Document:

EX-10.17

 Exhibit 10.17 

INDIVIDUAL GUARANTY 

October 9, 2015 
 ANB Bank 

3033 East First Avenue 
 Denver, Colorado 80206 

Ladies and Gentlemen: 
 The undersigned, for good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby guarantee to you and your successors and assigns, the punctual performance of all of the Obligations (as defined below) of MusclePharm Corporation
(“Debtor”) pursuant to the facilities and documents listed or referred to on Exhibit A (the “Debt Documents”). As used in this Guaranty, “Obligations” means all sums of money and each other duty or obligation that
Debtor may owe to you now or in the future pursuant to the Debt Documents. The undersigned further guarantees to pay upon demand all losses, reasonable costs, attorneys’ fees and expenses that you may incur by reason of Debtor’s default
under the Debt Documents or any default by the undersigned under this Guaranty (including, without limiting the generality of the foregoing, and reasonable costs of enforcement or collection of the Debt Documents or of this or any other guaranty).
Notwithstanding anything in this Guaranty to the contrary, you may not enforce this Guaranty unless there has occurred a default by Debtor consisting of the failure to (a) make a scheduled monthly payment when due under the Debt Documents or
(b) pay all amounts due under the Debt Documents by the scheduled maturity of January 15, 2016. 
 This Guaranty is a guaranty of
prompt payment and performance (and not merely a guaranty of collection). Nothing herein shall require you to first seek or exhaust any remedy against the Debtor, its successors and assigns, or any other person obligated with respect to the
Obligations, or to first foreclose, exhaust or otherwise proceed against any collateral or security or any other guaranty that may be given in connection with the Obligations. Upon any breach or default of the Debtor, or at any time thereafter, you
may make demand upon the undersigned and receive payment and performance of the Obligations, with or without notice or demand for payment or performance by the Debtor, its successors or assigns, or any other person. Suit may be brought and
maintained against the undersigned, at your election, without joinder of the Debtor, any other guarantor or any other person as parties thereto. The undersigned’s obligations are joint and several with those of any other guarantor of
Debtor’s obligations to you. 
 The undersigned agrees that her obligations under this Guaranty shall be primary, absolute, continuing
and unconditional, irrespective of and unaffected by any of the following actions or circumstances (regardless of any notice to or consent of the undersigned): (a) the genuineness, validity, regularity or enforceability of the Debt Documents or
any other document; (b) any extension, renewal, amendment, change, waiver or other modification of the Debt Documents or any other document; (c) the absence of, or delay in, any action to enforce the Debt Documents, this Guaranty or any
other document; (d) your failure or delay in obtaining any other guaranty of the Obligations; (e) the release of, extension of time for payment or performance by, or any other indulgence granted to the Debtor or any other person with
respect to the Obligations by operation of law or otherwise; (f) the existence, value, condition, loss, subordination or release (with or without substitution) of, or failure to have title to or perfect and maintain a security interest in, or
the time, place and manner of any sale or other disposition of any collateral or security given in connection with the Obligations, or any other impairment (whether intentional or negligent, by operation of law or otherwise) of the rights of the
undersigned; (g) the Debtor’s voluntary or involuntary bankruptcy, assignment for the benefit of creditors, reorganization, or similar proceedings affecting the Debtor or any of its assets; or (h) any other action or circumstances
that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. 
 This Guaranty, the Debt Documents and
the Obligations may be assigned by you or your successors or assigns without the consent of the undersigned. You will provide the undersigned with prompt written notice of any such assignment. The undersigned agrees that once she receives written
notice of an assignment from you (or your successors or assigns), the undersigned will pay all amounts due hereunder to such assignee or as instructed by you (or your successors or assigns). The undersigned also agrees to confirm in writing receipt
of the notice of assignment as may be reasonably requested by assignee. The undersigned hereby waives and agrees not to assert against any such assignee any of the defenses set forth in the immediate preceding paragraph. 

 This Guaranty may be terminated upon delivery to you (at your address shown above) of a written
termination notice from the undersigned. However, this Guaranty shall nevertheless continue and remain undischarged until all such Obligations are indefeasibly paid and performed in full, except as to obligations to repay principal amounts advanced
by you under the Debt Documents (and interest solely on such principal amounts) after you have received and had a reasonable time to process any such revocation. 

This Guaranty shall remain in full force and effect or be reinstated (as the case may be) if at any time payment or performance of any of the
Obligations (or any part thereof) is rescinded, reduced or must otherwise be restored or returned by you, all as though such payment or performance had not been made. If, by reason of any bankruptcy, insolvency or similar laws affecting the rights
of creditors, you shall be prohibited from exercising any of your rights or remedies against the Debtor or any other person or against any property, then, as between you and the undersigned, such prohibition shall be of no force and effect, and you
shall have the right to make demand upon, and receive payment from, the undersigned of all amounts and other sums that would be due to you upon a default with respect to the Obligations. 

Notice of acceptance of this Guaranty and of any default by the Debtor or any other person is hereby waived. Presentment, protest demand, and
notice of protest, demand and dishonor of any of the Obligations, and the exercise of possessory, collection or other remedies for the Obligations, are hereby waived. The undersigned warrants that it has adequate means to obtain from the Debtor on a
continuing basis financial data and other information regarding the Debtor and is not relying upon you to provide any such data or other information. Without limiting the foregoing, notice of adverse change in the Debtor’s financial condition
or of any other fact that might materially increase the risk of the undersigned is also waived. All settlements, compromises, accounts stated and agreed balances made in good faith between the Debtor, its successors or assigns, and you shall be
binding upon and shall not affect the liability of the undersigned. 
 The undersigned covenants that, so long as any Obligations remain
outstanding (even if not yet due), the undersigned (i) shall maintain individual ownership of Liquid Assets with a value at least equal to $6,200,000. For these purposes, “Liquid Assets” includes cash and publicly-traded securities
listed on a national exchange, and the value of such securities shall be the last reported sale price on such exchange. The undersigned further (a) covenants that she shall not dispose of any assets if such disposition would cause a material
adverse change in her financial condition and (b) represents and warrants to you that the she has an unencumbered interest of at least 28.43% in the same Consac, LLC reflected in the personal financial statement of Ryan Drexler previously
furnished to you. 
 Payment of all amounts now or hereafter owed to the undersigned by the Debtor or any other obligor for any of the
Obligations is hereby subordinated in right of payment to the indefeasible payment in full to you of all Obligations and is hereby assigned to you as a security therefor. 

THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES HER RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY
OR INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN THE UNDERSIGNED AND YOU RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
US. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, OR ANY
RELATED DOCUMENTS. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 

  
 2 

 This Guaranty is being executed in Colorado in connection with a loan to the Debtor (a
Colorado-based company) and shall be governed by the laws of the State of Colorado (without giving effect to conflicts of law principles that could result in application of the laws of any other jurisdiction). YOU MAY BRING ANY PROCEEDING IN
CONNECTION WITH THIS GUARANTY IN THE STATE OR FEDERAL COURTS LOCATED IN THE CITY AND COUNTY OF DENVER, COLORADO. THE UNDERSIGNED IRREVOCABLY SUBMITS TO THE JURISDICTION OF EACH SUCH COURT. THE UNDERSIGNED IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION THAT SHE MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING IN THE STATE OR FEDERAL COURTS LOCATED IN THE CITY AND COUNTY OF DENVER, COLORADO, AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM. ANY JUDGMENT MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. 
 As used in
this Guaranty, the word “person” shall include any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or any government or any political subdivision thereof. 

This Guaranty is intended by the parties as a final expression of the guaranty of the undersigned and is also intended as a complete and
exclusive statement of the terms thereof. No course of dealing, course of performance or trade usage, nor any paid evidence of any kind, shall be used to supplement or modify any of the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its provisions may be waived, modified, varied, released, terminated or surrendered, in whole or in part, only by a duly authorized written instrument signed by you. No failure by you to
exercise your rights hereunder shall give rise to any estoppel against you, or excuse the undersigned from performing hereunder. Your waiver of any right to demand performance hereunder shall not be a waiver of any subsequent or other right to
demand performance hereunder. 
 This Guaranty shall not be discharged or affected by the death of the undersigned, but shall bind her
heirs, executors, administrators, and assigns, and the benefits thereof shall extend to and include your successors and assigns. In the event of default hereunder, you may at any time inspect the undersigned’s records, or at your option,
undersigned shall furnish you with a current independent audit report. To the extent waivable, the undersigned waives the benefit of any statute or principle that requires you (or your successor) to bid “fair market value” or any other
measure of value at any foreclosure or similar sale, so that the undersigned may not use any such statute or principle to reduce the amount payable by the undersigned to any person seeking a deficiency judgment against the undersigned under the Debt
Documents. The invalidity of any provision of this Guaranty shall not affect the validity of such provision as applied to other circumstances or the validity of any other provision. 

The undersigned is executing this Guaranty to induce you to make accommodations to Borrower through the execution of amendments to the Debt
Documents in the form attached hereto as Exhibit B. This Guaranty is therefore supported by adequate consideration which the undersigned has received. All such waivers and accommodations are fully set forth in amendments to the Debt Documents being
executed simultaneously with this Guaranty. The undersigned acknowledges that you have not made any commitment or promise to grant any waivers or make any other accommodations in connection with the Debt Documents other than those explicitly set
forth in documents being executed simultaneously with this Guaranty and attached hereto as Exhibit B. 
  

