Exhibit 10.3

 
RESTRUCTURING AGREEMENT
 
This Restructuring Agreement (the “Agreement”) is made as of November 3, 2017,
by and between Ryan Drexler, an individual (“Drexler”) and MusclePharm
Corporation, a Nevada corporation (the “Company”).
 
Recitals
 
WHEREAS, the Company previously issued to Drexler (i) a convertible secured
promissory note dated as of December 7, 2015, and amended as of January 14,
2017, in the original principal amount of $6,000,000 (the “First Convertible
Note”), (ii) a convertible secured promissory note dated as of November 8, 2016,
in the original principal amount of $11,000,000 (the “Second Convertible Note”),
and (iii) a secured demand promissory note dated as of July 27, 2017, in the
original principal amount of $1,000,000 (the “Demand Note”; together with the
First Convertible Note and the Second Convertible Note, the “Prior Notes”);
 
WHEREAS, the First Convertible Note and the Second Convertible Note each
currently mature on November 8, 2017, while the Demand Note is due and payable
at any time on demand of Drexler;
 
WHEREAS, the Prior Notes are currently secured by a lien on and security
interest in all of the assets and properties of the Company, as described in the
Second Amended and Restated Security Agreement dated as of July 27, 2017, by and
between the Company and Drexler (the “Prior Security Agreement”); and
 
WHEREAS, the Company and Drexler have agreed (1) to amend and restate the Prior
Notes to, among other things, extend the maturity date of such instruments and
make certain other amendments as set forth in the Restructured Note (as defined
below), and (2) to amend and restate the Prior Security Agreement to reaffirm
Drexler’s continuing lien on substantially all of the assets and property of the
Company and make certain other amendments as set forth in the Security Agreement
(as defined below) (collectively, the “Restructuring”).
 
NOW, THEREFORE, THE PARTIES SEVERALLY AGREE AS FOLLOWS:
 
1. Amendment and Restatement of Prior Notes and Prior Security Agreement.
 
(i) Effective as of the Restatement Effective Date (as defined below), the Prior
Notes (including each schedule thereto, if any) are hereby amended and restated
to be in the form attached as Exhibit A hereto (the Prior Notes, as so amended
and restated, being referred to as the “Restructured Note”).
 
(ii) Effective as of the Restatement Effective Date (as defined below), the
Prior Security Agreement (including each schedule thereto, if any) is hereby
amended and restated to be in the form attached as Exhibit B hereto (the Prior
Security Agreement, as so amended and restated, being referred to as the
“Security Agreement”).
 
 
1

 
 
2. Effectiveness of Amendment and Restatement.    The amendment and restatement
of the Prior Notes as set forth in Section 1(i) hereof shall become effective on
the first date (the “Restatement Effective Date”) on which the following
conditions precedent shall have been satisfied:
 
(i) Restructuring Documents. Drexler shall have received the following, in each
case duly executed and delivered by the Company and dated as of the date hereof:
 
(a)
the Restructured Note;
 
(b)
the Security Agreement; and
 
(c)
such other documents as Drexler may reasonably request.
 
(ii) Payoff of Accrued Interest on Prior Notes. The Company shall have made a
payment to Drexler in the amount set forth as “Interest” in Section 3(i) below
(the “Interest Payoff Amount”), subject to a per diem adjustment as set forth in
Section 3(ii) below, which amount shall constitute payment and satisfaction in
full of the accrued and unpaid interest on the Prior Notes. Such payment shall
be made by a federal funds wire transfer to the account described on Exhibit C
hereto.
 
(iii) Crossroads
Consent.                                                       Drexler shall
have received, on or prior to the Restatement Effective Date, the consent of
Crossroads Financial Group, LLC, a North Carolina limited liability company
(“Crossroads”), in a form reasonably satisfactory to Drexler, consenting to the
Restructuring and agreeing to waive any potential “Event of Default” as defined
in and pursuant to the Company’s existing debt facility with Crossroads.
 
3. Amounts Outstanding under Prior Notes at Closing; Release.
 
(i) The Company acknowledges and agrees that, as of the date hereof, the
principal and interest outstanding under the Prior Notes are as follows:
 
Principal
 $18,000,000.00 
Interest (through November 8, 2017)
 $40,588.42 

 
(ii) The foregoing amounts do not include interest accruing on the Prior Notes
on or following the date hereof. If Drexler does not receive the Interest Payoff
Amount on the date hereof, the Interest Payoff Amount shall be increased by a
per diem amount of $5,078.62 for each day after November 8, 2017 through and
including the date of actual repayment.
 
