Document:

Exhibit 10.7

Exhibit 10.7

SEPARATION AGREEMENT

This Separation Agreement (“Agreement”) is made and entered into as of November 4, 2009 by and
between Matthew Burns, an individual (“Burns”), and HealthSport, Inc., a Delaware corporation
(“HealthSport”), with respect to the following facts:

A. Burns has served as an independent consultant for HealthSport pursuant to an independent
consultant agreement with HealthSport (the “Consultant Agreement”). Burns has served as a director
of HealthSport since May 2007. Burns has also in the past served as HealthSport’s chief operating
officer and secretary but is not an officer of HealthSport as of the date of this Agreement.

B. Burns now desires to terminate the Consultant Agreement and Burns’s position of independent
consultant with HealthSport.

C. Burns and HealthSport now desire to release one another from certain claims that they may
have against one another arising out of Burns’s Consultant Agreement with HealthSport, with Burns’s
past employment with HealthSport and otherwise prior to the date of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and
intending to be legally bound, HealthSport and Burns agree as follows:

Section 1. Resignation. Burns hereby resigns as an independent consultant of
HealthSport effective as of the date of this Agreement. Burns shall remain a director of
HealthSport. The Consultant Agreement is terminated as of the date of this Agreement. Burns shall
not be an employee of HealthSport. Burns will return to HealthSport all property owned by
HealthSport, including all originals and copies of the following, whether in Burns’s possession or
previously removed by Burns from HealthSport’s premises and still existing, and whether recorded on
paper, computer disk, other computer readable-form, or any other medium: all computers, office
equipment, company assets, lists, correspondence, books, letters, records, financial data, product
information, formulas, sales information and other materials and other materials and writing owned
by HealthSport or used by it in connection with the conduct of its business.

Section 2. Separation Payment. As separation compensation, HealthSport shall, subject
to Burns’ satisfaction of any withholding or other taxes that may be due:

(i) Pay to Burns the sum of $35,000 on or before December 1, 2009; and

(ii) Issue 100,000 unregistered shares of common stock of HealthSport to Burns on or before
December 1, 2009.

Burns shall be solely responsible for payment of any and all applicable taxes associated with this
Agreement.

 

 

 

Section 3. Section 409A Compliance. This Agreement is intended to comply with the
requirements of section 409A of the Internal Revenue Code (“409A”). In the event this Agreement or
any benefit paid to Burns hereunder is deemed to be subject to 409A, Burns hereby consents to the
Company adopting such conforming amendments as the Company deems necessary, in its reasonable
discretion, to comply with 409A. If upon Burns’s “separation from service” within the meaning of
409A, he is then a “specified employee” (as defined in 409A), then solely to the extent necessary
to comply with 409A and avoid the imposition of taxes under 409A, the Company shall defer payment
of “nonqualified deferred compensation” subject to 409A payable as a result of and within six (6)
months following such separation from service until the earlier of (i) the first business day of
the seventh month following Burns’ separation from service, or (ii) ten (10) days after the Company
receives written notification of Burns’ death. Any such delayed payments shall be made without
interest. In addition, to the extent required by 409A, any expense reimbursement payments to Burns
must be made by no later than the end of Burns’ taxable year following the taxable year in which
the expense is incurred. Such reimbursement or in-kind benefit rights may not be subject to
liquidation or exchange for another benefit. The Company (nor any of its directors, employees or
agents) shall not be liable to Burns or other persons as to any unexpected or adverse tax
consequence realized by Burns or other person as a result of this Agreement or any payment or
benefit provided under this Agreement.

Section 4. Indemnification Claims Not Released. Burns retains, and does not release in
this Agreement any rights to indemnification in accordance with the terms of HealthSport’s
articles of incorporation or bylaws.

Section 5. General Release. Except for the claims set forth in Section 4 above, Burns
for himself, his heirs, executors, administrators, assigns and successors, fully and forever
releases and discharges HealthSport and its current, former and future parents, subsidiaries,
related entities, employee benefit plans and their fiduciaries, predecessors, successors, officers,
directors, shareholders, agents, employees and assigns (collectively, “Releases”), with respect to
any and all claims, liabilities and causes of action, of every nature, kind and description, in
law, equity or otherwise, which have arisen, occurred or existed at any time prior to the signing
of this Agreement, including, without limitation, any and all claims, liabilities and causes of
action arising out of or relating to Burns’s employment relationship with HealthSport prior to the
date of this Agreement.

 

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Section 6. Knowing Waiver of Employment-Related Claims. Burns understands and agrees
that, with the exception of potential employment-related claims identified below, he is waiving any
and all rights he may have had, now has, or in the future may have, to pursue against any of the
Releases any and all remedies available to him under any employment-related causes of action,
including without limitation, claims of wrongful discharge, breach of contract, breach of the
covenant of good faith and fair dealing, fraud, violation of public policy, defamation,
discrimination, personal injury, physical injury, emotional distress, claims under Title VII of the
Civil Rights Act of 1964, as amended, the Americans With Disabilities Act, the Federal
Rehabilitation Act, the California Fair Employment and Housing Act, the California Family Rights
Act, the Equal Pay Act of 1963, the provisions of the California Labor Code and any other federal,
state or local laws and regulations relating to employment, conditions of employment (including
wage and hour laws), perquisites of employment (including but not limited to claims relating to
stock and/or stock options) and/or employment discrimination.
Claims not covered by the release provisions of this Agreement are (i) claims for unemployment
insurance benefits, (ii) claims under the California Workers’ Compensation Act, and (iii) claims
for indemnity under the California Labor Code, (iv) claims arising from HealthSport’s
nonperformance under this Agreement and (v) any challenge to the validity of Burns’s release of
claims under the Age Discrimination in Employment Act of 1967, as amended, (“ADEA”) as set forth in
Section 6 below. Burns expressly waives any right to recovery of any type, including damages and
reinstatement, in any administrative or court action, whether state or federal, and whether brought
by him or on his behalf, related in any way to the matters released herein.

Section 7. Knowing Waiver of ADEA Claims. Burns acknowledges that he is knowingly and
voluntarily waiving and releasing any rights he may have under the federal Age Discrimination in
Employment Act of 1967, as amended. He also acknowledges that the consideration given for this
waiver and release is in addition to anything of value to which he was already was entitled. Burns
further acknowledges that he has been advised by this writing, as required by law, that: (i) his
waiver and release specified in this paragraph do not apply to any rights or claims that may arise
after the date he signs this Agreement or to any challenge to the validity of this waiver of ADEA
claims; (ii) he has been advised hereby that he has the right to consult with an attorney prior to
executing this Agreement; (iii) he has twenty one (21) days to consider this Agreement (although he
may choose to voluntarily execute this Agreement earlier); (iv) he has seven (7) days following his
execution of this Agreement to revoke the Agreement (in writing); and (v) this Agreement will not
be effective until the date upon which the revocation period has expired, which will be the eighth
(8th) day after this Agreement is executed by Burns.

Section 8. Waiver of Civil Code § 1542. Burns expressly waives any and all rights and
benefits conferred upon him by Section 1542 of the Civil Code of the State of California, which
states as follows:

“A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”

Burns expressly agrees and understands that the release given by him pursuant to this Agreement
applies to all unknown, unsuspected and unanticipated claims, liabilities and causes of action
which he may have against any of the other Releases.

Section 9. Severability of Release Provisions. Burns agrees that if any provision of
the release given by him under this Agreement is found to be unenforceable, it will not affect the
enforceability of the remaining provisions and the courts may enforce all remaining provisions to
the extent permitted by law.

 

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Section 10. Representation Regarding Legal Actions. Burns represents that, as of the
date of this Agreement, he has not filed any lawsuits, charges, complaints, petitions, claims or
other accusatory pleadings against the Releases in any court or any with any governmental agency.
Except for claims preserved by law or expressly by this Agreement, Burns promises never to sue any
of the Releases, or otherwise institute or participate in any legal or administrative proceedings
against any of the Releases, with respect to any claim covered by the
release provisions of this Agreement, unless he is compelled by legal process to do so. Burns
promises and agrees that he shall not advocate or incite the institution of, or assist or
participate in, any suit, complaint, charge or administrative proceeding by any other person
against any of the Releases, unless compelled by legal process to do so.

Section 11. Promise to Maintain Confidentiality of HealthSport’s Confidential
Information. Burns acknowledges that due to the position he has occupied and the
responsibilities he has had at HealthSport, he has received confidential information concerning
HealthSport’s products, procedures, customers, sales, prices, contracts, and the like. Burns
hereby promises and agrees that, unless compelled by legal process, he will not disclose to others
and will keep confidential all information he has received while employed by HealthSport concerning
HealthSport’s products and procedures, the confidential purchasing information relating to
HealthSport’s customers, HealthSport’s sales, HealthSport’s prices, the terms of any of
HealthSport’s contracts with third parties, and the like. Burns agrees that a violation by him of
the foregoing obligation to maintain the confidentiality of HealthSport’s confidential information
will constitute a material breach of this Agreement.

Section 12. Entire Agreement. This Agreement constitutes the sole agreement between
the parties with respect to its subject matter and supersedes all prior discussions, arrangements
or agreements, whether written or oral, with respect to its subject matter.

Section 13. Waiver, Amendment and Modification of Agreement. The parties agree that
no waiver, amendment or modification of any of the terms of this Agreement shall be effective
unless in writing and signed by all parties affected by the waiver, amendment or modification. No
waiver of any term, condition or default of any term of this Agreement shall be construed as a
waiver of any other term, condition or default.

Section 14. Representation by Counsel. The parties acknowledge that they have had the
opportunity to be represented in negotiations for the preparation of this Agreement by counsel of
their own choosing, and that they have entered into this Agreement voluntarily, without coercion.
This Agreement shall be construed in accordance with its plain meaning and not strictly for or
against either party.

Section 15. California Law. The parties agree that this Agreement and its terms shall
be construed under California law, without regard to any choice of law provisions.

Section 16. Counterparts. This Agreement may be signed in multiple counterparts and
may be delivered by facsimile or electronic mail in portable document format or other means
intended to preserve the original graphical content of a signature. Each such counterparts shall
be an original and all of which, taken together, shall constitute one and the same instrument.

 

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Section 17. Period to Consider Terms of Agreement. Burns acknowledges that this
Agreement was presented to him on November 4, 2009 and that he is entitled to have up to
twenty-one (21) days’ time in which to consider the terms of this Agreement. Burns acknowledges
that he has obtained the advice and counsel from the legal representative of his choice and
executes this Agreement having had sufficient time within which to consider its terms. Burns
represents that if he executes this Agreement before 21 days have elapsed, he does
so voluntarily, upon the advice and with the approval of his legal counsel, and that he
voluntarily waives any remaining consideration period.

Section 18. Revocation of Agreement. Burns understands that after executing this
Agreement, he has the right to revoke it within seven (7) days after his execution of it. Burns
understands that this Agreement will not become effective and enforceable unless the seven-day
revocation period passes and Burns does not revoke the Agreement in writing. Burns understands
that this Agreement may not be revoked after the seven-day revocation period has passed. Burns
understands that any revocation of this Agreement must be made in writing and delivered to
HealthSport’s General Counsel within the seven-day period.

Section 19. Effective Date. This Agreement shall become effective and binding upon
the parties eight (8) days after Burns’s execution thereof, so long as Burns has not revoked this
Agreement within the time period and in the manner specified in Section 18, above.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	                     /s/ Matthew Burns
 	 
	 	Matthew Burns 	 
	 	 	 
	 	HEALTHSPORT, INC.

 	 
	 	By:  	/s/ Robert S. Davidson
 	 
	 	 	Robert S. Davidson 	 
	 	 	Chairman of the Board 	 

 

-6-Exhibit 10.8

Exhibit 10.8

EMPLOYMENT AGREEMENT

This
Employment Agreement, effective as of November 4, 2009 (the “Agreement”) is made by and
between HealthSport, Inc., a Delaware corporation (the “Company”), and Robert S. Davidson
(“Executive”). For purposes of this Agreement, the term “Company” refers jointly and severally to
HealthSport, Inc., InnoZen, Inc., its subsidiary as well as its affiliates, predecessors,
successors, subsidiaries, or other related companies.

BACKGROUND

The Company desires to employ the Executive as the Company’s President and the Executive
desires to accept employment with the Company on the terms and conditions set forth below.

TERMS

1. Employment.

a. The Executive agrees to accept employment with the Company and to render the services
specified in this Agreement subject to the terms and conditions of this Agreement. All
compensation paid to the Executive by the Company, or any parent, affiliate, subsidiary, or other
related company, and all benefits and perquisites received by the Executive from the Company, or
any parent, affiliate, subsidiary, or other related company, will be aggregated in determining
whether the Executive has received the compensation and benefits provided for herein.

b. Term. The term of this Agreement will be two (2) calendar years unless the
Agreement is terminated earlier as provided in this Agreement (the “Term”).

2. Duties.

a. General Duties. The Executive will perform all duties and responsibilities
assigned by the Chief Executive Officer (“CEO”) or the CEO’s designated representative and the
Company’s Board of Directors (the “Board”).

b. Full-Time Employment. During the Term of this Agreement, and excluding any periods
of vacation, family or sick leave, or holidays to which the Executive is entitled hereunder, the
Executive will devote full business time and energy to the business affairs and interests of the
Company and will use reasonable commercial efforts and ability to promote the interests of the
Company. The Executive will diligently endeavor to promote the business affairs and interests of
the Company and perform services contemplated by this Agreement in accordance with the policies
established by the Company from time to time.

c. Certain Permissible Activities. If expressly approved in advance by the Company in
writing, the Executive may serve as a director of another non-competing company. The Executive may
also (i) make and manage personal business investments of the Executive’s choice, (ii) teach at
educational institutions and deliver lectures, and (iii) serve in any capacity with any civic,
educational or charitable organization, or any governmental entity or trade
association without seeking or obtaining approval by the Company so long as such activities
and service do not materially interfere or conflict with the performance of the Executive’s duties
under this Agreement.

 

 

 

3. Compensation and Expenses.

a. Base Salary. In consideration for the services rendered by the Executive under
this Agreement, the Company will pay the Executive a base salary in the total gross, annual amount
of $260,000 (the “Base Salary”), payable in equal installments on the 15th and
30th of every month. The Company will withhold from the Base Salary all applicable
state and federal withholdings. The Board may, in its discretion, increase the Base Salary paid to
the Executive during the term of this Agreement, and in such event, this increased Base Salary
amount will be deemed the annual amount for the purposes of the Agreement and will commence on the
date determined by the Board.

b. Bonus. The Executive shall be eligible to receive cash bonuses (each, a “Bonus”)
based on his performance and the performance of the Company in an amount equal to sixty percent
(60%) of the Base Salary each year upon meeting 100% of the performance targets. The performance
targets shall be determined in the sole discretion of the Board and shall be based upon the
operating budget for the Company.

c. Expenses. The Company will reimburse, or advance funds to, the Executive for all
reasonable, ordinary, and necessary travel or entertainment expenses incurred by the Executive
during the Term of this Agreement in accordance with the Company’s then-current policy.

4. Benefits.

a. Paid Time Off. The Executive shall be entitled to take paid time off at such times
as the Executive may select and the affairs of the Company may permit, provided however, that the
Executive shall not be entitled to accrue any paid time off unless specifically approved by the
Board.

b. Equity Award. The Company shall grant 2,000,000 shares (the “Shares”) of the
Company’s restricted common stock under the Company’s 2009 Equity Incentive Plan (the “Plan”) and
pursuant to the Stock Award Agreement in the form attached hereto as Exhibit A. Subject to
the provisions of the Plan and such Stock Award Agreement, the Shares shall vest as to 20% on
December 1, 2009, 20% on February 15, 2010, 20% on May 15, 2010, and 40% on August 15, 2010.

c. Executive Benefit Programs. The Executive will be eligible to participate in any
equity incentive plan, stock purchase plan, pension or retirement plan, and insurance other benefit
plan that may be made generally available by the Company for its senior executives, including
programs of life, disability, basic medical and dental insurance, and supplemental medical and
dental insurance. Other than as stated herein, this Agreement does not obligate the Company to
create or institute any such benefits or plans.

 

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Notwithstanding any provision of this Agreement to the contrary, the Company will not be
obligated to provide the Executive with any of the benefits contained in this Section 4(b) if the
Executive, for any reason, is or becomes uninsurable with respect to coverage relating to any such
benefit(s) or otherwise fails to meet the eligibility requirements for the individual plans.

5. Termination.

a. Termination for Cause. The Company may terminate the Executive’s employment
pursuant to this Agreement at any time for Cause as defined herein and the termination will become
effective immediately at the time the Company provides the required written notice to the
Executive. If the Company decides to terminate the Executive’s employment under this Agreement for
Cause, the Company will have no further obligations to make any payments to the Executive under
this Agreement, except that the Executive will receive any unpaid accrued Base Salary through the
date of termination of employment within thirty (30) days of such termination. For purposes of
this Agreement, the term “Cause” will mean:

i. the Executive’s conviction of a felony;

ii. any act of theft, dishonesty, or insubordination by the Executive regardless of whether
the Executive’s theft, dishonesty, or insubordination affects the Company or its business in any
way;

iii. the Executive’s conviction of misappropriating assets or otherwise defrauding the Company
or any of its parent, subsidiaries or affiliates;

iv. a material breach by the Executive of any provision of this Agreement, or failure to
follow the written policies of the Company, which is not cured or corrected within thirty (30) days
after receiving written notice of such breach or failure; or

v. the Executive’s failure to follow the specific lawful instructions of the Board within
thirty (30) days after receiving written notice of such instruction.

b. Death or Disability. This Agreement and the Company’s obligations under this
Agreement will terminate upon the death or total disability of the Executive. For purposes of this
Section 5(b), “total disability” means that for a period of six consecutive months in any
twelve-month period the Executive is incapable of substantially fulfilling the duties set forth in
this Agreement because of physical, mental or emotional incapacity resulting from injury, sickness
or disease as determined by an independent physician mutually acceptable to the Company and the
Executive. If the Agreement terminates due to the death or total disability of the Executive, the
Company will pay the Executive or his legal representative any unpaid accrued Base Salary through
the date of termination of employment within fifteen (15) days of such termination (or, if
terminated as a result of a disability, until the date upon which the disability policy maintained
by the Company begins payment of benefits) plus any other compensation that may be earned and
unpaid.

 

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c. Voluntary Termination. The Executive may elect to terminate this Agreement by
delivering written notice to the Company thirty (30) days prior to the date on
which termination is elected. If the Executive voluntarily terminates his employment the
Company will have no further obligations to make payments under this Agreement, except that the
Company will pay to the Executive any unpaid and accrued Base Salary through the date of voluntary
termination of employment with fifteen (15) days of such termination.

d. Termination Without Cause. If the Executive is terminated for any reason other
than by death, disability, for Cause, or due to the Executive’s voluntary resignation of
employment, the Company will have no further obligation to make payments under this Agreement,
except that (i) the Company will pay to the Executive any unpaid and accrued Base Salary
through the date of termination of employment with ten (10) days of such termination, and (ii) if
the Executive is terminated without cause, the Company will pay to the Executive severance in an
amount equal to twelve (12) months of the Executive’s Base Salary in effect at the time of
termination with ten (10) days of such termination.

6. Change of Control.

a. For the purposes of this Agreement, a “Change of Control” will be deemed to have taken
place if, following full execution of this Agreement, any person, including a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the owner or
beneficial owner of more than 50% of the combined voting power of the then outstanding securities
of the Company that may be cast for the election of directors of the Company.

b. The Company and the Executive agree that, if the Executive is in the employ of the Company
on the date on which a Change of Control occurs (the “Change of Control Date”), the Company will
continue to employ the Executive and the Executive will remain in the employ of the Company for the
period commencing on the Change of Control Date and ending on the expiration of the Term, to
exercise such authority and perform such executive duties as are commensurate with the authority
being exercised and duties being performed by the Executive immediately prior to the Change of
Control Date.

c. During the remaining Term after the Change of Control Date, the Company will (i) continue
to honor the terms of this Agreement, including as to Base Salary and other compensation set forth
in Section 3 herein, and (ii) continue employee benefits as set forth in Section 4 herein at levels
in effect on the Change of Control Date (but subject to such reductions as may be required to
maintain such plans in compliance with applicable federal law regulating employee benefits).

d. If within the remaining Term after the Change of Control Date, (i) the Executive’s
employment is terminated by the Company other than for Cause (as defined in Section 5(a)), (ii)
there is a material reduction in the Executive’s compensation or employment related benefits, or
(iii) there is a material diminution in the Executive’s responsibilities or change in the
Executive’s status, working conditions or management responsibilities, including a relocation of
the Company, or a material change in the business objectives or policies, the Executive will
receive, subject to the provisions of subparagraph (e) below, severance in an amount equal to
twelve (12) months of the Executive’s current Base Salary, payable within fifteen (15) days of such
event.

 

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e. In the event that the payments and benefits provided for in this Agreement or otherwise
payable to the Executive (i) constitute “parachute payments” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this Section 6(e),
would be subject to the excise tax imposed by Section 4999 of the Code, then the Executive’s
payments and benefits shall be reduced to such extent necessary to result in no portion of such
benefits being subject to excise tax under Section 4999 of the Code. Within thirty (30) days after
the amount of any required reduction in payments and benefits is finally determined, the Company,
in consultation with the Executive, shall determine which amounts to reduce. Any determination
required under this Section 6(e) shall be made in writing by the Company’s independent public
accounting firm as in effect immediately prior to the change of control (the “Accounting Firm”),
whose determination shall be conclusive and binding upon the Executive and the Company for all
purposes. For purposes of making the calculations required by this Section 6(e), the Accounting
Firm may, after taking into account the information provided by the Executive, make reasonable
assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and
the Executive shall furnish to the Accounting Firm such information and documents as the Accounting
Firm may reasonably request in order to make a determination under this Section 6(e).

7. Conflicting Employment Agreements. The Executive represents that the Executive has
not executed any agreement with any previous person, company, or entity that may impose
restrictions on the Executive’s employment with the Company.

8. Confidential Relationship and Protection of Trade Secrets and Confidential
Information. In the course of the Executive’s employment by the Company, the Executive has had
access to, and will have access to, the Company’s sensitive and valuable trade secrets, proprietary
information, and confidential information concerning the Company, its present and future business
plans, pricing information, development projects, customers and business affairs, which constitute
valuable business assets of the Company, the use, application, or disclosure of any of which will
cause substantial and possible irreparable damage to the business and asset value of the Company.
Accordingly, the Executive accepts and agrees to be bound by the following provisions:

a. For the purposes of this Agreement, the following definitions apply:

i. “Trade Secret” means information, including a formula, a pattern, a compilation, a program,
a device, a method, a technique, or a process that: (A) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy. Trade Secrets also
includes any information or data described above which the Company obtains from another party and
which the Company treats as proprietary or designates as trade secrets, whether or not owned or
developed by the Company.

 

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ii. “Confidential Information” means any data or information, other than Trade Secrets, that
is valuable to the Company and is not generally known by the public. To the extent consistent with
the foregoing, Confidential Information includes, but is not limited
to, lists (whether or not in writing) of the Company’s current or potential customers, lists
of and other information about the Company’s executives and employees, financial information
(whether or not in writing) that has not been released to the public, marketing techniques, price
lists, pricing policies, and the Company’s business methods, contracts and contractual relations
with their customers and suppliers and future business plans. Confidential Information also
includes any information or data described above which the Company obtains from another party and
that the Company treats as proprietary or designates as confidential information whether or not
owned or developed by the Company.

b. At any time upon the request of the Company, and in any event upon the termination of
employment, the Executive will deliver to the Company all memoranda, notes, records, drawings,
manuals, files or other documents, and all copies of each, concerning or constituting Confidential
Information or Trade Secrets and any other property or files belonging to the Company that are in
the possession of the Executive, whether made or compiled by the Executive or furnished to or
acquired by the Executive from the Company.

c. In order to protect the Company’s Trade Secrets and Confidential Information, the Executive
agrees that:

i. The Executive shall hold in confidence the Trade Secrets of the Company. Except in the
performance of services for the Company, the Executive shall not at any time use, disclose,
reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Trade
Secrets of the Company or any portion thereof.

ii. The Executive shall hold in confidence the Confidential Information of the Company.
Except in the performance of services for the Company, the Executive shall not at any time during
the Executive’s employment with the Company and for a period of three (3) years thereafter use,
disclose, reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer
the Confidential Information of the Company or any portion thereof.

9. Property Rights. For purposes of this Agreement:

a. “Intellectual Property Right” means any form of legal protection for technology, including
common law rights, technical information and know-how, patents, copyrights, trade secret rights,
and trademark and trade dress rights, whether based on federal or state law and whether in the
United States or any foreign jurisdiction.

b. “Proprietary Information” means intellectual property including without limitation
proprietary ideas, designs, discoveries, inventions, improvements, know-how, show-how and business
information relating to the design, implementation, marketing and sale of its products and
services, such as by way of example source and object code computer programs, artwork, plans,
specifications, cost and pricing information, retail and wholesale customer lists, merchandising
information, and books, records and information regarding future business opportunities.

c. The Executive hereby agrees to fully inform and disclose, in writing, to the Company all
Proprietary Information currently owned by the Executive. The Executive
hereby grants to the Company an irrevocable, nonexclusive, worldwide, royalty free license,
including the right to grant sublicenses to any intellectual property rights that the Executive
currently owns.

