Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Item 1.01 Entry Into a Material Definitive Agreement
Effective July 26, 2010, MusclePharm Corporation (the "Company") entered into a Joint Development, Manufacturing, Distribution and Marketing Agreement (the "Agreement") with TapouT, LLC pursuant to which the Company intends to launch a MusclePharm apparel line that includes t-shirts, sweat suits, shorts and other active wear items. Under the Agreement, the Company and TapouT will jointly develop MusclePharm branded mixed martial arts apparel and accessories. TapouT currently has distribution in over 20,000 retail stores worldwide, as well as online, including a full line of fighter gear, men's, women's, youth and accessories.
The Agreement provides that the Company engages TapouT to be the Company's exclusive provider of distribution services for a three year term on a world-wide basis. These services include coordination of manufacturing and shipment of the products, coordination of sales of and fulfillment of orders for the products and the related billing and collections from customers, and consultation and recommendations with respect to product creation, branding, advertising, marketing and promotion. In addition the Company grants to TapouT the sole and exclusive right and license to manufacture anywhere in the world, and distribute and sell the products through the channels of distribution and retail stores mutually agreed to by the parties.
In consideration for TapouT performing the distribution services described above, TapouT will receive or retain fifty percent of the net profits from the sales of the products.