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.


 


Throwdown
Industries Holdings, LLC

Throwdown Industries, LLC

Throwdown Industries, INC.


XFIT
BRANDS, INC.


 


$2,000,000


 


14.00%
Senior Secured Fixed Rate Note due June 12, 2017


 


	Registered	 	New
    York, New York
	 	 	 
	No.
    R-3	 	Dated:
    June 12, 2014


 


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 TWO MILLION DOLLARS ($2,000,000) on June 12, 2017 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 14.00% 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 20th day of each calendar month, commencing
on July 20, 2014, 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; provided, that unless a Default
or an Event of Default (each as defined in the Note Purchase Agreement) has occurred or Holdings, on behalf of the Obligors, otherwise
elects in accordance with the Note Purchase Agreement, the Obligors shall pay cash interest for each Payment Date at a per annum
rate of 9.00%, and the additional interest that otherwise would have been payable in cash on the applicable Payment Date shall
instead be added to the outstanding principal balance of the Notes in accordance with the Note Purchase Agreement. Amounts payable
on each Payment Date shall be payable to the holder in whose name this Note is registered on the applicable Payment Date.


 






    	 



    	 



    


 


Such interest
will accrue from, and including, June 12, 2014 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.


 


“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 $2,500,000 aggregate principal amount of 14.00% Senior Secured Fixed Rate Notes due
June 12, 2017 (the “Notes”) of the Obligors. This Note is issued pursuant to and subject to the Note Purchase Agreement,
dated as of June 10, 2014 (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 Pledge and
Security Agreement, dated as of June 10, 2014, 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
Holdings by such registered owner.


 


2.Redemption.
Holdings, 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. The “Applicable Percentage” means (i) in the case of a redemption
on or prior to June 12, 2016, 107% or (ii) in the case of a redemption after June 12, 2016, 100%.


 


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 Holdings located at 18 Goodyear –
Suite 125, Irvine, CA 92618, 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 Holdings not less than three (3) Business Days prior to the requested
transfer date or such shorter period as Holdings 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.


 


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


 


Dated: