MusclePharm Corporation (OTCMKTS:MSLP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Secured Revolving Promissory Note
On October 4, 2019, MusclePharm Corporation (the “Company”) entered into a secured revolving promissory note (the “Revolving Note”) with Ryan Drexler, the Chief Executive Officer, President and Chairman of the Board of Directors of the Company. Under the terms of the Revolving Note, the Company can borrow up to $3,000,000. The Revolving Note bears interest at the rate of 12% per annum.
The use of funds will be solely for the purchase of whey protein to be used in the manufacturing of MusclePharm products.
Both the outstanding principal, if any, and all accrued interest under the Revolving Note are due on March 31, 2020. The Company may prepay the Revolving Note by giving Mr. Drexler one days’ written notice.
The Revolving Note contains customary events of default, including, among others, the failure by the Company to make a payment of principal or interest when due. Following an event of default, Mr. Drexler is entitled to accelerate the entire indebtedness under the Revolving Note. The Revolving Note also contains customary restrictions on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth in the Revolving Note. The Revolving Note is subordinated to certain other indebtedness of the Company held by Crossroads Financial Group, LLC, as described under Item 8.01 of the Company’s Current Report on Form 8-K filed on November 8, 2017 and as further described under Item 8.01 below.
In connection with the Revolving Note, the Company and Mr. Drexler entered into a security agreement dated October 4, 2019 (the “Security Agreement”) to which the Revolving Note is secured by all of the assets and properties of the Company and its subsidiaries whether tangible or intangible.
A copy of the Revolving Note and the Security Agreement are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference as though fully set forth herein. The foregoing summary description of the Revolving Note and the Security Agreement is not intended to be complete and is qualified in its entirety by the complete text of the Revolving Note and the Security Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The information set forth in Item 1.01 is incorporated by reference herein.
Item 8.01 Other Events.
Crossroads Letter Agreement
In connection with the Revolving Note, Mr. Drexler entered into a letter agreement with Crossroads Financial Group, LLC (“Crossroads”) and the Company (the “Crossroads Letter Agreement”) acknowledging (i) that the Revolving Note is a secondary obligation under the subordination agreement Mr. Drexler entered into with Crossroads on September 30, 2017 (as amended November 3, 2017, “the “Subordination Agreement”) and (ii) that the Revolving Note and all indebtedness, liabilities arising thereunder are subject to the Subordination Agreement in all respects. A copy of the Crossroads Letter Agreement is attached to this Current Report on Form 8-K as Exhibit 99.1.
MusclePharm Corp Exhibit
EX-10.1 2 mslp_ex101.htm SECURED REVOLVING PROMISSORY NOTE Blueprint Exhibit 10.1 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…
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About MusclePharm Corporation (OTCMKTS:MSLP)
MusclePharm Corporation is a performance lifestyle company. The Company develops, manufactures, markets and distributes branded nutritional supplements. The Company offers a range of powders, capsules, tablets and gels. The Company’s portfolio of brands targets various types of fitness enthusiasts, including professional, combat sport, weight training, bodybuilding, running, basketball, soccer, cross fit, golf, tennis, volleyball and other active lifestyle activities. The MusclePharm Sport Series includes supplements that cover the needs of athletes, including their workout needs. MusclePharm Hybrid Series products include Assault, Amino1 and Combat Protein Powder. FitMiss products are designed and formulated for the active woman’s lifestyle utilizing ingredients that cover the range of busy women’s needs, including weight loss, multi-vitamins, protein shakes, detox, skin care and pre-workout energy mixes. MusclePharm Core products include BCAA 3:1:2, CLA Core and Fish Oil.
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