Document:

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

	
Effective Date: May 31, 2011

	
Void After: May 31, 2016

CROWNBUTTE WIND POWER, INC.

WARRANT TO PURCHASE

COMMON STOCK

CROWNBUTTE WIND POWER, INC., a corporation organized under the laws of the State of Nevada (the "Company"), for value received on May 31, 2011 (the "Effective Date"), hereby issues to  _____________________________  (the "Holder") this Warrant to Purchase Common Stock (the "Warrant") to purchase Three Million Five Hundred Thousand (3,500,000) shares of the Company's common stock, par value $0.001 per share ("Common Stock"), at the Exercise Price (as defined below), as adjusted from time to time as provided herein, on or before May 31, 2016 (the "Expiration Date"), all subject to the following terms and conditions. The Warrant Shares (as defined below) issued upon exercise of this Warrant shall be subject to the provisions of the Company's Amended and Restated Articles of Incorporation, a copy of which will be furnished to the holder hereof upon written request and without charge.

As used in this Warrant, (i) "Business Day" means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York, New York, are authorized or required by law or executive order to close; (ii) "Exercise Price" means $0.0225 per share of Common Stock, subject to adjustment as provided herein; and (iii) "Warrant Shares" means shares of Common Stock in the Company, including any securities issued or issuable with respect thereto or into which or for which such shares may be exchanged for, or converted into, pursuant to any stock dividend, stock split, stock combination, recapitalization, reclassification, reorganization or other similar event.

  

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1.

	
DURATION AND EXERCISE OF WARRANT

(a)           Exercise Period. The Holder may exercise this Warrant, in whole or in part, on any Business Day on or before 5:00 P.M. Eastern Time, on the Expiration Date, at which time this Warrant shall become void and of no value.

 

(b)           Exercise Procedures.

(i)       While this Warrant remains outstanding and exercisable in accordance with Section 1(a), in addition to the matter set forth in Section l(b)(ii) below, the Holder may exercise this Warrant, in whole or in part, at any time and from time to time by:

(A)           Delivery to the Company of a duly completed and executed copy of the Notice of Exercise attached as Exhibit A (the "Notice of Exercise”);

(B)           Surrender of this original Warrant to the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder; and

(C)           Payment of the then-applicable Exercise Price per share multiplied by the number of Warrant Shares being purchased upon exercise of the Warrant (such amount, the "Aggregate Exercise Price") made in the form of cash, or by certified check, wire transfer, bank draft or money order payable in lawful money of the United States of America or in the form of a Cashless Exercise as defined below) to the extent permitted in Section l(b)(ii) below.

(ii)      At any time when a registration statement covering the resale of the Warrant Shares by the Holder is not available after the first anniversary of the Effective Date, in addition to the matter set forth in Section l(b)(i) above, the Holder may, in its sole discretion, exercise all or any part of the Warrant in a "cashless" or "net-issue” exercise (a "Cashless Exercise") by delivering to the Company (1) the Notice of Exercise and (2) the original Warrant, pursuant to formula:

	  	  	
X

	
=

	
Y * (A-B)

	  	  	  	  	
    A

	  	  	  	  	  
	  	
with:

	
X

	
=

	
the number of Warrant Shares to be issued to the Holder

	  	  	  	  	  
	  	  	
Y

	
=

	
the number of Warrant Shares with respect to which the Warrant is being exercised

	  	  	  	  	  
	  	  	
A

	
=

	
the fair market value per share of Common Stock on the date of exercise of the Warrant

	  	  	  	  	  
	  	  	
B

	
=

	
the then-current Exercise Price of the Warrant

  

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Solely for the purposes of this paragraph, "fair market value" per share of Common Stock shall mean (A) the average of the closing sales prices, as quoted on the primary national or regional stock exchange on which the Common Stock is listed, or, if not listed, the OTC Bulletin Board if quoted thereon, on the ten (10) trading days immediately preceding the date on which the Notice of Exercise is deemed to have been sent to the Company, or (B) if the Common Stock is not publicly traded as set forth above, as reasonably and in good faith determined by the Board of Directors of the Company as of the date which the Notice of Exercise is deemed to have been sent to the Company.

 

Notwithstanding the foregoing provisions of this Section l(b)(ii), the Holder may not make a Cashless Exercise if and to the extent that such exercise would require the Company to issue a number of shares of Common Stock in excess of its authorized but unissued shares of Common Stock, less all amounts of Common Stock that have been reserved for issuance upon the conversion of all outstanding securities convertible into shares of Common Stock and the exercise of all outstanding options, warrants and other rights exercisable for shares of Common Stock. If the Company does not have the requisite number of authorized but unissued shares of Common Stock to permit the Holder to make a Cashless Exercise, the Company shall use commercially reasonable efforts to obtain the necessary shareholder consent to increase the authorized number of shares of Common Stock to permit such Holder to make a Cashless Exercise pursuant to this Section l(b)(ii).

(iii)     Upon the exercise of this Warrant in compliance with the provisions of this Section 1(b), and except as limited pursuant to the last paragraph of Section l(b)(ii) above, the Company shall promptly issue and cause to be delivered to the Holder a certificate for the total number of shares of Common Stock for which this Warrant is being exercised. Each exercise of this Warrant shall be effective immediately prior to the close of business on the date that the Company has received each of this original Warrant, the Notice of Exercise and the Aggregate Exercise Price (or notice of a Cashless Exercise in accordance with Section l(b)(ii)j (the "Exercise Delivery Documents"). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the shares of Common Stock with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such shares.

(c)           Partial Exercise. This Warrant shall be exercisable, either in its entirety or, from time to time, for part only of the number of Warrant Shares referenced by this Warrant; provided, that any such partial exercise must be for an integral number of Warrant Shares. If this Warrant is exercised in part, the Company shall issue, at its expense, a new Warrant, in substantially the form of this Warrant, referencing such reduced number of Warrant Shares that remain subject to this Warrant.

