Asset Purchase Agreement

 

This Asset Purchase Agreement (“Agreement”) is made this 26th day of February
2015 (“Effective Date”) by and between XFit Brands, Inc., a Nevada corporation
and its subsidiaries and or assigns (collectively the “Company”), and Dennis
Dumas of 3754 Reflections Drive, Pleasanton, CA 94566 (“Dumas”). The Company and
Dumas are individually referred to as a “Party” and collectively as the
“Parties”.

 

W I T N E S S E T H

 

WHEREAS, the Company has previously hired Dumas as the Global Director of Sales
and Education pursuant to the terms and conditions in the Letter Agreement
signed by the Parties on February 6, 2015 (the “Letter Agreement”); and

 

WHEREAS, Dumas is the creator and exclusive owner of all rights, title, and
interest in the “Transformations” exercise and fitness program and all program
materials, manuals, and intellectual property including but not limited to the
trademarks and logos listed in Exhibit A, attached hereto and made a part hereof
(the Transformations exercise and fitness program and all program materials,
manuals, and intellectual property including but not limited to the trademarks
and logos listed in Exhibit A is collectively referred to as the
“Transformations Program”); henceforth, the Transformations Program will be
referred to as “Transformations, a Throwdown Product”, or any other format
deemed by the Company, in ALL literature, both digital and print; and

 

WHEREAS, Dumas desires to sell and the Company desires to purchase all
ownership, rights, title, and interest in the Transformations Program; and

 

WHEREAS, Dumas has the required knowledge and expertise to create, develop,
market, promote, and sell the Transformations Program; and

 

WHEREAS, Dumas shall act an independent contractor for the services provided in
this Agreement to market, sell, and promote the Transformations Program
exclusively for the Company.

 

NOW THEREFORE, in consideration of the premises and the mutual promises herein
made, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the Parties, the Parties, intending to be
legally bound, hereby agree as follows:

 

PURCHASE & SALE

 

1.1 Transfer and Sale of the Transformations Program by Dumas. Subject to the
terms and conditions set forth in this Agreement, Dumas hereby sells, conveys,
transfers, and delivers all of the rights, title, and interest to the
Transformations Program to the Company free and clear of any and all liens,
encumbrances, and or liabilities.

 

1.2 Payment of Purchase Price to Dumas.

 

(a) Cash Payment. Upon the signing of this Agreement AND the delivery of the
Transformations Program Manuals including all and any handwritten or digitally
based notes, drawings, or created materials for Individual Participants,
Companies, and Trainers, the Company shall pay Dumas a lump sum payment of
$7,500.00.

 

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(b) Initial Stock. Once the Company shares are able to be deposited through
Depository Trust Company, but in no case earlier than April 1, 2015, the Company
shall issue (11,000) Company shares each issued at approximately $5.00 per share
to Dumas. (~$55,000)

 

(c) Performance Based Earn-out. For the period of eighteen (18) months from the
date of this Agreement, the Company shall pay Dumas an “Earn Out” in the form of
Company shares of common stock. The value of the Earn Out shall accrue based on
fifty percent (50%) of all programming / services net proceeds derived from the
Transformations Program up to a maximum Earn Out of $187,500.00. The Earn Out
will be based on the thirty (30) trailing day average and considered earned and
issued the first business day of the month following the achievement of each
level as listed below. At each level, no amount of shares will be issued unless
the full amount of each target revenue is reached.

 

Earn Out of $187,500.00:

 

i. $62,500.00 of XFIT shares of common stock only after the Company receives all
of its first $125,000.00 in Transformations Program programming and services
revenue and the Transformations Program is accredited to offer CE certifications
by NAFC.

 

ii. $62,500.00 of XFIT shares of common stock only after the Company receives
all its second $125,000.00 in Transformations Program programming and services
revenue or cumulative revenue of $250,000.00.

 

iii. $62,500.00 of XFIT shares of common stock only after the Company receives
all its third $125,000 in Transformations Program programming and services
revenue or cumulative revenue of $375,000.00.

