8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 16, 2016

XFIT BRANDS, INC.

(Exact name of registrant as specified in its charter)

Nevada	000-55372	47-1858485
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

25731 Commercentre Drive, Lake Forest, CA	92630
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (949) 916-9680

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT WITH PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO

On December 16, 2016 we entered into an Amended and Restated Note Purchase Agreement (the “Agreement”) with PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio (“PIMCO”) pursuant to which we issued a $3.5 million 9% Senior Secured Fixed Rate Note due July 12, 2020 (the “Note”). The Note refinanced our prior 14% Senior Secured Note in the principal amount of $2.5 million (the “Prior Note”), providing us with an additional $1 million in working capital. As with the Prior Note, the Note is secured by a lien on substantially all of our assets (other than those sold pursuant to our factoring agreement with Crown Financial).

In connection with the Agreement, (i) PIMCO converted $ 278,689 in accrued and unpaid interest into 1,990,639 shares of our common stock. In addition we had previously issued PIMCO a warrant to purchase ten percent of our equity at an exercise price of $1.5 million. We amended the terms of the common stock purchase warrant previously issued to PIMCO to reduce the exercise price thereof to $350,000.

The foregoing descriptions of the Agreement, Note and the amended common stock purchase warrant are qualified in its entirety by reference to the provisions of such agreements filed as exhibits to this Current Report on the Form 8-K which are incorporated herein by reference.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.

The Note provides for monthly payments of interest at the rate of 9% per annum, with the principal due at maturity on July 12, 2020. The principal and interest on the Note will be accelerated upon an event of default as provided in the Note. The Agreement and the Note provide for standard representations and warranties. The Agreement prohibits us from paying cash dividends on our shares or our repurchasing shares of common stock.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.

The issuances of the Note, the shares of common stock issued upon conversion of accrued interest and the amended common stock purchase warrant were exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act (“Regulation D”). The Company made this determination based on the representations of PIMCO that PIMCO is an “accredited investor” within the meaning of Rule 501 of Regulation D and has access to information about the Company and its investment.

The Company did not pay any brokerage commissions or finders’ fees in connection with the transactions with PIMCO.

This Report is neither an offer to sell nor the solicitation of an offer to buy any securities. The securities have not been registered under the Securities Act and may not be offered or sold in the United States of America absent registration or an exemption from registration under the Securities Act.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

10.1	Amended and Restated Note Purchase Agreement dated as of December 16, 2016
10.2	9% Senior Secured Fixed-Rate Note due July 12, 2020
10.3	Amended and Restated Common Stock Purchase Warrant
10.4	Amended and Restated Pledge And Security Agreement
10.5	Patent Security Agreement
10.6	Trademark Security Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	XFIT BRANDS, INC.
	(Registrant)
Date: December 20, 2016	By:	/s/ David E. Vautrin
		David E. Vautrin
		Chief Executive Officer

EX-10.1

Throwdown Industries Holdings, LLC
Throwdown Industries, LLC
Throwdown Industries, INC.

XFIT BRANDS, INC.

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

Dated as of December 16, 2016

Throwdown Industries Holdings, LLC
Throwdown Industries, LLC
Throwdown Industries, INC.

XFIT BRANDS, INC.

9.00% Senior Secured Fixed Rate Notes due 2020

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

December 16, 2016

PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio
c/o Pacific Investment Management Company LLC
650 Newport Center Drive
Newport Beach, California 92660

Ladies and Gentlemen:

Throwdown Industries Holdings, LLC, a Delaware limited liability company (“Holdings”), Throwdown Industries, LLC, a Delaware limited liability company (“TD LLC”), Throwdown Industries, INC., a California corporation (“TDI”) and XFIT BRANDS, INC., a Nevada corporation (“XFIT” and, together with Holdings, TD LLC and TDI, each, an “Obligor” and, collectively, the “Obligors”), hereby jointly and severally agrees with PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio, a separate investment portfolio of PIMCO Funds, a Massachusetts business trust (the “Purchaser”), as follows:

Section 1. Authorization of Notes. The Obligors have authorized the issue of $3,500,000.00 aggregate principal amount of its 9.00% Senior Secured Fixed Rate Notes due July 12, 2020 (collectively, the “New Notes” and, together with the Existing Notes and any notes issued in replacement therefor, the “Notes”). Certain capitalized terms used in this Agreement are defined in Exhibit A; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended, supplemented or otherwise modified.

Section 2. Issue of New Notes.

(a)       Interest. The New Notes will be dated the date of delivery thereof, and will bear interest at the rate of 9.00% per annum, payable in arrears on the 12th day of each calendar month, commencing on January 12, 2016, and on the maturity date and each other date on which principal is due and payable, or, if any such day is not a Business Day, the immediately succeeding Business Day (each, a “Payment Date”). Accrued interest shall be computed on the basis of a 360-day year of twelve 30-day months.

(b)       Principal. The Applicable Percentage of the entire outstanding principal balance of the New Notes shall be due and payable on June 12, 2020, or such earlier date on which the New Notes are accelerated pursuant to Section 17 following an Event of Default or subject to optional redemption by XFIT, on behalf of the Obligors, in accordance with Section 2(c) below. The “Applicable Percentage” means (i) in the case of a redemption or principal payment, repayment or prepayment, whether optional or mandatory, following an Event of Default, by application of proceeds in connection with the exercise of remedies or otherwise, or upon any acceleration or deemed acceleration of the principal of the Notes, in each case, on or prior to June 12, 2019, 107% or (ii) in the case of a redemption or principal payment, repayment or prepayment, whether optional or mandatory, following an Event of Default, by application of proceeds in connection with the exercise of remedies or otherwise, or upon any acceleration or deemed acceleration of the principal of the Notes, in each case, after June 12, 2019, 100%.

(c)       Redemption. XFIT, on behalf of the Obligors, may redeem the New Notes, in whole or in part, at any time, at its option, at a redemption price equal to the Applicable Percentage of the principal amount of the New Notes to be redeemed, plus accrued and unpaid interest on the principal amount of New Notes to be redeemed to, but excluding, the redemption date. If less than all of the New Notes are to be redeemed, the Notes shall be redeemed on a pro rata basis.

Notice of any such redemption must be mailed by first-class mail or electronically delivered to the registered holder of the New Notes to be redeemed no less than 30 days prior to the redemption date and shall specify the designated redemption date and the aggregate principal amount to be redeemed thereon. Notice of redemption having been given, the New Notes to be so redeemed shall, on the redemption date, become due and payable at the redemption price provided for herein, and from and after such date (unless the Obligors shall default in the payment of the redemption price and accrued interest) such New Notes shall cease to bear interest. In the event of redemption of the New Notes in part only, new Notes for the unredeemed portion thereof will be issued in the name of the Purchaser.

Section 3. Exchange of Existing Notes; Sale and Purchase of New Notes; Issuance of Exchange Shares. Subject to the terms and conditions hereof and in reliance on the representations and warranties of the Obligors contained herein, the Purchaser agrees as follows:

(a)       Exchange of Existing Notes. Purchaser agrees to exchange the entire aggregate principal amount of its Existing Notes (at 100% of par) on the Restatement Date for an aggregate principal amount of New Notes equal to the entire aggregate principal amount of its Existing Notes.

(b)       Conversion of Accrued and Unpaid Interest. Purchaser agrees to accept 1,990,639 shares of XFIT’s common stock, $0.0001 par value per share (the “Common Stock”) on the Restatement Date, representing payment in full of all accrued and unpaid interest on the Existing Notes (assuming a conversion price of $0.14 per share) as of the Restatement Date. Prior to delivery of the Common Stock, Purchaser agrees to deliver a certificate containing certain investment representations and warranties substantially in the form set out in Exhibit B to this Agreement (the “Purchaser Certificate”).

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(c)        Purchase of New Notes. The Purchaser agrees to purchase, and each of the Obligors, jointly and severally, agrees to sell, additional New Notes in an aggregate principal amount equal to $1,000,000, such that the initial principal balance of all New Notes issued on the Restatement Date (including New Notes exchanged for Existing Notes pursuant to Section 3(a)) is equal to $3,500,000. The New Notes shall be issued in the name of the Purchaser for the initial principal balance of the New Notes substantially in the form set out in Exhibit C, with such changes therefrom, if any, as may be approved by the Purchaser and the Obligors.

(d)       Use of Proceeds. The Obligors shall use the proceeds of the additional issuance of the New Notes on the Effective Date as follows: (i) on the Effective Date, the Obligors shall pay in full all obligations of the Obligors under that certain settlement and release agreement, dated as of August 15, 2016, between Absolute Metals, LLC and TDI; and (ii) on the Effective Date or, if later, within one (1) Business Day following presentation of an invoice therefor, the Obligors shall pay the fees and expenses of Purchaser (including the legal fees and expenses of Latham & Watkins LLP). The balance of the proceeds of the additional issuance of the New Notes shall be used as general working capital of the Obligors, including, but not limited to. The balance of the proceeds of the additional issuance of the New Notes shall be used as general working capital of the Obligors, including, but not limited to, new turf installations to be undertaken by XFit's sports surface division..

Section 4. Closing. The Restatement Date Transactions, including delivery of the New Notes, Common Stock and Warrant to the Purchaser, shall be made at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022 at 10:00 A.M., New York time on the Restatement Date, against payment therefor by delivery by the Purchaser to the Obligors of immediately available funds in the aggregate amount of $1,000,000 by wire transfer to the following account:

The New Notes so delivered shall be registered in the Purchaser’s name or otherwise as the Purchaser shall have advised XFIT in writing not less than one Business Day prior to the Restatement Date.

Section 5. Conditions to Effectiveness. The effectiveness of this Agreement, including the Purchaser’s obligation to purchase and pay for the additional New Notes to be sold by the Obligors to the Purchaser on the Restatement Date, is subject to the fulfillment to the Purchaser’s satisfaction, on or prior to the Restatement Date, of the following conditions:

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(a)       Representations and Warranties. The representations and warranties of the Obligors in this Agreement and the other Transaction Documents shall be true and correct on the Restatement Date.

(b)       Performance; No Default. Each of the Obligors shall have performed and complied with all agreements and conditions contained in this Agreement and each other Transaction Document required to be performed or complied with by it on or prior to the Restatement Date and, after giving effect to the Restatement Date Transactions, no Default or Event of Default shall have occurred and be continuing. As of the Restatement Date, no event or circumstance has occurred that may have a Material Adverse Effect.

(c)       Documents. The Purchaser shall have received duly executed copies of this Agreement, the New Notes, the Warrant, a certificate evidencing the Common Stock and each of the other Transaction Documents and original or copies of such other documents as the Purchaser may reasonably request.

(d)       Legal Opinion. The Purchaser shall have received an opinion of counsel to the Obligors in form and substance satisfactory to the Purchaser.

(e)       Officer’s Certificate. The Obligors shall have delivered to the Purchaser an officer’s certificate, dated as of the Closing Date, certifying that the conditions specified in Sections 5(a), 5(b), 5(g), 5(h) and 5(i) have been fulfilled.

(f)       Secretary’s Certificate. The Purchaser shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of the Obligors certifying:

(i)       that attached thereto are true and complete copies of all resolutions and other consents adopted by such Obligor authorizing and approving the execution, delivery, filing and performance of this Agreement and the other Transaction Documents and the consummation of the Restatement Date Transactions, and that all such resolutions and consents are in full force and effect as of the Restatement Date and are all the resolutions and consents adopted in connection with the transactions contemplated hereby and thereby;

(ii)       that attached thereto are true and complete copies of the certificate of incorporation or formation and by-laws or limited liability company agreement of such Obligor and that such organizational documents are in full force and effect as of the Restatement Date;

(iii)       the names and signatures of the officers of the Obligors authorized to sign this Agreement, the other Transaction Documents and the other documents to be delivered hereunder and thereunder; and

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(iv)       that attached thereto are true and complete copies of good standing certificates (or their equivalent) for each Obligor from the secretary of state or similar Governmental Authority of the jurisdiction under the Laws in which such Obligor is organized and a foreign qualification certificate (or its equivalent) for such Obligor from the secretary of state or similar Governmental Authority of each jurisdiction in which such Obligor has qualified, or is required to qualify, to do business as a foreign corporation.

(g)       Changes in Structure. No Obligor shall have changed its jurisdiction of formation or been a party to any merger or consolidation and no Obligor shall have succeeded to all or any substantial part of the liabilities of any other entity.

(h)       No Governmental Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement or any other Transaction Document illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder or thereunder to be rescinded following completion thereof.

(i)       Authorization and Consents. The Purchaser shall have received duly executed copies of all approvals, consents, filings and waivers necessary to complete the transactions contemplated herein and in the other Transaction Documents.

(j)       Fees and Expenses. The Obligors, jointly and severally, shall have paid all of the fees, expenses and disbursements incurred by any Obligor or the Purchaser (including Purchaser’s reasonable attorneys’ fees) in connection with the Restatement Date Transactions.

Section 6. [Reserved].

Section 7. Representations and Warranties by the Obligors. The Obligors jointly and severally represent and warrant to the Purchaser as of the date hereof that:

(a)       Organization; Power and Authority. Each Obligor is a corporation or limited liability company duly incorporated or organized, validly existing and in good standing under the Laws of the state of California, Delaware or Nevada, as the case may be, and has full company power and authority to (i) enter into this Agreement and the other Transaction Documents to which such Obligor is a party, to carry out its obligations hereunder and thereunder and to consummate the Original Closing Date Transactions and the Restatement Date Transactions and (ii) own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. Each Obligor is duly licensed or qualified to do business and is in good standing in each jurisdiction, as set forth in Schedule II, in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary, except where such failure could not reasonably be expected to have a Material Adverse Effect.

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(b)       Authorization, etc. This Agreement and any other Transaction Document to which any of the Obligors is a party, the performance by the Obligors of their respective obligations hereunder and thereunder and the consummation by the Obligors of the Original Closing Date Transactions and the Restatement Date Transactions have been duly authorized by all necessary action on the part of each Obligor, and this Agreement and each other Transaction Document has been duly executed and delivered by the Obligors and constitutes a legal, valid and binding obligation of the Obligors enforceable against the Obligors in accordance with its terms.

(c)       Compliance with Laws, Other Instruments, etc. The Obligors have complied, and are now complying, in all material respects with all Laws applicable to them or their respective businesses, properties or assets. The execution, delivery and performance by the Obligors of this Agreement and each other Transaction Document will not:

(i)       contravene, result in any breach of, or constitute a default under, or result in the creation of any Encumbrance in respect of any property of any Obligor under any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, or its organizational documents or any other agreement or instrument to which any Obligor is bound or by which any Obligor or any of its properties may be bound or affected;

(ii)       conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to any Obligor or its property; or

(iii)       violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to any Obligor.

All Permits required for the Obligors to conduct their respective businesses have been obtained by them and are valid and in full force and effect. All fees and charges with respect to such Permits have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit applicable to any Obligor.

(d)       Common Stock. The Common Stock has been duly authorized and validly issued and is fully paid and non-assessable, has been issued (subject to the accuracy of Purchaser’s representations and warranties contained in the Purchaser Certificate) in compliance with all securities laws and is not subject to any pre-emptive or similar rights.

(e)       Governmental Authorizations, etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by any of the Obligors of this Agreement or any other Transaction Document.

(f)       Private Offering by the Obligors. None of the Obligors nor anyone acting on their behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchaser. None of the Obligors nor anyone acting on their behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of the Securities Act.

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(g)       Litigation; Observance of Agreements, Statutes and Orders. There are no actions, suits or proceedings pending or, to the Knowledge of any of the Obligors, threatened against any of the Obligors or any outstanding Governmental Orders affecting any of the Obligors or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could if adversely determined, have a Material Adverse Effect. No injunction, writ, temporary restraining order or any order of any nature has been issued by, or sought from, any court or other Governmental Authority purporting or seeking to enjoin or restrain the execution, delivery or performance of this Agreement or any other Transaction Document or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.

(h)       No Default. No Obligor is (i) in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (ii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority, except in the case of clause (ii), where such failure could not reasonably be expected to have a Material Adverse Effect.

(i)       Financial Statements. XFIT has filed with the Securities and Exchange Commission (the “SEC”) (which is available to the Purchaser on the SEC’s website) a complete copy of its annual report on Form 10-K for the year ended June 30, 2016 (the “Annual Report”). The financial statements contained in the Annual Report (i) have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved and (ii) are based on the books and records of XFIT and fairly present the financial condition of XFIT and its consolidated subsidiaries as of the respective dates they were prepared and the results of operations of XFIT and its consolidated subsidiaries for the periods indicated.

(j)       Undisclosed Liabilities. Except as set forth in the Annual Report or on Schedule XII-A, no Obligor has any Liabilities.

(k)       Absence of Certain Changes, Events and Conditions. Except as set forth in the Annual Report or Schedule XII-B, since December 31, 2013, there has not been, with respect to any Obligor, any of the following occurrences which continue to exist as of the date hereof:

(i)       event, occurrence or development that has had, or could have, individually or in the aggregate, a Material Adverse Effect;

(ii)       amendment of the charter, by-laws or other organizational documents of such Obligor;

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(iii)       split, combination or reclassification of any shares of its Equity Interests;

(iv)       issuance, sale or other disposition of any of its Equity Interests, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its Equity Interests;

(v)       declaration or payment of any dividends or distributions on or in respect of any of its Equity Interests or redemption, purchase or acquisition of its Equity Interests;

(vi)       material change in any method of accounting or accounting practice of such Obligors;

(vii)       incurrence, assumption or guarantee of any Indebtedness except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(viii)       transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Financial Statements or cancellation, discharge or payment of any material debts, liens or entitlements;

(ix)       transfer, assignment or grant of any license or sublicense of any rights under or with respect to any Intellectual Property, other than licenses granted in the ordinary course of business and consistent with past practice to manufacturers to produce products bearing Obligor logos;

(x)       any capital investment in, or any loan to, any other Person;

(xi)       acceleration, termination, material modification or amendment to or cancellation of any material Contract (including, but not limited to, any Material Contract) to which such Obligor is a party or by which it is bound;

(xii)       any material Capital Expenditures;

(xiii)       imposition of any Encumbrance upon any of such Obligor’s properties, capital stock or assets, tangible or intangible;

(xiv)       adoption, modification or termination of any: (A) material employment, severance, retention or other agreement with any current or former employee, officer, director, independent contractor or consultant, (B) Benefit Plan or (C) collective bargaining or other agreement with a Union, in each case whether written or oral;

(xv)       any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders, members, directors, officers and employees;

(xvi)       entry into a new line of business or abandonment or discontinuance of existing lines of business;

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(xvii)       adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

(xviii)       acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof; or

(xix)       any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

(l)       Taxes. Each Obligor:

(i)       has timely filed all Tax Returns that it was required to file. All such Tax Returns were complete and correct in all respects. All Taxes due and owing by any Obligor (whether or not shown on any Tax Return) have been timely paid;

(ii)       has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of applicable Law;

(iii)       has not been given or requested any extensions or waivers of statutes of limitations with respect to any Taxes of any Obligor;

(iv)       fully paid all deficiencies asserted, or assessments made, against any Obligor as a result of any examinations by any taxing authority;

(v)       is not a party to any Action by any taxing authority, and there are no pending or threatened Actions by any taxing authority against any Obligor;

(vi)       has delivered to the Purchaser copies of all federal, state, local and foreign income, franchise and similar Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by, any Obligor for all Tax periods ending after December 31, 2009;

(vii)       has not been a member of an affiliated, combined, consolidated or unitary Tax group for Tax purposes; and

(viii)       has no Liability for Taxes of any Person (other than an Obligor) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local or foreign Law), as transferee or successor, by contract or otherwise.

(m)       Use of Proceeds. No Obligor is and, after giving effect to the sale of the additional New Notes and the receipt of the proceeds therefrom and the other Restatement Date Transactions, no Obligor will be, an “investment company” or an entity “controlled” by an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

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(n)       Anti-Money Laundering Laws. The operations of the Obligors are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions where the Obligors conduct business, and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any of the Obligors with respect to the Money Laundering Laws is pending or, to the knowledge of any Obligor, threatened.

(o)       Foreign Assets Control Regulations, etc. None of the Obligors nor, to the Knowledge of the Obligors, any officer, agent, employee or Affiliate of any Obligor is (i) currently subject to any U.S. sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Treasury Department, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”) or (ii) located, organized or resident in a country that is the subject of Sanctions (including, without limitation, Cuba, Iran, North Korea, Sudan, Russia, the Crimea region of Ukraine and Syria). The Obligors and their respective affiliates are not now knowingly engaged in any dealings or transactions with any individual or entity, or in any country or territory, that is the subject or target of Sanctions and will not use the proceeds of the additional New Notes or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any Person that is the subject or target of Sanctions.

(p)       Material Contracts. Schedule VI lists each Material Contract for each Obligor. Each Material Contract is valid and binding on the applicable Obligor in accordance with its terms and is in full force and effect. None of the Obligors nor, to the Knowledge of any Obligor, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Material Contract for any Obligor. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to the Purchaser.