(d)           Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 14.

  

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ISSUANCE OF WARRANT SHARES

(a)           The Company covenants that all Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be (i) duly authorized, fully paid and non-assessable, and (ii) free from all liens, charges and security interests, with the exception of claims arising through the acts or omissions of the Holder and except as arising from applicable federal and state securities laws.

(b)           The Company shall register this Warrant upon records to be maintained by the Company for that purpose in the name of the record holder of such Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner thereof for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

 

(c)           The Company will not, by amendment of its articles of incorporation, by-laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all action necessary or appropriate in order to protect the rights of the Holder to exercise this Warrant, or against impairment of such rights.

	
3.

	
ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT SHARES

(a)           The Exercise Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3(a); provided, that notwithstanding the provisions of this Section 3(a), the Company shall not be required to make any adjustment if and to the extent that such adjustment would require the Company to issue a number of shares of Common Stock in excess of its authorized but unissued shares of Common Stock, less all shares of Common Stock that have been reserved for issuance upon the conversion of all outstanding securities convertible into shares of Common Stock and the exercise of all outstanding options, warrants and other rights exercisable for shares of Common Stock. If the Company does not have the requisite number of authorized but unissued shares of Common Stock to make any adjustment, the Company shall use its commercially reasonable efforts to obtain the necessary shareholder consent to increase the authorized number of shares of Common Stock to make such an adjustment pursuant to this Section 3(a).

(i)       Subdivision or Combination of Stock. In case the Company shall at any time subdivide (whether by way of stock dividend, forward stock split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased. If the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse stock split or otherwise) into a smaller number of shares, the number of Warrant Shares shall be proportionately decreased but the Exercise Price in effect immediately prior to such combination shall remain the same and not be adjusted. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(i).

  

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(ii)      Dividends in Stock, Property. Reclassification. If at any time, or from time to time, the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefore:

(A)           any shares of stock or other securities that are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or

 

 

(B)           additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of Section 3(a)(i) above), then and in each such case, the Exercise Price and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately, and the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefore, the amount of stock and other securities and property (including cash in the cases referred to above) that such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(ii).

  

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(iii)     Reorganization. Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or other assets or property (an "Organic Change"), then lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable assuming the full exercise of the rights represented by this Warrant. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. To the extent necessary to effect the foregoing provisions, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument reasonably satisfactory in form and substance to the Holder executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase. If there is an Organic Change, then the Company shall cause to be mailed to the Holder at its last address as it shall appear on the books and records of the Company, at least 10 calendar days before the effective date of the Organic Change, a notice stating the date on which such Organic Change is expected to become effective or close, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares for securities, cash or other property delivered upon such Organic Change; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the 10-day period commencing on the date of such notice to the effective date of the event triggering such notice. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law,

 

(b)           Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 3, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall promptly furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such adjustments and readjustments; and (ii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.

(c)           Certain Events. If any event occurs as to which the other provisions of this Section 3 are not strictly applicable but the lack of any adjustment would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent and principles of such provisions, or if strictly applicable would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent and principles of sueh provisions, then the Company's Board of Directors will, in good faith and subject to applicable law, make an appropriate adjustment to protect the rights of the Holder; provided, that no such adjustment pursuant to this Section 3(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 3.

  

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4.

	
TRANSFERS AND EXCHANGES OF WARRANT AND WARRANT SHARES

 

(a)           Registration of Transfers and Exchanges. Subject to Section 4(c), upon the Holder's surrender of this Warrant, with a duly executed copy of the Form of Assignment attached as Exhibit B, to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder, the Company shall register the transfer of all or any portion of this Warrant, Upon such registration of transfer, the Company shall issue a new Warrant, in substantially the form of this Warrant, evidencing the acquisition rights transferred to the transferee and a new Warrant, in similar form, evidencing the remaining acquisition rights not transferred, to the Holder requesting the transfer.

(b)           Warrant Exchangeable for Different Denominations. The Holder may exchange this Warrant for a new Warrant or Warrants, in substantially the form of this Warrant, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder, each of such new Warrants to be dated the date of such exchange and to represent the right to purchase such number of Warrant Shares as shall be designated by the Holder. The Holder shall surrender this Warrant with duly executed instructions regarding such re-certification of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder.

(c)           Restrictions on Transfers. This Warrant may not be transferred at any time without (i) registration under the Securities Act or (ii) an exemption from such registration and a written opinion of legal counsel addressed to the Company that the proposed transfer of the Warrant may be effected without registration under the Securities Act, which opinion will be in form and from counsel reasonably satisfactory to the Company,

(d)           Permitted Transfers and Assignments. Notwithstanding any provision to the contrary in this Section 4, the Holder may transfer, with or without consideration, this Warrant or any of the Warrant Shares (or a portion thereof) to the Holder's affiliates (as such term is defined under Rule 144 of the Securities Act) without obtaining the opinion from counsel that may be required by Section 4(c)(ii); provided, that the Holder delivers to the Company and its counsel certification, documentation and other assurances reasonably required by the Company's counsel to enable the Company's counsel to render an opinion to the Company's transfer agent that such transfer does not violate applicable securities laws.

	
5.

	
MUTILATED OR MISSING WARRANT CERTIFICATE

If this Warrant is mutilated, lost, stolen or destroyed, upon request by the Holder, the Company will, at its expense, issue, in exchange for and upon cancellation of the mutilated Warrant, or in substitution for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the form of this Warrant, representing the right to acquire the equivalent number of Warrant Shares; provided, that as a prerequisite to the issuance of a substitute Warrant, the Company may require satisfactory evidence of loss, theft or destruction as well as an indemnity from the Holder of a lost, stolen or destroyed Warrant,

	
6.