 

ARTICLE II

ADDITIONAL DUTIES AND RESPONSIBILITIES

 

2.1 Additional Duties and Responsibilities. As further consideration for all
payments made as detailed in Article I above, for a period of eighteen (18)
months from the date of this Agreement, Dumas agrees to market, promote, and
sell the Transformations Program to various fitness facilities worldwide. Dumas’
responsibilities shall include but not be limited to the following:

 

(a) Dumas shall deliver the Transformations Program materials and manuals to the
Company (collectively the “Manuals”), which shall include but not be limited to;

 

i. Detailed exercise and training methods, nutritional information, and overall
health and body wellness materials for participants;

 

ii. Detailed exercise and training methods, nutritional information, and overall
health and body wellness materials and pricing for fitness facility owners and
fitness trainers and instructors;

 

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(b) Providing detailed pricing and other financial information necessary for
fitness facility owners and fitness trainers to generate revenue from the
Transformations Program;

 

(c) Preparing, annual, objectives, plans, performance standards and policies for
the Transformations Program;

 

(d) Generating revenue and profit through the sales of the Transformations
Program;

 

(e) Generating revenue and profit by providing fitness trainer and instructor
certifications, classes, and educational workshops for fitness facilities and
fitness trainers and instructors;

 

(f) Updating and modifying Manuals as necessary;

 

(g) Ensuring the Transformations Program is accredited to offer CE
certifications by NAFC;

 

(h) Offer and Certify Under The Throwdown name, the executed accredited
certificates via NAFC.

 

(i) With the exception of the single Melo Park Facility d/b/a Civitas, which
Dumas is a co-owner, Dumas will solely and exclusively provide training and
education to the Company during the term of his employment pursuant to the
Letter Agreement.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF DUMAS

 

Dumas represents and warrants to the Company as of the date hereof as follows:

 

3.1 Ownership of the Transformations Program. Dumas is the sole owner of the
Transformations Program to be sold, conveyed, transferred and delivered to the
Company pursuant to this Agreement. The Transformations Program shall be
transferred free and clear of any liens, encumbrances, contracts, or other
rights to subscribe for or purchase, or contract or other obligations to issue
or grant any rights to acquire, any part of the Transformations Program.

 

3.2 Capacity and Authority. Dumas is not bound by any agreement that which would
prohibit the transactions contemplated by this Agreement. Dumas has the
requisite power, legal capacity and authority to execute and deliver this
Agreement, and subject to the terms and conditions hereof, to consummate the
transactions contemplated by this Agreement, including the power and legal
capacity and authority to sell, convey, transfer and deliver the Transformations
Program to be sold by Dumas to the Company.

 

3.3 Enforceability; No Conflicts. This Agreement has been duly and validly
executed and delivered by Dumas and constitutes the legally valid and binding
obligation of Dumas, enforceable against Dumas in accordance with its terms. The
execution, delivery and performance of this Agreement by Dumas will not violate,
or constitute a breach or default under agreement, contract, or license.

 

3.4 Legal Proceedings. There is currently no order or action pending or
threatened against the Transformations Program.

 

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3.5 Material Information. Dumas is unaware of any information whatsoever that
has not been or will not be disclosed to the Company that may materially affect
the value of the Transformations Program to be purchased by the Company in
accordance with the terms and conditions of this Agreement.

 

3.6 Third Party License. Except for the Intellectual Property License Agreement
dated November 1, 2014 by and between Dumas and 2 G Fitness, LLC, there is no
other license, contract, or agreement that grants to any other third party any
rights of ownership or use whatsoever to the Transformations Program.

 

3.7 Attorney Review. Dumas warrants and represents that in executing this
Agreement, Dumas has had the opportunity to rely on legal advice from an
attorney of his choice, so that the terms of this Agreement and their
consequences could have been fully read and explained to Dumas by an attorney
and that Dumas fully understands the terms and conditions of this Agreement.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Dumas as of the date hereof as follows:

 

4.1 Authorization. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Nevada. The Company
has the requisite power, legal capacity and authority to execute and deliver
this Agreement, and subject to the terms and conditions hereof, to consummate
the transactions contemplated by this Agreement.

 

4.2 Financial Ability. The Company has the ability to pay the Purchase Price in
accordance with the terms and conditions of this Agreement.

 

ARTICLE V
COVENANTS WITH RESPECT TO CONDUCT OF THE COMPANY AND DUMAS

 

5.1 Consents. Dumas shall give required notices, if any, to third parties, and
use commercially reasonable efforts to obtain any third-party consents necessary
to complete the transactions contemplated by this Agreement.

 

5.2 Notification of Certain Matters. Dumas shall give prompt notice to the
Company, and the Company shall give prompt notice to Dumas, of (a) their
awareness of the occurrence, or failure to occur, of any event that would cause
any of their respective representations or warranties contained in this
Agreement to be untrue or inaccurate in any material respect at any time from
the date of this Agreement, and (b) any failure of Dumas or the Company, as the
case may be, to comply with or satisfy, in any material respect, any covenant,
condition or agreement to be complied with or satisfied by them under this
Agreement at the time required.