(q)       Title to Assets, Real Property. Each applicable Obligor has good and valid (and, in the case of owned Real Property, good and marketable fee simple) title to, or a valid leasehold interest in, all Real Property and personal property and other assets reflected in the Financial Statements or acquired after the date thereof. All such properties and assets (including leasehold interests) are free and clear of Encumbrances except for the following (collectively referred to as “Permitted Encumbrances”):

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liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures and for which there are adequate accruals or reserves on the Financial Statements;

mechanics, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the business of the Obligors; or

easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property which are not, individually or in the aggregate, material to the business of the Obligors.

Schedule III lists (A) the street address of each parcel of Real Property; (B) if such property is leased or subleased by an Obligor, the landlord under the lease, the rental amount currently being paid, and the expiration of the term of such lease or sublease for each leased or subleased property; and (C) the current use of such property. With respect to owned Real Property, each Obligor has delivered or made available to the Purchaser true, complete and correct copies of the deeds and other instruments (as recorded) by which such Obligor acquired such Real Property, and copies of all title insurance policies, opinions, abstracts and surveys in the possession of any Obligor and relating to the Real Property.

With respect to leased Real Property, each Obligor has delivered or made available to the Purchaser true, complete and correct copies of any leases affecting the Real Property. No Obligor is a sublessor or grantor under any sublease or other instrument granting to any other Person any right to the possession, lease, occupancy or enjoyment of any leased Real Property. The use and operation of the Real Property in the conduct of the applicable Obligor’s business do not violate in any material respect any Law, covenant, condition, restriction, easement, license, permit or agreement. No material improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the applicable Obligor. There are no Actions pending nor, to the Knowledge of any Obligor, threatened against or affecting the Real Property or any portion thereof or interest therein in the nature or in lieu of condemnation or eminent domain proceedings.

Intellectual Property. Schedule IV lists all Obligor Intellectual Property that is subject to the Obligor Intellectual Property Registrations including registered trademarks, domain names and copyrights, issued and reissued patents and pending applications for any of the foregoing or used in or necessary for any Obligor’s current or planned business or operations. All (A) required filings and fees related to the Intellectual Property Registrations have been timely filed with and paid to the relevant Governmental Authorities and authorized registrars, and all Intellectual Property Registrations are otherwise in good standing; (B) right, title and interest in and to the Obligor Intellectual Property, is owned by the applicable Obligor, exclusively and is free and clear of Encumbrances; and (C) Obligor Intellectual Property is free of any infringements, violations or misappropriations.

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Each Obligor is in full compliance with all legal requirements applicable to the Obligor Intellectual Property and such Obligor’s ownership and use thereof.

Schedule IV lists all licenses, sublicenses and other agreements whereby any Obligor is granted rights, interests and authority, whether on an exclusive or non-exclusive basis, with respect to any Licensed Intellectual Property that is used in or necessary for any Obligor’s current or planned business or operations. All such agreements are valid, binding and enforceable between the applicable Obligor and the other parties thereto, and such Obligor and such other parties are in full compliance with the terms and conditions of such agreements.

The Obligor Intellectual Property and Licensed Intellectual Property as currently or formerly owned, licensed or used by the Obligors or proposed to be used, and the Obligors’ conduct of their respective business as currently and formerly conducted and proposed to be conducted have not, do not and will not infringe, violate or misappropriate the Intellectual Property of any Person. No Obligor has received any communication, and no Action has been instituted, settled or, to any Obligor’s Knowledge, threatened that alleges any such infringement, violation or misappropriation, and none of the Obligor Intellectual Property is subject to any outstanding Governmental Order.

Schedule IV lists all licenses, sublicenses and other agreements pursuant to which any Obligor grants rights or authority to any Person with respect to any Obligor Intellectual Property or Licensed Intellectual Property. All such agreements are valid, binding and enforceable between the applicable Obligor and the other parties thereto, and such Obligor and such other parties are in full compliance with the terms and conditions of such agreements. No Person has infringed, violated or misappropriated, or is infringing, violating or misappropriating, any Obligor Intellectual Property.

(r)       Inventory. All inventory of each Obligor, whether or not reflected on the Financial Statements, consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, except for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established. All such inventory is owned by the applicable Obligor free and clear of all Encumbrances, and no inventory is held on a consignment basis. The quantities of each item of inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances of the applicable Obligor.

The accounts receivable reflected on the Financial Statements and the accounts receivable arising after the date thereof (i) have arisen from bona fide transactions entered into by the applicable Obligor involving the sale of goods or the rendering of services in the ordinary course of business consistent with past practice; (ii) constitute only valid, undisputed claims of the applicable Obligor not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the ordinary course of business consistent with past practice; and (iii) subject to a reserve for bad debts shown on the Financial Statements or, with respect to accounts receivable arising after the date thereof, on the accounting records of the applicable Obligor, are collectible in full within 30 days after billing. The reserve for bad debts shown on the Financial Statements or, with respect to accounts receivable arising after the date thereof, on the accounting records of the Obligors have been determined in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of disclosures normally made in footnotes.

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(s)       Customers and Suppliers. No Obligor has received any notice, and no Obligor has any reason to believe, that any Material Customer or Material Supplier has ceased, or intends to cease on or after the date hereof, to use any Obligor’s goods or services, or supply goods or services to any Obligor, or to otherwise terminate or materially reduce its relationship with any Obligor.

(t)       Insurance. Schedule VIII sets forth a true and complete list of all Insurance Policies and true and complete copies of such Insurance Policies have been made available to the Purchaser. Such Insurance Policies are in full force and effect and shall remain in full force and effect following the consummation of the transactions contemplated by this Agreement. Neither the Obligors nor any of their respective Affiliates has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Obligors and are sufficient for compliance with all applicable Laws and Contracts to which any Obligor is a party or by which it is bound. There are no claims related to the business of the any Obligor pending under any such Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights.

(u)       Environmental Matters. Each of the Obligors jointly and severally represents and warrants the following regarding environmental matters:

(i)       Each Obligor is currently and has been in compliance with all Environmental Laws and has not received from any Person any: (A) Environmental Notice or Environmental Claim; or (B) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the date this representation is made.

(ii)       Each Obligor has obtained and is in material compliance with all Environmental Permits (each of which is disclosed in Schedule V) necessary for the ownership, lease, operation or use of the business or assets of such Obligor and all such Environmental Permits will be in full force and effect through the date this representation is made in accordance with Environmental Law, and no Obligor is aware of any condition, event or circumstance that might prevent or impede, after the date hereof, the ownership, lease, operation or use of the business or assets of any Obligor as currently carried out.

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(iii)       No real property currently or formerly owned, operated or leased by any Obligor is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

(iv)       There has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the business or assets of any Obligor or any real property currently or formerly owned, operated or leased by any Obligor, and no Obligor has received an Environmental Notice that any real property currently or formerly owned, operated or leased in connection with the business of any Obligor (including soils, groundwater, surface water, buildings and other structure located on any such real property) has been contaminated with any Hazardous Material which could reasonably be expected to result in an Environmental Claim against, or a violation of Environmental Law or term of any Environmental Permit by, any Obligor.

(v)       No Obligor has retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental Law.

(vi)       No Obligor is aware of, nor does any Obligor reasonably anticipate, any condition, event or circumstance concerning the Release or regulation of Hazardous Materials that might prevent, impede or materially increase the costs associated with the ownership, lease, operation, performance or use of the business or assets of any Obligor as currently carried out.

(vii)       Schedule V contains (A) a complete and accurate list of all active or abandoned aboveground or underground storage tanks owned or operated by any Obligor and (B) a complete and accurate list of all off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by any Obligor and any predecessors of any Obligor as to which any Obligor may retain liability, and none of these facilities or locations has been placed or proposed for placement on the National Priorities List (or CERCLIS) under CERCLA, or any similar state list, and no Obligor has received any Environmental Notice regarding potential liabilities with respect to such off-site Hazardous Materials treatment, storage, or disposal facilities or locations used by any Obligor.

(viii)       The Obligors have listed in Schedule V and provided or otherwise made available to the Purchaser (A) any and all environmental reports, studies, audits, records, sampling data, site assessments, risk assessments, economic models and other similar documents with respect to the business or assets of the Obligors or any currently or formerly owned, operated or leased real property which are in the possession or control of any Obligor related to compliance with Environmental Laws, Environmental Claims or an Environmental Notice or the Release of Hazardous Materials; and (B) any and all material documents concerning planned or anticipated Capital Expenditures required to reduce, offset, limit or otherwise control pollution and/or emissions, manage waste or otherwise ensure compliance with current or future Environmental Laws (including, without limitation, costs of remediation, pollution control equipment and operational changes).

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(v)       Employee Benefit Matters. Schedule X contains a true and complete list of each Benefit Plan. With respect to each Benefit Plan, the Obligors has made available to the Purchaser accurate, current and complete copies of each of the following: (i) where the Benefit Plan has been reduced to writing, the plan document together with all amendments; (ii) where the Benefit Plan has not been reduced to writing, a written summary of all material plan terms; and (iii) in the case of any Benefit Plan that is intended to be qualified under Section 401(a) of the Code, a copy of the most recent determination, opinion or advisory letter from the Internal Revenue Service.

Each Benefit Plan, other than any Multiemployer Plan, has been established, administered and maintained in accordance with its terms and in compliance with all applicable Laws (including ERISA and the Code), except where such failure to comply could not reasonably be expected to have a Material Adverse Effect. Each Qualified Benefit Plan is so qualified and has received a favorable and current determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that the plan and the trust related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and nothing has occurred that could reasonably be expected to cause the revocation of such determination letter from the Internal Revenue Service or the unavailability of reliance on such opinion letter from the Internal Revenue Service, as applicable, nor has such revocation or unavailability been threatened. Nothing has occurred with respect to any Benefit Plan that has subjected or could reasonably be expected to subject any Obligor to a penalty under Section 502 of ERISA or to tax or penalty under Section 4975 of the Code. All benefits, contributions and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with, GAAP. There is no pending or, to any Obligor’s Knowledge, threatened Action relating to a Benefit Plan (other than routine claims for benefits).

None of the Obligors nor any of their respective ERISA Affiliates has (i) incurred or reasonably expects to incur, either directly or indirectly, any material Liability under Title I or Title IV of ERISA or related provisions of the Code or foreign Law relating to employee benefit plans; (ii) failed to timely pay premiums to the Pension Benefit Guaranty Corporation; (iii) withdrawn from any Benefit Plan; or (iv) engaged in any transaction which would give rise to liability under Section 4069 or Section 4212(c) of ERISA.

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With respect to each Benefit Plan, except as otherwise disclosed on Schedule X, (i) no such plan is a Multiemployer Plan, and all contributions required to be paid by any Obligor or its ERISA Affiliates have been timely paid to the applicable Multiemployer Plan; (ii) no such plan is a “multiple employer plan” within the meaning of Section 413(c) of the Code or a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA); (iii) no Action has been initiated by the Pension Benefit Guaranty Corporation to terminate any such plan or to appoint a trustee for any such plan; (iv) no such plan is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, and no such plan has failed to satisfy the minimum funding standards of Section 302 of ERISA or Section 412 of the Code; and (v) no “reportable event,” as defined in Section 4043 of ERISA, has occurred with respect to any such plan.

Except as otherwise disclosed on Schedule X, other than as required under Section 601 et. seq. of ERISA or other applicable Law, no Benefit Plan provides post-termination or retiree welfare benefits to any individual for any reason, and none of the Obligors nor any of their respective ERISA Affiliates has any Liability to provide post-termination or retiree welfare benefits to any individual.

Neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional or subsequent events): (i) entitle any current or former director, officer, employee, independent contractor or consultant of any Obligor to severance pay or any other payment; (ii) accelerate the time of payment, funding or vesting, or increase the amount of compensation due to any such individual; (iii) limit or restrict the right of any Obligor to merge, amend or terminate any Benefit Plan; or (iv) increase the amount payable under or result in any other material obligation pursuant to any Benefit Plan.

(w)       Employment Matters. Except as otherwise disclosed on Schedule XI, (i) all compensation, including wages, commissions and bonuses, payable to employees, independent contractors or consultants of any Obligor for services performed on or prior to the date this representation is made have been paid in full (or accrued in full on the balance sheet contained in the Financial Statements) and there are no outstanding agreements, understandings or commitments of any Obligor with respect to any employment, compensation, commissions or bonuses; (ii) no Obligor is, and no Obligor has ever been, a party to, bound by, or negotiating any collective bargaining agreement or other Contract with a Union, and there is not, and has never been, any Union representing or purporting to represent any employee of any Obligor, and, to each Obligor’s Knowledge, no Union or group of employees is seeking or has sought to organize employees for the purpose of collective bargaining; (iii) there has never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor disruption or dispute affecting any Obligor or any of its employees; no Obligor has any duty to bargain with any Union; (iv) each Obligor is and has been in compliance in all material respects with the terms of the collective bargaining agreements and other Contracts listed on Schedule XI, all applicable Laws pertaining to employment and employment practices, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’ compensation, leaves of absence and unemployment insurance; (v) all individuals characterized and treated by any Obligor as independent contractors or consultants are properly treated as independent contractors under all applicable Laws; (vi) all employees classified as exempt under the Fair Labor Standards Act and state and local wage and hour laws are properly classified; and (vii) there are no Actions against any Obligor pending, or to the Knowledge of any Obligor, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment of any current or former applicant, employee, consultant, volunteer, intern or independent contractor of any Obligor, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay, wage and hours or any other employment related matter arising under applicable Laws.

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(x)       Books and Records. The minute books and stock record books of the each Obligor, all of which have been made available to the Purchaser, are complete and correct and have been maintained in accordance with sound business practices. The minute books of each Obligor contain, in all material respects, accurate and complete records of all meetings, and actions taken by written consent of, the stockholders, the board of directors and any committees of the board of directors of the applicable Obligor, and no meeting, or action taken by written consent, of any such stockholders, board of directors or committee has been held for which minutes have not been prepared and are not contained in such minute books.

(y)       Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of any Obligor.

(z)       Foreign Corrupt Practices Act. None of the Obligors nor, to the Knowledge of any Obligor, any other person associated with or acting on behalf of any Obligor, including, without limitation, any director, officer, agent, employee or Affiliate of any Obligor has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity or to influence official action; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or (iv) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and each Obligor has instituted and maintains policies and procedures designed to ensure compliance therewith.

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(aa) Transactions with Affiliates. There are no Contracts or other transactions between or among any of the Obligors, on the one hand, and any officer, director, employee, present or former stockholder (including any spouse, parent, sibling, descendants (including adoptive relationships and stepchildren) of any such natural persons, or trust or other entity in which any such natural persons or such other individuals owns or otherwise holds any beneficial interest in) or Affiliate of any of the Obligors, on the other hand.

(bb) Full Disclosure. No representation or warranty by any Obligor in this Agreement, any other Transaction Document or any certificate or other document furnished or to be furnished to the Purchaser pursuant to this Agreement or any other Transaction Document contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

(cc) Pledge Agreement. The Pledge Agreement is effective to create in favor of the Purchaser legal, valid and enforceable Encumbrances on, and security interests in, the Collateral and, assuming all appropriate filings or recordings are made in the appropriate offices as may be required under applicable laws, the Pledge Agreement constitutes a fully perfected first priority Encumbrance on, and a security interest in, all right, title and interest of each Obligor in such Collateral subject to no other Encumbrances other than Permitted Encumbrances.

Section 8. Representations and Warranties by the Purchaser. The Purchaser represents and warrants to each Obligor that it is acquiring the New Notes for its own account for investment. The Purchaser agrees that if it should in the future determine to transfer, sell, assign, pledge, hypothecate or otherwise dispose of the New Notes, or any interests therein, such transfer, sale or other disposition shall not be made in violation of Section 5 of the Securities Act.

Section 9. Affirmative Covenants. Unless the Obligors have received the prior written consent or waiver of the Purchaser, each Obligors jointly and severally shall comply with and be subject to each of the following covenants:

(a)       Annual Financial Statements. Within 90 days after the end of each fiscal year of XFIT, XFIT shall deliver to the Purchaser copies of its consolidated financial statements consisting of a balance sheet of XFIT and its consolidated subsidiaries as at the end of such fiscal year and statements of income, stockholders’ equity and cash flows of XFIT and its consolidated subsidiaries for such fiscal year, setting forth in comparative form the corresponding figures for the preceding fiscal year (if applicable), certified by and containing an opinion, unqualified as to scope, of a firm of independent certified public accountants selected by XFIT and acceptable to the Purchaser; provided that the foregoing delivery requirement shall be satisfied if XFIT shall have filed with the SEC its Annual Report on Form 10-K for such fiscal year, which is available to the public via EDGAR or any successor system.

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(b)       Quarterly Financial Statements. Within 45 days after the end of each of the first three quarters of each fiscal year of XFIT, XFIT shall deliver to the Purchaser copies of financial statements consisting of consolidated balance sheets of XFIT and its consolidated subsidiaries as at the end of such quarter and statements of income, stockholders’ equity and cash flows of XFIT and its consolidated subsidiaries for each such quarter, setting forth in comparative form the corresponding figures for the corresponding periods of the preceding fiscal year (if applicable), all in reasonable detail and certified (subject to normal year-end audit adjustments) by a senior financial officer of XFIT as having been prepared in accordance with GAAP; provided that the foregoing delivery requirement shall be satisfied if XFIT shall have filed with the SEC its Quarterly Report on Form 10-Q for such fiscal quarter, which is available to the public via EDGAR or any successor system.

(c)       Board Minutes. Each Obligor shall deliver to the Purchaser upon request copies of the minutes of each meeting of the board of directors or other governing body of such Obligor, each action taken by written consent of the members or stockholders, the board of directors or other governing body and any committees of the board of directors or other governing body of such Obligor, all of which shall be complete and correct and maintained in accordance with sound business practices, and no meeting, or action taken by written consent, of any such stockholders, board of directors, other governing body or committee shall be held for which minutes are not prepared.

(d)       Corporate Existence, etc. Each Obligor shall at all times maintain (i) under the Laws of the state of California, Delaware or Nevada, as the case may be, its valid company existence and good standing, (ii) its due license and qualification to do business and good standing in each jurisdiction set forth on Schedule II and, following the date of this Agreement, each other jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary and (iii) all Permits necessary to the conduct of its businesses.

(e)       Compliance with Law. Each Obligor shall comply with all Laws applicable to it or its business, properties or assets.

(f)       Contractual Obligations. Each Obligor shall (i) comply with all contractual obligations, unless and to the extent such obligations are being contested in good faith by appropriate proceedings and adequate reserves (as determined in accordance with GAAP) have been established on its books and financial statements of such Obligor for such obligations; and (ii) perform and observe all of its obligations and covenants set forth in each of the Transaction Documents.

(g)       Payment of Taxes, Fees and Claims. Each Obligor shall (i) pay and discharge all Taxes due and owing by such Obligor before the same becomes delinquent and before penalties accrue thereon, unless and to the extent such Taxes are being contested in good faith by appropriate procedures and adequate accruals or reserves (as determined in accordance with GAAP) have been established on the books and financial statements of such Obligor for such Taxes; (ii) pay when due all transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement (including any real property transfer Tax and any other similar Tax). Each Obligor shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and the Purchaser shall cooperate with respect thereto as necessary); (iii) pay and discharge all claims for labor, material and supplies which, if unpaid and delinquent, would become under applicable Law a Lien upon property of any Obligor, unless and to the extent such claims are being contested in good faith by appropriate procedures and adequate accruals or reserves (as determined in accordance with GAAP) have been established on the books and financial statements of the Obligors for such claims.

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(h)       Maintenance of Assets, Insurance, and Records; Inspection. Each Obligor shall (i) maintain and keep its properties and assets in good repair, working order and condition, ordinary wear and tear excepted; (ii) maintain with financially sound and reputable insurance companies (x) property and casualty and other insurance covering risks and hazards of such types and in such amounts as are customary for adequately-insured companies of similar size engaged in similar industries and lines of business, and (y) directors and officers liability insurance with coverage of no less than $1,000,000 per occurrence/in an amount per occurrence and on terms and conditions satisfactory to the Purchaser; and (iii) keep adequate books, accounts and records in accordance with past custom and practice as used in the preparation of the Financial Statements, which books, accounts and records shall fairly present the financial condition and results of operations of the Obligors. Such books, accounts and records shall be available for inspection by one or more representatives of the Purchaser during normal business hours and upon not less than three (3) Business Days’ prior notice.

(i)       Other Covenants. Each Obligor shall (i) own, exclusively or jointly with other Persons, all right, title and interest in and to, or have a valid license for, and shall maintain all Intellectual Property necessary to the conduct of its business, free and clear of Encumbrances, (ii) enter into and maintain in full force and effect binding, written agreements with every current and former employee of such Obligor, and with every current and former independent contractor, whereby such employees and independent contractors (x) assign to the applicable Obligor any ownership interest and right they may have in the Obligor Intellectual Property and (y) acknowledge the applicable Obligor’s exclusive ownership of all Obligor Intellectual Property, and (iii) remain in full compliance with all legal requirements applicable to the Obligor Intellectual Property and the applicable Obligor’s ownership and use thereof.