	
PAYMENT OF TAXES

The Company will pay all transfer and stock issuance taxes attributable to the preparation, issuance and delivery of this Warrant and the Warrant Shares (and replacement Warrants) including, without limitation, all documentary and stamp taxes; provided, however, that the Company shall not be required to pay any tax in respect of the transfer of this Warrant, or the issuance or delivery of certificates for Warrant Shares or other securities in respect of the Warrant Shares to any person or entity other than to the Holder.

  

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7.

	
FRACTIONAL WARRANT SHARES

No fractional Warrant Shares shall be issued upon exercise of this Warrant. Upon the exercise of this Warrant, the Company, in lieu of issuing any fractional Warrant Share, shall round up the number of Warrant Shares issuable to nearest whole share.

	
8.

	
NO EQUITY STOCK RIGHTS AND LEGEND

No holder of this Warrant, as such, shall be entitled to vote or be deemed the holder of any other securities of the Company that may at any time be issuable on the exercise hereof, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, the rights of a shareholder of the Company or the right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting shareholders (except as provided herein), or to receive dividends or subscription rights or otherwise (except as provide herein).

Each certificate for Warrant Shares initially issued upon the exercise of this Warrant, and each certificate for Warrant Shares issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT5), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS."

  

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9.

	
NOTICES

All notices, consents, waivers and other communications under this Warrant must be in writing and will be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment; (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, if to the registered Holder hereof; or (d) seven days after the placement of the notice into the mails (first class postage prepaid), to the Holder at the address, facsimile number or e-mail address furnished by the registered Holder to the Company, or if to the Company, to it at 111 5th Avenue NE, Mandan, ND 58554, Attention: Mark Schaftlein, Chief Executive Officer, Facsimile: (701) 667-2083 (or to such other address, facsimile number or e-mail address as the Holder or the Company as a party may designate by notice the other party in accordance with this Section 9) with a copy to Allen & Vellone, P.C., 1600 Stout Street, Suite 1100, Denver, Colorado 80202, Attention: Patrick J. Russell.

 

	
10.

	
SEVERABILITY

If a court of competent jurisdiction holds any provision of this Warrant invalid or unenforceable, the other provisions of this Warrant will remain in full force and effect. Any provision of this Warrant held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

	
11.

	
BINDING EFFECT

This Warrant shall be binding upon and inure to the sole and exclusive benefit of the Company, its successors and assigns, the registered Holder or Holders from time to time of this Warrant and the Warrant Shares.

	
12.

	
SURVIVAL OF RIGHTS AND DUTIES

This Warrant shall terminate and be of no further force and effect on the earlier of 5:00 P.M., Eastern Time, on the Expiration Date or the date on which this Warrant has been exercised in full.

	
13.

	
GOVERNING LAW

This Warrant will be governed by and construed under the laws of the State of Nevada without regard to conflicts of laws principles that would require the application of any other law.

	
14.

	
DISPUTE RESOLUTION

In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within five (5) Business Days of receipt of the Notice of Exercise giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, at its sole discretion, within five (5) Business Days, submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside accountant. The Company shall catise at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be final, binding and conclusive upon all parties absent demonstrable error.

  

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NOTICES OF RECORD DATE

Upon (a) any establishment by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or right or option to acquire securities of the Company, or any other right, or (b) any capital reorganization, reclassification, recapitalization, merger or consolidation of the Company with or into any other corporation, any transfer of all or substantially all the assets of the Company, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a majority of the Company's voting stock (whether newly issued, or from treasury, or previously issued and then outstanding, or any combination thereof), the Company shall mail to the Holder at least ten (10) Business Days, or such longer period as may be required by law, prior to the record date specified therein, a notice specifying (i) the date established as the record date for the purpose of such dividend, distribution, option or right and a description of such dividend, option or right, (ii) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to become effective and (iii) the date, if any, fixed as to when the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, transfer, consolation, merger, dissolution, liquidation or winding up.

	
16.

	
RESERVATION OF SHARES

The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock for issuance upon the exercise of this Warrant, tree from pre-emptive rights, such number of shares of Common Stock for which this Warrant shall from time to time be exercisable. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation. Without limiting the generality of the foregoing, the Company covenants that it will use commercially reasonable efforts to take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant and use commercially reasonable efforts to obtain all such authorizations, exemptions or consents, including but not limited to consents from the Company's shareholders or Board of Directors or any public regulatory body, as may be necessary to enable the Company to perform its obligations under this Warrant.

  

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17.

	
HEADINGS

The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

	
18.

	
AMENDMENT AND WAIVERS

Any term of this Warrant may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder.

 

	
19.

	
NO THIRD PARTY RIGHTS

This Warrant is not intended, and will not be construed, to create any rights in any parties other than the Company and the Holder, and no person or entity may assert any rights as third-party beneficiary hereunder.

[SIGNATURE PAGE FOLLOWS]

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the date first set forth above.

	  	
CROWNBUTTE WIND POWER, INC.

	  	  
	  	
By

	  	  
	  	
Name:  Mark Schaftlein

	  	
Title:    Chief Executive Officer

  

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EXHIBIT A

NOTICE OF EXERCISE

(To be executed by the Holder of Warrant if such Holder desires to exercise Warrant)

 

To Crownbutte Wind Power, Inc.:

 

The undersigned hereby irrevocably elects to exercise the Warrant with respect to the purchase of _____________________________ full shares of common stock of Crownbutte Wind Power, Inc. issuable upon exercise of the Warrant and delivery of:

(1)           $___________ (in cash as provided for in the foregoing Warrant) and any applicable taxes payable by the undersigned pursuant to such Warrant; and

(2)           A portion of the Warrant exercisable to purchase ___________ shares of Common Stock (pursuant to a Cashless Exercise in accordance with Section l(b)(ii) of the Warrant) (check here if the undersigned desires to deliver an unspecified number of shares equal to the number sufficient to effect a Cashless Exercise o).