					
	Accepted:	 		  	Undersigned Guarantor
			
	 /s/ Sean Ribble
	 		  	 /s/ Jodi Drexler-Billet

	Sean Ribble, ANB Bank	 		  	 Jodi Drexler-Billet, individually
 Address: 215
East 68th - St

		 		  	               NYC 10065
		 		  	 Social Security No.: XXX-XX-XXXX

  
 3 

 ACKNOWLEDGEMENT 
  

					
	STATE OF New York	  	)	  	
		  		  	) ss:
	COUNTY OF New York	  	)	  	

 The above and foregoing Individual Guaranty was acknowledged before me this
9th day of October, 2015 by Jodi Drexler-Billet. 
  

			
	WITNESS my hand and official seal.	  	
		
	        [SEAL]	  	

		
	MY commission expires: 6/3/2017	  	Notary Public
		
		  	

            

  
 4 

 EXHIBIT A 

TO GUARANTY OF JODI DREXLER-BILLET TO ANB BANK DATED OCTOBER 13, 2015 

 

	1.	Revolving Line Facility 

  

	 	•	 	Promissory note dated September 12, 2014, in the original principal amount of $8,000,000 

  

	 	•	 	Commercial Loan Agreement with an addendum, dated September 12, 2014 

  

	 	•	 	Security Agreement dated September 12, 2014 

  

	 	•	 	Agreement to Provide Insurance dated September 12, 2014 

  

	 	•	 	Debt Modification Agreement – Revolving Line of Credit executed as of October 9, 2015, to be effective as of September 30, 2015 

 

	2.	Term Loan Facility 

  

	 	•	 	Promissory note dated February 20, 2015, In the original principal amount of $4,000,000 

  

	 	•	 	Commercial Loan Agreement dated February 20, 2015 

  

	 	•	 	Security Agreement dated February 20, 2015 

  

	 	•	 	Agreement to Provide Insurance dated February 20, 2015 

  

	 	•	 	Debt Modification Agreement – Term Loan executed as of October 9, 2015, to be effective as of dated September 30, 2015 

  
 5 

 Exhibit B to Guaranty 

 

 DEBT MODIFICATION AGREEMENT – TERM LOAN 

This agreement is being entered into as of October 9, 2015, to be effective as of September 30, 2015, between ANB Bank, a Colorado state bank
(“Lender”), and MusclePharm Corporation, a Nevada corporation (“Borrower”). 
 RECITALS 

Borrower has obtained a term loan from Lender (the “Facility”) as evidenced by the promissory note of Borrower dated February 20, 2015, in the
original principal amount of $4,000,000 (the “Note”). In connection with the Facility, the parties also entered into a Commercial Loan Agreement (the “Loan Agreement”), a Security Agreement, a Securities Entitlement Control
Agreement and an Agreement to Provide Insurance, all dated as of February 20, 2015. The Note, the Loan Agreement and the other documents referred to above, along with any other documents signed or entered into in connection with the Facility,
are referred to below as the “Loan Documents”. 
 Borrower has requested that the Lender waive any defaults under the Facility. The purpose of
this agreement is for Lender to agree to waive any such defaults existing as of the date this agreement is entered into and to revise certain terms of the Facility in consideration for receiving joint and several personal guaranties (the
“Guaranties”) of the Facility from Mr. Ryan Drexler, the Executive Chairman of the Borrower, and Ms. Jodi Drexler-Billet, an individual indirect investor in Borrower. 

AGREEMENT 
 The parties agree as follows:

  

	 	1.	The Note and the Loan Agreement are hereby revised so that the final Maturity Date of the Facility shall be January 15, 2016 (the “Maturity Date”), at which time all amounts outstanding under the Note and
the Facility shall be due and payable in full. Before the Maturity Date, in addition to scheduled payments under the Facility, Borrower shall pay to Lender on the Facility the full amount of all proceeds received by Borrower in connection with any
debt or equity financing or any sale of assets (other than the sale of inventory in the ordinary course of business. 

  

	 	2.	 In exchange for the execution and delivery of the Guaranty, Lender hereby agrees to waive any defaults existing as of the date the parties enter into
this agreement. In addition, Lender agrees that, notwithstanding provisions in the Loan Documents regarding defaults, Borrower shall not be deemed in default under any of the Loan Documents before December 10, 2015, except for defaults
resulting from failure to make 

 Exhibit B to Guaranty 

 

	 	
timely payments of amounts due under the Facility. Without limiting the generality of the preceding sentence, Lender may not declare the Facility in default before December 10, 2015,
pursuant to the “Material Change” or “Insecurity” provisions, i.e. Sections 7.M and 7.N, respectively, of the Loan Agreement. This Section 2 shall not preclude the possibility of events occurring before
December 10 and not then cured from becoming defaults thereafter. 

  

	 	3.	Borrower represents and warrants to Lender as follows: 

  

	 	(a)	After giving effect to the waiver set forth herein, there is no default under the Loan Documents, and no event has occurred that with notice or time could become such a default. 