 

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ARTICLE VI

GENERAL

 

6.1 Amendments. Waivers This Agreement may be amended only by an agreement in
writing signed by the Parties. No waiver of any provision, or consent to any
exception to any provision, of this Agreement shall be effective unless and
until in writing and signed by the Party to be bound and then only for the
specific purpose, extent and instance so provided.

 

6.2 Entire Agreement. This Agreement constitutes the entire agreement among the
Parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the Parties in connection therewith. The
Whereas Clauses preceding the Agreement are true and correct and incorporated
into this Agreement.

 

6.3 No Brokers or Finders. None of the Parties have incurred any liability to
pay any fees or commissions to any broker, finder, or agent with respect to this
Agreement.

 

6.4 Accuracy of Information. To the knowledge of Dumas, no representation or
warranty of Dumas contained in this Agreement or any other material furnished to
the Company by or on behalf of Dumas under this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.

 

6.5 Confidentiality. Dumas agrees to keep confidential any and all “Confidential
Information” regarding or relating to the Company. “Confidential Information” is
defined as any and all information of any kind, whether in written, electronic,
oral, or any other format now in existence or developed after the date of this
Agreement, and whether or not labeled as “Confidential”, including without
limitation, information relating to the Company business, financial condition,
licenses, marketing strategies, suppliers, customers, client or customer lists,
operations, pricing, contracts, contract terms and conditions and all
information of any kind relating to Company, its respective shareholders and /or
related or associated companies which have been disclosed, submitted or
howsoever made available by or on behalf of Company to Dumas whether before or
after of this Agreement.

 

6.6 Governing Law. This Agreement, the legal relations among the Parties, and
any Action, whether contractual or non-contractual, instituted by any Party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement shall be governed by and construed in accordance with
the laws of the State of California, with venue lying exclusively in Orange
County, California.

 

6.7 No Assignment. Dumas may not assign any rights or obligations under this
Agreement without the express written consent of the Company.

 

6.8 Headings. The descriptive headings of the Articles, Sections and subsections
of this Agreement are for convenience only and do not constitute a part of this
Agreement.

 

6.9 Counterparts. This Agreement may be executed in any number of counterparts,
each such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one Agreement. This Agreement may be
executed by facsimile transmission or PDF e-mail. Such facsimile or PDF e-mail
signature shall be treated in all respects as having the same effect as an
original signature.

 

6.10 Notices. Any notice or other communication hereunder must be given in
writing and (a) delivered in person; or (b) transmitted by fax or email provided
that any notice so given is also mailed; or (c) mailed by certified or
registered mail, postage prepaid, receipt requested; or (d) sent by a nationally
recognized overnight private courier (for overnight delivery), as follows:

 

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If to Company:   David Vautrin, CEO     18 Goodyear, Suite 125     Irvine, CA
92618     Phone: 949     Fax: 813 387 3050     dave.vautrin@xfitbrands.com      
If to Dumas:   Dennis Dumas     3754 Reflections Drive     Pleasanton, CA 94566
    Phone: ____________________     Fax: ______________________     Email:
____________________

 

or to such other address or to such other Person as any Party shall have last
designated by notice to the other Party. Each such notice or other communication
shall be effective only when actually received at such address.

 

6.11 Remedies; Waiver; and Specific Performance. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available under this Agreement. No failure on the
part of any Party to exercise or delay in exercising any right hereunder shall
be deemed a waiver thereof, nor shall any single or partial exercise preclude
any further or other exercise of such or any other right.

 

6.12 Attorney’s Fees. In the event of the commencement of any Action by any
Party arising under or out of, in connection with, or in respect of this
Agreement, the prevailing Party shall be entitled to reasonable attorney’s fees,
costs and expenses incurred in such Action. Attorney’s fees incurred in
enforcing any judgment in respect of this Agreement are recoverable as a
separate item. The Parties intend that the preceding sentence be shall severable
from the other provisions of this Agreement, survive any judgment, and to the
maximum extent permitted by law, not be deemed merged into such judgment.

 

6.13 Severability. If any provision of this Agreement is determined by any
Governmental Entity to be invalid, illegal or unenforceable, the remaining
provisions of this Agreement to the extent permitted by Law shall remain in full
force and effect.

 

[Signatures follow]

 

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IN WITNESS WHEREOF, the Parties have mutually agreed to the terms and conditions
of this Agreement to be executed by themselves and their respective officers who
are authorized to do so on this______ day of February, 2015.

 

DENNIS DUMAS         By: Dennis Dumas         COMPANY: XFIT BRANDS, INC.        
By:     Name: David E. Vautrin   Title: CEO  

 

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EXHIBIT A

 

Transformations Program Logos

 

[image_001.jpg]

 

[image_002.jpg]

 

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