mslp_ex101





  Exhibit 10.1











 



THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933.



 



NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THIS NOTE, THE
REPAYMENT OF ALL INDEBTEDNESS EVIDENCED HEREBY AND THE EXERCISE OF
ANY RIGHT OR REMEDY HEREUNDER BY THE HOLDER HEREOF ARE SUBJECT TO
THE TERMS AND CONDITIONS SET FORTH IN THAT CERTAIN SUBORDINATION
AGREEMENT, DATED ON OR ABOUT SEPTEMBER 30, 2017, BY AND BETWEEN
CROSSROADS FINANCIAL GROUP, LLC AND THE INITIAL HOLDER HEREOF. IN
THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF SUCH SUBORDINATION
AGREEMENT AND THIS NOTE, THE TERMS OF THE SUBORDINATION AGREEMENT
SHALL GOVERN AND CONTROL.



 



SECURED REVOLVING PROMISSORY NOTE



 


	

Up to
US$3,000,000.00   

	

October
15, 2020








 


For
Value Received, MusclePharm
Corporation, a Nevada
corporation (“the
Company”), hereby
unconditionally promises to pay to the order
of Ryan
Drexler (“Lender”),
in lawful money of the United States of America and in immediately
available funds, the principal sum of three million dollars
(US$3,000,000.00), or, if less, the aggregate unpaid principal
amount of all Advances (as defined below) (the
“Revolving
Loan”), together with
accrued and unpaid Interest (as defined below) thereon and any
Costs of Collection (as defined below), due and payable on the
dates and in the manner set forth below in this Secured Revolving
Promissory Note (the “Note”).



 


1. Advances. The Lender may, in its sole discretion, make
one or more advances (each, an “Advance,”
and collectively, the “Advances”)
to the Company, and the Company may, to the extent that the Lender
permits in his sole discretion, borrow funds from the Lender
hereunder. While the decision to make any Advance is at all times
within the sole discretion of the Lender, whether the limitation
set forth in clause 1(c) below is satisfied or not, it is
understood and agreed by the Company that, as further limitations
on the making of Advances by the Lender:



 


(a) each request for an Advance shall be made by
the Company in writing, delivered to the Lender at least one (1)
business days prior to the requested date of such Advance, and
shall specify the date of such Advance and the amount of such
Advance,



 


(b) requests may only be made if no Event of
Default (as defined below) has occurred and is
continuing,



 


(c) each request shall be in the amount of at
least ten thousand dollars (US$10,000) and shall be in
thousand-dollar increments, and



 


(d) the aggregate principal amount of all
Advances outstanding at any time, taking into account any and all
Advances and repayments made as of any date, shall in no event
exceed three million dollars (US$3,000,000.00).



 


The Lender shall, and is hereby authorized to,
record on the schedule attached hereto the date and amount of each
Advance and the date and amount of each principal payment
hereunder, provided, that, the
failure of the Lender to record any Advance shall have no effect on
the obligation of the Company to repay the Advance or to pay any
other amount hereunder.



 


2. Interest. Simple interest shall accrue on the
outstanding principal amount of each Advance from the date of such
Advance until payment of such Advance at a rate of twelve percent
(12%) per annum (“Interest”),
compounding annually. Interest shall be calculated on the basis of
a 365-day year for the actual number of days
elapsed.



 


3. Costs of
Collection. If an Event of
Default (as defined below) has occurred, the Company shall pay the
reasonable costs and expenses (including reasonable
attorney’s fees) incurred by the Lender in the enforcement of
the Lender’s rights hereunder (“Costs of
Collection”).



 


4. Repayment.



 


(a) All Advances made and not otherwise repaid,
if any, all accrued Interest not otherwise paid, if any, and all
accrued Costs of Collection not otherwise paid, if any (the
“Repayment
Amount”), or at the sole
discretion of the Lender, any portion of the Repayment Amount,
shall be due and payable on the earlier of (a) the Maturity Date,
as defined below, and (b) three (3) days following any demand of
the Lender (each such date, a “Repayment
Date”). Demand for
payment hereunder shall be made by notice in writing, delivered by
overnight courier to the undersigned at 4500 Park Granada,
Suite 202, Calabasas, CA 91302, or
sent by email to the chief financial officer and the then
independent directors on the Company’s board of directors
(the “Independent
Directors”), at their
email addresses used for Company business (with such demand being
deemed made and effective one (1) business day after being sent via
overnight courier, and effective on the same day it was sent (or,
if not sent on a business day, on the following business day) if
sent via email), setting out details of the amount outstanding and
the appropriate method of payment.