The undersigned requests that certificates for such shares be issued in the name of:

	  
	  
	
(Please print name, address and social security or federal

	
employer identification number (if applicable))1

	  
	  
	  
	  

If the shares issuable upon this exercise of the Warrant are not all of the Warrant Shares which the Holder is entitled to acquire upon the exercise of the Warrant, the undersigned requests that a new Warrant evidencing the rights not so exercised be issued in the name of and delivered to:

 

1 If Warrant Shares are to be issued in any name other than that of the registered Holder of the Warrant, then the Holder must include an opinion of counsel, reasonably satisfactory to the Company, to the effect that such issuance complies with all applicable securities laws.

  

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(Please print name, address and social security or federal

	
employer identification number (if applicable))1

	  
	  
	  
	  

	  	
Name of Holder (print): _______________________

	  	
Signature: ___________________________________

	  	
By: ________________________________________

	  	
Title: _______________________________________

	  	
Dated: ______________________________________

  

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EXHIBIT B

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, _____________________________ hereby sells, assigns and transfers to each assignee set forth below all of the rights of the undersigned under the Warrant (as defined in and evidenced by the attached Warrant) to acquire the number of Warrant Shares set opposite the name of such assignee below and in and to the foregoing Warrant with respect to said acquisition rights and the shares issuable upon exercise of the Warrant:

	
Name of Assignee

(and social security or federal employer

identification number (if applicable))

	  	
Address

	  	
Number of Warrant Shares

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	
  

	  	
  

	  

If the total of the Warrant Shares are not all of the Warrant Shares evidenced by the foregoing Warrant, the undersigned requests that a new Warrant evidencing the right to acquire the Warrant Shares not so assigned be issued in the name of and delivered to the undersigned.

	  	
Name of Holder (print): ________________________

	  	
Signature: ___________________________________

	  	
By: ________________________________________

	  	
Title: _______________________________________

	  	
Dated: ______________________________________

  

15Unassociated Document

EMPLOYMENT AGREEMENT

AGREEMENT made as of August 15, 2011 between MusclePharm Corporation, a Nevada corporation with offices at 4721 Ironton Street, Building A, Denver, CO 90839 (hereinafter called the “Company”), and Brad J. Pyatt, residing at 4721 Ironton Street, Building A, Denver, CO 90839  (hereinafter referred to as the “Executive”).

WITNESSETH:

WHEREAS, the Company is a healthy life-style company that develops and manufactures a full line of scientifically approved nutritional supplements; and

WHEREAS, the Company’s Board of Directors (the “Board” or the “Board of Directors”) believes that the Executive possesses the skills and abilities necessary for the Company to meet its current and future objectives; and 

 

WHEREAS, the Executive desires to provide such services to the Company in such capacities, on and subject to the terms and conditions hereof;

NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	
1. 

	
EMPLOYMENT

 Subject to all of the terms and conditions hereof, the Company does hereby employ the Executive and the Executive does hereby accept such employment.

	
2. 

	
TERM

This Agreement shall be effective retroactively commencing on January 1, 2011 and shall continue until December 31, 2015 (the “Term”), unless sooner terminated as herein provided including termination under any of the subsections described in Section 7.

 

	
3. 

	
COMPENSATION

(a)           Base Salary.  The Company agrees to pay the Executive during the Term hereof an aggregate salary at the annual rate of: (1) Two Hundred Fifty Thousand Dollars ($250,000) for the 2011 calendar year; (2) Three Hundred Fifty Thousand Dollars ($350,000) for the 2012 calendar year; (3) Four Hundred Thousand Dollars ($400,000) for the 2013 calendar year; (4) Four Hundred Fifty Thousand Dollars ($450,000) for the 2014 calendar year; and (5) Five Hundred Thousand Dollars ($500,000) for the 2015 calendar year.  The Company shall make all salary payments in equal bi-weekly installments in arrears.  Unless otherwise determined by the Board, Executive’s Base Salary at the commencement of the second and each subsequent year shall be adjusted to provide for all cost of living increases.  All salary, bonus, or other compensation payable to the Executive shall be subject to the customary withholding, FICA, medical and other tax and other employment taxes and deductions as required by federal, state and local law with respect to compensation paid by an employer to an employee.

 

  

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(b)           Preferred Stock.  As of the date hereof, the Company hereby grants to the Executive thirty one (31) shares of its Series B Preferred Stock (the “Series B Preferred Stock”).  On the third (3rd) anniversary of the date hereof, provided that the Executive remains employed by the Company on such date, the Company shall grant to the Executive ten thousand (10,000) shares of its Series A Preferred Stock (together with the Series B Preferred Stock, the “Stock”).

If there is any change in the number or kind of Stock outstanding (i) by reason of a stock dividend, spin-off, recapitalization, stock split, or combination or exchange of shares; (ii) by reason of a merger, reorganization, or consolidation; (iii) by reason of a reclassification or change in par value; or (iv) by reason of any other extraordinary or unusual event affecting the outstanding Stock, or if the value of outstanding Stock is substantially reduced as a result of a spin-off or the Company’s payment of an extraordinary dividend or distribution, the number of Stock issued, or to be issued, to the Executive pursuant to this Agreement and/or the kind of Stock issued, or to be issued, to the Executive pursuant to this Agreement shall be appropriately adjusted by the Company to reflect any increase or decrease in the number of, or change in the kind or value of, issued Stock to preclude any dilution to the number or kind of Stock issued, or to be issued, to the Executive hereunder.