 

	 	(b)	All of Borrower’s representations and warranties in the Loan Documents are true, complete and correct as if made on and as of the date of this agreement, except to the extent that such representations and
warranties relate to an earlier date specified therein (and those excepted representations and warranties were true, complete and correct when made). 

  

	 	(c)	The information furnished to Lender in connection with the Facility, this agreement or any guarantor of the Facility (including, without limiting the generality of the foregoing, any information relating to the
wherewithal of a guarantor) does not contain any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

  

	 	4.	As part of the consideration for Lender’s execution and delivery of this agreement, Borrower hereby waives, releases Lender from, and covenants not to sue regarding or assert, any claim, right of setoff or defense
against payment arising directly or indirectly from the Facility, actions or inactions by Lender in connection with the Facility, or otherwise relating in any way to Borrower’s relationship with Lender. 

 

	 	5.	All of the Loan Documents remain in full force and effect, unmodified except as set forth above. However, in case of any inconsistency between this agreement and the Loan Documents, this agreement shall govern.

  

	 	6.	This agreement shall be included in the Loan Documents, so that any provision of general applicability in the other loan Documents (such as choice of law, venue, etc.), shall also apply to this agreement In addition,
any guaranty of the Facility shall be a Loan Document, so that any default under such a Guaranty shall also be a default under the Note and Loan Agreement. 

 Exhibit B to Guaranty 

 

	 	7.	All waivers and concessions by Lender in this Agreement are subject to the execution and delivery to Lender of the Guaranties in the form previously agreed to by Lender. 

Effective as of September 30, 2015 
 MusclePharm
Corporation 
  

			
	By:	 	 
		 	
	ANB Bank
		
	By:	 	 

 Exhibit B to Guaranty 

 

 DEBT MODIFICATION AGREEMENT – REVOLVING LINE OF CREDIT 

This agreement is being entered into as of October 9, 2015, to be effective as of September 30,2015, between ANB Bank, a Colorado state bank
(“Lender”), and MusclePharm Corporation, a Nevada corporation (“Borrower”). 
 RECITALS 

Borrower has obtained a revolving line of credit from Lender (the “Facility”) as evidenced by the promissory note of borrower dated
September 12, 2014, in the original principal amount of $8,000,000 (the ‘‘Note”). In connection with the revolving line of credit, the parties also entered into a Commercial Loan Agreement with an addendum (the “Loan
Agreement”), a Security Agreement and an Agreement to Provide Insurance, all dated as of September 12, 2014. The Note, the Loan Agreement and the other documents referred to above, along with any other documents signed or entered into in
connection with the Facility, are referred to below as the “Loan Documents”. 
 Borrower has requested that the Lender waive any defaults under
the Facility. The purpose of this agreement is for Lender to agree to waive any such defaults existing as of the date this agreement is entered into and to revise certain terms of the Facility in consideration for receiving joint and several
personal guaranties (the “Guaranties”) of the Facility from Mr. Ryan Drexler, the Executive Chairman of the Borrower, and Ms. Jodi Drexler-Billet, an individual indirect investor in Borrower. 

AGREEMENT 
 The parties agree as follows:

  

	 	1.	The Note and the Loan Agreement are hereby revised so that the final Maturity Date of the Facility shall be January 15, 2016, at which time all amounts outstanding under the Note and the Facility shall be due and
payable in full. Before the Maturity Date, in addition to scheduled payments under the Facility, Borrower shall pay to Lender on the Facility the full amount of all proceeds received by Borrower in connection with any debt or equity financing or any
sale of assets (other than the sale of inventory in the ordinary course of business), net of any amounts required to be paid from such proceeds on Borrower’s promissory note to Lender dated February 20, 2015, in the original principal
amount of $4,000,000. 

  

	 	2.	In exchange for the execution and delivery of the Guaranty, Lender hereby agrees to waive any defaults existing as of the date the parties enter into this agreement. In addition, Lender agrees that, notwithstanding
provisions in the Loan Documents regarding defaults, Borrower shall not be deemed in default under any of the Loan Documents before December 10, 2015, except for defaults resulting from failure to make timely payments of amounts due under the
Facility. Without limiting the generality of the preceding sentence, Lender may not declare the Facility in default before December 10, 2015, pursuant to the “Material Change” or “Insecurity” provisions, i.e. Sections
7.M and 7.N, respectively, of the Loan Agreement. This Section 2 shall not preclude the possibility of events occurring before December 10 and not then cured from becoming defaults thereafter. 

 Exhibit B to Guaranty 

 

	 	3.	Notwithstanding anything in the Loan Documents to the contrary, Lender shall not be obligated to make any advances under the Facility (a) if the total amount outstanding under the Facility after making such advance
would exceed the lesser of (i) $3,000,000 or (ii) the Borrowing Base determined pursuant to Section 16.O of the Loan Agreement, or (b) after receiving notice of revocation of any guaranty of the Facility. 