 



 







 






 


(b) The Company shall be entitled to prepay any
outstanding principal amount of any Advances without premium or
penalty following at least one (1) day’s advance written
notice to the Lender, provided, that, any
such prepayment shall be accompanied by a payment by the Company of
all accrued and unpaid Interest and Costs of Collection on such
prepaid principal.



 


(c) Unless earlier due and payable as provided
in Section 4(a), the Repayment Amount shall be due and payable on
the earliest of (i) March 31, 2021, (ii) immediately upon receipt
by the Company of a Notice of Acceleration (as defined below) from
the Lender as provided by Section 8(a), (iii) immediately upon the
occurrence of an Event of Default of the type described in Section
7(b) and (iv) as provided by Section 8(b) (the earliest such date
being the “Maturity
Date”).



 


(d) All payments by the Company under this Note
(including prepayments) shall be made without set-off or
counterclaim and be free and clear and without any deduction or
withholding for any taxes or fees of any nature whatever, unless
the obligation to make such deduction or withholding is imposed by
law. All payments hereunder shall be made in cash in immediately
available U.S. Dollars.



 


5. Application of
Payments. Payments made
hereunder shall be applied, first, to accrued but unpaid Costs of
Collection, if any; second, to accrued but unpaid Interest, if any;
third to unpaid principal on the Revolving Loan, if any (beginning
with the earliest Advance for which principal remains unpaid and
continuing in chronological order to subsequent Advances). Any
excess amounts remaining after such application shall be returned
to the Company within three (3) business days.



 


6. Secured
Note. This Note is the
Note referred to in, and is executed and delivered in connection
with, that certain Fifth Amended And Restated Security Agreement
dated as of even date herewith between the Company and the Lender
(as the same may from time to time be amended, modified or
supplemented or restated, the “Security
Agreement”). This Note
and all obligations of the Company hereunder, including without
limitation all Advances, all Interest, and any Costs of Collection,
are secured by the Collateral, as such term is defined in the
Security Agreement. No reference in this Note to the Security
Agreement shall impair the obligation of the Company, which is
absolute and unconditional, to pay all amounts under this Note
strictly in accordance with the terms of this
Note.



 


7. Default. There shall exist an event of default
hereunder (an “Event of
Default”)
if



 


(a) the Company fails to repay or pay any and
all unpaid principal, accrued and unpaid Interest, accrued and
unpaid Costs of Collection and all other amounts owing under this
Note and the Security Agreement when due and payable pursuant to
the terms of this Note, unless such failure is cured within three (3) days of the
date the Lender has given notice of such breach to the
Company;



 


(b) the Company or any of its subsidiaries files
any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law or any other law for
the relief of, or relating to, debtors, now or hereafter in effect,
or makes any general assignment for the benefit of
creditors;



 


(c) an involuntary petition is filed against the
Company or any of its subsidiaries (unless such petition is
dismissed or discharged within sixty (60) days) under any
bankruptcy statute or similar law now or hereafter in effect, or a
custodian, receiver, trustee, assignee for the benefit of creditors
(or other similar official) is appointed to take possession,
custody or control of any property of the
Company;



 


(d) the Company breaches any other material term
of this Note or the Security Agreement (unless, in the case of any
curable material breach, such material breach is cured within
thirty (30) days of the earlier of the date on which (x) the Lender
has given notice of such breach to the Company and (y) the Company
has actual knowledge of such breach);



 


(e) the Company amends or modifies the terms of
any existing indebtedness in a manner that increases the principal
amount thereof or the interest rate applicable thereto, accelerates
the maturity of the obligations thereunder or otherwise adversely
affects the Lender; provided,
that, the foregoing shall not
constitute an Event of Default if approved by a majority of the
Independent Directors;



 



 







 






 


(f) a final judgment or judgments for the
payment of money aggregating in excess of $1,000,000 that are not
covered by insurance or an indemnity from a creditworthy party are
rendered against the Company and/or any of its subsidiaries and
which judgments are not, within thirty (30) days after the entry
thereof, bonded, discharged or stayed pending appeal, or are not
discharged within thirty (30) days after the expiration of such
stay; provided,
that, the foregoing shall not
constitute an Event of Default if such judgment is entered in
connection with a matter for which there is a reserve as of the
date hereof or that, as of the date hereof, is otherwise pending or
has been threatened against the Company in
writing;



