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.

 

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 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