(c)           Bonus.  Bonuses to all of the Company’s employees are determined by the Board of Directors at the end of every fiscal year, and will depend upon the progress and profitably of the Company.  The Company does not guarantee Executive the payment of any bonuses.

	
4. 

	
DUTIES

The Executive is hereby employed as Chief Executive Officer of the Company and shall perform the following services in connection with the general business of the Company:

(a)           Duties as Chief Operating Officer.  Except as otherwise determined from time to time by the Board of Directors, Executive shall be involved in all aspects of the day to day business operations of the Company.  Executive shall also be responsible for determining necessary strategic partnerships and investment opportunities relating to the Company, both nationally and internationally, and shall have wide discretion in implementing the vision, strategic goals and operational mission of the Company. Executive shall, on a full time and exclusive basis, devote all of his business time, attention and energies to the operations of the Company and other duties as required by this Agreement, and shall use his best efforts to advance the best interests of the Company..

(b)           Location.  Executive acknowledges that Executive will work primarily in the Company’s principal place of business and Executive hereby agrees that he will make himself available to travel to any other location deemed reasonably necessary by the Board of Directors in order to fulfill Executive’s duties.

(b)           Compliance.   The Executive hereby agrees to observe and comply with such reasonable rules and regulations of the Company as may be duly adopted from time to time by the Board of Directors and otherwise to carry out and perform those orders, directions and policies stated to him from time to time by the Board of Directors, either as specified in the minutes of the proceedings of the Board of Directors of the Company or otherwise in writing that are reasonably necessary and appropriate to carry out his duties hereunder. Such orders, directions and policies shall be legal and shall be consistent with the Executive's position.

 

  

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5. 

	
EXTENT OF SERVICES

The Executive agrees to serve the Company faithfully and to the best of his ability and shall devote his full time, attention and energies to the business of the Company during customary business hours. The Executive agrees to carry out his duties in a competent and professional manner and to at all times promote the best interests of the Company.

	
 6. 

	
BENEFITS AND EXPENSES 

During the term of this agreement Executive shall be entitled to, and the Company shall provide, the following benefits in addition to those specified in Section 3:

(a)           Vacation.  The Executive shall be entitled to 2 weeks vacation in each twelve (12) month period during the Term. Vacation may be taken at such time(s) as Executive may determine provided that such vacation does not interfere with the Company's business operations. The Executive must use his vacation in any event by May 31 of the year next following the year in which the vacation accrues or such vacation time shall expire.  The Executive shall not be entitled to compensation for unused vacation except that, upon termination of his employment, the Company shall pay to the Executive for all of his accrued, unexpired vacation time.

(b)           Expense Reimbursement.  The Company shall reimburse the Executive upon submission of vouchers for his out-of-pocket expenses for travel, entertainment, meals and the like reasonably incurred by him pursuant to his employment hereunder in accordance with the general policy of the Company as adopted by its Board of Directors from time to time.

(c)           Health Insurance.  The Company shall provide the Executive with health insurance in the coverage consistent with those provided to other key executives of the Company as determined by the Board of Directors from time to time.

(d)           Disability.  If the Company maintains disability insurance, then the Company shall provide a disability policy for the Executive comparable to the policies in force for other similar executives in the Company. If the Company does not maintain a disability policy, then the Executive may obtain such a policy in amounts equal to his salary and be reimbursed by the Company for all premium payments thereunder.

(e)           Other Benefits. The Company shall provide to the Executive other benefits as reasonably determined by the Board from time to time.

 

  

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7.

	
TERMINATION; DISABILITY; RESIGNATION; TERMINATION WITHOUT CAUSE

(a)           Termination for Cause.  The Company shall have the right to terminate the Executive's employment hereunder:

(1)           For cause upon ten (10) business days’ prior written notice to Executive.  Upon such termination, Executive shall have no further duties or obligations under this Agreement (except as provided in Section 8) and the obligations of the Company to Executive shall be as set forth below.  For purposes of this Agreement, “cause” shall mean:

(A)   Executive’s conviction of a felony under federal or state law;

(B)   Executive’s failure to perform (other than as a result of Executive's being Disabled), in any material respect, any of his duties or obligations under or in accordance with this Agreement and either (i) the Executive fails to cure such failure within ten (10) business days following receipt of notice from the Company, or (ii) if such failure by its nature cannot be cured within  such ten business day period, the Executive fails to commence to cure such failure within such ten business day period and proceed to cure such failure within thirty (30) days thereafter.

(C)   Executive commits any dishonest, malicious or grossly negligent act which is materially detrimental to the business or reputation of the Company, or the Company’s business relationships, provided, however, that in such event the Company shall give the Executive written notice specifying in reasonable detail the reason for the termination.

 Notwithstanding the foregoing, the Executive may, within ten (10) business days following delivery of the notice of termination referred to in the preceding paragraph, by written notice to the Board of Directors, cause the matter of the termination of his employment by the Company to be discussed at the next regularly scheduled meeting of the Board of Directors or at a special meeting of the Board of Directors requested by a majority of the members of the Board of Directors who are not employees of the Company or any of its subsidiaries.  The Executive shall be entitled to be present and to be represented by counsel at such meeting which shall be conducted according to a procedure deemed equitable by a majority of the directors present.  If, at such meeting, it shall be determined that the employment of the Executive had been terminated without proper cause, the provisions of this Agreement shall be reinstated with the same force and effect as if the notice of termination had not been given; and the Executive shall be entitled to receive the compensation and other benefits provided herein for the period from the date of the delivery of the notice of termination through the date of such reinstatement.

In the event, the Company terminates the Executive's employment for cause, then the Executive shall be entitled to receive through the end of the Term:  (1)  his base salary as defined in Section 3(a) hereof; and (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation.