 


(g) the Company fails to pay, when due, giving
effect to any applicable grace period, any payment with respect to
any funded indebtedness in excess of $500,000 due to any third
party (other than, with respect to unsecured funded indebtedness
only, payments contested by the Company in good faith by proper
proceedings and with respect to which adequate reserves have been
set aside for the payment thereof in accordance with U.S. generally
accepted accounting principles) or is otherwise in breach or
violation of any agreement for monies owed or owing in an amount in
excess of $500,000, other than (i) unsecured trade obligations in
the ordinary course of business, which breach or violation permits
the other party thereto to declare a default or otherwise
accelerate amounts due thereunder or (ii) matters disclosed in the
Company’s securities filings; provided,
that, the foregoing shall not
constitute an Event of Default if such failure to pay is approved
in writing by a majority of the Independent Directors;
or



 


(h) there exists any circumstances or events
that would, with or without the passage of time or the giving of
notice, result in a default or event of default under any agreement
binding the Company or any subsidiary, which default or event of
default would or is likely to have a material adverse effect on the
business, assets, operations or financial condition of the Company
and its subsidiaries, taken as a whole; provided,
that, the foregoing shall not
constitute an Event of Default if such circumstances or events are
undertaken, caused, approved, consented to or voted in favor of by
the Lender in his capacity as an employee, officer or director of
the Company.



 


8. Acceleration and
Remedies.



 


(a) Upon the occurrence and during the
continuance of any Event of Default described in clause (a) or
clauses (d) through (h) of Section 7 of this Note, the Lender shall
be entitled to accelerate the entire indebtedness hereunder,
including all principal, all Interest and all Costs of Collection,
which shall become due and payable following receipt by the Company
of written notice of the occurrence of said Event of Default
(“Notice of
Acceleration”).



 


(b) Upon the occurrence and during the
continuance of any Event of Default described in clauses (b) or (c)
of Section 7 of this Note, the entire indebtedness hereunder,
including all principal, all Interest, and all Costs of Collection,
shall be automatically accelerated, and shall be immediately due
and payable, without any demand, notice, or other action of the
Lender or any other person or entity.



 


 (c) Notwithstanding anything to the contrary in
this Note or any other agreement, instrument or document, upon the
occurrence and during the continuance of any Event of Default, the
Lender may exercise any and all rights and remedies it may have
under this Note, the Security Agreement, or applicable
law.



 


9. Covenants.



 


(a) Restrictions on Additional
Indebtedness and Liens and Subordination. The Company may not incur or suffer to exist any
Indebtedness (as defined below) other than Permitted Indebtedness
(as defined below) or any Lien (as defined below) other than
Permitted Liens (as defined below).



 


(i) “Indebtedness” shall mean any and all indebtedness for
borrowed money; all obligations in respect of any deferred purchase
price; all obligations in respect of capital leases; all
reimbursement obligations in respect of letters of credit, surety
bonds and similar instruments; all obligations evidenced by notes,
bonds, loan agreements, debentures and similar instruments; and all
guarantee obligations and contingent obligations in respect of any
of the foregoing.



 


(ii) “Permitted
Indebtedness” shall mean
(a) Indebtedness evidenced by this Note; (b) Indebtedness in
respect of taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith
by appropriate proceedings; provided,
that, the Company
maintains adequate reserves therefor; (c) Indebtedness existing as
of the date hereof and set forth on the schedule of Permitted
Indebtedness attached hereto, or pursuant to an instrument set
forth on such schedule or disclosed in the Company’s
securities filings; (d) Indebtedness to trade creditors (including
suppliers) incurred in the ordinary course of business, including
Indebtedness incurred in the ordinary course of business with
corporate credit cards; (e) extensions, refinancings, repayment and
renewals of the obligations under this Note and under any Permitted
Indebtedness described in clauses (c) or (d)
above, provided,
that, the principal amount
is not increased or the terms modified to impose materially more
burdensome terms upon the Company unless such increase or
modification is approved by a majority of the Independent
Directors; (f) Indebtedness incurred after the date of this Note
and approved by a majority of the Independent Directors; and (g)
Indebtedness evidenced by that certain Amended and Restated
Convertible Secured Promissory Note dated August 21, 2020 issued by
the Company to the Lender.



 



 







 






 


 (iii) “Lien” shall mean any lien, claim, encumbrance or
similar interest in or on any asset, including without limitation
any security interest or mortgage.