 

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d. The Executive hereby agrees that the Executive will promptly and fully inform and disclose,
in writing, to the Company all Proprietary Information which the Executive may have during the term
of the Executive’s relationship with Company whether conceived by the Executive alone or with
others and whether or not conceived during regular working hours. The Executive shall document
such Proprietary Information by making timely entries in a notebook describing all work or
activities on such Proprietary Information. All such Proprietary Information (whether or not
documented in the notebook) shall be the exclusive property of the Company. The Executive shall
assist the Company to obtain intellectual property protection on all such Proprietary Information
in the name of the Company and shall execute all documents and do all things necessary to (a)
obtain patents, trademarks, copyrights, and other intellectual property protection pertaining
thereto in the name of Company, (b) vest the Company with full and exclusive title thereto, and (c)
protect the same against infringement by others.

e. The Company and the Executive acknowledge that any work of authorship heretofore or
hereafter (during the term of this Agreement) authored or owned by the Executive that relates to
the performance of this Agreement shall be considered to be a work made for hire within the meaning
of the 1976 Copyright Act; however, with respect to any and all portions of the works of authorship
that cannot be considered as a work made for hire, Executive shall and hereby does assign unto the
Company all of the right, title, and interest (including copyright) of every kind whatsoever in
such portions of said works of authorship. The rights vested in, or assigned unto, the Company
shall comprise all of the rights in said works of authorship of every kind, nature, and
description, including but not by way of limitation, (a) all physical documents such as, but not
limited to, blueprints, drawings and artwork, computer files and programs, and rough drafts
thereof, and any and all documentation in support thereof, customer names and lists, and other
printed documents; (b) the right to secure copyright thereon anywhere throughout the world, in the
Company’s name or otherwise; (c) any and all publication rights therein, in whatever form; (d) the
right to use, license, exploit, sell, or otherwise dispose thereof in any manner and for any
purpose the Company sees fit; and (e) any and all subsidiary rights therein. The Executive agrees
during and after the term of this Agreement, at the Company’s request and its expense, to assist
the Company and its nominees in every proper way to obtain, and to vest in it or them, copyrights
in the works of authorship in all countries, by executing all necessary or desirable documents,
including registration applications for copyrights and assignments thereof, and to execute all
other documents necessary to accomplish the intent of this Agreement. The Executive waives any and
all moral rights in copyright to the Company.

f. The Company and the Executive agree that, because of the unique nature of the Company’s
business and products and services, the Executive shall not voluntarily or involuntarily, for any
cause or reason whatsoever:

i. use any of said Proprietary Information to create, promote, encourage, or assist in the
formation or operation of any business;

 

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ii. use, publish or distribute information learned about the Company’s customers through the
Executive’s relationship with the Company; or

iii. impart, disclose, or otherwise communicate to any other person, other than one currently
employed by the Company, any information concerning said Proprietary Information.

g. Notwithstanding the foregoing, any provision in this Agreement requiring Executive to
assign his rights in an invention shall not apply to an invention that qualifies fully under the
provisions of California Labor Law Code §2870, which provides:

(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed entirely on
his or her own time without using the employer’s equipment, supplies, facilities, or
trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention
to the employer’s business, or actual or demonstrably anticipated research or Work
Product of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of this
state and is unenforceable.

10. Indemnification. The Company shall indemnify the Executive if he is named as a
party to any proceeding (other than an action by the Company), by reason of the fact that he is, or
was, a Director, officer, employee, or agent of the Company or is or was serving at the request of
the Company as a director, officer, employee, or agent of another corporation, limited liability
company, partnership, joint venture, trust, or other enterprise, including any liability incurred
by the Executive in connection with such proceeding, including any appeal thereof.

11. Repayment of Advances/Overpayment of Benefits. The Executive agrees that, to the
extent permitted by law and in compliance with Section 409A of the Internal Revenue Code (“409A”),
if the Executive owes the Company any sum of money at the time the Executive ceases to be employed
by the Company, the Company may deduct the sum owed by the Executive from any compensation due to
the Executive. In addition, to the extent permitted by law, the Executive agrees to allow the
Company to deduct from the Executive’s wages or other amounts due to the Executive, any
overpayments or unearned benefits, including but not limited to, a deduction for paid time off,
and/or tuition reimbursement made to or advanced to the Executive by the Company.