 

	 	4.	The following covenants are deleted from the Loan Agreement: 

  

	 	(a)	the covenant in the fifth paragraph of Section 6.Z and Section 16.H (relating to debt-service coverage ratio); 

  

	 	(b)	the covenant in the eleventh paragraph of Section 6.Z and Section 16.I (relating to Current ratio and working capital); and 

 

	 	(c)	the covenant in the thirteen paragraph of Section 6.Z and Section 16.D (relating to market capitalization). 

 

	 	5.	Borrower agrees to provide the reports required by Section 16.M of the Loan Agreement weekly (rather than monthly as previously provided in Section 16.M). Each such report shall be delivered no later than
Wednesday of each week and shall reflect the information required by Section 16.M as of a date no earlier than the preceding Friday. 

  

	 	6.	Borrower agrees to pay a Facility extension fee of $10,000 to Lender. Borrower hereby authorizes Lender to withdraw such payment from a deposit account maintained by Borrower with Lender. 

 

	 	7.	Borrower represents and warrants to Lender as follows: 

  

	 	(a)	After giving effect to the waiver set forth herein, there is no default under the Loan Documents, and no event has occurred that with notice or time could become such a default. 

 

	 	(b)	All of Borrower’s representations and warranties in the Loan Documents are true, complete and correct as if made on and as of the date of this agreement, except to the extent that such representations and
warranties relate to an earlier date specified therein (and those excepted representations and warranties were true, complete and correct when made). 

 Exhibit B to Guaranty 

 

	 	(c)	The information furnished to Lender in connection with the Facility, this agreement or any guarantor of the Facility (including, without limiting the generality of the foregoing, any information relating to the
wherewithal of a guarantor) does not contain any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

  

	 	8.	As part of the consideration for Lender’s execution and delivery of this agreement, Borrower hereby waives, releases Lender from, and covenants not to sue regarding or assert, any claim, right of setoff or defense
against payment arising directly or indirectly from the Facility, actions or inactions by Lender in connection with the Facility, or otherwise relating in any way to Borrower’s relationship with Lender. 

 

	 	9.	All of the Loan Documents remain in full force and effect unmodified except as set forth above. However, in case of any inconsistency between this agreement and the Loan Documents, this agreement shall govern.

  

	 	10.	This agreement shall be included in the Loan Documents, so that any provision of general applicability in the other loan Documents (such as choice of law, venue, etc.), shall also apply to this agreement. In addition,
any guaranty of the Facility shall be a Loan Document, so that any default under such a Guaranty shall also be a default under the Note and Loan Agreement. 

  

	 	11.	All waivers and concessions by Lender in this Agreement are subject to the execution and delivery to Lender of the Guaranties in the form previously agreed to by Lender. 

Effective as of September 30, 2015 
 MusclePharm
Corporation 
  

			
	By:	 	 
	
	ANB Bank
		
	By:Exhibit

Exhibit 10.1

TRANSITION AGREEMENT
This Transition Agreement (the “Agreement”) is entered into as of March 14, 2016 (the “Effective Date”), by and between ALLEN J. CARLSON, an individual residing in Sarasota County, Florida (“Carlson”) and SUN HYDRAULICS CORPORATION (the “Company”), a Florida corporation.
W I T N E S S E T H:
WHEREAS, Carlson has expressed his desire to transition his role with the Company as a full-time employee on March 31, 2016; and 
WHEREAS, the Company and Carlson have agreed upon the terms for an orderly transition and the continuation of certain services by Carlson, as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto, intending to be legally bound hereby, agree as follows:
1.    Service as President and CEO.
A.    Beginning on the Effective Date, and continuing through March 31, 2016, Carlson will continue to serve as the Company’s President and Chief Executive Officer and to receive his current compensation and benefits.  Carlson will submit his resignation as President and Chief Executive Officer to the Company’s Secretary at the close of business on March 31, 2016.  Notwithstanding the foregoing, the Company shall have the right to terminate Carlson for Cause.
B.    Termination of employment by the Company shall be deemed “for Cause” if it results from (a) the willful and continued failure by Carlson substantially to perform his reasonably assigned employment duties or regular failure to follow the specific directives of the Board of Directors (the “Board”) (in either case other than a failure resulting from his incapacity due to Disability), after written demand for substantial performance, that specifically identifies the manner in which the Company believes Carlson has not substantially performed his duties, is delivered by the Company to Carlson; or (b) the willful engaging by Carlson in misconduct which is materially injurious to the Company, monetarily or otherwise.  For purposes of this Section 1, no act, or failure to act, on Carlson’s part shall be considered “willful” unless done, or omitted to be done, intentionally, and without a reasonable belief that his action or omission was in the best interest of the Company.  Notwithstanding the foregoing, Carlson shall not be deemed to have been terminated for Cause hereunder without (i) reasonable advance written notice setting forth the reasons for the Company’s intention to terminate for Cause, (ii) a reasonable opportunity for Carlson to cure any such breach during the 30-day period after receipt of such notice, and (iii) an opportunity at any reasonable time during the 30-day period after Carlson’s receipt of such notice, for Carlson, together with his counsel, to be heard before the Board.
C.    If Carlson is terminated for Cause, he shall be entitled only to his salary and benefits through the date of such termination.  
2.    Transition Period.  From and after April 1, 2016, or, if earlier, on the date of his termination for Cause, Carlson will perform transition services as requested by the Company’s Board or its Chief Executive Officer and receive the compensation set forth in Exhibit A attached hereto and incorporated herein.  The parties agree that such services will be nominal and primarily require information exchanges, introductions 