 

  

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 In the event that Executive’s employment is terminated by the Company without cause including but not limited to an involuntary change in position or termination of the Executive as a result of a material breach of this Agreement by the Company, Executive shall receive from the Company, through the end of the Term:  (1)  his base salary as defined in Section 3(a) hereof; (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation; and (3) an additional two weeks’ pay of the Executive’s then current Base Salary.

(b)           Disability.  The Company shall have the right to terminate the Executive's employment hereunder:

(1)           By reason of the Executive's becoming Disabled for an aggregate period of ninety (90) days in any consecutive three hundred sixty (360) day period (the “Disability Period”).

(A)   “Disabled” as used in this Agreement means that, by reason of physical or mental incapacity, Executive shall fail or be unable to substantially perform the customary duties of his employment.

(B)   If the existence of a disability is in dispute, it shall be resolved by two physicians, one appointed by Executive and one appointed by the Board of Directors of the Company.  If the two physicians so selected cannot agree as to whether or not Executive is Disabled as defined in subsection (A) above, the two physicians so selected shall designate a third physician and a majority of the three physicians so selected shall determine whether or not Executive is Disabled.

(C)   In the event Executive is Disabled, during the period of such disability he shall continue to receive his base compensation in the amount set forth in Section 3(a) hereof, which base compensation shall be reduced by the amount of all disability benefits he actually receives under any disability insurance program in place with the Company until the first to occur of (1) the cessation of the Disability or (2) the termination of this Agreement by the Company at any time after the Disability Period.  During the period of Disability and prior to termination, the Executive shall continue to receive the benefits provided in Section 6 hereof and shall have the right to exercise options to purchase shares of the Company’s common stock in accordance with the 2007 Plan.

(D)   For the purposes of this Section 7(b), any amounts to be paid to Executive by the Company pursuant to subsection (C) above, shall not be reduced by any disability income insurance proceeds received by him under any disability insurance policies owned or paid for by the Executive.

 

(E)   If the Executive is terminated at the end of the Disability Period, then the Executive shall receive through the end of the Term: (1) his base salary as defined in Section 3(a) hereof; (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation;; and (3) an additional two weeks’ pay of the Executive’s then current Base Salary.

 

  

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(d)           Death.  The Company's employment of the Executive shall terminate upon his death and all payments and benefits shall cease upon such date provided, however, that under this Agreement the estate of such Executive shall be entitled to receive through the date of termination (1) his base salary as defined in Section 3(a) hereof, (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation;; and (3) an additional two weeks’ pay of the Executive’s then current Base Salary.

(e)           Termination by the Executive.

The Executive may elect, by written notice to the Company, such notice to be effective immediately upon receipt by the Company, to terminate his employment hereunder if:

(1)   The Company sells all or substantially all of its assets;

(2)   The Company merges or consolidates with another business entity in a transaction immediately following which the holders of all of the outstanding shares of the voting capital stock of the Company own less than a majority of the outstanding shares of the voting capital stock of the resulting entity (whether or not the resulting entity is the Company); provided, however, that the Executive shall not be permitted to terminate his employment under this subsection unless he notifies the Company in writing that he does not approve of the directors selected to serve on the Board after the merger or similar transaction described herein;

 

(3)   More than fifty (50%) percent of the outstanding shares of the voting capital stock of the Company are acquired by a person or group (as such terms are used in Section 13(d) of the Securities Exchange Act of 1934, as amended), which person or group includes neither the Executive nor the holders of the majority of the outstanding shares of the voting capital stock of the Company on the date hereof; provided, however, that the Executive shall not be permitted to terminate his employment under this subsection unless he notifies the Company in writing that he does not approve of the directors selected to serve on the Board after the merger or similar transaction described herein;

(4)   The Company assigns to the Executive duties that are not commensurate with the position for which he is being hired pursuant hereto;

 

(5)  The Company defaults in making any of the payments required under this Agreement and said default continues for a thirty (30) day period after the Executive has given the Company written notice of the payment default.

 If the Executive elects to terminate his employment hereunder pursuant to this Section 7(e), then (1) the Company shall continue to pay to the Executive his salary as provided in Section 3(a) hereof through the end of the Term; (2) the Company shall continue to provide to the Executive the benefits provided in Section 6 hereof through the end of the Term; and (3) the Company shall provide Executive an additional two weeks’ pay of the Executive’s then current Base Salary.

 

  

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(f)           Resignation.  If the Executive voluntarily resigns during the term of this Agreement other than pursuant to Section 7(e) hereof, then all payments and benefits shall cease on the effective date of resignation, provided that under this Agreement the Executive shall be entitled to receive through the date of such resignation: (1) his base salary as defined in Section 3(a) hereof, (2) the benefits provided in Section 6 hereof including all accrued but unpaid vacation;; and (3) an additional two weeks’ pay of the Executive’s then current Base Salary.

(g)           Mitigation. In the event of the termination of this Agreement by the Executive as a result of a material breach by the Company of any of its obligations hereunder, or in the event of the termination of the Executive’s employment by the Company in breach of this Agreement, the Executive shall not be required to seek other employment in order to mitigate his damages hereunder.

	
8. 

	
CONFIDENTIALITY; RESTRICTIVE COVENANTS; NON COMPETITION

(a)           Non-Disclosure of Information.  (1) The Executive recognizes and acknowledges that by virtue of his position as a key executive, he will have access to the lists of the Company's referral sources, suppliers, advertisers and customers, financial records and business procedures, sales force and personnel, programs, software, selling practices, plans, special methods and processes for electronic data processing, special techniques for testing commercial and sales materials and products, custom research services in product development, marketing strategy, product manufacturing techniques and formulas, and other unique business information and records (collectively “Proprietary Information”), as same may exist from time to time, and that they are valuable, special and unique assets of the Company's business. The Executive also may develop on behalf of the Company a personal acquaintance with the present and potential future clients and customers of the Company, and the Executive’s acquaintance may constitute the Company’s sole contact with such clients and customers.