(iii) The Company confirms, acknowledges, and agrees that all of the principal,
interest, fees, expenses and other amounts outstanding under the Prior Notes,
including those set forth above (collectively, the “Obligations”), are valid and
outstanding, and the Company does not have any rights of offset, recoupment,
netting, or deduction, or any defenses, claims or counterclaims with respect to,
and agrees not to dispute, challenge, or contest, any of the Obligations, and
each party hereby indemnifies, holds harmless, and forever releases the other
party and his/its respective controlled affiliates and each of his/its
respective past and present agents, representatives, attorneys and fiduciaries
(the “Released Parties”) from any and all claims and causes of action of any
kind or nature that the releasing party now has or may hereafter have against
any Released Party that relate to the Prior Notes based on facts, known or
unknown, existing on or before the date hereof or that are related to or arise
in connection with the Restructuring or this Agreement (except for any rights or
obligations provided for in this Agreement, the Restructured Note or the
Security Agreement).
 
 
2

 
 
(iv) The Company confirms, acknowledges, and agrees that Drexler has a valid,
duly perfected, first priority and fully enforceable security interest in and
lien on all of the Collateral (as defined in the Security Agreement), as and to
the extent provided for in the Security Agreement, and that the Company agrees
not to dispute, challenge, or contest, the enforceability, validity, attachment,
perfection or first priority (as and to the extent provided for in the Security
Agreement) of the lien and security interest securing the Obligations, and each
party hereby indemnifies, holds harmless, and forever releases the Released
Parties from any and all claims and causes of action of any kind or nature,
known or unknown, that such releasing party or any other party now has or may
hereafter have against any Released Party that relate to the Prior Security
Agreement based on facts, known or unknown, existing on or before the date
hereof or lien and security interest securing the Obligations.
 
4. Attorney Costs. The Company shall pay all reasonable, out-of-pocket fees,
charges and disbursements of counsel to Drexler in connection with the
Restructuring (directly to such counsel if requested by Drexler) in an amount
not to exceed $100,000.
 
5. Further Assurances. The parties hereto shall do all such things and provide
all such reasonable assurances as may be required to consummate the transactions
contemplated hereby, and the parties hereto shall provide such further documents
or instruments required by the other parties as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out the provisions
hereof.
 
6. Effect of Amendment and Restatement. Except as expressly set forth herein
(including the exhibits hereto), this Agreement shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of either party under the Prior Notes or the Prior Security
Agreement. Neither this Agreement nor the effectiveness of the Restructured Note
or the Security Agreement shall extinguish the obligations for the payment of
money outstanding under the Prior Notes or discharge or release any security
interest in respect thereof.
 
7. Amendment and Waiver. No provision of this Agreement may be amended or waived
except by an instrument in writing executed by the party against whom such
amendment or waiver is to be effective.
 
8. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which together shall
constitute a single instrument and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile, email in “portable document format” (“.pdf”) form or by
other electronic means intended to preserve the original graphic and pictorial
appearance of a document will have the same effect as physical delivery of the
paper document bearing the original signature.
 
 
3

 
 
9. Entire Agreement. This Agreement, together with the Restructured Note and
Security Agreement, constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
 
10. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
 
11. Governing Law; Jurisdiction; Venue.
 
(i) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York (without giving effect to any conflict of laws
principles that would require application of the laws of another jurisdiction
other than Section 5-1401 of the General Obligations Law of the State of New
York).
 
(ii) Each party irrevocably submits to the jurisdiction of the courts of the
State of New York and of the United States sitting in the State of New York, and
of the courts of its/his own corporate or individual domicile with respect to
actions or proceedings brought against it/him as a defendant, for purposes of
all proceedings. Each party irrevocably waives, to the fullest extent permitted
by law, any objection which it/he may now or hereafter have to the laying of
venue of any proceeding and any claim that any proceeding has been brought in an
inconvenient forum. Any process or summons for purposes of any proceeding may be
served on a party by mailing a copy thereof by registered mail, or a form of
mail substantially equivalent thereto, addressed to it at its address as
provided for notices under the Restructured Note.
 
12. Waiver of Jury Trial. Each party hereby irrevocably waives any and all right
to trial by jury in any proceeding.
 
[Remainder of page intentionally blank]
 

4

 
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the
date first set forth above.
 
 
 
 
Ryan Drexler, an individual
 
 
 
 
 
 
 
/s/ Ryan Drexler

 
 
 
 
 
 
 
 
 
 
 
 
MusclePharm Corporation, a Nevada corporation
 
 

 
 
 
  By:
/s/ Brian Casutto
 
 
 
 
Name: Brian Casutto
 
 
 
 
Title: Executive Vice President, Sales & Operations
 

 
 

[Signature page to Restructuring Agreement]
5

 

 
Exhibit A
 
 
Restructured Note
 
 
 
 
 
6

 

 
Exhibit B
 
Security Agreement
 
 
 
 
 
7

 

 
Exhibit C
 
Wire Instructions
 
 
 
 
8