to third parties and responses to other requests that can generally be handled remotely by Carlson.  Such services are in addition to Carlson’s duties and obligations as a member of the Company’s Board.
3.    Restricted Stock Award.  Provided that Carlson has complied with his obligations hereunder, the Company will grant to Carlson on April 1, 2016, 35,000 restricted shares of Company common stock, the restrictions of which will lapse on April 1, 2017 (the “Restricted Shares”).
4.    Restrictive Covenants.  Carlson acknowledges and recognizes the highly competitive nature of the Company’s business and, in consideration of his continued employment and compensation by the Company during and following his termination of employment, Carlson agrees to the following:
A.    From the Effective Date through April 1, 2017 (the “Restricted Period”), anywhere in the world (the “Restricted Area”), Carlson will not, individually or in conjunction with others, directly or indirectly, engage in any Competitive Business Activities (as hereinafter defined) other than on behalf of the Company, unless specifically agreed to in writing by the Company, and as agreed by the Company and Carlson, whether on a full-time or on a part-time basis, whether as an officer, director, proprietor, employee, partner, independent contractor, investor (other than as a holder of less than five percent (5%) of the outstanding capital stock of a publicly traded corporation), consultant, advisor, agent or otherwise.  “Competitive Business Activities” shall be deemed to mean the provision of services, directly or indirectly, for or on behalf of any of the following Persons:
1.    the hydraulics divisions and subsidiaries and their affiliated group entities of Daman, Danfoss, Delta Power/TechNord, Deltrol, Eaton, Hawe, Hydac, Hydraforce, Parker, Rexroth, Valvoil, Wandfluh and Winner;
2.    any Person that has served at any time subsequent to April 1, 2011, as a distribution or channel partner of the Company; and
3.    any Person that has served at any time subsequent to April 1, 2011, as a supplier of materials to the Company.
“Person” shall be deemed to mean and include natural persons, partnerships, corporations, limited liability companies, professional associations or other organizations or entities; and, with respect to a non-natural person, its subsidiaries and controlled affiliates.
B.    During the Restricted Period and within the Restricted Area, Carlson will not, directly or indirectly, compete with the Company by soliciting, inducing or influencing any of the Company’s Customers which have a business relationship with the Company at any time during the Restricted Period to discontinue or reduce the extent of such relationship with the Company.  The Company’s “Customers” shall be deemed to be any Person, including without limitation distributors, value-added resellers, original equipment manufacturers, and other fluid power companies, for whom or for which the Company (i) at the time of termination or expiration of this 

Agreement sells hydraulic cartridges valves, manifolds or fluid power systems; and (ii) any time during the twelve (12) months period preceding termination of Carlson’s employment or expiration of this Agreement has sold hydraulic cartridges valves, manifolds or fluid power systems.
C.    During the Restricted Period and within the Restricted Area, Carlson will not, directly or indirectly, for or on behalf of himself or any other Person, (a) recruit, solicit or otherwise influence any 