 

(a)(2) The Executive will not during the Term of his employment, and at any time following the end of the Term of or earlier termination of this Agreement regardless of the reason therefor, disclose trade secrets or other confidential information about the Company, including but not limited to Proprietary Information, to any person, firm, corporation, association or other entity for any reason or any purpose whatsoever or utilize such Proprietary Information for his own benefit or the benefit of any third party; provided, however, that nothing contained herein shall prohibit the Executive from using his personal acquaintance with any clients or customers of the Company at any time in a manner that is not inconsistent with their remaining as clients or customers of the Company.

(a)(3) All equipment, records, files, memoranda, computer print-outs and data, reports, correspondence and the like, relating to the business of the Company which Executive shall use or prepare or come into contact with shall remain the sole property of the Company.  The Executive shall immediately turn over to the Company all such material in Executive's possession, custody or control at such time as this Agreement is terminated.

 

  

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(a)(4) “Proprietary Information” shall not include information that was a matter of public knowledge on the date of this Agreement or subsequently becomes public knowledge other than as a result of having been revealed, disclosed or disseminated by Executive, directly or indirectly, in violation of this Agreement.

(b)           Enforcement.  In view of the foregoing, the Executive acknowledges and agrees that it is reasonable and necessary for the protection of the good will, business, trade secrets, confidential information and Proprietary Information of the Company that he makes the covenants in this Section 8 and that the Company will suffer irreparable injury if the Executive engages in the conduct prohibited by Section 8 (a) of this Agreement. The Executive agrees that upon a breach, threatened breach or violation by him of any of the foregoing provisions of this Section 8, the Company, in addition to all other remedies it may have including an action at law for damages, shall be entitled as a matter of right to injunctive relief, specific performance or any other form of equitable relief in any court of competent jurisdiction without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law, to enjoin and restrain the Executive and each and every other person, partnership, association, corporation or organization acting in concert with the Executive, from the continuance of any action constituting such breach. The Company shall also be entitled to recover from the Executive all of its reasonable costs incurred in the enforcement of this Section 8 including its reasonable legal fees. The Executive acknowledges that the terms of Section 8(a) are reasonable and enforceable and that, should there be a violation or attempted or threatened violation by the Executive of any of the provisions contained in these subsections, the Company shall be entitled to relief by way of injunction, specific performance or other form of equitable relief.  In the event that any of the foregoing covenants in Sections 8 (a) shall be deemed by any court of competent jurisdiction, in any proceedings in which the Company shall be a party, to be unenforceable because of its duration, scope, or area, it shall be deemed to be and shall be amended to conform to the scope, period of time and geographical area which would permit it to be enforced.

(e)           Independent Covenants.   The Company and the Executive agree that the covenants contained in this Section 8 shall each be construed as a separate agreement independent of any of the other terms and conditions of this Agreement, and the existence of any claim by the Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense by the Executive to the Company’s enforcement of any of the covenants of this Section 8.

(f) Exclusion from Arbitration.  The terms and conditions of this Section 8 including the enforcement thereof by the Company are specifically excluded from the arbitration of all other matters under this Agreement as provided in Section 13 hereof.

	
9.

	
DISCLOSURE AND ASSIGNMENT OF RIGHTS.

(a) Disclosure.  The Executive agrees that he will promptly assign to the Company or its nominee(s) all right, title and interest of the Executive in and to any and all ideas, inventions, discoveries, secret processes, and methods and improvements, together with any and all patents or other forms of intellectual property protection that may be obtainable in connection therewith or that may be issued thereon, such as trademarks, service marks and copyrights, in the United States and in all foreign countries, which the Executive may invent, develop, or improve or cause to be invented developed or improved, on behalf of the Company while engaged in Company related decisions, during the Term or within six (6) months after the Term or earlier termination of this Agreement, which are or were related to the scope of the Company’s business or any work carried on by the Company or to any problems and projects specifically assigned to the Executive. All works and writings which relate to the Company’s business are works for hire, and any and all copyrights therefor shall be placed in the name of and inure to the benefit of the Company.

 

  

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(b) Assignment of Interest.  The Executive agrees to disclose immediately to duly authorized representatives of the Company any ideas, inventions, discoveries, processes, methods and improvements covered by the terms of this Section 9 and to execute, at the Company’s expense, all documents reasonably required in connection with the Company’s application for appropriate protection and registration under the federal and foreign patent, trademark, and copyright law and the assignment thereof to the Company’s nominee (s). The Executive hereby appoints the Company’s Chairman as true and lawful attorney in fact with full powers of substitution and delegation to execute acknowledge and deliver any such instruments and assignments, which the Executive shall fail or refuse to execute or deliver.

10.           INDEMNIFICATION.

The Company shall indemnify the Executive to the maximum extent permitted under the Nevada Revised Statutes, or any successor thereto, and shall promptly advance any expenses incurred by the Executive prior to the final disposition of the proceeding to which such indemnity relates upon receipt from the Executive of a written undertaking to repay the amount so advanced if it shall be determined ultimately that the Executive is not entitled to indemnity under the standards set forth in the Nevada Revised Statutes or its successor.  The Employer shall use commercially reasonable efforts to obtain and maintain throughout the Term of the employment of the Executive hereunder directors’ and officers’ liability insurance for the benefit of the Executive.  The indemnification obligations of the Company under this Section 10 shall survive the termination of the Term or of this Agreement for any reason whatsoever unless the Agreement is terminated for cause.

	
11. 

	
NOTICES.