Section 10. Negative Covenants. Each Obligor jointly and severally covenants that so long as any of the Notes are outstanding:

(a)       Merger, Consolidation, etc. No Obligor will consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:

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the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of such Obligor as an entirety, as the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any State thereof (including the District of Columbia) with a net worth equal to or in excess of such Obligor immediately following the consummation of such transaction, and such Person shall have (x) executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and (y) caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel, or other independent counsel satisfactory to the Purchaser, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; and

immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of all or substantially all of the assets of any Obligor shall have the effect of releasing any Obligor or any successor thereof that shall theretofore have become such in the manner prescribed in this Section 10(a) from its liability under this Agreement or the other Transaction Documents.

(b)       No Other Indebtedness. No Obligor will incur, assume, become liable in respect of or suffer to exist any Indebtedness other than (i) the Notes, (ii) Indebtedness incurred in connection with the Kodiak Securities Purchase Agreement and the related Unsecured Note; (iii) Indebtedness under that certain Wells Fargo Business Line of Credit as in effect as February 12, 2016 in an amount at any one time not to exceed $35,000 in the aggregate; (iv) obligations arising under the Crown Receivables Sale Agreement; and (v) as otherwise approved in writing by the Purchaser (collectively, clauses (i) through (v), “Permitted Indebtedness”).

(c)       Liens. No Obligor will cause or permit (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to an Encumbrance; provided, that an Obligor may create or incur or suffer to be created or incurred or to exist:

(i)       Encumbrances to secure taxes, assessments and other government charges in respect of obligations not overdue or liens on properties to secure claims for labor, material or supplies in respect of obligations not overdue;

(ii)       Encumbrances on properties in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the applicable Obligor shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review;

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(iii)       Encumbrances of carriers, warehousemen, mechanics and materialmen, and other like liens on properties in existence less than 90 days from the date of creation thereof in respect of obligations not overdue;

(iv)       Encumbrances on real estate consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlord’s or lessor’s liens and other minor liens; provided, that none of such liens interferes materially with the use of the property affected in the ordinary conduct of the business of such Obligor;

(v)       purchase money security interests in or purchase money mortgages on real or personal property acquired after the date hereof to secure purchase money Indebtedness, incurred in connection with the acquisition of such property, which security interests or mortgages cover only the real or personal property so acquired; and

(vi)       Encumbrances in favor of Crown Financial, LLC on accounts receivable as provided under the Crown Receivables Sale Agreement; and

(vii)       liens in favor of and for the benefit of the Purchaser.

(d)       Restricted Payments. No Obligor will, directly or indirectly, declare, pay, or make any Restricted Payments.

(e)       Dispositions. No Obligor will Dispose of any of its property, whether now owned or hereinafter acquired, nor shall Holdings, TD LLC or TDI issue or sell, nor shall XFIT permit Holdings, TD LLC or TDI to issue or sell, any Equity Interests of Holdings, TD LLC or TDI to any Person, except:

(i)       the sale or Disposition of machinery and equipment no longer used or useful in the business of the applicable Obligor;

(ii)       the Disposition of obsolete or worn-out Property in the ordinary course of business;

(iii)       the sale of inventory in the ordinary course of business;

(iv)       the Disposition of accounts receivable to Crown Financial, LLC for cash consideration payable on the date of sale in an amount no less than 70% of the outstanding face amount thereof, in each case, in accordance with the terms of the Crown Receivables Sale Agreement; and

(v)       Dispositions of other property in any fiscal year of XFIT so long as (A) the purchase price paid to the Obligors for such property shall have a fair market value not exceeding $50,000 in the aggregate for all Obligors and (B) the purchase price paid to the Obligors for such property shall be paid solely in cash.

(f)       Capital Expenditures. No Obligor will make or commit to make any Capital Expenditure, except Capital Expenditures of an Obligor in the ordinary course of business not exceeding $100,000 in the aggregate for all Obligors in any fiscal year of XFIT.

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Section 11. Further Assurances. Following the date hereof, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

Section 12. Indemnification.

(a)       Survival. The representations and warranties contained herein and in the other Transaction Documents shall survive the execution and delivery of this Agreement, the Restatement Date and the termination of this Agreement. All covenants and agreements of the parties contained herein shall survive the execution and delivery of this Agreement, the Restatement Date and the termination of this Agreement indefinitely or for the period explicitly specified therein.

(b)       Indemnification by Obligors. Each Obligor shall jointly and severally indemnify and defend the Purchaser and its Affiliates and their respective Representatives (collectively, the “Purchaser Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Purchaser Indemnitees based upon, arising out of, with respect to or by reason of:

(i)       any inaccuracy in or breach of any of the representations or warranties of any Obligor contained in this Agreement or any other Transaction Document or in any certificate or instrument delivered by or on behalf of any Obligor pursuant to this Agreement or any other Transaction Document;

(ii)       any breach or non-fulfillment of any covenant, agreement or obligation to be performed by any Obligor pursuant to this Agreement or any other Transaction Document; or

(iii)       otherwise relating to or arising out of this Agreement, any other Transaction Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Transaction Document or any transaction contemplated hereby or thereby.

(c)       Effect of Investigation. Neither the representations, warranties and covenants of the Obligors, nor the right to indemnification of any Purchaser Indemnitee making a claim under this Section 12 with respect thereto, shall be affected or deemed waived by reason of any investigation made by or on behalf of a Purchaser Indemnitee (including by any of its Representatives) or by reason of the fact that a Purchaser Indemnitee or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of a Purchaser Indemnitee’s waiver of any condition set forth in Section 7.

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Section 13. Waiver, Change or Modification; Counterparts. No course of dealing between any Obligor and the Purchaser (or any Person acting on its behalf) or delay on the part of the Purchaser in exercising any rights hereunder or under the Notes shall operate as a waiver of any rights of the Purchaser, except to the extent expressly waived in writing by the Purchaser. This Agreement may not be changed orally, but only by an agreement in writing signed by, or on behalf of, each of the Obligors and the Purchaser. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same instrument

Section 14. Replacement of Notes. Upon receipt of evidence reasonably satisfactory to XFIT, on behalf of the Obligors, of the loss, theft, destruction, defacing or mutilation of any Note, then in each such case the Obligors will execute and deliver a new Note of like tenor and unpaid principal amount, in lieu of such lost, stolen, destroyed, defaced or mutilated Note, and dated the date to which interest has been paid on such Note (or, if no interest has been so paid, dated the date of such Note).

Section 15. Payment. The Obligors will pay for the benefit of the holders of the Notes (by wire transfer of immediately available funds) to an account specified to XFIT in writing and maintained by the Purchaser all amounts (other than the final payment of principal) payable in respect of any Note or Notes without presentment or surrender of any such Note. Such account is initially designated by the Purchaser as set forth on Schedule I hereto.

Section 16. Events of Default. Each of the following events shall constitute an “Event of Default” hereunder and under the Notes:

(a)       Payment Default. Any Obligor shall default in the payment of any amount owing hereunder, under the Notes or under any other Transaction Document when due, and the Obligors do not cure such default within five (5) Business Days after the earlier of Knowledge or notice from Purchaser of such default;

(b)       Representation and Warranty Breach. Any representation, warranty or certification made herein or in any other Transaction Document by any Obligor or any certificate furnished to the Purchaser pursuant to the provisions hereof or thereof or any information with respect to any Obligor furnished in writing by on behalf of any Obligor shall prove to have been untrue or misleading in any material respect as of the time made or furnished;

(c)       Covenant Default. The failure of any Obligor to perform, comply with or observe any term, covenant or agreement applicable to such Obligor contained in this Agreement or any other Transaction Document, and if such failure is capable of being cured, the Obligors do not cure such default within ten (10) Business Days after the earlier of Knowledge or notice from Purchaser of such failure;

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(d)       Judgments. A judgment or judgments for the payment of money in excess of $100,000 in the aggregate for all Obligors shall be rendered against one or more Obligors by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within fifteen (15) days from the date of entry thereof;

(e)       Cross Default. Any Obligor shall be in default (beyond any and all applicable periods of notice and cure) under any note, indenture, loan agreement, guaranty, hedge agreement or other payment obligation in excess of $100,000 in the aggregate for all Obligors;

(f)       Insolvency Event. Any of the following events shall occur: (i) any Obligor shall discontinue or abandon operation of its business; (ii) any Obligor shall fail generally to, or admit in writing its inability to, pay its debts as they become due; (iii) a proceeding shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of such Obligor in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Obligor, or for any substantial part of its property, or for the winding up or liquidation of its affairs, which proceeding shall not have been timely contested and shall result in an order for relief which shall remain unstayed for a period of thirty (30) days, (iv) the commencement by any Obligor of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such Obligor’s consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Obligor, or for any substantial part of its property, or any general assignment for the benefit of creditors or (v) any Obligor shall take any company action in furtherance of, or the action of which would result in any of the actions set forth in the preceding clauses (i), (ii), (iii) or (iv);

(g)       Enforceability. For any reason, this Agreement or any other Transaction Document at any time shall not be in full force and effect or shall not be enforceable in accordance with its terms, or any Encumbrance granted pursuant hereto or pursuant to any other Transaction Document shall fail to be perfected and of first priority, or any Obligor shall contest the validity, enforceability, perfection or priority of any Encumbrance granted pursuant to this Agreement or pursuant to any other Transaction Document or any Obligor shall seek to disaffirm, terminate, limit or reduce its obligations hereunder or under any other Transaction Document;

(h)       Material Adverse Effect. A Material Adverse Effect shall occur;

(i)       Change in Control. A Change in Control shall have occurred;

(j)       Going Concern. Any Obligor’s audited financial statements or notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of such Obligor as a “going concern” or reference of similar import;

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(k)       Inability to Perform. Any Obligor shall admit in writing its inability to, or its intention not to, perform any of its obligations under this Agreement or any other Transaction Document; or

(l)       Governmental Action. Any Obligor shall become the subject of a cease and desist order of any Governmental Authority or enter into a memorandum of understanding or consent agreement with the Governmental Authority, any of which, may have, or is purportedly the result of any condition which could have, a Material Adverse Effect.

Section 17. Remedies.

Upon the occurrence of an Event of Default, at the option of the Purchaser, exercised by written notice to the Obligors (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Event of Default described in Section 16(f), the Applicable Percentage of the entire outstanding principal amount of the Notes and all other amounts payable hereunder and under the other Transaction Documents shall become immediately due and payable.

To the extent permitted by any applicable law, the Obligors shall jointly and severally be liable to the Purchaser for interest on any amounts owing by any Obligor hereunder or under any other Transaction Document from the date any Obligor becomes liable for such amounts until such amounts are paid in full. Interest on any sum that accrued after the related Event of Default shall be at a rate equal to eighteen percent (18%) per annum.

The Obligor shall jointly and severally be liable to the Purchaser for (i) the amount of all legal or other expenses including, without limitation, all out-of-pocket costs and expenses of the Purchaser in connection with the enforcement of this Agreement or any other Transaction Document, including without limitation, the fees and expenses of counsel in connection with or as a result of an Event of Default and (ii) any other loss, damage, cost or expense arising or resulting from the occurrence of an Event of Default.

The Purchaser shall have, in addition to any other rights specified hereunder, any rights and remedies otherwise available to it under any other Transaction Document or other agreement or applicable law, including without limitation, the rights and remedies of a secured creditor under the applicable uniform commercial code. All rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Purchaser may have.

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Section 18. Amendment and Restatement of Existing Note Purchase Agreement.

(a)       Effect of Amendment and Restatement of Existing Note Purchase Agreement. As of the Restatement Date, this Agreement shall amend and restate the Existing Note Purchase Agreement, but shall not constitute a novation thereof or in any way impair or otherwise affect the rights or obligations of the parties thereunder (including with respect to Existing Notes and representations and warranties made thereunder) except as such rights or obligations are amended or modified hereby. The Existing Note Purchase Agreement as amended and restated hereby shall be deemed to be a continuing agreement among the parties, and all documents, instruments and agreements delivered pursuant to or in connection with the Existing Note Purchase Agreement not amended and restated in connection with the entry of the parties into this Agreement shall remain in full force and effect, each in accordance with its terms, as of the date of delivery or such other date as contemplated by such document, instrument or agreement to the same extent as if the modifications to the Existing Note Purchase Agreement contained herein were set forth in an amendment to the Existing Note Purchase Agreement in a customary form, unless such document, instrument or agreement has otherwise been terminated or has expired in accordance with or pursuant to the terms of this Agreement, the Existing Note Purchase Agreement or such document, instrument or agreement or as otherwise agreed by the required parties hereto or thereto.

(b)       Ratification of Other Transaction Documents. Each party hereto hereby agrees that (a) notwithstanding the effectiveness of the amendment and restatement of the Existing Note Purchase Agreement, the Transaction Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects and (b) the Transaction Documents and all of the Collateral described therein do, and shall continue to, secure the payment of all of the obligations set forth therein and herein.

Section 19. Miscellaneous.

(a)       Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and permitted assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not, provided that no Obligor may assign its rights or obligations hereunder or any interest herein without the prior written consent of the Purchaser. Any assignment by any Obligor without such consent required above shall be null and void.

(b)       Public Announcements. No Obligor shall issue any press release or make any other public announcement or disclosure with respect to this Agreement and the transactions contemplated herein without the prior written consent of the Purchaser, except for any press release, public announcement or other public disclosure that is required by applicable law or governmental regulations or by order of a court of competent jurisdiction. Prior to making any such required disclosure, the applicable Obligor shall have given written notice to the Purchaser describing in reasonable detail the proposed content of such disclosure and shall permit the Purchaser to review and comment upon the form and substance of such disclosure.

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(c)       Expenses. Whether or not the transaction hereby contemplated shall be consummated, the Obligors shall jointly and severally pay all of the fees, expenses and disbursements incurred by any Obligor and, to the extent provided in the Expense Letter, the Purchaser in connection with the negotiation, execution and delivery of the Transaction Documents.

(d)       Severability. Each provision of this Agreement shall be considered severable and if for any reason any provision that is not essential to the effectuation of the basic purposes of the Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable and contrary to existing or future applicable law, such invalidity shall not impair the operation of or affect those provisions of this Agreement that are valid. In that case, this Agreement shall be construed so as to limit any term or provision so as to make it enforceable or valid within the requirements of any applicable law, and in the event such term or provision cannot be so limited, this Agreement shall be construed to omit such invalid or unenforceable provisions.

(e)       Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

(f)       Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

(g)       Entire Agreement. This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, the Original Closing Date Transaction, the Restatement Date Transaction and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Exhibits and Schedules, the statements in the body of this Agreement will control.

(h)       Notices. All notices, requests, consents and other communications and transmissions hereunder, or under or in respect of any Note, shall be in writing and shall be deemed to have been duly given to any party when delivered personally (by courier service or otherwise), upon receipt or three (3) days after being mailed by registered first-class mail, postage prepaid and return receipt requested in each case to the applicable address set forth below:

(i)       if to the Purchaser, at PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio, c/o Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, California 92660, Attn: General Counsel with a copy to Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022-4834, Attn: Loren N. Finegold;

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(ii)       if to XFIT, at Attn: David E. Vautrin, 25731 Commercentre Drive, Lake Forest CA 92630, with a copy to Joseph Galda, Esq., 1055 Westlakes Drive, Suite 300, Berwyn, Pennsylvania 19312;

(iii)       if to the Obligors, at Attn: David E. Vautrin, 25731 Commercentre Drive, Lake Forest CA 92630, with a copy to Joseph Galda, Esq., 1055 Westlakes Drive, Suite 300, Berwyn, Pennsylvania 19312; and

(iv)       or, in each case, at such other address in the United States of America as shall have been furnished in writing pursuant to this Section 14.

(i)       No Third-party Beneficiaries. Except as provided in Section 12 herein, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

(j)       Governing Law. THIS AGREEMENT AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT, TORT OR OTHERWISE) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE IN ANY WAY HERETO OR THERETO OR THE NEGOTIATION, EXECUTION OR PERFORMANCE THEREOF OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

(k)       Waiver of Jury Trial. EACH OF THE OBLIGORS AND THE PURCHASER HEREBY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF, OR RELATING TO, THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[SIGNATURE PAGE FOLLOWS]

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If the foregoing correctly sets forth our understanding, please sign the form of acceptance on the enclosed counterpart of this letter and return the same to the undersigned, whereupon this letter shall become a binding contract between the Purchaser and the Obligors.

Very truly yours,
THROWDOWN INDUSTRIES HOLDINGS, LLC
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES, LLC
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
XFIT BRANDS, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO

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The foregoing Note Purchase Agreement
is hereby accepted as of the date first
set forth above.

PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES:
PIMCO HIGH YIELD PORTFOLIO
By: Pacific Investment Management Company LLC,

as its Investment Advisor, acting through Investors

Fiduciary Trust Company, in the Nominee Name of IFTCO

By:	/s/ T. Christian Stracke
Name:	T. Christian Stracke
Title:	Managing Director

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EX-10.2

Execution Version 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN CONTRAVENTION OF SECTION 5 OF SUCH ACT.

XFIT BRANDS, INC.

THROWDOWN INDUSTRIES HOLDINGS, LLC

THROWDOWN INDUSTRIES, LLC

THROWDOWN INDUSTRIES, INC.

$3,500,000

9.00% Senior Secured Fixed Rate Note due July 12, 2020

Registered	New York, New York
No. R-5	Dated: December 16, 2016

Each of Throwdown Industries Holdings, LLC, a Delaware limited liability company (“Holdings”), Throwdown Industries, LLC, a Delaware limited liability company (“TD LLC”), XFit Brands, Inc., a Nevada Corporation (“XFit Brands”), and Throwdown Industries, Inc., a California corporation (“TDI” and, together with Holdings, XFit Brands and TD LLC, each, an “Obligor” and, collectively, the “Obligors”), for value received, hereby jointly and severally promises to pay to PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio, a separate investment portfolio of PIMCO Funds, a Massachusetts business trust (the “Purchaser”), the principal sum of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000) on July 12, 2020 or such earlier date on which this Note is accelerated pursuant to the Note Purchase Agreement or subject to optional redemption by Holdings, on behalf of the Obligors, as described herein (the “Maturity Date”) (or, if such day is not a Business Day, on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no interest will accrue as a result of such delay), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, in immediately available funds, and to pay interest on the unpaid balance of said principal sum (as increased on account of any deferred and capitalized interest) at the rate of 9.00% per annum (computed on the basis of a 360-day year of twelve 30-day months), in like coin or currency and funds, from and including the date hereof, on the 12^th day of each calendar month, commencing on January 12, 2016, and on the maturity date and each other date on which principal is due and payable (each, a “Payment Date”) until payment of such principal sum has been made or duly provided for. Amounts payable on each Payment Date shall be payable to the holder in whose name this Note is registered on the applicable Payment Date. Capitalized terms used but not defined herein shall have the meaning set forth in the Note Purchase Agreement.

Such interest will accrue from, and including, December 16, 2016 or the most recent Payment Date (whether or not such Payment Date was a Business Day) for which interest was paid to, but excluding, the relevant Payment Date. If any Payment Date falls on a day that is not a Business Day, the payment due on such day will be postponed to the next succeeding Business Day, with the same force and effect as if made on the date such payment was due, and no interest will accrue as a result of such delay.

The Applicable Percentage of the entire outstanding principal balance of this Note shall be due and payable on the Maturity Date. The “Applicable Percentage” means (i) in the case of a redemption or principal payment, repayment or prepayment, whether optional or mandatory, following an Event of Default, by application of proceeds in connection with the exercise of remedies or otherwise, or upon any acceleration or deemed acceleration of the principal of the Notes, in each case, on or prior to June 12, 2019, 107% or (ii) in the case of a redemption or principal payment, repayment or prepayment, whether optional or mandatory, following an Event of Default, by application of proceeds in connection with the exercise of remedies or otherwise, or upon any acceleration or deemed acceleration of the principal of the Notes, in each case, after June 12, 2019, 100%.

“Business Day” is any day which is not a Saturday or Sunday or a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close.

This Note is one of a duly authorized issue of $3,500,000 aggregate principal amount of 9.00% Senior Secured Fixed Rate Notes due July 12, 2020 (the “Notes”) of the Obligors. This Note is issued pursuant to and subject to the Amended and Restated Note Purchase Agreement, dated as of December 16, 2016 (as amended, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”) between the Obligors and the Purchaser, and is secured by certain collateral pledged by the Obligors pursuant to the Amended and Restated Pledge and Security Agreement, dated as of December 16, 2016, between the Obligors and the Purchaser, as amended, supplemented or otherwise modified from time to time.

1. Payment. Payment of principal and interest as provided herein shall be made for the benefit of the registered owner hereof on the applicable Payment Date or on the Maturity Date, as the case may be, in each case by wire transfer to the account designated in writing to XFit Brands by such registered owner.