 

- 8 -

 

12. Prior Employment. The Executive represents and warrants that the Executive is not
employed or restricted from entering into any employment relationship with the Company, or
restricted or limited in the scope of services that the Executive can perform on behalf of the
Company, by any agreement with or obligation to any person, firm, or entity or by any other
disability or restraint, including, but not limited to, the order, judgment, or decree of any court
or governmental agency. The Executive hereby agrees to indemnify and hold the Company harmless
from any and all expenses, losses, or damages it may incur, including, but not limited to, all
expenses of defense and attorneys’ fees, cause by reason of the Executive’s breach of this
covenant.

13. 409A Compliance. This Agreement is intended to comply with the requirements of 409A. In
the event this Agreement or any benefit paid to Executive hereunder is deemed to be subject to
409A, the Company may adopt such conforming amendments as the Company deems necessary, in its
reasonable discretion, to comply with 409A. If upon Executive’s “separation from service” within
the meaning of 409A, he is then a “specified employee” (as defined in 409A), then solely to the
extent necessary to comply with 409A and avoid the imposition of taxes under 409A, the Company
shall defer payment of “nonqualified deferred compensation” subject to 409A payable as a result of
and within six (6) months following such separation from service until the earlier of (i) the first
business day of the seventh month following the Executive’s separation from service, or
(ii) ten (10) days after the Company receives written notification of Executive’s death. Any such
delayed payments shall be made without interest. In addition, to the extent required by 409A, any
expense reimbursement payments to Employee must be made by no later than the end of Executive’s
taxable year following the taxable year in which the expense is incurred. Such reimbursement or
in-kind benefit rights may not be subject to liquidation or exchange for another benefit. The
Company (nor any of its directors, employees or agents) shall not be liable to Executive as to any
unexpected or adverse tax consequence realized by Executive as a result of this Agreement or any
payment or benefit provided under this Agreement.

14. Severability. If any provision of this Agreement otherwise is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or jurisdiction where it is to
be performed, this Agreement will be considered divisible as to such provision and such provision
will be inoperative in such state or jurisdiction and will not be part of the consideration moving
from either of the parties to the other. The remaining provisions of this Agreement will be valid
and binding and of like effect as though such provision were not included.

15. Governing Law and Jurisdiction. This Agreement shall be governed by and construed
in accordance with the laws of the State of California. Any litigation arising under this
Agreement shall be brought exclusively in the appropriate state or federal court of competent
jurisdiction located in Los Angeles County, California, and the Company and the Executive hereto
expressly consent to personal jurisdiction or venue with regard to such courts.

 

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16. Notice. Notices given pursuant to the provisions of this Agreement will be sent
by certified mail, postage prepaid, or by overnight courier, or telecopier to the following
addresses:

If to the Company:

HealthSport, Inc.

6429 Independence Ave.

Woodland Hills, CA 91367

Attention: Thomas Beckett

If to the Executive:

HealthSport, Inc.

6429 Independence Ave.

Woodland Hills, CA 91367

Attention: Robert S. Davidson

Either party may, from time to time, designate any other address to which any such notice will
be sent. Any such notice will be deemed to have been delivered upon the earlier of actual receipt
or four (4) days after deposit in the mail, if by certified mail.

17. Waiver/Amendment. The waiver by any party to this Agreement of a breach of any
provision hereof by any other party will not be construed as a waiver of any subsequent breach by
any party. No provision of this Agreement may be terminated, amended, supplemented, waived, or
modified other than by an instrument in writing signed by the party against whom the enforcement of
the termination, amendment, supplement, waiver, or modification is sought.

18. Attorney’s Fees. In the event any action is commenced to enforce any provision of
this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees, costs, and
expenses.

19. Entire Agreement. This Agreement is the entire agreement between the Executive and
the Company. This Agreement supersedes all prior agreements and understandings between the parties
with respect to the subject matter hereof and may not be modified or terminated orally. No
modification, termination, or attempted waiver will be valid unless it is in writing and is
executed by the Company and the Executive.

20. Counterparts. This Agreement may be executed in counterparts, all of which will
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	/s/ Robert S. Davidson
 	 
	 	ROBERT S. DAVIDSON 	 
	 	 	 
	 	COMPANY:

HEALTHSPORT, INC.

a Delaware corporation
 	 
	 	 	 
	 	By:  	                    /s/ Hank Durschlag
 	 
	 	 	Hank Durschlag 	 
	 	 	Title:  	Chief Executive Officer 	 

 

- 11 -

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