(a)           Any and all notices or other communications given under this Agreement shall be in writing and shall be deemed to have been duly given on (1) the date of delivery, if delivered in person to the addressee, (2) the next business day if sent by overnight courier, or (3) three (3) days after mailing, if mailed within the continental United States, postage prepaid, by certified or registered mail, return receipt requested, to the party entitled to receive same, at his or its address set forth below:

If to the Company:

MusclePharm Corporation

4721 Ironton Street, Building A

Denver, CO 90839

Attention: Brad J. Pyatt

Telephone: (303) 396-6100

Email: brad.pyatt@musclepharm.com

 

  

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If to the Executive:

Brad J. Pyatt

4721 Ironton Street, Building A

Denver, CO 90839

(b)           The parties may designate by notice to each other any new address for the purposes of this Agreement as provided in this Section 11.

	
 12. 

	
MISCELLANEOUS PROVISIONS

(a)            Applicable Law.  This document shall, in all respects, be governed by the laws of the State of Colorado excluding any conflicts of law provisions.  The parties acknowledge that substantially all of the negotiations relating to this Agreement were conducted in, and that this Agreement has been executed by both parties in State of Colorado.

 

(b)           Survival.  The parties agree that the covenants contained in Section 3 hereof shall survive any termination of employment by the Executive and any termination of this Agreement.  In addition, the parties agree that any compensation or right which shall have accrued to the Executive as of the date of any termination of employment or termination hereof shall survive any such termination and shall be paid when due to the extent accrued on the date of such termination.

 

(c)           Assignability.  All of the terms and provisions contained herein shall inure to the benefit of and shall be binding upon the parties and their respective heirs, personal representatives, successors and assigns.  The obligations of the Executive may not be delegated, except as set forth herein, however, and the Executive may not, without the Company’s written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest therein.  Any such attempted delegation or disposition shall be null and void and without effect.  The Company and the Executive agree that this Agreement and all of the Company’s rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any affiliate of or successor to the Company.  The term “successor” shall mean, with respect to the Company or any of its subsidiaries, and any other corporation or other business entity which, by merger, consolidation, purchase of the assets, or otherwise, acquires all or a material part of the assets of the Company.  Any assignment by the Company of its rights and obligations hereunder to any affiliate of or successor shall not be considered a termination of employment for purposes of this Agreement.

 

  

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(d)           Modifications or Amendments.  No amendment, change or modification of this document shall be valid unless in writing and signed by each of the parties herein.

 

(e)           Waiver.  No reliance upon or waiver of one or more provisions of this Agreement shall constitute a waiver of any other provisions hereof.

 

(f)           Severability.  If any provision of this Agreement as applied to either party or to any circumstances shall be adjudged by a court of competent jurisdiction to be void or unenforceable, the same shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement.  If any court construes any of the provisions to be unreasonable because of the duration of such provision or the geographic or other scope thereof, such court may reduce the duration or restrict the geographic or other scope of such provision and enforce such provision as so reduced or restricted.

 

(g)           Separate Counterparts.  This document may be executed in one or more separate counterparts, each of which, when so executed, shall be deemed to be an original.  Such counterparts shall, together, constitute and shall be one and the same instrument.

 

(h)           Headings.  The captions appearing at the commencement of the sections hereof are descriptive only and are for convenience of reference.  Should there be any conflict between any such caption and the section at the head of which it appears the substantive provisions of such section and not such caption shall control and govern in the construction of this document.

 

(i)           Specific Performance.  It is agreed that the rights granted to the parties hereunder are of a special and unique kind and character and that, if there is a breach by either party of any material provision of this document, the other party would not have any adequate remedy at law.  It is expressly agreed, therefore, that the rights of the parties may be enforced by an action for specific performance and other equitable relief.

 

(j)           Further Assurances.  Each of the parties shall execute and deliver any and all additional papers, documents and other assurances, and shall do any and all acts and things reasonably necessary in connection with the performance of their obligations hereunder and to carry out their intentions as set forth herein.

 

(k)           Entire Agreement.  This Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter of this Agreement, and any and all prior agreements, understandings or representations are hereby terminated and canceled in their entirety.

 

  

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(l)           Neutral Construction.  Neither party may rely on any drafts of this Agreement in any interpretation of the Agreement.  Each party to this Agreement has reviewed this Agreement and has participated in its drafting and, accordingly, neither party shall attempt to invoke the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party in any interpretation of this Agreement.

 

(m)           Attorneys’ Fees.  In the event that either party hereto commences litigation against the other to enforce such party’s rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys’ fees (including in-house counsel), paralegals’ fees, and legal assistants’ fees through all appeals.

 

	
13. 

	
SUBMISSION TO ARBITRATION.

Except as hereinafter expressly provided, every difference or dispute, of whatever nature, between the Company and the Executive involving (1)  any breach of this Agreement or (2) any other difference or dispute arising out of, related to, under or having any connection with this Agreement, shall be settled and finally determined by arbitration in Denver, Colorado in accordance with the then current commercial arbitration rules of the American Arbitration Association, and judgment upon any award rendered may be entered in any court having jurisdiction, including but not limited to the courts of the State of Colorado, and the determination of such arbitration proceeding shall be binding and conclusive upon the parties.  Any claim by the Company against the Executive arising out of, under, or related to, Section 8 of this Agreement, whether for equitable relief or monetary damages or any combination, is specifically excluded from arbitration under this Section 13.

[ signature page follows ]

 

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement on the date first above written.

 

	  	
MUSCLEPHARM CORPORATION

	 
	  	  	  	 
	  	  	  	 
	  	
By:

	
/s/ Brad J. Pyatt

	 
	  	
 

	
Name: Brad J. Pyatt

	 
	  	
 

	
Title: Chief Executive Officer

	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	
EXECUTIVE

	 
	  	  	  	 
	  	  	  	 
	  	
 

	

/s/ Brad J. Pyatt

	 
	  	
 

	
Brad J. Pyatt

	 

 

 

 

  

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