2. Redemption. XFit Brands, on behalf of the Obligors, may redeem the Notes, in whole or in part, at any time, at its option, at a redemption price equal to the Applicable Percentage of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest on the principal amount of Notes to be redeemed to, but excluding, the redemption date. If less than all of the Notes are to be redeemed, the Notes shall be redeemed on a pro rata basis.

Notice of any such redemption must be mailed by first-class mail or electronically delivered to the registered holder of the Notes to be redeemed no less than 30 days prior to the redemption date and shall specify the designated redemption date and the aggregate principal amount to be redeemed thereon. Notice of redemption having been given, the Notes to be so redeemed shall, on the redemption date, become due and payable at the redemption price provided for herein, and from and after such date (unless the Obligors shall default in the payment of the redemption price and accrued interest) such Notes shall cease to bear interest.

In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof will be issued in the name of the holder or holders hereof.

3. Registration, Transfer, Exchange and Denominations of Notes. So long as any of the Notes remain outstanding and unpaid, the Obligors will cause to be maintained in the United States, an office or agency where the Notes may be presented for payment, transfer or exchange as provided in this Note. Such office or agency is presently located at the office of XFit Brands located at 25731 Commercentre Drive, Lake Forest, CA 92630, and the Obligors agree to give prompt written notice of any change in such office or agency to each holder of Notes then outstanding. The Obligors shall keep, or engage a third party registrar to keep, a register or registers in which, subject to such reasonable regulations as it may prescribe, the Obligors or such registrar, as the case may be, shall register the names and addresses of the holders of Notes in registered form and shall register the transfer of Notes in registered form as provided in this Note.

Whenever any Note or Notes shall be presented at such office or agency for exchange or registration of transfer, the Obligors shall execute and, in exchange therefor and upon cancellation thereof, shall deliver a new Note or Notes registered in such name or names and in such denominations as may be requested and in the same aggregate principal amount and dated as of the interest payment date to which interest has been paid on, or, if no interest has yet been so paid, then dated the date of, the Note or Notes so surrendered.

No transfer of any Note shall be registered unless evidenced by a written instrument of transfer duly executed by the registered owner in person or by his duly authorized attorney, and received by XFit Brands not less than three (3) Business Days prior to the requested transfer date or such shorter period as XFit Brands shall agree upon.

4. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York (without regard to its conflicts of law provisions other than sections 5-1401 and 5-1402 of the General Obligations Law).

5. WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS AND THE HOLDER HEREBY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF, OR RELATING TO, THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

IN WITNESS WHEREOF, each of the Obligors has caused this Note to be duly executed in its company name.

XFIT BRANDS, INC
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES HOLDINGS, LLC
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES, LLC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO

Dated: December 16, 2016

[Signature Page to Note R-5]

EX-10.3

WARRANT

THIS WARRANT HAS BEEN ISSUED IN REPLACEMENT OF THAT CERTAIN WARRANT CERTIFICATE NO. 2 ISSUED ON NOVEMBER 26, 2014 WHICH IN TURN HAD BEEN ISSUED IN REPLACEMENT OF THAT CERTAIN WARRANT ORIGINALLY ISSUED ON JUNE 12, 2014 (THE “ORIGINAL WARRANT”) TO EVIDENCE THE ASSIGNMENT OF THE ORIGINAL WARRANT FROM THROWDOWN INDUSTRIES HOLDINGS, LLC (THE “ASSIGNOR”) TO XFIT BRANDS, INC. (THE “COMPANY”) AND ASSUMPTION OF THE ORIGINAL WARRANT BY THE COMPANY PURSUANT TO THE TERMS OF THAT CERTAIN ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT, DATED AS OF NOVEMBER 26, 2014, BY AND AMONG ASSIGNOR, THE COMPANY AND PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO, A SEPARATE INVESTMENT PORTFOLIO OF PIMCO FUNDS.

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

Warrant Certificate No.: 3

Original Issue Date: December 16, 2016

FOR VALUE RECEIVED, XFIT BRANDS, INC., a Nevada corporation (the “Company”), hereby certifies that PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio, a separate investment portfolio of PIMCO Funds, a Massachusetts business trust, or its registered assigns (the “Holder”) is entitled to purchase from the Company duly authorized and validly issued Capital Stock equal to the Applicable Percentage of the Capital Stock Deemed Outstanding, in each case, on the date of any exercise of this Warrant, at a purchase price equal to the applicable Exercise Price, all subject to the terms, conditions and adjustments set forth below in this Warrant.

1. Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:

“Applicable Percentage” means, as of any date of determination, ten percent (10%) less the aggregate of the Partial Exercise Percentages with respect to any shares of Capital Stock issued from time to time prior to such date of determination as a result of any partial exercise of this Warrant in accordance with Section 3.

“Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in the city of New York, New York are authorized or obligated by law or executive order to close.

“Capital Stock” means (i) the common stock, par value $0.0001 per share, of the Company, and (ii) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the Company, or control or otherwise participate in the management or governance of the Company.

“Capital Stock Deemed Outstanding” means, at any given time, the sum (without duplication) of (i) all Capital Stock actually outstanding at such time, plus (ii) all Capital Stock reserved for issuance at such time under stock option or other equity incentive plans approved by the board of directors of the Company, but only to the extent such Capital Stock is actually subject to outstanding Options at such time, whether or not any outstanding Options are actually exercisable at such time, plus (iii) all Capital Stock issuable upon exercise of any other Options (other than Options described in clause (ii) above) actually outstanding at such time, plus (iv) all Capital Stock issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding any Convertible Securities issuable upon exercise of Options actually outstanding at such time), other than Convertible Securities that constitute Capital Stock actually outstanding at such time, in each case, regardless of whether the Options or Convertible Securities are actually exercisable at such time.

“Company” has the meaning set forth in the preamble.

“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Capital Stock, but excluding Options.

“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., New York time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Notice, the Warrant and the applicable Exercise Price.

“Exercise Notice” has the meaning set forth in Section 3(a)(i).

“Exercise Period” has the meaning set forth in Section 2.

“Exercise Price” means the product of (i) the Applicable Percentage (in the case of an exercise of this Warrant in whole) or the Partial Exercise Percentage (in the case of an exercise of this Warrant in part) and (ii) $3,500,000.

“Fair Market Value” means, as of any particular date: (i) the volume weighted average of the closing sales prices of the Capital Stock for such day on all domestic securities exchanges on which the Capital Stock may at the time be listed; (ii) if there have been no sales of the Capital Stock on any such exchange on any such day, the average of the highest bid and lowest asked prices for the Capital Stock on all such exchanges at the end of such day; (iii) if on any such day the Capital Stock is not listed on a domestic securities exchange, the closing sales price of the Capital Stock as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association for such day; or (iv) if there have been no sales of the Capital Stock on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Capital Stock quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Capital Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Capital Stock is not listed on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association, the “Fair Market Value” of the Capital Stock shall be the fair market value per share as determined jointly by the board of directors of the Company and the Holder.

“Holder” has the meaning set forth in the preamble.

“Options” means any warrants or other rights or options to subscribe for or purchase Capital Stock or Convertible Securities.

“Original Issue Date” means December 16, 2016.

“Partial Exercise Percentage” means, with respect to any partial exercise of this Warrant in accordance with Section 3, the percentage of the Capital Stock Deemed Outstanding on the date of such partial exercise specified by the Holder in the related Exercise Notice; provided, that such percentage shall in no event exceed the Applicable Percentage as of such date.

“Nasdaq” means The NASDAQ Stock Market LLC.

“OTC Bulletin Board” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof.

“Pink OTC Markets” means the OTC Markets Group Inc. electronic interdealer quotation system, including OTCQX, OTCQB and OTC Pink.

“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

“Warrant Shares” means the Capital Stock or other equity interest in the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

2. Term of Warrant. Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., New York time, on June 12, 2024 or, if such day is not a Business Day, on the next preceding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein). The Company shall give the Holder written notice of the expiration of the Exercise Period not less than thirty (30) days but not more than sixty (60) days prior to the end of the Exercise Period.

3. Exercise of Warrant.

(a) Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

(i) surrender of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction), together with an Exercise Notice in the form attached hereto as Exhibit A (each, an “Exercise Notice”), duly completed (including specifying whether such exercise is with respect to the Applicable Percentage or a stated Partial Exercise Percentage) and executed; and

(ii) payment to the Company of the applicable Exercise Price in accordance with Section 3(b).

(b) Payment of the Exercise Price. Payment of the applicable Exercise Price shall be made, at the option of the Holder as expressed in the Exercise Notice, by the following methods:

(i) by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Exercise Price;

(ii) by instructing the Company to withhold a portion of the Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market Value as of the Exercise Date equal to such Exercise Price;

(iii) by surrendering to the Company (x) Warrant Shares previously acquired by the Holder with an aggregate Fair Market Value as of the Exercise Date equal to such Exercise Price and/or (y) other securities of the Company having a value as of the Exercise Date equal to such Exercise Price (which value in the case of debt securities shall be the principal amount thereof plus accrued and unpaid interest and in the case of shares of Capital Stock shall be the Fair Market Value thereof); or

(iv) any combination of the foregoing.

(c) Delivery of Capital Stock Certificates. Upon receipt by the Company of an Exercise Notice, surrender of this Warrant and payment of the applicable Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within two (2) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise. The certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Notice and shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder or holders of record of such Warrant Shares for all purposes, as of the Exercise Date.

(d) Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.

(e) Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this warrant, the Company hereby represents, covenants and agrees:

(i) This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

(ii) All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are validly issued and issued without violation of any preemptive or similar rights of any member of the Company and free and clear of all taxes, liens and charges.

(iii) The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which Capital Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

(iv) The Company shall use its best efforts to cause the Warrant Shares, immediately upon such exercise, to be listed on any domestic securities exchange upon which shares of Capital Stock or other securities constituting Warrant Shares are listed at the time of such exercise.

(v) The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of the Warrant Shares by the Company upon exercise of this Warrant.

(f) Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

(g) Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available, solely for the purpose of issuance upon the exercise of this Warrant, the maximum portion of Warrant Shares issuable upon the exercise of this Warrant. The Company shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue Capital Stock upon the exercise of this Warrant.

4. Effect of Certain Events on Warrant Shares.

(a) Adjustment to Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the equity of the Company, (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction, in each case which entitles the holders of Capital Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Capital Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of this Warrant shall thereafter be applicable, as nearly as possible, to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant. The provisions of this Section 4(a) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transaction. The Company shall not affect any such reorganization, reclassification, consolidation, merger, sale or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant and reasonably satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(a), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(a) with respect to this Warrant.

(b) Dividends and Distributions. Subject to the provisions of Section 4(a), if the Company shall, at any time or from time to time after the Original Issue Date, make or declare, or fix a record date for the determination of holders of Capital Stock entitled to receive, a dividend or any other distribution payable in securities of the Company (other than a dividend or distribution of shares of Capital Stock, Options or Convertible Securities in respect of outstanding shares of Capital Stock), cash or other property, then, and in each such event, provision shall be made so that the Holder shall receive upon exercise of the Warrant, in addition to the number of Warrant Shares receivable thereupon, the kind and amount of securities of the Company, cash or other property which the Holder would have been entitled to receive had the Warrant been exercised in full into Warrant Shares on the date of such event and had the Holder thereafter, during the period from the date of such event to and including the Exercise Date, retained such securities, cash or other property receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under this Section 4(b) with respect to the rights of the Holder; provided, that no such provision shall be made if the Holder receives, simultaneously with the distribution to the holders of Capital Stock, a dividend or other distribution of such securities, cash or other property in an amount equal to the amount of such securities, cash or other property as the Holder would have received if the Warrant had been exercised in full into Warrant Shares on the date of such event.

(c) Certificate as to Adjustment.

(i) As promptly as reasonably practicable following any adjustment of the kind of Warrant Shares pursuant to the provisions of Section 4(a), but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

(ii) As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the amount of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(d) Notices. In the event:

(i) that the Company shall take a record of the holders of its Capital Stock (or other securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any Capital Stock of any type or any other securities, or to receive any other security; or

(ii) of any capital reorganization of the Company, any reclassification of the Capital Stock of the Company, any consolidation or merger of the Company with or into another Person, or sale of all or substantially all of the Company’s assets to another Person; or

(iii) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

then, and in each such case, the Company shall send or cause to be sent to the Holder at least 30 days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Capital Stock (or such other securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their Capital Stock (or such other securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.

5. Purchase Rights. In addition to any adjustments pursuant to Section 4(a) above, if at any time the Company grants, issues or sells any Capital Stock, Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Capital Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Capital Stock are to be determined for the grant, issue or sale of such Purchase Rights.

6. Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B. Upon such compliance, surrender and delivery, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

7. Holder Not Deemed a Member; Limitations on Liability. Except as otherwise specifically provided herein (including Section 4(b)), prior to the issuance to the Holder of the Membership Interest to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Capital Stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a member of the Company or any right to vote, give or withhold consent to any company action (whether any reorganization, issue of Capital Stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive distributions or subscription rights or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a member of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices and other information given to the holders of Capital Stock of the Company generally, contemporaneously with the giving thereof to the holders.

8. Replacement on Loss; Division and Combination.

(a) Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for equivalent Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

(b) Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

9. No Impairment. The Company shall not, by amendment of its Certificate of Formation or Limited Liability Company Agreement, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

10. Compliance with the Securities Act.

(a) Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.”

(b) Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i) The Holder is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

(ii) The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144A under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii) The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

(c) Registration Rights.

(i) If the Company determines to register any of its securities, either for its own account or the account of a security holder or holders, other than (A) a registration on Form S-8 (or any successor form), (B) a registration on Form S-4 (or any successor form), or (C) a registration with respect to a distribution of shares of the Company’s common stock by TD Legacy, LLC, a Florida limited liability company to its members, the Company will include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, the Warrant Shares underlying this Warrant, subject to any reductions required due to the SEC’s interpretation of Rule 415 of the Securities Act.

(ii) If, in connection with the underwritten public offering by the Company, the managing underwriter(s) advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration exceeds the number that can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company will include in such registration (i) first, the securities proposed to be sold by the Company in such public offering; (ii) second, the Warrant Shares; and (iii) third, the securities that each other selling stockholder has requested that the Company include in such registration. The Holder agrees, if requested by the managing underwriter(s) for any such offering, to execute a lock up agreement in connection with any such registration for a period of the date of filing of such registration statement and ending 90 days after effectiveness of said registration statement.

(iii) The Holder agrees, if requested by the Company, to execute a mutually acceptable registration rights agreement.

(iv) All expenses incurred in connection with registrations, filings, or qualifications pursuant to this Section 10(c), including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one counsel for the Holder shall be borne and paid by the Company.

11. Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

12. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).

If to the Company:	XFit Brands, Inc. 25731 Commercentre Drive Lake Forest, CA 92630 E-mail: Dave.Vautrin@xfitbrands.com Attention: David E. Vautrin
If to the Holder:	PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio c/o Pacific Investment Management Co. 840 Newport Center Dr. Newport Beach, CA 92660 E-mail: Benson@pimco.com Attention: Sandy Benson

13. Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

14. Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

15. Entire Agreement. This Warrant constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

16. Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

17. No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

18. Headings. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

19. Amendment and Modification; Waiver. Except as otherwise expressly provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

20. Severability. If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

21. Governing Law. THIS WARRANT AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT, TORT OR OTHERWISE) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE IN ANY WAY HERETO OR THERETO OR THE NEGOTIATION, EXECUTION OR PERFORMANCE THEREOF OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

22. Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York, in each case located in the city of New York and Borough of Manhattan, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

23. Waiver of Jury Trial. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF, OR RELATING TO, THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

24. Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

25. No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.

XFIT BRANDS, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO

Accepted and agreed,
PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO By: Pacific Investment Management Company LLC, as its Investment Advisor, acting through Investors Fiduciary Trust Company, in the Nominee Name of IFTCO
By:	/s/ T. Christian Stracke
Name:	T. Christian Stracke
Title:	Managing Director

EXHIBIT A

WARRANT EXERCISE NOTICE

This Warrant Exercise Notice (this “Notice”), dated [_____ __], 20[__], relates to Warrant Number [__] dated [_], 20[__] (the “Warrant”) issued by XFit Brands, Inc., a Nevada corporation (the “Company”), to PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio, a separate investment portfolio of PIMCO Funds, a Massachusetts business trust (the “Holder”), pursuant to which the Holder is entitled to subscribe for and purchase the Warrant Shares described therein. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. Exercise of the Warrant. On the date hereof, the Holder hereby exercises the Warrant for [the Applicable Percentage] [a Partial Exercise Percentage of [__]%] of the Capital Stock (the “Exercise”). In connection with the Exercise, Holder is delivering an executed copy of the Warrant herewith.

2. Delivery of Capital Stock. In accordance with the Warrant, the Holder hereby requests the Company to deliver the Capital Stock referred to in paragraph 1 above in the denominations and registered to the Persons specified below:

Denomination Register to

3. Payment of Exercise Price. The applicable Exercise Price is $[_____]. In accordance with Section 3(b) of the Warrant, the Holder hereby designates the method of payment of such Exercise Price as follows:

(i) With respect to [__]% of such Exercise Price, the Holder shall, no later than one (1) Business Day after the date of this Notice, deliver to the Company a certified or official bank check payable to the order of the Company or initiate a wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such portion of such Exercise Price.

(ii) With respect to [__]% of such Exercise Price, the Holder hereby instructs the Company to withhold a portion of the Warrant Shares issuable upon this Exercise with an aggregate Fair Market Value as of the date hereof equal to such portion of such Exercise Price.

(iii) With respect to [__]% of such Exercise Price, the Holder is surrendering to the Company herewith (x) Warrant Shares previously acquired by the Holder with an aggregate Fair Market Value as of the date hereof equal to such portion of such Exercise Price and/or (y) other securities of the Company having a value as of the date hereof equal to such portion of such Exercise Price (which value in the case of debt securities is the principal amount thereof plus accrued and unpaid interest and in the case of shares of Capital Stock is the Fair Market Value thereof).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Very Truly Yours,

PIMCO FUNDS: PRIVATE

ACCOUNT PORTFOLIO SERIES:

PIMCO HIGH YIELD PORTFOLIO

By: Pacific Investment Management Company LLC, as its Investment Advisor, acting through Investors Fiduciary Trust Company, in the Nominee Name of IFTCO

By:

Name:

Title:

EXHIBIT B

FORM OF ASSIGNMENT

EX-10.4

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

dated as of December 16, 2016

between

THROWDOWN INDUSTRIES HOLDINGS, LLC

THROWDOWN INDUSTRIES, LLC

THROWDOWN INDUSTRIES, INC.

XFIT BRANDS, INC.

and

PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO, as Secured Party

TABLE OF CONTENTS

	PAGE
Section 1. DEFINITIONS	1
Section 2. GRANT OF SECURITY	9
Section 3. SECURITY FOR OBLIGATIONS.	10
Section 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.	11
Section 5. DIVIDENDS, DISTRIBUTIONS AND VOTING	25
Section 6. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES.	27
Section 7. SECURED PARTY APPOINTED ATTORNEY-IN-FACT, IRREVOCABLE POWER OF ATTORNEY	28
Section 8. REMEDIES.	29
Section 9. CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS	33
Section 10. STANDARD OF CARE; SECURED PARTY MAY PERFORM.	33
Section 11. INDEMNITY AND EXPENSES.	34
Section 12. MISCELLANEOUS.	35

SCHEDULE II –	LOCATION OF INVENTORY AND EQUIPMENT
SCHEDULE III –	INVESTMENT RELATED PROPERTY
SCHEDULE IV –	MATERIAL CONTRACTS
SCHEDULE V –	LETTERS OF CREDIT
SCHEDULE VI –	INTELLECTUAL PROPERTY
SCHEDULE VII –	COMMERCIAL TORT CLAIMS
ANNEX A –	PLEDGE SUPPLEMENT
ANNEX B –	FORM OF TRADEMARK SECURITY AGREEMENT
ANNEX C –	FORM OF PATENT SECURITY AGREEMENT
ANNEX D –	FORM OF COPYRIGHT SECURITY AGREEMENT

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This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated as of December 16, 2016 (this “Agreement”), between each of the undersigned (the “Grantors”) and PIMCO Funds: Private Account Portfolio Series: PIMCO High Yield Portfolio, a separate investment portfolio of PIMCO Funds, a Massachusetts business trust (the “Secured Party”).

RECITALS:

WHEREAS, reference is made to that certain Amended and Restated Note Purchase Agreement, dated as of the date hereof (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”), by and among each Grantor and the Secured Party.

WHEREAS, in consideration of the extensions of credit as set forth in the Note Purchase Agreement each Grantor has agreed to secure all obligations under the Note Purchase Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, each Grantor and the Secured Party agree as follows:

Section 1. DEFINITIONS

(a) General Definitions. In this Agreement, the following terms shall have the following meanings:

“Account Debtor” shall mean each Person who is obligated on a Receivable or any Supporting Obligation related thereto.

“Accounts” shall mean all “accounts” as defined in Article 9 of the UCC.

“Affiliate” shall mean, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 5% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

“Agreement” shall have the meaning set forth in the preamble.

“Authenticate” shall mean “authenticate” as defined in Article 9 of the UCC.

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Cash Proceeds” shall mean all proceeds of any Collateral consisting of cash, checks and other near-cash items.

“Chattel Paper” shall mean all “chattel paper” as defined in Article 9 of the UCC, including, without limitation, “electronic chattel paper” or “tangible chattel paper”, as each term is defined in the UCC.

“Closing Date” shall mean the date on which the Note Purchase Agreement is made.

“Collateral” shall have the meaning set forth in Section 2(a) hereof.

“Collateral Documents” shall mean this Agreement and all other instruments, documents and agreements delivered by any of the parties to the Transaction Documents pursuant to the Agreement or any other Transaction Document in order to grant, perfect and/or establish or maintain the priority of a security interest in favor of the Secured Party on any real, personal or mixed property of such party as security for the Secured Obligations.

“Collateral Records” shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

“Collateral Support” shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

“Commercial Tort Claims” shall mean all “commercial tort claims” as defined in the UCC, including, without limitation, all commercial tort claims listed and described with specification on Schedule VII hereto (as such Schedule may be amended or supplemented from time to time).

“Commodities Accounts” (i) shall mean all “commodity accounts” as defined in Article 9 of the UCC and (ii) shall include, without limitation, all of the accounts listed on Schedule III hereto under the heading “Commodities Accounts” (as such Schedule may be amended or supplemented from time to time).

“Copyright Licenses” shall mean any and all agreements granting any right in, to or under Copyrights (whether such Grantor is licensee or licensor thereunder) including, without limitation, each agreement referred to in Schedule VI(B) (as such Schedule may be amended or supplemented from time to time).

“Copyrights” shall mean all United States, state and foreign copyrights, including but not limited to copyrights in software and databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, now or hereafter in force throughout the world, all registrations and applications for any of the foregoing including, without limitation, the applications referred to in Schedule VI(A) (as such Schedule may be amended or supplemented from time to time), all rights corresponding thereto throughout the world, all extensions and renewals of any thereof, the right to sue or otherwise recover for past, present and future infringement of any of the foregoing, and all proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.

“Deposit Accounts” (i) shall mean all “deposit accounts” as defined in Article 9 of the UCC and (ii) shall include, without limitation, all of the accounts listed on Schedule III hereto under the heading “Deposit Accounts” (as such Schedule may be amended or supplemented from time to time).

“Dispose or Disposition” shall have the meaning set forth in the Note Purchase Agreement.

“Documents” shall mean all “documents” as defined in Article 9 of the UCC.

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“Documents Evidencing Goods” shall mean all Documents evidencing, representing or issued in connection with Goods.

“Encumbrance” shall mean (i) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other Title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (ii) in the case of Pledged Equity Interests, any purchase option, call or similar right of a third party with respect to such Pledged Equity Interests.

“Equipment” shall mean: (i) all “equipment” as defined in the UCC, (ii) all machinery, manufacturing equipment, data processing equipment, computers, office equipment, furnishings, furniture, appliances, and tools (in each case, regardless of whether characterized as equipment under the UCC), (iii) all Fixtures and (iv) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefor, wherever located, now or hereafter existing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

“Event of Default” shall have the meaning set forth in the Note Purchase Agreement.

“Fixtures” shall mean all “fixtures” as defined in Article 9 of the UCC.

“General Intangibles” (i) shall mean all “general intangibles” as defined in Article 9 of the UCC and (ii) shall include, without limitation, all interest rate or currency protection or hedging arrangements, all contracts, all tax refunds and all licenses, permits, concessions and authorizations, (in each case, regardless of whether characterized as general intangibles under the UCC).

“Goods” (i) shall mean all “goods” as defined in Article 9 of the UCC and (ii) shall include, without limitation, all Inventory, Equipment, Documents Evidencing Goods and Software Embedded In Goods.

“Health-Care-Insurance Receivable” shall have the meaning specified in the UCC.

“Indemnitee” shall mean the Secured Party, and its Affiliates’ officers, partners, directors, trustees, employees and agents.

“Instruments” shall mean all “instruments” as defined in Article 9 of the UCC.

“Insurance” shall mean: (i) all insurance policies covering any or all of the Collateral (regardless of whether the Secured Party is the loss payee thereof) and (ii) any key man life insurance policies.

“Intellectual Property” shall mean, all intellectual property right, whether arising under United States, multinational or foreign laws or otherwise, including, but not limited to, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses, and the right to sue or otherwise recover for past, present and future infringement, misappropriation, dilution or other violation of any of the foregoing, and all proceeds of the foregoing, including, without limitation, licenses, fees, royalties, income, payments, claims, damages and proceeds of suit.

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“Intellectual Property Licenses” shall mean, collectively, the Copyright Licenses, Patent Licenses, Trademark Licenses, and Trade Secret Licenses.

“Inventory” shall mean: (i) all “inventory” as defined in the UCC and (ii) all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Grantor’s business; all goods in which any Grantor has an interest in mass or a joint or other interest or right of any kind; and all goods which are returned to or repossessed by any Grantor, and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

“Investment Accounts” shall mean the Collateral Account, Securities Accounts, Commodities Accounts and Deposit Accounts.

“Investment Related Property” shall mean: (a) all “investment property” (as such term is defined in Article 9 of the UCC) and (b) all of the following (regardless of whether classified as investment property under the UCC): all (i) Pledged Equity Interests, (ii) Pledged Debt, (iii) the Investment Accounts and (iv) Certificates of Deposit.

“Knowledge of the Obligor or the Guarantors’ Knowledge” shall have the meaning set forth in the Note Purchase Agreement.

“Letter of Credit Right” shall mean “letter-of-credit right” as defined in the UCC.

“Material Adverse Effect” shall have the meaning set forth in the Note Purchase Agreement.

“Material Contract” shall mean any contract or other arrangement to which any Grantor is a party for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Money” shall mean “money” as defined in the UCC.

“Non-Assignable Contract” shall mean any agreement, contract or license to which any Grantor is a party that by its terms purport to restrict or prevent the assignment or granting of a security interest therein (either by its terms or by any federal or state statutory prohibition or otherwise irrespective of whether such prohibition or restriction is enforceable under Section 9-406 through 9-409 of the UCC).

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

“Patent Licenses” shall mean all agreements granting any right in, to, or under Patents (whether such Grantor is licensee or licensor thereunder) including without limitation, each agreement referred to in Schedule VI(D) hereto (as such Schedule may be amended or supplemented from time to time).

“Patents” shall mean all United States, state and foreign patents and applications for letters patent, including, but not limited to, each patent and patent application referred to in Schedule VI(C) hereto (as such Schedule may be amended or supplemented from time to time), all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations of any of the foregoing, all rights corresponding thereto throughout the world, the right to sue for past, present and future infringements of any of the foregoing and all proceeds of the foregoing including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

4

“Payment Intangible” shall have the meaning specified in Article 9 of the UCC.

“Permitted Encumbrances” shall mean:

(i) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures and for which there are adequate accruals or reserves on the Financial Statements;

(ii) mechanics, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the business of the Obligors; or

(iii) easements, rights of way, zoning ordinances and other similar encumbrances affecting Real Property which are not, individually or in the aggregate, material to the business of the Obligors.

“Permitted Sale” shall mean:

(i) the sale or Disposition of machinery and equipment no longer used or useful in the business of any Grantor;

(ii) the Disposition of obsolete or worn-out Property in the ordinary course of business;

(iii) the sale of inventory in the ordinary course of business; and

(iv) Dispositions of other property in any fiscal year of any Grantor (together with all other property Disposed of that year) so long as (A) the purchase price paid to such Grantor or a Subsidiary of that Grantor for such property shall have a fair market value not exceeding $50,000 and (B) the purchase price paid to such Grantor or a Subsidiary of that Grantor for such property shall be paid solely in cash.

“Person” shall mean and include natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governmental authorities.

“Pledged Debt” shall mean all indebtedness for borrowed money owed to such Grantor, whether or not evidenced by any instrument or promissory note, including, without limitation, all indebtedness described on Schedule III hereto under the heading “Pledged Debt” (as such Schedule may be amended or supplemented from time to time), all monetary obligations owing to any Grantor from any other Grantor the instruments evidencing any of the foregoing, and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing.

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“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests and any other participation or other interests in any equity or profits of any business entity.

“Pledged LLC Interests” shall mean all interests in any limited liability company including, without limitation, all limited liability company interests listed on Schedule III hereto under the heading “Pledged LLC Interests” (as such Schedule may be amended or supplemented from time to time) and the certificates, if any, representing such limited liability company interests and any interest of such Grantor on the books and records of such limited liability company or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests and any other warrant, right or option to acquire any of the foregoing.

“Pledged Partnership Interests” shall mean all interests in any general partnership, limited partnership, limited liability partnership or other partnership including, without limitation, all partnership interests listed on Schedule III hereto under the heading “Pledged Partnership Interests” (as such Schedule may be amended or supplemented from time to time) and the certificates, if any, representing such partnership interests and any interest of such Grantor on the books and records of such partnership or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and any other warrant, right or option to acquire any of the foregoing.

“Pledged Stock” shall mean all shares of capital stock owned by such Grantor, including, without limitation, all shares of capital stock described on Schedule III hereto under the heading “Pledged Stock” (as such Schedule may be amended or supplemented from time to time), and the certificates, if any, representing such shares and any interest of such Grantor in the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to such shares, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of the foregoing.

“Pledged Trust Interests” shall mean all interests in a Delaware business trust or other trust including, without limitation, all trust interests listed on Schedule III hereto under the heading “Pledged Trust Interests” (as such Schedule may be amended or supplemented from time to time) and the certificates, if any, representing such trust interests and any interest of such Grantor on the books and records of such trust or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such trust interests and any other warrant, right or option to acquire any of the foregoing.

“Proceeds” shall mean: (i) all “proceeds” as defined in Article 9 of the UCC, (ii) payments or distributions made with respect to any Investment Related Property and (iii) whatever is receivable or received when Collateral or proceeds are sold, leased, licensed, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

“Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv) Instruments and (v) to the extent not otherwise covered above, all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of how classified under the UCC together with all of Grantors’ rights, if any, in any goods or other property giving rise to such right to payment and all Collateral Support and Supporting Obligations related thereto and all Receivables Records; provided that Receivables shall not include accounts receivables sold to Crown Financial, LLC in connection with the Crown Receivables Sale Agreement in accordance with Section 10(e) of the Note Purchase Agreement.

6

“Receivables Records” shall mean (i) all original copies of all documents, instruments or other writings or electronic records or other Records evidencing the Receivables, (ii) all books, correspondence, credit or other files, Records, ledger sheets or cards, invoices, and other papers relating to Receivables, including, without limitation, all tapes, cards, computer tapes, computer discs, computer runs, record keeping systems and other papers and documents relating to the Receivables, whether in the possession or under the control of Grantor or any computer bureau or agent from time to time acting for Grantor or otherwise, (iii) all evidences of the filing of financing statements and the registration of other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other creditors or agents thereof, and certificates, acknowledgments, or other writings, including, without limitation, lien search reports, from filing or other registration officers, (iv) all credit information, reports and memoranda relating thereto and (v) all other written or non-written forms of information related in any way to the foregoing or any Receivable.

“Record” shall have the meaning specified in the UCC.

“Representation Date” shall mean each of (i) the date hereof and (ii) each Subsequent Draw Date.

“Secured Obligations” shall mean all obligations of every nature of each Grantor from time to time owing to the Secured Party or any Secured Party or any Affiliates of the Secured Party.

“Secured Party” shall have the meaning set forth in the preamble.

“Securities” shall mean any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Securities Accounts” (i) shall mean all “securities accounts” as defined in Article 8 of the UCC and (ii) shall include, without limitation, all of the accounts listed on Schedule III hereto under the heading “Securities Accounts” (as such Schedule may be amended or supplemented from time to time).

“Software Embedded in Goods” means, with respect to any Goods, any computer program embedded in Goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the Goods in such a manner that it customarily is considered part of the Goods or (ii) by becoming the owner of the Goods a person acquires a right to use the program in connection with the Goods.

“State” shall mean a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

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“Subsequent Draw Date” has the meaning set forth in the Note Purchase Agreement.

“Supporting Obligation” shall mean all “supporting obligations” as defined in the UCC.

“Trade Secret Licenses” shall mean any and all agreements granting any right in or to Trade Secrets (whether such Grantor is licensee or licensor thereunder) including, without limitation, each agreement referred to in Schedule VI(G) hereto (as such Schedule may be amended or supplemented from time to time).

“Trade Secrets” shall mean all trade secrets and all other confidential or proprietary information and know-how, whether or not reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to the foregoing, the right to sue for past, present and future misappropriation of any of the foregoing, and all proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

“Trademark Licenses” shall mean any and all agreements granting any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder) including, without limitation, each agreement referred to in Schedule VI(F) hereto (as such Schedule may be amended or supplemented from time to time).

“Trademarks” shall mean all United States, state and foreign trademarks, service marks, certification marks, collective marks, trade names, corporate names, d/b/as, business names, fictitious business names, internet domain names, trade styles, logos, other source or business identifiers, designs and general intangibles of a like nature, rights of publicity and privacy pertaining to the right to use names likeness and biographical data as real, all registrations and applications for any of the foregoing including, but not limited to, the registrations and applications referred to in Schedule VI(E) hereto (as such Schedule may be amended or supplemented from time to time), the goodwill of the business connection with the use of and symbolized by the foregoing, the right to sue or otherwise recover for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

“Transaction Documents” shall mean the Note Purchase Agreement, this Agreement, the Warrant Agreement and the Expense Letter.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York.

(b) Definitions; Interpretation. All capitalized terms used herein (including the preamble and recitals hereto) and not otherwise defined herein shall have the meanings ascribed thereto in the Note Purchase Agreement or, if not defined therein, in the UCC. With respect to terms defined in more than one article of the UCC, unless otherwise specified such terms shall have the meaning specified in Article 9 of the UCC. References to “Sections,” “Exhibits” “Annexes” and “Schedules” shall be to Sections, Exhibits, Annexes and Schedules, as the case may be, of this Agreement (as such Sections, Exhibits, Annexes and Schedules may be amended or supplemented from time to time in accordance with the terms of this Agreement), unless otherwise specifically provided. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. If any conflict or inconsistency exists between this Agreement and the Note Purchase Agreement, the Note Purchase Agreement shall govern. All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC.

8

Section 2. GRANT OF SECURITY

(a) Grant of Security. Each Grantor hereby grants to the Secured Party a security interest and continuing lien on all of such Grantor’s right, Title and interest in, to and under all personal property of such Grantor including, but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located (all of which being hereinafter collectively referred to as the “Collateral”):

(1) Documents;

(2) General Intangibles;

(3) Goods (including, without limitation, Documents Representing Goods and Software Embedded in Goods);

(4) Insurance;

(5) Intellectual Property;

6) Investment Related Property (including, without limitation, Deposit Accounts);

(7) Letter of Credit Rights and letters of credit;

(8) Money;

(9) Receivables and Receivable Records;

(10) Commercial Tort Claims;

(11) to the extent not otherwise included above, Material Contracts, motor vehicles, choses in action and all other personal property of any kind and all Collateral Records, Collateral Support and Supporting Obligations relating to any of the foregoing; and

(12) to the extent not otherwise included above, all Proceeds, products, accessions, rents and profits of or in respect of any of the foregoing; provided that so long as the Crown Receivables Sale Agreement is in full force and effect, the Collateral shall not include any Accounts or Rebates (as defined in the Receivables Purchase Agreement); and

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(b) Certain Limited Exclusions. Notwithstanding anything herein to the contrary, in no event shall the security interest granted under Section 2(a) hereof attach to (a) any lease, license, contract, property rights or agreement to which each Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity), provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in (i) or (ii) including, without limitation, any proceeds of such lease, license, contract, property rights or agreement; or (b) in any of the outstanding capital stock of a “controlled foreign corporation” (as defined in the Internal Revenue Code of 1986, as amended) in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporation entitled to vote; provided that immediately upon the amendment of the Internal Revenue Code to allow the pledge of a greater percentage of the voting power of capital stock in a controlled foreign corporation without adverse tax consequences, the Collateral shall include, and the security interest granted by each Grantor shall attach to, such greater percentage of capital stock of each controlled foreign corporation.

Section 3. SECURITY FOR OBLIGATIONS.

(a) Security for Obligations. This Agreement secures, and the Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Secured Obligations.

(b) Continuing Liability under Collateral. Notwithstanding anything herein to the contrary, (i) each Grantor shall remain liable for all obligations under the Collateral and nothing contained herein is intended or shall be a delegation of duties to the Secured Party or any Secured Party and (ii) each Grantor shall remain liable under each of the agreements included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Secured Party nor any Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document related thereto nor shall the Secured Party nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, (iii) the exercise by the Secured Party of any of its rights hereunder shall not release each Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral.

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Section 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

(a) Generally.

(i) Representations and Warranties. Each Grantor hereby represents and warrants, on each Representation Date, that:

(1) it owns the Collateral purported to be owned by it or otherwise has the rights it purports to have in each item of Collateral and, as to all Collateral whether now existing or hereafter acquired, will continue to own or have such rights in each item of the Collateral, in each case free and clear of any and all Encumbrances, rights or claims of all other Persons other than encumbrances created by this Agreement and Permitted Encumbrances, including, without limitation, liens arising as a result of such Grantor becoming bound (as a result of merger or otherwise) as debtor under a security agreement entered into by another Person;

(2) Throwdown Industries Holdings, LLC and Throwdown Industries, LLC have each been duly organized as a limited liability company solely under the laws of Delaware and remain duly existing as such. Neither Throwdown Industries Holdings, LLC nor Throwdown Industries, LLC has filed any certificates of domestication, transfer or continuance in any other jurisdiction;

(3) Throwdown Industries, Inc., has been duly organized as a corporation solely under the laws of California and remains duly existing as such. Throwdown Industries, Inc. has not filed any certificates of domestication, transfer or continuance in any other jurisdiction;

(4) XFit Brands, Inc., has been duly organized as a corporation solely under the laws of Nevada and remains duly existing as such. XFit Brands, Inc. has not filed any certificates of domestication, transfer or continuance in any other jurisdiction;

(5) the execution and delivery of this Agreement by such Grantor and the performance by it of its obligations under this Agreement are within its corporate or other powers and have been duly authorized by all necessary corporate or other action;

(6) assuming the filing of UCC financing statements naming each Grantor as debtor and the Secured Party as secured party and describing the Collateral in the filing offices set forth opposite such Grantor’s name on Schedule I(E) hereof (as such Schedule may be amended or supplemented from time to time) and other filings delivered by each Grantor, the security interests granted to the Secured Party hereunder constitute valid and perfected first priority Encumbrance;

(7) other than the financing statements filed in favor of the Secured Party, no effective UCC financing statement, fixture filing or other instrument similar in effect under any applicable law covering all or any part of the Collateral is on file in any filing or recording office except for financing statements for which proper termination statements have been delivered to the Secured Party for filing;

(8) no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for either (i) the pledge or grant by any Grantor of the Encumbrances purported to be created in favor of the Secured Party hereunder or (ii) the exercise by the Secured Party of any rights or remedies in respect of any Collateral (whether specifically granted or created hereunder or created or provided for by applicable law), except (A) for the filings contemplated by clause (iii) above and (B) as may be required, in connection with the disposition of any Investment Related Property, by laws generally affecting the offering and sale of Securities and as may be required under federal laws pertaining to Intellectual Property;

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(9) all actions and consents, including all filings, notices, registrations and recordings necessary or desirable for the exercise by the Secured Party of the voting or other rights provided for in this Agreement or the exercise of remedies in respect of the Collateral have been made or obtained;

(10) it has indicated on Schedule I(A) hereto (as such Schedule may be amended or supplemented from time to time): (w) the type of organization of such Grantor, (x) the jurisdiction of organization of such Grantor, (y) its organizational identification number, if any, and (z) the jurisdiction where the chief executive office or its sole place of business is, and for the one-year period preceding the date hereof has been, located;

(11) the full legal name of such Grantor is as set forth on Schedule I(A) and it has not done in the last five (5) years, and does not do, business under any other name (including any trade-name or fictitious business name) except for those names set forth on Schedule I(B) (as such Schedule may be amended or supplemented from time to time);

(12) except as provided on Schedule I(C), it has not changed its name, jurisdiction of organization, chief executive office or sole place of business (or, if such Grantor is a natural person, principal residence or principal place of business) or its corporate structure in any way (e.g. by merger, consolidation, change in corporate form or otherwise) within the past five (5) years;

(13) such Grantor has not within the last five (5) years become bound (whether as a result of merger or otherwise) as debtor under a security agreement entered into by another Person, which has not heretofore been terminated;

(14) with respect to each agreement identified on Schedule I(D), it has indicated on Schedule I(A) and Schedule I(B) the information required pursuant to Section I(a)(iii) and (iv) with respect to each Grantor under each such agreement;

(15) all information supplied by any Grantor with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material respects; and

(16) none of the Collateral constitutes, or is the Proceeds of, “farm products” (as defined in the UCC).