employee of the Company to discontinue such employment relationship with the Company, or (b) employ or seek to employ, or cause or permit to be employed any person who is then (or was at any time within six (6) months prior to the date Carlson employs or seeks to employ such person) an employee of the Company.  For purposes of this Section 4.C., “employ” shall be deemed to mean to engage or permit to be engaged, whether as a legal employee or as an independent contractor.
D.    During the Restricted Period, Carlson will not interfere with, disrupt or attempt to disrupt any past, present or prospective relationship, contractual or otherwise, between the Company and any Company Customer, employee or agent.
5.    Non-Disclosure of Information.  Carlson acknowledges that the Company’s trade secrets; private or secret procedures; methods and ideas; market research data or analyses and marketing plans; fees, costs and pricing structures; customer lists and information concerning the Company’s products, services, training methods, development, technical information, marketing activities and procedures, and corporate strategies, credit, financial and other data concerning the Company’s Customers, as they exist from time to time; and other information, observations and data obtained by Carlson while employed by the Company concerning the Company’s business, products, services and business relationships; and all similar and related information in whatever form (“Proprietary Information”) are valuable, special and unique assets of the Company, access to and knowledge of which are essential to the performance by Carlson of his employment with the Company.  In light of the highly competitive nature of the industry in which the Company’s business is conducted, Carlson agrees that all Proprietary Information, heretofore or in the future obtained by him as a result of his association with the Company shall be considered confidential.
In recognition of this fact, Carlson agrees that Carlson will never use or disclose any such Proprietary Information for Carlson’s own purposes or for the benefit of any person or other entity or organization (except the Company) under any circumstances unless such Proprietary Information has been publicly disclosed generally or, unless upon written advice of legal counsel reasonably satisfactory to the Company, Carlson is legally required to disclose such Proprietary Information.  Documents (as hereinafter defined) prepared by Carlson or that come into Carlson’s possession during Carlson’s association with the Company are and remain the property of the Company, and when this Agreement terminates, such Documents shall be returned to the Company at its principal place of business and herein noted.
“Documents” shall mean all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, including, but not limited to:  papers; books; records; tangible things; correspondence; e-mail, telecopy and telex messages; memoranda; work‐papers; reports; statements; summaries; analyses; evaluations; Customer records and information; agreements; agendas; advertisements; manuals; brochures; publications; directories; industry lists; schedules; price lists; Customer lists; statistical records; training manuals; computer printouts; books of account, records and invoices reflecting business operations; all things similar to any of the foregoing however denominated.  In all cases where originals are not available, the term “Documents” shall also mean identical copies of original documents or non‐identical copies thereof.
6.    Non-Disparagement.  Except as otherwise required by law, Carlson will not make, publish, or disseminate any derogatory statements or comments about the Company or any of its subsidiaries and affiliated entities, or any of their past or present officers or directors, or take any action which a reasonable person would expect would impair the good will, business reputation, or good name of any of them.  
7.    Independent Obligations.  It is understood by and between the parties hereto that the foregoing covenants by Carlson contained in Paragraphs 4 and 5 of this Agreement shall be construed to be agreements independent of any other element of Carlson’s employment with the Company.  The existence of any claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, 

as a result of the relationship between the parties shall not constitute a defense to the enforcement of the covenants in this Agreement against Carlson, and the Company’s breach of any term of this Agreement or any other obligation does not waive or release Carlson from the restrictions contained in Paragraphs 4 and 5.
8.    Remedies.
A.    Carlson acknowledges and agrees that the Company’s remedy at law for a breach or threatened breach of any of the provisions of Paragraphs 4 or 5 herein would be inadequate and the breach shall be per se deemed as causing irreparable harm to the Company.  In recognition of this fact, in the event of a breach by Carlson of any of the provisions of Paragraphs 4 or 5, Carlson agrees that, in addition to any remedy at law available to the Company, including, but not limited to monetary damages, the Company, without posting any bond, shall be entitled to obtain, and Carlson agrees not to oppose the Company’s request for equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.
B.    Carlson acknowledges that the granting of a temporary injunction, temporary restraining order or permanent injunction merely prohibiting the use of Proprietary Information would not be an adequate remedy upon breach or threatened breach of Paragraph 5 and consequently agrees, upon proof of any such breach, to the granting of injunctive relief prohibiting any form of competition with the Company.  Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach.
9.    General Release.  On March 31, 2016, or, if earlier, on the date of his termination for Cause, Carlson will execute and return to the Company a General Release in the form of Exhibit B attached hereto and incorporated herein.
10.    Assumption of Agreement.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree in writing to perform this Agreement.  Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and, provided that Carlson has complied with and is not in breach of his obligations under this Agreement, (i) Carlson shall be entitled to immediate payment in an amount equal to the product of (A) $43,000, and (B) the number of months remaining in the Transition Services Period; and (ii) all forfeiture provisions relating to, and restrictions upon transfer of the Restricted Shares shall immediately lapse.  As used in this Section 10, “Company” shall mean the Company as herein above defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise; and the date on which any such succession becomes effective shall be deemed to be the date on which Carlson shall receive the compensation and benefits described herein from the Company.  
11.    Waiver.  Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provisions hereunder shall not affect its right thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement.  No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.
12.    Mediation.  The Company and Carlson agree that, prior to bringing any lawsuit or otherwise formally asserting a claim in any proceeding, they will attempt in good faith to resolve their dispute through 

