PROMISSORY NOTE

 

$150,000.00 September 7, 2017

 

FOR VALUE RECEIVED, XFit Brands, Inc., a Nevada corporation (“Borrower”), hereby
promises to pay to the order of GCP, Inc., a Colorado corporation (hereinafter
referred to, together with each subsequent holder hereof, as “Lender”), in
lawful money of the United States and in the principal sum of One Hundred Fifty
Thousand and no/100 Dollars ($150,000.00), or so much thereof as may be
outstanding from time to time, together with all accrued and unpaid interest
thereon, in the amounts, at the times, in the manner and subject to the terms
and conditions set forth in this Promissory Note (this “Note”).

 

1. Payment; Principal and Interest.

 

(a) Principal and Interest Repayment. The principal amount of this Note shall be
payable, together with accrued and unpaid interest thereon, on June 30, 2018
(the “Maturity Date”). The principal amount of this Note shall bear interest at
a rate of [ten] percent (10%) per annum, which shall be payable on the Maturity
Date. Interest shall be calculated on the basis of a 365/366-day year for the
actual number of days elapsed.

 

(b) Limitations on Interest Rates. Notwithstanding any provision in this Note to
the contrary, the total liability for payments in the nature of interest shall
not exceed the applicable limits imposed by any applicable federal or state
interest rate laws. If any payments in the nature of interest, additional
interest and other charges made hereunder are held to be in excess of the
applicable limits imposed by any applicable federal or state law, the amount
held to be in excess shall be considered payment of principal under this Note
and the indebtedness evidenced hereby shall be reduced by such amount so that
the total liability for payments in the nature of interest, additional interest
and other charges shall not exceed the applicable limits imposed by any
applicable federal or state interest rate laws.

 

2. Advances. Advances under this Note shall be made in sufficient amounts to
fund the principal amount hereof. All advances by Lender to Borrower hereunder
and all payments made on account of principal hereof shall be recorded by
Lender, and prior to any transfer thereof, endorsed by Lender on Exhibit A
attached hereto, which is a part of this Note. The aggregate amount of principal
outstanding shall not at any time exceed the principal amount of this Note.

 

Lender is authorized to record on appropriate records of Lender, in the form
attached hereto as Exhibit A, the date and· the amount of the advance made by
Lender pursuant to this Note, each continuation thereof, and the date and amount
of each payment or prepayment of principal and interest thereof. Any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided, however, that the failure of Lender to make
any such recordation (or any error in such recordation) shall not affect the
obligations of Borrower hereunder.

 

3. No Setoff. Each payment hereunder, whether for principal, interest or
otherwise, shall be made without setoff, counterclaim, defense, condition, or
reservation of right.

 

   

  

 

4. Prepayments. This Note may be prepaid in whole or in part at any time and
from time to time without premium or penalty. All money paid toward the
satisfaction of this Note shall be applied first to the payment of accrued and
unpaid interest and then to the retirement of the principal.

 

5. Default. Each of the following events shall be an “Event of Default”
hereunder:

 

(a) Borrower fails to pay timely any of the principal and any accrued interest
or other amounts due under this Note when the same becomes due and payable;

 

(b) Borrower files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law for the relief
of, or relating to, debtors, now or hereafter in effect; applies for or consents
to the appointment of a custodian, receiver, trustee, sequestrator, conservator
or similar official for Borrower or for a substantial part of Borrower’s assets;
makes a general assignment for the benefit of creditors; becomes unable to, or
admits in writing its inability to, pay its debts generally as they come due; or
takes any corporate action in furtherance of any of the foregoing; and

 

(c) An involuntary petition is filed against Borrower (unless such petition is
dismissed or discharged within sixty (60) days) under any bankruptcy statute now
or hereafter in effect, or a custodian, receiver, trustee, sequestrator,
conservator, assignee for the benefit of creditors (or other similar official)
is appointed to take possession, custody or control of any property of Borrower.