(ii) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(1) except for the security interest created by this Agreement, it shall not create or suffer to exist any Encumbrance upon or with respect to any of the Collateral, except Permitted Encumbrances, and such Grantor shall defend the Collateral against all Persons at any time claiming any interest therein;

(2) it shall not produce, use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy of insurance covering the Collateral;

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(3) without limiting any prohibitions or restrictions on mergers in the Note Purchase Agreement, it shall not change such Grantor’s name, identity, corporate structure (e.g. by merger, consolidation, change in corporate form or otherwise), sole place of business, chief executive office, type of organization or jurisdiction of organization or establish any trade names unless it shall have (a) notified the Secured Party in writing at least thirty (30) days prior to any such change or establishment, identifying such new proposed name, identity, corporate structure, sole place of business, chief executive office, jurisdiction of organization or trade name and providing such other information in connection therewith as the Secured Party may reasonably request and (b) taken all actions necessary or advisable to maintain the continuous validity, perfection and the same or better priority of the Secured Party’s security interest in the Collateral granted or intended to be granted and agreed to hereby, which in the case of any merger or other change in corporate structure shall include, without limitation, executing and delivering to the Secured Party a completed Pledge Supplement, substantially in the form of Annex A attached hereto, upon completion of such merger or other change in corporate structure confirming the grant of the security interest hereunder;

(4) if the Secured Party or any Secured Party gives value to enable Grantor to acquire rights in or the use of any Collateral, it shall use such value for such purposes and such Grantor further agrees that repayment of any Obligation shall apply on a “first-in, first-out” basis so that the portion of the value used to acquire rights in any Collateral shall be paid in the chronological order such Grantor acquired rights therein;

(5) it shall pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Collateral, except to the extent the validity thereof is being contested in good faith; provided, such Grantor shall in any event pay such taxes, assessments, charges, levies or claims not later than five (5) days prior to the date of any proposed sale under any judgment, writ or warrant of attachment entered or filed against such Grantor or any of the Collateral as a result of the failure to make such payment;

(6) upon such Grantor or any officer of such Grantor obtaining Knowledge thereof, it shall promptly notify the Secured Party in writing of any event that may materially and adversely affect the value of the Collateral or any portion thereof, the ability of any Grantor or the Secured Party to dispose of the Collateral or any portion thereof, or the rights and remedies of the Secured Party in relation thereto, including, without limitation, the levy of any legal process against the Collateral or any portion thereof;

(7) it shall not take or permit any action which could impair the Secured Party’s rights in the Collateral; and

(8) it shall not sell, transfer or assign (by operation of law or otherwise) any Collateral except for Permitted Sales.

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(b) Equipment and Inventory.

(i) Representations and Warranties. Each Grantor represents and warrants, on each Representation Date, that:

(1) all of the Equipment and Inventory included in the Collateral is kept for the past five (5) years only at the locations specified in Schedule II hereto (as such Schedule may be amended or supplemented from time to time);

(2) any Inventory now or hereafter produced by any Grantor included in the Collateral have been and will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended, and the rules and regulations thereunder; and

(3) none of the Inventory or Equipment is in the possession of an issuer of a negotiable document (as defined in Section 7-104 of the UCC) therefor or otherwise in the possession of a bailee or warehouseman.

(ii) Covenants and Agreements. Each Grantor covenants and agrees that:

(1) it shall keep the Equipment and Inventory in the locations specified on Schedule II hereto unless it shall have (a) notified the Secured Party in writing at least thirty (30) days prior to any change in locations, identifying such new locations and providing such other information in connection therewith as the Secured Party may reasonably request and (b) taken all actions necessary or advisable to maintain the continuous validity, perfection and the same or better priority of the Secured Party’s security interest in the Collateral intended to be granted and agreed to hereby, or to enable the Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Equipment and Inventory;

(2) it shall keep correct and accurate records of the Inventory, as is customarily maintained under similar circumstances by Persons of established reputation engaged in similar business, and in any event in conformity with generally accepted accounting principles;

(3) it shall not deliver any Document Evidencing any Goods to any Person other than the issuer of such Document to claim the Goods evidenced therefor or the Secured Party;

(4) if any Equipment or Inventory is in possession or control of any third party, including, without limitation, any warehouseman, bailee or agent, each Grantor shall join with the Secured Party in notifying the third party of the Secured Party’s security interest and obtaining an Authenticated acknowledgment from such third party that it is holding the Equipment and Inventory for the benefit of the Secured Party; and

(5) with respect to any item of Equipment which is covered by a certificate of Title under a statute of any jurisdiction under the law of which indication of a security interest on such certificate is required as a condition of perfection thereof, upon the reasonable request of the Secured Party, (A) provide information with respect to any such Equipment, (B) execute and file with the registrar of motor vehicles or other appropriate authority in such jurisdiction an application or other document requesting the notation or other indication of the security interest created hereunder on such certificate of title, and (C) deliver to the Secured Party copies of all such applications or other documents filed during such calendar quarter and copies of all such certificates of Title issued during such calendar quarter indicating the security interest created hereunder in the items of Equipment covered thereby.

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(c) Receivables.

(i) Representations and Warranties. Each Grantor represents and warrants, on each Representation Date, that:

(1) each Receivable (a) is and will be the legal, valid and binding obligation of the Account Debtor in respect thereof, representing an unsatisfied obligation of such Account Debtor, (b) is and will be enforceable in accordance with its terms, (c) is not and will not be subject to any setoffs, defenses, taxes, counterclaims (except with respect to refunds, returns and allowances in the ordinary course of business with respect to damaged merchandise) and (d) is and will be in compliance with all applicable laws, whether federal, state, local or foreign;

(2) none of the Account Debtors in respect of any Receivable is the government of the United States, any agency or instrumentality thereof, any state or municipality or any foreign sovereign. No Receivable requires the consent of the Account Debtor in respect thereof in connection with the security interest hereunder, except any consent which has been obtained; and

(3) each Grantor has delivered to the Secured Party a complete and correct copy of each standard form of document under which a Receivable may arise.

(ii) Covenants and Agreements: Each Grantor hereby covenants and agrees that:

(1) it shall keep and maintain at its own cost and expense satisfactory and complete records of the Receivables, including, but not limited to, the originals of all documentation with respect to all Receivables and records of all payments received and all credits granted on the Receivables, all merchandise returned and all other dealings therewith;

(2) it shall perform in all material respects all of its obligations with respect to the Receivables;

(3) it shall not amend, modify, terminate or waive any provision of any Receivable in any manner which could reasonably be expected to have a Material Adverse Effect on the value of such Receivable as Collateral. Other than in the ordinary course of business as generally conducted by it on and prior to the date hereof, and except as otherwise provided in subsection (5) below, following an Event of Default, such Grantor shall not (w) grant any extension or renewal of the time of payment of any Receivable, (x) compromise or settle any dispute, claim or legal proceeding with respect to any Receivable for less than the total unpaid balance thereof, (y) release, wholly or partially, any Person liable for the payment thereof, or (z) allow any credit or discount thereon;

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(4) it shall mark conspicuously, in form and manner reasonably satisfactory to the Secured Party, all Chattel Paper, Instruments and other evidence of Receivables (other than any delivered to the Secured Party as provided herein), as well as the Receivables Records with an appropriate reference to the fact that the Secured Party has a security interest therein;

(5) except as otherwise provided in this subsection, each Grantor shall continue to collect all amounts due or to become due to such Grantor under the Receivables and any Supporting Obligation and diligently exercise each material right it may have under any Receivable, any Supporting Obligation or Collateral Support, in each case, at its own expense, and in connection with such collections and exercise, such Grantor shall take such action as such Grantor or the Secured Party may deem necessary or advisable. Notwithstanding the foregoing, the Secured Party shall have the right at any time to notify, or require any Grantor to notify, any Account Debtor of the Secured Party’s security interest in the Receivables and any Supporting Obligation and, in addition, at any time following the occurrence and during the continuation of an Event of Default, the Secured Party may: (1) direct the Account Debtors under any Receivables to make payment of all amounts due or to become due to such Grantor thereunder directly to the Secured Party; (2) notify, or require any Grantor to notify, each Person maintaining a lockbox or similar arrangement to which Account Debtors under any Receivables have been directed to make payment to remit all amounts representing collections on checks and other payment items from time to time sent to or deposited in such lockbox or other arrangement directly to the Secured Party; and (3) enforce, at the expense of such Grantor, collection of any such Receivables and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done. If the Secured Party notifies any Grantor that it has elected to collect the Receivables in accordance with the preceding sentence, any payments of Receivables received by such Grantor shall be forthwith (and in any event within two (2) Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Secured Party if required, in the Collateral Account maintained under the sole dominion and control of the Secured Party, and until so turned over, all amounts and proceeds (including checks and other instruments) received by such Grantor in respect of the Receivables, any Supporting Obligation or Collateral Support shall be received in trust for the benefit of the Secured Party hereunder and shall be segregated from other funds of such Grantor and such Grantor shall not adjust, settle or compromise the amount or payment of any Receivable, or release wholly or partly any Account Debtor or obligor thereof, or allow any credit or discount thereon; and

(6) it shall use its best efforts to keep in full force and effect any Supporting Obligation or Collateral Support relating to any Receivable.

(iii) Delivery and Control of Receivables. With respect to any Receivables in excess of $50,000 individually or $50,000 in the aggregate that is evidenced by, or constitutes, Tangible Chattel Paper or Instruments, each Grantor shall cause each originally executed copy thereof to be delivered to the Secured Party (or its agent or designee) appropriately indorsed to the Secured Party or indorsed in blank: (a) with respect to any such Receivables in existence on the date hereof, on or prior to the date hereof and (b) with respect to any such Receivables hereafter arising, within ten (10) days of such Grantor acquiring rights therein. With respect to any Receivables in excess of $50,000 individually or $50,000 in the aggregate which would constitute “electronic chattel paper” under the UCC, each Grantor shall take all steps necessary to give the Secured Party control (within the meaning of Section 9-105 of the UCC) over such Receivables: (a) with respect to any such Receivables in existence on the date hereof, on or prior to the date hereof and (b) with respect to any such Receivables hereafter arising, within ten (10) days of such Grantor acquiring rights therein. Any Receivable not otherwise required to be delivered or subjected to the control of the Secured Party in accordance with this subsection (iii) shall be delivered or subjected to such control upon request of the Secured Party.

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(d) Pledged Equity Interests and Pledged Debt

(i) Representations and Warranties. Each Grantor hereby represents and warrants, on each Representation Date, that:

(1) Schedule III hereto (as such Schedule may be amended or supplemented from time to time) sets forth under the headings “Pledged Stock,” “Pledged LLC Interests,” “Pledged Partnership Interests,” and “Pledged Trust Interests,” respectively, all of the Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust Interests owned by any Grantor and such Pledged Equity Interests constitute the percentage of issued and outstanding shares of stock, percentage of membership interests, percentage of partnership interests or percentage of beneficial interest of the respective issuers thereof indicated on such Schedule;

(2) except as set forth on Schedule III(B) hereto it has not acquired any equity interests of another entity within the past five (5) years;

(3) it is the record and beneficial owner of the Pledged Equity Interests free of all Encumbrances, rights or claims of other Persons and there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the issuance or sale of, any Pledged Equity Interests;

(4) except for any consents that have been obtained and remain in full force and effect, no consent of any Person including any other general or limited partner, any other member of a limited liability company, any other shareholder or any other trust beneficiary is necessary or desirable in connection with the creation, perfection or first priority status of the security interest of the Secured Party in any Pledged Equity Interests or the exercise by the Secured Party of the voting or other rights provided for in this Agreement or the exercise of remedies in respect thereof;

(5) none of the Pledged LLC Interests nor Pledged Partnership Interests are or represent interests in issuers that are: (a) registered as investment companies, (b) are dealt in or traded on securities exchanges or markets or (c) have opted to be treated as securities under the uniform commercial code of any jurisdiction; and

(6) Schedule III hereto (as such Schedule may be amended or supplemented from time to time) sets forth under the heading “Pledged Debt” all of the Pledged Debt owned by any Grantor and all of such Pledged Debt has been duly authorized, authenticated or issued, and delivered and is the legal, valid and binding obligation of the issuers thereof and is not in default and constitutes all of the issued and outstanding inter-company indebtedness evidenced by an instrument or certificated security of the respective issuers thereof owing to such Grantor.

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(ii) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(1) without the prior written consent of the Secured Party, it shall not vote to enable or take any other action to: (a) amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents in any way that materially changes the rights of such Grantor with respect to any Investment Related Property or adversely affects the validity, perfection or priority of the Secured Party’s security interest, (b) permit any issuer of any Pledged Equity Interest to issue any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such issuer, (c) other than as permitted under the Note Purchase Agreement, permit any issuer of any Pledged Equity Interest to dispose of all or a material portion of their assets, (d) waive any default under or breach of any terms of organizational document relating to the issuer of any Pledged Equity Interest or the terms of any Pledged Debt, or (e) cause any issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the UCC) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the UCC; provided, however, notwithstanding the foregoing, if any issuer of any Pledged Partnership Interests or Pledged LLC Interests takes any such action in violation of the foregoing in this clause (e), such Grantor shall promptly notify the Secured Party in writing of any such election or action and, in such event, shall take all steps necessary or advisable to establish the Secured Party’s “control” thereof;

(2) it shall comply with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its rights with respect to any Investment Related Property;

(3) without the prior written consent of the Secured Party, it shall not permit any issuer of any Pledged Equity Interest to merge or consolidate unless (i) such issuer creates a security interest that is perfected by a filed financing statement (that is not effective solely under Section 9-508 of the UCC) in collateral in which such new debtor has or acquires rights, and (ii) all the outstanding capital stock or other equity interests of the surviving or resulting corporation, limited liability company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Grantors; provided that if the surviving or resulting Grantors upon any such merger or consolidation involving an issuer which is a controlled foreign corporation (as defined in the U.S. Internal Revenue Code of 1986, as amended), then such Grantor shall only be required to pledge equity interests in accordance with Section 2(b);

(4) each Grantor consents to the transfer of any Pledged Partnership Interest and any Pledged LLC Interest to the Secured Party or its designee following an Event of Default and to the substitution of the Secured Party or its designee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto;

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(5) it shall notify the Secured Party of any default under any Pledged Debt that has caused, either in any case or in the aggregate, a Material Adverse Effect; and

(6) in the event it acquires rights in any Pledged Equity Interest or Pledged Debt after the date hereof, it shall deliver to the Secured Party a completed Pledge Supplement, substantially in the form of Annex A attached hereto, together with all Supplements to Schedules thereto, reflecting such new Pledged Equity Interest or Pledged Debt and all other Pledged Equity Interest or Pledged Debt. Notwithstanding the foregoing, it is understood and agreed that the security interest of the Secured Party shall attach to all Pledged Equity Interest or Pledged Debt immediately upon any Grantor’s acquisition of rights therein and shall not be affected by the failure of any Grantor to deliver a supplement to Schedule III as required hereby.

(iii) Delivery and Control. Each Grantor agrees that with respect to any Pledged Equity Interest or Pledged Debt in which it currently has rights it shall comply with the provisions of this subsection (iii) on or before the Representation Date and with respect to any Pledged Equity Interest or Pledged Debt hereafter acquired by such Grantor it shall comply with the provisions of this subsection (iii) immediately upon acquiring rights therein, in each case in form and substance satisfactory to the Secured Party. With respect to any Pledged Equity Interest or Pledged Debt that is represented by a certificate or that is an “instrument” (other than any Investment Related Property credited to a Securities Account) it shall cause such certificate or instrument to be delivered to the Secured Party, indorsed in blank by an “effective indorsement” (as defined in Section 8-107 of the UCC), regardless of whether such certificate constitutes a “certificated security” for purposes of the UCC. With respect to any Pledged Equity Interest or Pledged Debt that is an “uncertificated security” for purposes of the UCC (other than any “uncertificated securities” credited to a Securities Account), it shall cause the issuer of such uncertificated security to either (i) register the Secured Party as the registered owner thereof on the books and records of the issuer or (ii) execute an agreement, in form and substance satisfactory to the Secured Party, pursuant to which such issuer agrees to comply with the Secured Party’s instructions with respect to such uncertificated security without further consent by such Grantor. If any issuer of any Pledged Equity Interest or Pledged Debt is located in a jurisdiction outside of the United States, each Grantor shall take such additional actions, including, without limitation, causing the issuer to register the pledge on its books and records or making such filings or recordings, in each case as may be necessary or advisable, under the laws of such issuer’s jurisdiction to insure the validity, perfection and priority of the security interest of the Secured Party. Upon the occurrence of an Event of Default, the Secured Party shall have the right, without notice to any Grantor, to transfer all or any portion of Pledged Equity Interest or Pledged Debt to its name or the name of its nominee or agent. In addition, the Secured Party shall have the right at any time, without notice to any Grantor, to exchange any certificates or instruments representing any Pledged Equity Interest or Pledged Debt for certificates or instruments of smaller or larger denominations.

(e) Investment Accounts

(i) Representations and Warranties. Each Grantor hereby represents and warrants, on each Representation Date, that:

(1) Schedule III hereto (as such Schedule may be amended or supplemented from time to time) sets forth under the headings “Securities Accounts” and “Commodities Accounts,” respectively, all of the Securities Accounts and Commodities Accounts in which each Grantor has an interest. Each Grantor is the sole entitlement holder of each such Securities Account and Commodities Account, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Secured Party pursuant hereto) having “control” (within the meanings of Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any such Securities Account or Commodity Account or any securities or other property credited thereto; and

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(2) Schedule III hereto (as such Schedule may be amended or supplemented from time to time) sets forth under the heading “Deposit Accounts” all of the Deposit Accounts in which each Grantor has an interest and each Grantor is the sole account holder of each such Deposit Account and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Secured Party pursuant hereto) having either sole dominion and control (within the meaning of common law) or “control” (within the meaning of Section 9-104 of the UCC) over, or any other interest in, any such Deposit Account or any money or other property deposited therein.

(ii) Covenants & Agreements. in the event it acquires rights in any Securities Accounts, Securities Entitlements, Deposit Accounts or Commodity Accounts after the date hereof, it shall deliver to the Secured Party a completed Pledge Supplement, substantially in the form of Annex A attached hereto, together with all Supplements to Schedules thereto, reflecting such new Securities Accounts, Securities Entitlements, Deposit Accounts or Commodity Accounts and all other Securities Accounts, Securities Entitlements, Deposit Accounts or Commodity Accounts. Notwithstanding the foregoing, it is understood and agreed that the security interest of the Secured Party shall attach to all Securities Accounts, Securities Entitlements, Deposit Accounts or Commodity Accounts immediately upon any Grantor’s acquisition of rights therein and shall not be affected by the failure of any Grantor to deliver a supplement to Schedule III as required hereby.

(iii) Delivery and Control. Each Grantor agrees that with respect to any Investment Related Property consisting of Securities Accounts or Securities Entitlements, it shall cause the securities intermediary maintaining such Securities Account or Securities Entitlement to enter into an agreement, in form and substance satisfactory to the Secured Party, pursuant to which it shall agree to comply with the Secured Party’s “entitlement orders” without further consent by such Grantor and shall establish the Secured Party shall have “control” (within the meaning of Section 9-106 of the UCC) over such Securities Accounts or Securities Entitlements. With respect to any Investment Related Property that is a “Deposit Account,” it shall cause the depositary institution maintaining such account to enter into an agreement, in form and substance satisfactory to the Secured Party, pursuant to which the depositary institution shall agree to comply with the Secured Party’s instructions without further consent by such Grantor and shall establish the Secured Party shall have “control” (within the meaning of Section 9-104 of the UCC) over such Deposit Account. With respect to any Investment Related Property that is a “Commodity Account,” it shall cause the commodity intermediary maintaining such account to enter into an agreement, in form and substance satisfactory to the Secured Party, pursuant to which the Secured Party shall have “control” (within the meaning of Section 9-106 of the UCC) over such Commodity Account. Each Grantor shall have entered into such control agreement or agreements with respect to: (i) any Securities Accounts, Securities Entitlements or Deposit Accounts that exist on the Representation Date, as of or prior to the Representation Date and (ii) any Securities Accounts, Securities Entitlements, Deposit Accounts or Commodity Accounts that are created or acquired after the Representation Date, as of or prior to the deposit or transfer of any such Securities Entitlements or funds, whether constituting moneys or investments, into such Securities Accounts, Deposit Accounts or Commodity Accounts.

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(f) Material Contracts.