mediation (“Mediation”) in Sarasota County, Florida, before a single mediator selected by the party asserting the claim, subject to the reasonable consent of the party against whom the claim is asserted.  The Company shall be represented at the Mediation by an officer of the Company with full authority to agree to the resolution of the dispute.  Florida law will be used for purposes of determining the obligations of the Parties and interpreting this Agreement at the Mediation.  The mediator’s fees, and any costs and expenses of the mediator, will be borne equally by the Company and Carlson.
13.    Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision, or part thereof, of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, rule, public policy or court determination in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision in any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.  If any court determines that any provision of Paragraphs 4 or 5 hereof is unenforceable because of the duration or scope of such provision, such court shall have the power to reduce the scope or duration of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.  
14.    Waiver of Jury Trial.  As a specifically bargained for inducement for each of the parties hereto to enter into this Agreement (after having the opportunity to consult with counsel), each party hereto expressly waives the right to trial by jury in any lawsuit or proceeding relating to or arising in any way from this Agreement or the matters contemplated hereby.
15.    General Terms and Conditions.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute one and the same agreement.  Electronic or facsimile copies of this Agreement fully executed shall be deemed an original for all purposes, and the parties waive the “best evidence” rule or any similar law or rule in any proceeding in which this Agreement shall be presented as 

evidence.  This Agreement will be governed by and construed in accordance with the internal laws of the State of Florida, without regard to its conflicts of laws provision.  If any legal action or proceeding is commenced to enforce the terms, policies, representations or warranties herein, the prevailing party shall be entitled to recover its attorneys’ fees and costs from the other party.  The U.S. District for the Middle District of Florida, or if such court lacks jurisdiction, the Twelfth Judicial Circuit (or its successor) in and for Sarasota County Florida, shall be the venue and exclusive proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement.  This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof.  This Agreement may not be changed, altered, modified or amended except in writing signed by both parties.  Any termination of this Agreement shall not, however, affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.  
16.    Older Workers’ Benefit Protection Act Provisions.  In accordance with the requirements of the Older Workers’ Benefits Protection Act, Carlson expressly acknowledges the following:
A.    Consideration.  The consideration provided pursuant to this Agreement is in addition to any consideration that he would otherwise be entitled.

B.    Independent Legal Counsel.  Carlson has been advised and encouraged to consult with an attorney before signing this Agreement.  Carlson acknowledges that if he desired to, Carlson had an adequate opportunity to do so.
C.    Consideration Period.  Carlson has 21 calendar days from the date the original Agreement was given to him, March 14, 2016, to consider this Agreement before signing it.  The 21 day period expires on April 4, 2016.  Carlson may use as much or as little of this 21 day period as Carlson wishes before signing.  If Carlson does not sign and return this Agreement within this 21 day period, it will not become effective or enforceable and Carlson will not receive all of the benefits described in this Agreement.
D.    Revocation Period and Effective Date.  Carlson has seven (7) calendar days after signing this Agreement to revoke it.  To revoke this Agreement after signing it, Carlson must deliver a written notice of revocation to the Company before the seven (7) day period expires.  This Agreement shall not become effective until the eighth (8th) calendar day after Carlson signs it (“Revocation Expiration Date”).  If Carlson revokes this Agreement, it will not become effective or enforceable and Carlson will not receive the benefits described in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Transition Agreement to be executed as of the date and year first above written.
SUN HYDRAULICS CORPORATION

/s/ Allen J. Carlson                By:    /s/ Philippe Lemaitre            
ALLEN J. CARLSON                    Philippe Lemaitre, Chairman of the Board

EXHIBIT A
TRANSITION COMPENSATION

1.    From and after the date on which Allen J. Carlson (“Carlson”) no longer serves as an employee of the Company, in consideration for providing the transition services required under this Agreement and complying with all of the terms thereof, Carlson will receive the following compensation:
		
	A.
	for a period of twelve (12) months (the “Transition Services Period”), monthly compensation of $43,000, payable on the first day of each calendar month, beginning April 1, 2016;

		
	B.
	for continuation of insurance coverage under COBRA, a lump sum payment of $16,706.26 on April 1, 2016, or such other date as the parties agree; and

		
	C.
	the award of the Restricted Shares on April 1, 2016.

2.    Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to Carlson or his estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to applicable law or regulation.  In lieu of withholding such amounts, the Company may accept other provisions to the end that it has sufficient funds to pay all taxes required to be withheld in respect of any of such payments.
3.    Notwithstanding anything in this Agreement to the contrary, in the event that payments under this Agreement (the “Termination Payment”), either alone or together with other payments (or the value of other benefits) which Carlson has the right to receive from the Company in connection with a Change in Control, would not be deductible (in whole or in part) by the Company as a result of any Termination Payment constituting a “parachute payment” within the meaning of Section 280G of the Code, the Termination Payment shall be reduced to the largest amount as will result in no portion of the Termination Payment (or such other payments and/or benefits) not being fully deductible by the Company as a result of Section 280G of the Code.  The determination of the amount of any such required reduction pursuant to the foregoing provision, and the valuation of any non-cash benefits for purposes of such determination, shall be made exclusively by the firm that was acting as the Company’s auditors prior to the Change in Control (whose fees and expenses shall be borne by the Company, and such determination shall be conclusive and binding).

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