 


(iv) “Permitted
Liens” shall mean (a)
Liens securing Indebtedness evidenced by this Note; (b) Liens for
taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by
appropriate proceedings, provided,
that, the Company
maintains adequate reserves therefor; (c) claims of materialmen,
mechanics, carriers, warehousemen, processors or landlords arising
out of operation of law so long as the obligations secured thereby
(i) are not past due or (ii) are being properly contested and for
which the Company has established adequate reserves; (d) Liens
consisting of deposits or pledges made in the ordinary course of
business in connection with workers’ compensation,
unemployment insurance, social security and similar laws; (e) Liens
on equipment (including capital leases) to secure purchase money
Indebtedness existing as of the date hereof, or any permitted
refinancing thereof, so long as such security interests do not
apply to any property of the Company other than the equipment so
acquired, and the Indebtedness secured thereby does not exceed the
cost of such equipment, and provided,
that, any extension,
renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the
Indebtedness being extended, renewed, or refinanced (as may have
been reduced by any payment thereon) does not increase; (f) Liens
on accounts, inventory, machinery, equipment, instruments,
documents, chattel paper, general intangibles and other assets to
secure purchase money Indebtedness under agreements set forth on
the schedule of Permitted Indebtedness attached hereto; (g) Liens
to secure the obligations under agreements set forth on the
schedule of Permitted Liens attached hereto or to secure Permitted
Indebtedness; and (h) Liens securing Indebtedness evidenced by that
certain Amended and Restated Convertible Secured Promissory Note
dated as of August 21, 2020 issued by the Company to the
Lender.



 


10. Waivers. The Company, for itself and its legal
representatives, successors and assigns, hereby expressly waives
demand, protest, presentment, notice of dishonor, notice of
acceptance, and notice of protest, and all other demands and
notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note.



 


11. Transfer; Successors and
Assigns. The terms and
conditions of this Note shall inure to the benefit of and be
binding upon the respective successors and assigns of the Company
and the Lender. Notwithstanding the foregoing, the Lender may not
assign, pledge or otherwise transfer this Note without the prior
written consent of the Company. Subject to the preceding sentence,
this Note may be transferred only upon surrender of the original
Note for registration of transfer, duly endorsed, or accompanied by
a duly executed written instrument of transfer in form satisfactory
to the Company. Thereupon, a new note for the same principal amount
and interest will be issued to, and registered in the name of, the
transferee. Interest and principal are payable only to the
registered holder of this Note.



 


12. Governing
Law. This Note shall be
governed by and construed in accordance with the laws of the State
of California (without giving effect to any conflict of laws
principles that would require application of the laws of another
jurisdiction).



 


13. Jurisdiction. Each
of the Company and the Lender irrevocably submits to the
jurisdiction of the courts of the State of California and of the
United States sitting in the State of California, and of the courts
of its own corporate or individual domicile with respect to actions
or proceedings brought against it as a defendant, for purposes of
all proceedings. Each of the Company and the Lender irrevocably
waives, to the fullest extent permitted by law, any objection which
it 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 the Company or the Lender, as
applicable, 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 this
Note.



 


14. Waiver of Jury
Trial. Each of the Company and the
Lender hereby irrevocably waives any and all right to trial by jury
in any proceeding.



 


15. Notices. Any notice required or permitted by this
Note shall be in writing and shall be deemed sufficient when
delivered personally or by overnight courier or sent by email or
fax (upon customary confirmation of receipt), or forty-eight (48)
hours after being deposited in the U.S. mail as certified or
registered mail with postage prepaid, addressed to the party to be
notified at such party’s address or fax
number as set forth on the signature page, as
subsequently modified by written notice, or if no address is
specified on the signature page, at the most recent address set
forth in the Company’s books and
records; provided,
that, any notice to the
Company by the Lender also shall be provided to the Independent
Directors.



 


16. Amendments and
Waivers. Any term of this
Note may be amended only with the written consent of the Company
and the Lender. Any amendment or waiver effected in accordance
herewith shall be binding upon the Company, the Lender and each
transferee of this Note.



 



 







 






 


17. Entire
Agreement. This Note,
together with the Security Agreement, constitutes the entire
agreement between the Company and the Lender pertaining to the
subject matter hereof, and any and all other written or oral
agreements existing between the Company and the Lender are
expressly canceled.