 

Upon the occurrence of an Event of Default hereunder, Lender shall notify
Borrower of the occurrence of such Event of Default and if Borrower does not
cure the Event of Default within ten (10) days following the receipt of such
notice, (i) all unpaid principal, accrued interest and other amounts owing
hereunder shall, at the option of Lender in the case of Sections 5(a), or
automatically, in the case of Sections 5(b) or (c) be immediately due and
payable by Borrower, and (ii) Lender may proceed to protect and enforce its
right by suit in the specific performance of any covenant or agreement contained
in this Note or in aid of the exercise of any power granted in this Note or may
proceed to enforce the payment of this Note or to enforce any other legal or
equitable rights as Lender may have, including exercising any right or remedies
available to Lender under this Note. In addition, any and all amounts (including
principal, unpaid interest and reasonable costs and expenses of collection)
outstanding hereunder after a default shall bear interest from the date due
until paid at a rate equal to the rate provided for in Section l(a) plus two
percent (2%) per annum. The rights and remedies of Lender under this Note shall
be cumulative and not alternative.

 

6. Waiver; Representations and Expenses. Borrower waives presentment, notice of
dishonor, protest and notice of protest of this Note and all other notices or
demands in connection with the delivery, acceptance, performance, default or
endorsement of this Note, and shall pay out-of-pocket costs and expenses of
collection when incurred by Lender, including, without limitation, attorneys’
fees and expenses. No extension nor indulgence granted from time to time shall
be construed as a novation of this Note or as a reinstatement of the
indebtedness evidenced hereby or as a waiver of the rights of Lender herein.

 

7. Governing Law. This Note, and disputes or controversies arising hereunder,
and the rights and obligations of the parties under this Note, shall be governed
by, and construed and interpreted in accordance with, the law of the State of
Colorado without regard to conflicts of law principles.

 

   

  

 

8. Headings. Section headings in this Note are included herein for convenience
of reference only and shall not constitute a part of this Note for any other
purpose or given any substantive effect.

 

9. Severability. Whenever possible, each provision of this Note shall be
interpreted in such a manner as to be valid, legal and enforceable under the
applicable law of any jurisdiction. Without limiting the generality of the
foregoing sentence, in case any provision of this Note shall be invalid, illegal
or unenforceable under the applicable law of any jurisdiction, the validity,
legality and enforceability of the remaining provisions, or of such provision in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

10. Amendments and Waivers. No amendment, modification, forbearance or waiver of
any provision of this Note shall be effective unless the same shall be in
writing and signed by Lender and Borrower.

 

11. Notices. Except as otherwise provided herein, all notices, requests and
demands to or upon a party to this Note to be effective shall be in writing and
shall be deemed validly given upon receipt thereof, whether by personal
delivery, U.S. mail, overnight courier, fax, e mail or other electronic
communication or otherwise, in each case addressed as follows:

 

  If to Lender:           GCP, Inc.     2944 Zuni Street, Unit C     Denver, CO
80211     Attention: Greg Barrow     Phone: (720) 200-4500           Email:
jgb@generalcapitalpartners.com       If to Borrower:           XFit Brands, Inc.
    25731 Commercentre Drive.     Lake Forest, California 92630     Attention:
Board of Directors     Phone: (949) 916-9680           With copies (which shall
not constitute notice) to: Joseph P. Galda, Esq.     J.P. Galda & Co.     1055
Westlakes Dr., Suite 300     Berwyn, PA 19087     Phone: (215) 815-1534    
Email: jpgalda@jpgaldaco.com  

 

or to such other address, fax number or email address as each party may
designate for itself by like notice give in accordance with this Section 11.

 

   

  

 

12. Successors and Assigns. The provisions of this Note shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except that Borrower may not assign or transfer any of its
respective rights or obligations under this Note without the consent of the
Lender.

 

13. Consent to Forum. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF LENDER OR BORROWER SHALL BE
BROUGHT AND MAINTAINED IN THE DISTRICT COURT OF LARIMER COUNTY, COLORADO. LENDER
AND BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE NONEXCLUSIVE
JURJSDICTION OF THE DJSTRICT COURT OF LARIMER COUNTY, COLORADO, FOR THE PURPOSE
OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREE TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. LENDER AND
BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
COLORADO AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 11. LENDER AND BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

14. Waiver of Jury Trial. LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF LENDER AND BORROWER.

 

   

  

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed and
delivered as of the date first written above.

 

  BORROWER       XFIT BRANDS, INC.           Brent David Willis   Chairman

 

[SIGNATURE PAGE- GCP NOTE]

 

   

  

 

Exhibit A to Promissory Note

Dated September 8, 2017

 

Schedule of Borrowings and Payments

 

Borrowings Date  Amount        September 8, 2017  $45,000.00         Total 
$45,000.00 

 

Payments

 

    Amount of Principal         Pate   Paid or Repaid   Unpaid Principal Balance
  Notation Made