Transaction Bonus Agreement
Exhibit
This
Transaction Bonus Agreement (the “Agreement”) is entered
into by and between Xxxx Xxxxxxx (the “Equity Holder”) and
MusclePharm Corporation, a Nevada corporation headquartered at 0000
Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (the “Company”) and shall
become effective immediately as of the date on which the Equity
Holder signs below.
This
Agreement shall supplement any other agreement between the Equity
Holder and the Company, including any employment, equity, severance
or retention agreement that may currently or hereafter
exist.
For
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Upon
the occurrence of a Qualifying Sale (as defined below), and
provided that on the date of the Qualifying Sale the Equity Holder
is an owner of at least 20% of the shares of the Company, the
Equity Holder shall be entitled to a transaction bonus equal to 10%
of the Aggregate Purchase Price (as defined below), if the
Aggregate Purchase Price is in excess of $50,000,000.00 (the
“Transaction
Bonus”). Any Transaction Bonus shall be paid (i) in
cash and/or in property in the same proportion and of the same type
payable to common stockholders of the Company generally in
connection with the Qualifying Sale, or, in the Company’s
sole discretion, solely in cash, and (ii) on or following the
consummation of the Qualifying Sale on the same schedule as, and
under the same terms and conditions applicable to, the
Company’s common stockholders in connection with the
Qualifying Sale, but in no event over a period of longer than five
(5) years following the consummation of the Qualifying Sale. The
Company agrees that it shall not consummate a Qualifying Sale
without arranging for the payment of the Transaction Bonus at the
closing of the Qualifying Sale or promptly thereafter. For the
avoidance of doubt, the Equity Holder shall be eligible to receive
the Transaction Bonus whether the Qualifying Sale occurs during his
employment with the Company or at any time following the cessation
of his employment with the Company for any reason.
(a)
“Qualifying
Sale” shall mean the sale of all or substantially all
of (i) the assets of the Company or (ii) the outstanding common
stock of the Company, whether by merger, consolidation, sale or
other transfer of shares of common stock (other than a merger or
consolidation where the stockholders of the Company prior to the
merger or consolidation are the holders of a majority of the voting
securities of the entity that survives such merger or
consolidation); provided, that for the
avoidance of doubt, that such sale also constitutes a “change
in control event” described in Section 1.409A-3(i)(5)(v) or
(vii) of the Treasury Regulations with respect to the
Company.
(b)
“Aggregate Purchase
Price” means the sum of (x) all cash paid or payable
and (y) the fair market value of all property or securities
transferred in connection with a Qualifying Sale. Amounts paid into
escrow, installment payments and contingent payments in connection
with a Qualifying Sale shall be included as part of the Aggregate
Purchase Price; provided, however, that the portions of
the Transaction Bonus based on amounts paid into escrow,
installment payments and contingent payments will be calculated and
paid if and when such amounts are released directly to the Company
or to the Company’s common stockholders, as
applicable.
2. Any
modification or waiver of any provision of this Agreement must be
made in writing and signed by both parties.
3. This
Agreement constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all prior
written or oral agreements relating thereto.
4. This
Agreement shall be governed by and construed in accordance with the
internal laws of the State of California, and each of the parties
hereto irrevocably consents to the jurisdiction and venue of the
federal and state courts located in the State of California for any
disputes arising out of this Agreement.
5. This
Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one of the same
instrument.
6. The
Company represents and warrants to the Equity Holder that it has
the full power and authority to enter into this Agreement and to
perform its obligations hereunder and that the execution and
delivery of this Agreement and the performance of its obligations
hereunder will not conflict with any agreement to which the Company
is a party.
7. This
Agreement shall inure to the benefit of, be binding upon and
enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted
assigns.
IN
WITNESS WHEREOF, the Executive and the Company have caused this
Transaction Bonus Agreement to be executed as of the date set forth
below.
MUSCLEPHARM
CORPORATION
By:
/s/ Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
Lead Director
Date:
February 26,
2018
XXXX
XXXXXXX
/s/ Xxxx
Xxxxxxx
Date:
February 26,
2018
