notes) and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto. The Agent may perform any of its duties hereunder
by or through its agents or employees.

 

2. Nature of Duties.
The Agent shall have no duties or responsibilities except those expressly set forth in the Agreement. Neither the Agent nor any
of its partners, members, shareholders, officers, directors, employees or agents shall be liable for any action taken or omitted
by it as such under the Agreement or hereunder or in connection herewith or therewith, be responsible for the consequence of any
oversight or error of judgment or answerable for any loss, unless caused solely by its or their gross negligence or willful misconduct
as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not have by reason of the Agreement or any other Transaction
Document a fiduciary relationship in respect of any Debtor or any Secured Party; and nothing in the Agreement or any other Transaction
Document, expressed or implied, is intended to or shall be so construed as to impose upon the Agent any obligations in respect
of the Agreement or any other Transaction Document except as expressly set forth herein and therein.

 

3. Lack of Reliance on
the Agent. Independently and without reliance upon the Agent, each Secured Party, to the extent it deems appropriate, has made
and shall continue to make (a) its own independent investigation of the financial condition and affairs of the Company and its
subsidiaries in connection with such Secured Party’s investment in the Debtors, the creation and continuance of the Obligations,
the transactions contemplated by the Transaction Documents, and the taking or not taking of any action in connection therewith,
and (b) its own appraisal of the creditworthiness of the Company and its subsidiaries, and of the value of the Collateral from
time to time, and the Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Secured
Party with any credit, market or other information with respect thereto, whether coming into its possession before any Obligations
are incurred or at any time or times thereafter. The Agent shall not be responsible to the Debtors or any Secured Party for any
recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered
in connection herewith, or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility,
priority or sufficiency of the Agreement or any other Transaction Document, or for the financial condition of the Debtors or the
value of any of the Collateral, or be required to make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of the Agreement or any other Transaction Document, or the financial condition of the Debtors,
or the value of any of the Collateral, or the existence or possible existence of any default or Event of Default under the Agreement,
the Notes or any of the other Transaction Documents.

 

4. Certain Rights of the
Agent. The Agent shall have the right to take any action with respect to the Collateral, on behalf of all of the Secured Parties.
To the extent practical, the Agent shall request instructions from the Secured Parties with respect to any material act or action
(including failure to act) in connection with the Agreement or any other Transaction Document, and shall be entitled to act or
refrain from acting in accordance with the instructions of Secured Parties holding a majority in principal amount of Notes (based
on then-outstanding principal amounts of Notes at the time of any such determination); if such instructions are not provided despite
the Agent’s request therefor, the Agent shall be entitled to refrain from such act or taking such action, and if such action
is taken, shall be entitled to appropriate indemnification from the Secured Parties in respect of actions to be taken by the Agent;
and the Agent shall not incur liability to any person or entity by reason of so refraining. Without limiting the foregoing, (a)
no Secured Party shall have any right of action whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the terms of the Agreement or any other Transaction Document, and the Debtors shall have no
right to question or challenge the authority of, or the instructions given to, the Agent pursuant to the foregoing, and (b) the
Agent shall not be required to take any action which the Agent believes (i) could reasonably be expected to expose it to personal
liability or (ii) is contrary to this Agreement, the Transaction Documents or applicable law.

 

5. Reliance. The Agent
shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made
by the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the other Transaction Documents
and its duties thereunder, upon advice of counsel selected by it, and upon all other matters pertaining to this Agreement and the
other Transaction Documents and its duties thereunder, upon advice of other experts selected by it. Anything to the contrary notwithstanding,
the Agent shall have no obligation whatsoever to any Secured Party to assure that the Collateral exists or is owned by the Debtors
or is cared for, protected or insured or that the liens granted pursuant to the Agreement have been properly or sufficiently or
lawfully created, perfected, or enforced or are entitled to any particular priority.

 

6. Indemnification.
To the extent that the Agent is not reimbursed and indemnified by the Debtors, the Secured Parties will jointly and severally reimburse
and indemnify the Agent, in proportion to their initially purchased respective principal amounts of Notes, from and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in performing its duties hereunder
or under the Agreement or any other Transaction Document, or in any way relating to or arising out of the Agreement or any other
Transaction Document except for those determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction
to have resulted solely from the Agent's own gross negligence or willful misconduct. Prior to taking any action hereunder as Agent,
the Agent may require each Secured Party to deposit with it sufficient sums as it determines in good faith is necessary to protect
the Agent for costs and expenses associated with taking such action.

 

7. Resignation by the
Agent. 

 

(a)The Agent
may resign from the performance of all its functions and duties under the Agreement and the other Transaction Documents at any
time by giving thirty (30) days’ prior written notice (as provided in the Agreement) to the Debtors and the Secured Parties.
Such resignation shall take effect upon the appointment of a successor Agent pursuant to clauses (b) and (c) below.

 

(b)Upon any
such notice of resignation, the Secured Parties, acting by a Majority in Interest, shall appoint a successor Agent hereunder.

 

(c) If a
successor Agent shall not have been so appointed within said thirty (30)-day period, the Agent shall then appoint a successor Agent
who shall serve as Agent until such time, if any, as the Secured Parties appoint a successor Agent as provided above. If a successor
Agent has not been appointed within such thirty (30)-day period, the Agent may petition any court of competent jurisdiction or
may interplead the Debtors and the Secured Parties in a proceeding for the appointment of a successor Agent, and all fees, including,
but not limited to, extraordinary fees associated with the filing of interpleader and expenses associated therewith, shall be payable
by the Debtors on demand.

 

(d)Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent and the retiring Agent shall be discharged from its duties and
obligations under the Agreement.  After any retiring Agent’s resignation or removal hereunder as Agent, the provisions
of the Agreement including this Annex B shall inure to its benefit as to any actions taken or omitted to be taken by it while it
was Agent.

 

8. Rights with respect
to Collateral. Each Secured Party agrees with all other Secured Parties and the Agent (a) that it shall not, and shall
not attempt to, exercise any rights with respect to its security interest in the Collateral, whether pursuant to any other agreement
or otherwise (other than pursuant to this Agreement), or take or institute any action against the Agent or any of the other Secured
Parties in respect of the Collateral or its rights hereunder (other than any such action arising from the breach of this Agreement)
and (b) that such Secured Party has no other rights with respect to the Collateral other than as set forth in this Agreement and
the other Transaction Documents.Exhibit 10.5

 

INTELLECTUAL PROPERTY
SECURITY AGREEMENT

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

W I T N E S S E T H:

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

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

 

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

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

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

DEFINED TERMS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

[Signature
Pages Follow]

    	 

    	 

    

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

 

	
        W270, INC.

         

         

	
        By:__________________________________________

        Name:

        Title:

         

	 
	
        Saleen Automotive, Inc. 

         

        By:_________________________________

        Name:

        Title:

         

        SMS Signature Cars 

         

        By:_________________________________

        Name:

        Title:

         

        

         

         

	 

    	 

    	 

    

ACCEPTED AND ACKNOWLEDGED BY:

 

LENDER:

 

[NAME]

 

 

By:

Name:

Title:

 

    	 

    	 

    

SCHEDULE I

to

INTELLECTUAL PROPERTY SECURITY AGREEMENT

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