 


18. Counterparts. This Note may be executed in any number of
counterparts, each of which will be deemed to be an original and
all of which together will constitute a single
agreement.



 


19. Loss of Note. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of
this Note or any Note exchanged for it, and indemnity satisfactory
to the Company (in case of loss, theft or destruction) or surrender
and cancellation of such Note (in the case of mutilation), the
Company will make and deliver in lieu of such Note a new Note of
like tenor.



 


20. Interest Rate
Limitation. Notwithstanding
anything to the contrary contained herein, the interest paid or
agreed to be paid under this Note shall not exceed the maximum rate
of non-usurious interest permitted by applicable law (the
“Maximum
Rate”). If the Lender
shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal amount
remaining owed under this Note or, if it exceeds such unpaid
principal amount, refunded to the Company. In determining whether
the interest contracted for, charged, or received by the Lender
exceeds the Maximum Rate, the Lender may, to the extent permitted
by applicable law, (i) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (ii)
exclude voluntary prepayments and the effects thereof, and (iii)
amortize, prorate, allocate and spread in equal or unequal parts
the total amount of interest throughout the contemplated term of
this Note.



 


21. Indemnification. The
Company shall, to the fullest extent permitted by law, indemnify
(but only to the extent of and out of Company assets) the Lender
against all reasonable expenses (including reasonable
attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the Lender in
connection with any claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative, before or by any
court or any administrative or legislative body or authority, in
which the Lender is involved, as a party or otherwise, or with
which the Lender may be threatened, arising in connection with this
Note or the Security Agreement (each, an “Action”), except to the extent the same has been
finally adjudicated to constitute fraud, gross negligence or
willful misconduct of the Lender or a breach by the Lender of this
Note or the Security Agreement. Promptly after receipt by the
Lender of notice of the commencement or threatened commencement
against it of any third party Action, the Lender will notify the
Company. The Company will be entitled to assume the defense of the
Action unless the Lender shall have reasonably concluded that a
conflict may exist between the Company and the Lender in conducting
the defense of the Action. If the Company assumes the defense of
any Action in accordance with the provisions of this Section, it
will not be liable to the Lender for any legal or other expenses
subsequently separately incurred by the Lender in connection with
the defense of such Action. The Company shall not be liable for any
settlement of a third-party Action effected without its written
consent, which consent may not be unreasonably
withheld.



 


22. Severability. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision of this
Note.



 



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IN WITNESS
WHEREOF, the undersigned have
duly executed this Secured Revolving Promissory Note as of the date
indicated herein.



 



 


	
 

	


MusclePharm Corporation

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	

By:  

	


/s/ Allen Sciarillo

	
 


	
 

	
 

	

Name:  Allen
Sciarillo

	
 


	
 

	
 

	

Title:  
Chief Financial Officer

	
 








 


 


 


 



Acknowledged and Agreed:



 


 



 



/s/ Ryan Drexler_____________



 



 


 














 






 

 



Schedule of Permitted Indebtedness



 



Purchase and Sale Agreement, dated as of January 11, 2016, between
the Company and Prestige Capital Corporation, as amended or
modified through the date hereof, and as hereafter amended or
modified with the consent of the Lender in his capacity as such or
as a director or officer of the Company, providing for aggregate
borrowings up to a maximum principal amount of $12,000,000 (as
amended).



 



Loan and Security Agreement, dated as of October 6, 2017, among the
Company, Canada MusclePharm Enterprises Corp. and Crossroads
Financial Group, LLC, as amended or modified through the date
hereof, and as hereafter amended or modified with the consent of
the Lender in his capacity as such or as a director or officer of
the Company, providing for aggregate borrowings up to a maximum
principal amount of $4,000,000 (as amended).



 



Capital leases outstanding at December 31, 2019 described in Note 6
to the Consolidated Financial Statements contained in the
Company’s 10-K for the year ended December 31,
2019.


 



Amounts payable under the Settlement Agreement, dated as of
September 25, 2020, between the Company and NBF Holdings Canada
Inc.



 



Schedule of Permitted Liens



 



Loan and Security Agreement, dated as of October 6, 2017, among the
Company, Canada MusclePharm Enterprises Corp. and Crossroads
Financial Group, LLC, as amended or modified through the date
hereof, and as hereafter amended or modified with the consent of
the Lender in his capacity as such or as a director or officer of
the Company, providing for aggregate borrowings up to a maximum
principal amount of $4,000,000 (as amended).