(i) Representations and Warranties. Each Grantor hereby represents and warrants, on each Representation Date, that:

(1) Schedule IV hereto sets forth all of the Material Contracts to which such Grantor has rights;

(2) the Material Contracts, true and complete copies (including any amendments or supplements thereof) of which have been furnished to the Secured Party, have been duly authorized, executed and delivered by all parties thereto, are in full force and effect and are binding upon and enforceable against all parties thereto in accordance with their respective terms. There exists no default under any Material Contract by any party thereto and neither such Grantor, nor to its best Knowledge, any other Person party thereto is likely to become in default thereunder and no Person party thereto has any defenses, counterclaims or right of set-off with respect to any Material Contract. Each Person party to a Material Contract (other than any Grantor) has executed and delivered to the applicable Grantor a consent to the assignment of such Material Contract to the Secured Party pursuant to this Agreement; and

(3) no Material Contract prohibits assignment or requires consent of or notice to any Person in connection with the assignment to the Secured Party hereunder, except such as has been given or made.

(ii) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(1) in addition to any rights under the Section of this Agreement relating to Receivables, the Secured Party may at any time notify, or require any Grantor to so notify, the counterparty on any Material Contract of the security interest of the Secured Party therein. In addition, after the occurrence and during the continuance of an Event of Default, the Secured Party may upon written notice to the applicable Grantor, notify, or require any Grantor to notify, the counterparty to make all payments under the Material Contracts directly to the Secured Party;

(2) each Grantor shall deliver promptly to the Secured Party a copy of each material demand, notice or document received by it relating in any way to any Material Contract;

(3) each Grantor shall deliver promptly to the Secured Party, and in any event within ten (10) Business Days, after (1) any Material Contract of such Grantor is terminated or amended in a manner that is materially adverse to such Grantor or (2) any new Material Contract is entered into by such Grantor, a written statement describing such event, with copies of such material amendments or new contracts, delivered to the Secured Party (to the extent such delivery is permitted by the terms of any such Material Contract, provided, no prohibition on delivery shall be effective if it were bargained for by such Grantor with the intent of avoiding compliance with this Agreement, and an explanation of any actions being taken with respect thereto;

(4) it shall perform in all material respects all of its obligations with respect to the Material Contracts;

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(5) it shall promptly and diligently exercise each material right (except the right of termination) it may have under any Material Contract, any Supporting Obligation or Collateral Support, in each case, at its own expense, and in connection with such collections and exercise, such Grantor shall take such action as such Grantor or the Secured Party may deem necessary or advisable;

(6) it shall use its best efforts to keep in full force and effect any Supporting Obligation or Collateral Support relating to any Material Contract; and

(7) with respect to any Non-assignable Contract that is a Material Contract, each Grantor shall, unless the relevant restrictions on transfer are overridden by Section 9-406 of the UCC, within thirty (30) days of the date hereof with respect to any Non-Assignable Contract in effect on the date hereof and within thirty (30) days after entering into any Non-Assignable Contract after the Closing Date, request in writing the consent of the counterparty or counterparties to the Non-Assignable Contract pursuant to the terms of such Non-Assignable Contract or applicable law to the assignment or granting of a security interest in such Non-Assignable Contract to the Secured Party and use its best efforts to obtain such consent as soon as practicable thereafter.

(g) Letter of Credit Rights.

(i) Representations and Warranties. Each Grantor hereby represents and warrants, on each Representation Date, that:

(1) all material letters of credit to which such Grantor has rights is listed on Schedule V hereto; and

(2) it has obtained the consent of each issuer of any material letter of credit to the assignment of the proceeds of the letter of credit to the Secured Party.

(ii) Covenants and Agreements. Each Grantor hereby covenants and agrees that with respect to any material letter of credit hereafter arising it shall obtain the consent of the issuer thereof to the assignment of the proceeds of the letter of credit to the Secured Party and shall deliver to the Secured Party a completed Pledge Supplement, substantially in the form of Annex A attached hereto, together with all Supplements to Schedules thereto. Notwithstanding the foregoing, it is understood and agreed that the security interest of the Secured Party shall attach to all letters of credit immediately upon any Grantor’s acquisition of rights therein and shall not be affected by the failure of any Grantor to deliver a supplement to Schedule V as required hereby.

(h) Intellectual Property.

(i) Representations and Warranties. Except as disclosed in Schedule VI(H) (as such Schedule may be amended or supplemented from time to time), each Grantor hereby represents and warrants, on each Representation Date, that:

(1) Schedule VI (as such Schedule may be amended or supplemented from time to time) sets forth a true and complete list of (i) all United States, state and foreign registrations of and applications for Patents, Trademarks, and Copyrights owned by each Grantor and (ii) all Patent Licenses, Trademark Licenses and Copyright Licenses, granting rights in any Patents, Trademarks or Copyrights owned by Grantor and any other such licenses that are material to the business of such Grantor;

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(2) all registrations and applications for Copyrights, Patents and Trademarks are standing in the name of each Grantor;

(3) it is the sole and exclusive owner of the entire right, title, and interest in and to all Intellectual Property on Schedule VI (as such Schedule may be amended or supplemented from time to time), and owns or has the valid right to use all other Intellectual Property used in or necessary to conduct its business, free and clear of all Encumbrances, claims, encumbrances and licenses, except for Permitted Encumbrances and the Intellectual Property Licenses set forth on Schedule VI(B), (D), (F) and (G) (as each may be amended or supplemented from time to time);

(4) all Intellectual Property owned by Grantor and, to the best of each Grantor’s Knowledge, licensed to Grantor: (i) is subsisting (ii) to the best of each Grantor’s Knowledge is valid and enforceable and (iii) has not been adjudged invalid or unenforceable, in whole or in part each Grantor has performed all acts and has paid all renewal, maintenance, and other fees and taxes required to maintain each and every registration and application of Intellectual Property that such Grantor owns in full force and effect;

(5) no action or proceeding before any court or administrative authority in pending or, to the best of Grantor’s Knowledge, threatened against Grantor challenging such Grantor’s right to register, the validity of, or such Grantor’s rights to own, use, or license any Intellectual Property;

(6) each Grantor has been using appropriate statutory notice of registration in connection with its use of registered Trademarks, proper marking practices in connection with the use of Patents, and appropriate notice of copyright in connection with the publication of Copyrights material to the business of such Grantor;

(7) each Grantor uses adequate standards of quality in the manufacture, distribution, and sale of all products sold and in the provision of all services rendered under or in connection with all Trademarks owned by Grantor and has taken all action necessary to insure that all licensees of such Trademarks use such adequate standards of quality;

(8) the conduct of such Grantor’s business does not infringe upon any trademark, patent, copyright, trade secret or similar intellectual property right owned or controlled by a third party; no claim is pending, or to the best of such Grantor’s Knowledge, threatened, has been made that the conduct of such Grantor’s business or the use of any Intellectual Property owned or used by Grantor violates the asserted rights of any third party;

(9) to the best of each Grantor’s Knowledge, no third party is infringing upon any Intellectual Property owned or used by such Grantor;

(10) no settlement or consents, covenants not to sue, nonassertion assurances, or releases have been entered into by each Grantor or to which each Grantor is bound that adversely affect such Grantor’s rights to own or use any Intellectual Property; and

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(11) each Grantor has not made any agreements to assign, sell, transfer or grant an option or license for any Intellectual Property or that has not been terminated or released, other than licenses granted in the ordinary course of business and consistent with past practice to manufacturers to produce products bearing Obligor logos. There is no effective financing statement or other document or instrument now executed, or on file or recorded in any public office, granting a security interest in or otherwise encumbering any part of the Intellectual Property, other than in favor of the Secured Party.

(ii) Covenants and Agreements. Each Grantor hereby covenants and agrees as follows:

(1) except for Intellectual Property that is not in use and has negligible value, Grantor shall not do any act or omit to do any act whereby any of the Intellectual Property which is material to the business of Grantor may lapse, or become abandoned, dedicated to the public, or unenforceable, or which would adversely affect the validity, grant, or enforceability of the security interest granted therein;

(2) except for copyrights of negligible value, Grantor shall, within thirty (30) days of the creation or acquisition of any Copyrightable work which is material to the business of Grantor, apply to register the Copyright in the United States Copyright Office;

(3) it shall promptly notify the Secured Party if it knows or has reason to know that any item of the Intellectual Property that is in use or has more than negligible value of any Grantor may become (a) abandoned or dedicated to the public or placed in the public domain, (b) invalid or unenforceable, or (c) subject to any adverse determination or development (including the institution of proceedings) in any action or proceeding in the United States Patent and Trademark Office, the United States Copyright Office, and state registry, any foreign counterpart of the foregoing, or any court arbitral tribunal or regulatory agency;

(4) it shall take all reasonable steps in the United States Patent and Trademark Office, the United States Copyright Office, any state registry or any foreign counterpart of the foregoing, to pursue any application and maintain any registration of each Trademark, Patent, and Copyright owned by any Grantor and which is now or shall become included in the Intellectual Property including, but not limited to, those items on Schedule VI(A), (C) and (E) (as each may be amended or supplemented from time to time) expect for those pertaining to IP that are no longer in use and has negligible value;

(5) in the event that any Intellectual Property owned by or exclusively licensed to any Grantor is infringed, misappropriated, or diluted by a third party, such Grantor shall promptly take all reasonable actions to stop such infringement, misappropriation, or dilution and protect its exclusive rights in such Intellectual Property including, but not limited to, the initiation of a suit for injunctive relief and to recover damages;

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(6) it shall maintain the level of the quality of products sold and services rendered under any Trademark at a level at least substantially consistent with the quality of such products and services as of the date hereof, and each Grantor shall take all steps necessary to insure that licensees of such Trademarks use such standards of quality;

(7) it shall take all steps reasonably necessary to protect the secrecy of all material Trade Secrets, including, without limitation, entering into confidentiality agreements with employees and labeling and restricting access to secret information and documents;

(8) it shall promptly (but in no event more than thirty (30) days) report to the Secured Party (i) the filing of any application to register any Intellectual Property whether it owns in whole or in part or to the best of its Knowledge which it is exclusively licensing from a third party with the United States Patent and Trademark Office, the United States Copyright Office, or any state registry or foreign counterpart of the foregoing (whether such application is filed by such Grantor or through any agent, employee, licensor, licensee, or designee thereof), (ii) the registration of any Intellectual Property by any such office, or (iii) the acquisition of any application or registration and, in each case, shall execute and deliver to the Secured Party a completed Pledge Supplement, substantially in the form of Annex A attached hereto, together with all Supplements to Schedules thereto or signed counterpart of a Trademark Security Agreement, Patent Security Agreement, or Copyright Security Agreement substantially in the form of Annexes B, C, and D, as applicable together with all supplements to the schedules thereto;

(9) except with the prior consent of the Secured Party or as permitted under the Note Purchase Agreement, each Grantor shall not execute, and there will not be on file in any public office, any financing statement or other document or instruments, except financing statements or other documents or instruments filed or to be filed in favor of the Secured Party and each Grantor shall not sell, assign, transfer, license, grant any option, or create or suffer to exist any Encumbrance upon or with respect to the Intellectual Property, except for the Encumbrance created by and under this Security Agreement and the other Transaction Documents;

(10) it shall not hereafter permit the inclusion in any contract to which it hereafter becomes a party of any provision that would impair or prevent the creation of a security interest in, or the assignment of, such Grantor’s rights and interests in any Intellectual Property acquired under such Contracts;

(11) it shall use proper statutory notice in connection with its use of any of the Intellectual Property; and

(12) it shall continue to collect, at its own expense, all amounts due or to become due to such Grantor in respect of any Intellectual Property. In connection with such collections, each Grantor may take (and, at the Secured Party’s reasonable direction, shall take) such action as such Grantor or the Secured Party may deem reasonably necessary or advisable to enforce collection of such amounts. Notwithstanding the foregoing, the Secured Party shall have the right at any time, to notify, or require any Grantor to notify, any obligors with respect to any such amounts of the existence of the security interest created hereby.

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(i) Commercial Tort Claims

(i) Representations and Warranties. Each Grantor hereby represents and warrants, on each Representation Date, that Schedule VII (as such Schedule may be amended or supplemented from time to time) sets forth all Commercial Tort Claims of each Grantor; and

(ii) Covenants and Agreements. Each Grantor hereby covenants and agrees that with respect to any Commercial Tort Claim hereafter arising it shall deliver to the Secured Party a completed Pledge Supplement, substantially in the form of Annex A attached hereto, together with all Supplements to Schedules thereto, identifying such new Commercial Tort Claims.

Section 5. DIVIDENDS, DISTRIBUTIONS AND VOTING.

(a) Except as provided in the next sentence, in the event any Grantor receives (x) any dividends, interest or distributions on any Investment Related Property, or (y) any securities or other property upon the merger, consolidation, liquidation or dissolution of any issuer of any Investment Related Property, then (1) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without further action and (2) such Grantor shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Secured Party over such dividends, distributions, interest, securities or other property (including, without limitation, delivery thereof to the Secured Party) and pending any such action such Grantor shall be deemed to hold such dividends, distributions, interest, securities or other property in trust for the benefit of the Secured Party and shall be segregated from all other property of such Grantor. Notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Secured Party authorizes each Grantor to retain all ordinary cash dividends and distributions paid in the normal course of the business of the issuer and consistent with the past practice of the issuer and all scheduled payments of interest.

(b) Voting.

(i) So long as no Event of Default shall have occurred and be continuing:

(1) except as otherwise provided under the covenants and agreements relating to Investment Related Property in this Agreement or elsewhere herein or in the Note Purchase Agreement, each Grantor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Investment Related Property or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Note Purchase Agreement; provided, no Grantor shall exercise or refrain from exercising any such right if the Secured Party shall have notified such Grantor that, in the Secured Party’s reasonable judgment, such action would have a Material Adverse Effect on the value of the Investment Related Property or any part thereof; and provided further, such Grantor shall give the Secured Party at least five (5) Business Days prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by such Grantor of any Pledged Stock for, or such Grantor’s consent to, the election of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor such Grantor’s consent to or approval of any action otherwise permitted under this Agreement and the Note Purchase Agreement, shall be deemed inconsistent with the terms of this Agreement or the Note Purchase Agreement within the meaning of this Section 5(b)(i)(1), and no notice of any such voting or consent need be given to the Secured Party; and

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(2) the Secured Party shall promptly execute and deliver (or cause to be executed and delivered) to each Grantor all proxies, and other instruments as such Grantor may from time to time reasonably request for the purpose of enabling such Grantor to exercise the voting and other consensual rights when and to the extent which it is entitled to exercise pursuant to clause (1) above.

(ii) Upon the occurrence and during the continuation of an Event of Default:

(1) all rights of each Grantor to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become vested in the Secured Party who shall thereupon have the sole right to exercise such voting and other consensual rights; and

(2) in order to permit the Secured Party to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder: (1) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Secured Party all proxies, dividend payment orders and other instruments as the Secured Party may from time to time reasonably request and (2) each Grantor acknowledges that the Secured Party may utilize the power of attorney set forth in Section 7.

Section 6. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES.

(a) Access; Right of Inspection. Upon reasonable prior notice, the Secured Party shall have full and free access during normal business hours to all the books, correspondence and records of each Grantor, and the Secured Party and its representatives may examine the same, take extracts therefrom and make photocopies thereof, and each Grantor agrees to render to the Secured Party, at such Grantor’s cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. If requested by a Grantor, and necessary in order to prevent such Grantor from breaching any third party contracts, the Secured Party shall agree to keep confidential information obtained from the Grantor, subject to customary exceptions, including without limitation, if required by legal or regulatory process and if necessary in connection with the enforcement of the Secured Party’s rights under the Transaction Documents. Upon reasonable prior notice, the Secured Party and its representatives shall also have the right to enter any premises of each Grantor and inspect any property of each Grantor where any of the Collateral of such Grantor granted pursuant to this Agreement is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein.

(b) Further Assurances.

(i) Each Grantor agrees that from time to time, at the expense of such Grantor, that it shall promptly Authenticate, execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Secured Party may reasonably request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each Grantor shall:

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(1) file such financing or continuation statements, or amendments thereto, and execute and deliver such other agreements, instruments, endorsements, powers of attorney or notices, as may be necessary or desirable, or as the Secured Party may reasonably request, in order to perfect and preserve the security interests granted or purported to be granted hereby;

(2) take all actions necessary to ensure the recordation of appropriate evidence of the liens and security interest granted hereunder in the Intellectual Property with any intellectual property registry in which said Intellectual Property is registered or in which an application for registration is pending including, without limitation, the United States Patent and Trademark Office, the United States Copyright Office, the various Secretaries of State, and the foreign counterparts on any of the foregoing;

(3) at any reasonable time, upon request by the Secured Party, exhibit the Collateral to and allow inspection of the Collateral by the Secured Party, or persons designated by the Secured Party; and

(4) at the Secured Party’s request, appear in and defend any action or proceeding that may affect such Grantor’s Title to or the Secured Party’s security interest in all or any part of the Collateral.

(ii) Each Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, or any similar document in any jurisdictions and with any filing offices as the Secured Party may determine, in its sole discretion, are necessary or advisable to perfect or otherwise protect the security interest granted to the Secured Party herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Secured Party may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to the Secured Party herein, including, without limitation, describing such property as “all assets” or “all personal property, whether now owned or hereafter acquired. Each Grantor shall furnish to the Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Party may reasonably request, all in reasonable detail.

(iii) Each Grantor hereby authorizes the Secured Party to modify this Agreement after obtaining such Grantor’s approval of or signature to such modification by amending Schedule VI hereto (as such Schedule may be amended or supplemented from time to time) to include reference to any right, Title or interest in any existing Intellectual Property or any Intellectual Property acquired or developed by any Grantor after the execution hereof.

Section 7. SECURED PARTY APPOINTED ATTORNEY-IN-FACT, IRREVOCABLE POWER OF ATTORNEY.

(a) Each Grantor hereby irrevocably appoints the Secured Party (such appointment being coupled with an interest) as such Grantor’s attorney-in-fact, with full authority in the place and stead of such Grantor, and authorizes the Secured Party, in the name of such Grantor, the Secured Party or otherwise, from time to time in the Secured Party’s discretion, to take any action and to execute any instrument that the Secured Party may deem reasonably necessary or advisable to accomplish the purposes of this agreement, including, without limitation, the following:

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(i) upon the occurrence and during the continuance of any Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to the Secured Party pursuant to the Transaction Documents;

(ii) upon the occurrence and during the continuance of any Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;

(iii) upon the occurrence and during the continuance of any Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with clause (b) above;

(iv) upon the occurrence and during the continuance of any Event of Default, to file any claims or take any action or institute any proceedings that the Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Secured Party with respect to any of the Collateral;

(v) to prepare, sign, and file for recordation in any intellectual property registry, appropriate evidence of the lien and security interest granted herein in the Intellectual Property in the name of such Grantor as assignor;

(vi) to take or cause to be taken all actions necessary to perform or comply or cause performance or compliance with the terms of this Agreement, including, without limitation, access to pay or discharge taxes or Encumbrances levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Secured Party in its sole discretion, any such payments made by the Secured Party to become obligations of such Grantor to the Secured Party, due and payable immediately without demand; and

(vii) generally to sell, transfer, lease, license, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Secured Party were the absolute owner thereof for all purposes, and to do, at the Secured Party’s option and such Grantor’s expense, at any time or from time to time, all acts and things that the Secured Party deems reasonably necessary to protect, preserve or realize upon the Collateral and the Secured Party’s security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

Section 8. REMEDIES.

(a) Generally.

(i) If any Event of Default shall have occurred and be continuing, the Secured Party may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it at law or in equity, all the rights and remedies of the Secured Party on default under the UCC (whether or not the UCC applies to the affected Collateral) to collect, enforce or satisfy any Secured Obligations then owing, whether by acceleration or otherwise, and also may pursue any of the following separately, successively or simultaneously:

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(1) require any Grantor to, and each Grantor hereby agrees that it shall at its expense and promptly upon request of the Secured Party forthwith, assemble all or part of the Collateral as directed by the Secured Party and make it available to the Secured Party at a place to be designated by the Secured Party that is reasonably convenient to both parties;

(2) enter onto the property where any Collateral is located and take possession thereof with or without judicial process;

(3) prior to the disposition of the Collateral, store, process, repair or recondition the Collateral or otherwise prepare the Collateral for disposition in any manner to the extent the Secured Party deems appropriate; and

(4) without notice except as specified below or under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive basis) or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Secured Party’s offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such other terms as the Secured Party may deem commercially reasonable.

(ii) The Secured Party or any Secured Party may be the purchaser of any or all of the Collateral at any public or private (to the extent to portion of the Collateral being privately sold is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations) sale in accordance with the UCC and the Secured Party, as collateral agent for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any Collateral payable by the Secured Party at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of each Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that it would not be commercially unreasonable for the Secured Party to dispose of the Collateral or any portion thereof by using Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Each Grantor hereby waives any claims against the Secured Party arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Secured Obligations, each Grantor shall be liable for the deficiency and the fees of any attorneys employed by the Secured Party to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Secured Party, that the Secured Party has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior to their stated maturities. Nothing in this Section shall in any way alter the rights of the Secured Party hereunder.

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(iii) The Secured Party may sell the Collateral without giving any warranties as to the Collateral. The Secured Party may specifically disclaim or modify any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(iv) The Secured Party shall have no obligation to marshal any of the Collateral.

(v) The Secured Party shall have the right to notify, or require each Grantor to notify, any obligors with respect to amounts due or to become due to such Grantor in respect of the Collateral, of the existence of the security interest created herein, to direct such obligors to make payment of all such amounts directly to the Secured Party, and, upon such notification and at the expense of such Grantor, to enforce collection of any such amounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done:

(1) all amounts and proceeds (including checks and other instruments) received by any Grantor in respect of amounts due to such Grantor in respect of the Collateral or any portion thereof shall be received in trust for the benefit of the Secured Party hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over or delivered to the Secured Party in the same form as so received (with any necessary endorsement) to be held as cash Collateral and applied as provided by the Section in this Agreement relating to Cash Proceeds (Section 7.6 hereof); and

(2) Grantors shall not adjust, settle or compromise the amount or payment of any such amount or release wholly or partly any obligor with respect thereto or allow any credit or discount thereon.

(b) Application of Proceeds. Except as expressly provided elsewhere in this Agreement, all proceeds received by the Secured Party in respect of any sale, any collection from, or other realization upon all or any part of the Collateral shall be applied in full or in part by the Secured Party against, the Secured Obligations in the following order of priority: first, to the payment of all costs and expenses of such sale, collection or other realization, including reasonable compensation to the Secured Party and its agents and counsel, and all other expenses, liabilities and advances made or incurred by the Secured Party in connection therewith, and all amounts for which the Secured Party is entitled to indemnification hereunder (in its capacity as the Secured Party) and all advances made by the Secured Party hereunder for the account of the applicable Grantor, and to the payment of all costs and expenses paid or incurred by the Secured Party in connection with the exercise of any right or remedy hereunder or under any Transaction Document, all in accordance with the terms hereof or thereof; second, to the extent of any excess of such proceeds, to the payment of all other Secured Obligations for the ratable benefit of the Secured Party; and third, to the extent of any excess of such proceeds, to the payment to or upon the order of such Grantor or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

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(c) Sales on Credit. If the Secured Party sells any of the Collateral upon credit, Grantor will be credited only with payments actually made by purchaser and received by the Secured Party and applied to indebtedness of the Purchaser. In the event the purchaser fails to pay for the Collateral, the Secured Party may resell the Collateral and Grantor shall be credited with proceeds of the sale.

(d) Cash & Cash Proceeds. If an Event of Default shall have occurred and be continuing, (1) the Secured Party shall have the right to apply the balance from any Deposit Account or instruct the bank at which any Deposit Account is maintained to pay the balance of any Deposit Account to or for the benefit of the Secured Party and (2) all Cash and Cash Proceeds shall be held by such Grantor in trust for the Secured Party, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Secured Party in the exact form received by such Grantor (duly indorsed by such Grantor to the Secured Party, if required) and held by the Secured Party. All such funds from any Deposit Account, Cash and Cash Proceeds or any other Money held by the Secured Party may, in the sole discretion of the Secured Party, (A) be held by the Secured Party for the ratable benefit of the Secured Party, as collateral security for the Secured Obligations (whether matured or unmatured) and/or (B) then or at any time thereafter may be applied by the Secured Party against the Secured Obligations then due and owing.

(e) Investment Related Property. In addition to the rights and remedies specified above, the following provisions shall also be applicable to Investment Related Property. Each Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933 and applicable state securities laws, the Secured Party may be compelled, with respect to any sale of all or any part of the Investment Related Property conducted without prior registration or qualification of such Investment Related Property under the Securities Act and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Investment Related Property for their own account, for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sale may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances, each Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Secured Party shall have no obligation to engage in public sales and no obligation to delay the sale of any Investment Related Property for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it. If the Secured Party determines to exercise its right to sell any or all of the Investment Related Property, upon written request, each Grantor shall and shall cause each issuer of any Pledged Stock to be sold hereunder, each partnership and each limited liability company from time to time to furnish to the Secured Party all such information as the Secured Party may request in order to determine the number and nature of interest, shares or other instruments included in the Investment Related Property which may be sold by the Secured Party in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.

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(f) Intellectual Property. In addition to the rights and remedies specified above, the following provisions shall also be applicable to Intellectual Property.

(i) Anything contained herein to the contrary notwithstanding, upon the occurrence and during the continuation of an Event of Default:

(1) the Secured Party shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of any Grantor, the Secured Party or otherwise, in the Secured Party’s sole discretion, to enforce any Intellectual Property, in which event such Grantor shall, at the request of the Secured Party, do any and all lawful acts and execute any and all documents required by the Secured Party in aid of such enforcement and such Grantor shall promptly, upon demand, reimburse and indemnify the Secured Party as provided in the Section in this Agreement relating to indemnity and expenses in connection with the exercise of its rights under this Section, and, to the extent that the Secured Party shall elect not to bring suit to enforce any Intellectual Property as provided in this Section, each Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property by others and for that purpose agrees to diligently maintain any action, suit or proceeding against any Person so infringing as shall be necessary to prevent such infringement;

(2) upon written demand from the Secured Party, each Grantor shall grant, assign, convey or otherwise transfer to the Secured Party or such Secured Party’s designee all of such Grantor’s right, title and interest in and to the Intellectual Property and shall execute and deliver to the Secured Party such documents as are necessary or appropriate to carry out the intent and purposes of this Agreement; and

(3) within five (5) Business Days after written notice from the Secured Party, each Grantor shall make available to the Secured Party, to the extent within such Grantor’s power and authority, such personnel in such Grantor’s employ on the date of such Event of Default as the Secured Party may reasonably designate, by name, title or job responsibility, to permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Grantor under or in connection with the Trademarks, Trademark Licenses, such persons to be available to perform their prior functions on the Secured Party’s behalf and to be compensated by the Secured Party at such Grantor’s expense on a per diem, pro-rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event of Default.

(ii) Solely for the purpose of enabling the Secured Party to exercise rights and remedies under this Section 8 and at such time as the Secured Party shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Secured Party, to the extent it has the right to do so, an irrevocable, nonexclusive worldwide license (exercisable without payment of royalty or other compensation to such Grantor), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of the Trademark Owner to avoid the risk of invalidation of said Trademarks, to use, operate under, license, or sublicense any Intellectual Property now or hereafter owned by or licensed to such Grantor.

Section 9. CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS

This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until the payment in full of all Secured Obligations, the cancellation or termination of the commitments and any other contingent obligation included in the Secured Obligations, be binding upon each Grantor, its successors and assigns, and inure, together with the rights and remedies of the Secured Party hereunder, to the benefit of the Secured Party and its successors, transferees and assigns. Without limiting the generality of the foregoing, but subject to the terms of the Transaction Documents, the Secured Party may assign or otherwise transfer any Secured Obligations held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to the Secured Party herein or otherwise. Upon the payment in full of all Secured Obligations, the cancellation or termination of the commitments and any other contingent obligation included in the Secured Obligations, the security interest granted hereby shall terminate hereunder and of record, the power of attorney granted to the Secured Party pursuant to Section 7 shall terminate, and all rights to the Collateral shall revert to Grantors. Upon any such termination the Secured Party shall, at Grantors’ expense, execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination.

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Section 10. STANDARD OF CARE; SECURED PARTY MAY PERFORM.

The powers conferred on the Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Secured Party accords its own property. Neither the Secured Party nor any of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or otherwise. If any Grantor fails to perform any agreement contained herein, the Secured Party may itself perform, or cause performance of, such agreement, and the expenses of the Secured Party incurred in connection therewith shall be payable by each Grantor and pending such payment shall be included in the obligations secured hereby.

Section 11. INDEMNITY AND EXPENSES.

(i) Each Grantor agrees:

(1) to defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold harmless each Indemnitee, from and against any and all claims, losses and liabilities in any way relating to, growing out of or resulting from this Agreement and the transactions contemplated hereby (including without limitation enforcement of this Agreement), except to the extent such claims, losses or liabilities result from such Indemnitee’s gross negligence or willful misconduct; and

(2) to pay to the Secured Party promptly following written demand the amount of any and all reasonable costs and reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents in accordance with the terms and conditions of the Note Purchase Agreement.

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(ii) Expenses. Each Grantor agrees to pay promptly all the actual costs and reasonable expenses of creating and perfecting Encumbrances in favor of the Secured Party, including search, filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to the Secured Party and of counsel providing any opinions that the Secured Party may request in respect of the Collateral or the Encumbrances created pursuant to the Collateral Documents; all the actual costs and reasonable fees, expenses and disbursements of any auditors, accountants, consultants or appraisers; all the actual costs and reasonable expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by the Secured Party and its counsel) in connection with the custody or preservation of any of the Collateral; and after the occurrence of a Default or an Event of Default, all costs and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel) and costs of settlement, incurred by the Secured Party in enforcing any Secured Obligations of or in collecting any payments due from any Grantor hereunder or under the other Transaction Documents by reason of such Default or Event of Default (including in connection with the sale of, collection from, or other realization upon any of the Collateral) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings.

(iii) The obligations of each Grantor in this Section 11 shall survive the termination of this Agreement and the discharge of such Grantor’s other obligations under this Agreement, the Note Purchase Agreement and any other Transaction Documents.

Section 12. MISCELLANEOUS.

(a) Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given to each Grantor or the Secured Party, shall be sent to such Person’s address as set forth in the Note Purchase Agreement or in the other relevant Transaction Document. Each notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided, no notice to the Secured Party shall be effective until received by the Secured Party.

(b) Amendments and Waivers.

(i) Secured Party’s Consent. No amendment, modification, termination or waiver of any provision of this Agreement, or consent to any departure by any Grantor therefrom, shall in any event be effective without the written concurrence of the Secured Party.

(ii) No Waiver; Remedies Cumulative. No failure or delay on the part of the Secured Party in the exercise of any power, right or privilege hereunder or under any other Transaction Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. All rights, powers and remedies existing under this Agreement and the other Transaction Documents are cumulative, and not exclusive of, any rights or remedies otherwise available. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

(c) Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective successors and assigns including all persons who become bound as debtor to this Agreement. No Grantor shall, without the prior written consent of the Secured Party, assign any right, duty or obligation hereunder.

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(d) Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

(e) Survival of Representations, Warranties and Agreements. All representations, warranties and agreements made herein shall survive the execution and delivery hereof. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Grantor set forth in Sections 10 and 11 shall survive the payment of the Secured Obligations and the termination hereof.

(f) Marshaling; Payments Set Aside. The Secured Party shall not be under any obligation to marshal any assets in favor of any Grantor or any other Person or against or in payment of any or all of the Secured Obligations.

(g) Severability. In case any provision in or obligation hereunder shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

(h) Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

(i) APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF STATE OF NEW YORK.

(j) CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING HERETO OR ANY OTHER TRANSACTION DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 12; AGREES THAT SUCH SERVICE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

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(k) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER TRANSACTION DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 12(K) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(l) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

(m) Effectiveness. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Grantors and the Secured Party of written or telephonic notification of such execution and authorization of delivery thereof.

(n) Entire Agreement. This Agreement and the other Transaction Documents embody the entire agreement and understanding between Grantors and the Secured Party and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the Transaction Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

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IN WITNESS WHEREOF, each Grantor and the Secured Party have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

THROWDOWN INDUSTRIES
HOLDINGS, LLC
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES, LLC
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
THROWDOWN INDUSTRIES, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO
XFIT BRANDS, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO

[Signature Page to Pledge and Security Agreement]

PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO
By: Pacific Investment Management Company LLC, as its Investment Advisor, acting through Investors
Fiduciary Trust Company, in the Nominee Name of IFTCO,
as the Secured Party
By:	/s/ T. Christian Stracke
Name:	T. Christian Stracke
Title:	Managing Directo

2

EX-10.5

PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT (as may be amended, restated, supplemented or otherwise modified from time to time, this “Patent Security Agreement”), dated as of December 16, 2016, is made by XFIT BRANDS, INC., a Nevada corporation(the “Grantor”), in favor of PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO, a separate investment portfolio of PIMCO FUNDS, a Massachusetts business trust (the “Secured Party”).

WHEREAS, the Grantor is party to that certain Amended and Restated Pledge and Security Agreement, dated as of December 16, 2016 (as may be further amended, supplemented, replaced or otherwise modified from time to time, the “Pledge and Security Agreement”) between the Grantor and the other grantors party thereto and the Secured Party pursuant to which the Grantor granted to the Secured Party a security interest in certain property, including the Patent Collateral (as defined below), and is required to execute and deliver this Patent Security Agreement for recording with the United States Patent and Trademark Office and other applicable Governmental Authorities.

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

SECTION 1.     DEFINED TERMS. All capitalized terms used but not otherwise defined herein have the meanings given to them (including by reference) in the Pledge and Security Agreement.

SECTION 2.      GRANT OF SECURITY INTEREST IN PATENT COLLATERAL.

(1) Grant of Security Interest. The Grantor hereby grants to the Secured Party a security interest and continuing lien on all of the Grantor’s right, title and interest in, to and under all personal property of the Grantor including, but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located (collectively, the “Patent Collateral”):

(a) all United States, state and foreign patents and applications for letters patent, including, but not limited to, each patent and patent application referred to in Schedule I hereto (as such Schedule may be amended or supplemented from time to time),

(b) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations of any of the foregoing,

(c) all rights corresponding thereto throughout the world,

(d) the right to sue or otherwise recover for past, present and future infringement of any of the foregoing, and

(e) all proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

(2) Certain Limited Exclusions. Notwithstanding anything herein to the contrary, in no event shall the security interest granted under Section 2(1) of this Patent Security Agreement attach to (a) any lease, license, contract, property rights or agreement to which the Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of the Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity), provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in (i) or (ii) including, without limitation, any proceeds of such lease, license, contract, property rights or agreement; or (b) in any of the outstanding capital stock of a “controlled foreign corporation” (as defined in the Internal Revenue Code of 1986, as amended) in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporation entitled to vote; provided that immediately upon the amendment of the Internal Revenue Code to allow the pledge of a greater percentage of the voting power of capital stock in a controlled foreign corporation without adverse tax consequences, the Patent Collateral shall include, and the security interest granted by the Grantor shall attach to, such greater percentage of capital stock of each controlled foreign corporation.

SECTION 3.     SECURITY FOR OBLIGATIONS.

(1) Security for Obligations. This Patent Security Agreement secures, and the Patent Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Secured Obligations.

(2) Continuing Liability under Patent Collateral. Notwithstanding anything herein to the contrary, (a) the Grantor shall remain liable for all obligations under the Patent Collateral and nothing contained herein is intended or shall be a delegation of duties to the Secured Party or any Secured Party and (b) the Grantor shall remain liable under each of the agreements included in the Patent Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Secured Party nor any Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Patent Security Agreement or any other document related thereto nor shall the Secured Party nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the Patent Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, (c) the exercise by the Secured Party of any of its rights hereunder shall not release the Grantor from any of its duties or obligations under the contracts and agreements included in the Patent Collateral.

(3) Termination. Upon the payment in full of all Secured Obligations, the cancellation or termination of the commitments and any other contingent obligation included in the Secured Obligations, the security interest granted hereby shall terminate hereunder and of record and all rights to the Patent Collateral shall revert to the Grantor. Upon any such termination, the Secured Party shall, at the Grantor’s expense, execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination.

SECTION 4.     APPLICABLE LAW. This Patent Security Agreement and the rights and obligations of the parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York without regard to conflict of law principles that would result in the application of any law other than the law of State of New York.

SECTION 5.     COUNTERPARTS. This Patent Security Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

[Remainder of page intentionally left blank]

2

IN WITNESS WHEREOF, the Grantor has caused this Patent Security Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first written above.

XFIT BRANDS, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO

Accepted and Agreed:

PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES:

PIMCO HIGH YIELD PORTFOLIO

By: Pacific Investment Management Company LLC,

as its Investment Advisor, acting through Investors

Fiduciary Trust Company, in the Nominee Name of IFTCO

By:	/s/ T. Christian Schacke
Name:	T. Christian Schacke
Title:	Managing Director

SCHEDULE I
to
PATENT SECURITY AGREEMENT

U.S. Patents and Patent Applications

Title	App. No.	Patent No.	Status
Sports Training System	11/071,583	7,857,734	Issued

EX-10.6

TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT (as may be amended, restated, supplemented or otherwise modified from time to time, this “Trademark Security Agreement”), dated as of December 16, 2016, is made by XFIT BRANDS, INC., a Nevada corporation(the “Grantor”), in favor of PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES: PIMCO HIGH YIELD PORTFOLIO, a separate investment portfolio of PIMCO FUNDS, a Massachusetts business trust (the “Secured Party”).

WHEREAS, the Grantor is party to that certain Amended and Restated Pledge and Security Agreement, dated as of December 16, 2016 (as may be further amended, supplemented, replaced or otherwise modified from time to time, the “Pledge and Security Agreement”) between the Grantor and the other grantors party thereto and the Secured Party pursuant to which the Grantor granted to the Secured Party a security interest in certain property, including the Trademark Collateral (as defined below), and is required to execute and deliver this Trademark Security Agreement for recording with the United States Patent and Trademark Office and other applicable Governmental Authorities.

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

SECTION 1.      DEFINED TERMS. All capitalized terms used but not otherwise defined herein have the meanings given to them (including by reference) in the Pledge and Security Agreement.

SECTION 2.      GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL.

(1) Grant of Security Interest. The Grantor hereby grants to the Secured Party a security interest and continuing lien on all of the Grantor’s right, title and interest in, to and under all personal property of the Grantor including, but not limited to the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located (collectively, the “Trademark Collateral”):

(a) all United States, state and foreign trademarks, service marks, certification marks, collective marks, trade names, corporate names, d/b/as, business names, fictitious business names, internet domain names, trade styles, logos, other source or business identifiers, designs and general intangibles of a like nature, rights of publicity and privacy pertaining to the right to use names likeness and biographical data as real, all registrations and applications for any of the foregoing including, but not limited to, the registrations and applications referred to in Schedule I hereto (as such Schedule may be amended or supplemented from time to time),

(b) the goodwill of the business connected with the use of and symbolized by the foregoing,

(c) the right to sue or otherwise recover for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and

(c) all proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

(2) Certain Limited Exclusions. Notwithstanding anything herein to the contrary, in no event shall the security interest granted under Section 2(1) of this Trademark Security Agreement attach to (a) any lease, license, contract, property rights or agreement to which the Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of the Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity), provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in (i) or (ii) including, without limitation, any proceeds of such lease, license, contract, property rights or agreement; or (b) in any of the outstanding capital stock of a “controlled foreign corporation” (as defined in the Internal Revenue Code of 1986, as amended) in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporation entitled to vote; provided that immediately upon the amendment of the Internal Revenue Code to allow the pledge of a greater percentage of the voting power of capital stock in a controlled foreign corporation without adverse tax consequences, the Trademark Collateral shall include, and the security interest granted by the Grantor shall attach to, such greater percentage of capital stock of each controlled foreign corporation.

SECTION 3.     SECURITY FOR OBLIGATIONS.

(1) Security for Obligations. This Trademark Security Agreement secures, and the Trademark Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Secured Obligations.

(2) Continuing Liability under Trademark Collateral. Notwithstanding anything herein to the contrary, (a) the Grantor shall remain liable for all obligations under the Trademark Collateral and nothing contained herein is intended or shall be a delegation of duties to the Secured Party or any Secured Party and (b) the Grantor shall remain liable under each of the agreements included in the Trademark Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Secured Party nor any Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Trademark Security Agreement or any other document related thereto nor shall the Secured Party nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the Trademark Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, (c) the exercise by the Secured Party of any of its rights hereunder shall not release the Grantor from any of its duties or obligations under the contracts and agreements included in the Trademark Collateral.

(3) Termination. Upon the payment in full of all Secured Obligations, the cancellation or termination of the commitments and any other contingent obligation included in the Secured Obligations, the security interest granted hereby shall terminate hereunder and of record and all rights to the Trademark Collateral shall revert to the Grantor. Upon any such termination, the Secured Party shall, at the Grantor’s expense, execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination.

SECTION 4.     APPLICABLE LAW. This Trademark Security Agreement and the rights and obligations of the parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York without regard to conflict of law principles that would result in the application of any law other than the law of State of New York.

SECTION 5.     COUNTERPARTS. This Trademark Security Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

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IN WITNESS WHEREOF, the Grantor has caused this Trademark Security Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first written above.

XFIT BRANDS, INC.
By:	/s/ David E. Vautrin
Name:	David E. Vautrin
Title:	CEO

Accepted and Agreed:

PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES:

PIMCO HIGH YIELD PORTFOLIO

By: Pacific Investment Management Company LLC,

as its Investment Advisor, acting through Investors

Fiduciary Trust Company, in the Nominee Name of IFTCO

By:	/s/ T. Christian Schacke
Name:	T. Christian Schacke
Title:	Managing Director

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

U.S. Federal Trademark Registrations

Trademark	App. No.	Reg. No.	Status
XFIT BRANDS EXPERIENTIAL FITNESS PRODUCTS	87/090,750	—	Pending
XFIT BRANDS	86/480,639	4,781,967	Registered
GLIDEBOXX	86/517,350	4,807,774	Registered
ENVIROTURF	77/605,294	3,706,734	Registered