Exhibit 10.1
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE
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.
Amended and Restated Convertible Secured Promissory
Note
$2,735,199
|
Effective as of July 1, 2020 (the “Effective
Date”)
|
CPN-3
|
Los Angeles, California
|
WHEREAS,
MusclePharm
Corporation, a
Nevada corporation (the “Company”), previously (i) issued
to Ryan Drexler or his
assigns (the “Holder”) a secured revolving
promissory note dated as of October 4, 2019, $1,348,216 of which is
outstanding as of the Effective Date (the “Revolver Note”), (ii) entered into
a collateral receipt and security agreement with Holder dated as of
December 27, 2019, $252,500 of which is outstanding as of the
Effective Date (the “Bond”) and (iii) issued to Holder
a convertible secured promissory note dated as of November 8, 2017,
$1,134,483 of which is outstanding as of the Effective Date (the
“Convertible
Note”; together with the Revolver Note and the Bond,
the “Prior
Notes”);
and
WHEREAS, certain of
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 Third Amended and Restated Security Agreement
dated as of November 3, 2017, by and between the Company and the
Holder (the “Prior Security
Agreement”).
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the
Holder hereby amend and restate the terms of, and supersede in
their entirety, the Prior Notes as follows:
For
value received, the Company promises to pay to the Holder the
principal sum of Two Million, Seven
Hundred Thirty-Five Thousand, One Hundred Ninety-Nine
Dollars ($2,735,199), plus interest on the outstanding
principal amount at the rate of twelve percent (12%) per annum, in
each case in accordance with the terms and subject to adjustment as
set forth in this amended and restated note (this
“Note”).
This
Note is secured by a lien on and security interest in all of the
assets and properties of the Company, as described in the Fourth
Amended and Restated Security Agreement of even date herewith by
and between the Company and the Holder (the “Security Agreement”).
This
Note is subject to the following terms and conditions:
1. Maturity.
(a) Repayment. Unless earlier converted or
repaid (as applicable) as provided in Sections 1(d), 2
or 3, all outstanding principal (including any PIK Interest)
and any accrued but unpaid interest under this Note (whether or not
that interest has been capitalized) (the “Conversion Amount”), shall be due
and payable on November 1, 2020 (as such date may be accelerated
solely in accordance with the terms hereof, the “Maturity Date”).
(b) Interest.
(i) Interest on this
Note shall commence on the Effective Date and shall continue and
accrue daily at the applicable rate on the outstanding principal
amount until paid in full or converted in accordance with this
Note.
(ii) Interest
shall be computed on the basis of a year of 365 days for the actual
number of days elapsed.
(iii) Interest
shall accrue on this Note and be paid in kind by adding such
interest then due to the unpaid principal amount of this Note,
compounded annually, and such interest shall be referred to herein
as “PIK
Interest.”
(c) Events of Default.
(i) Notwithstanding
Section 1(a) above, at the option and upon the declaration of the
Holder and upon written notice to the Company, the entire
Conversion Amount shall become due and payable upon an Event of
Default. The occurrence of the following shall constitute an
“Event of
Default”:
(1) the
Company fails to pay any and all unpaid principal, accrued and
unpaid interest and all other amounts owing under the Note and the
Security Agreement when due and payable pursuant to the terms of
the Note, provided, however,
that an Event of Default shall not be deemed to have occurred on
account of a failure to pay due solely to an administrative or
operational error of any depositary institution that is crediting
by ACH or wiring such payment if the Company had the funds to make
the payment when due and payment is received by the Holder within
two (2) business days following the Company’s knowledge of
such failure to pay;
(2) 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;
(3) an
involuntary petition is filed against the Company or any of its
subsidiaries (unless such petition is dismissed or discharged
within forty-five (45) 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; or
(4) 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 Holder has given notice of
such breach to the Company and (y) the Company has actual knowledge
of such breach);
(5) 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 Holder;
provided,
that, the foregoing shall not constitute an Event of Default
if undertaken, caused, approved or voted in favor of by the Holder
in his capacity as an employee, officer or director of the
Company;
(6) a
final judgment or judgments for the payment of money aggregating in
excess of $100,000 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;
(7) 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 $100,000 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 $100,000, other
than 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; provided, that, the
foregoing shall not constitute an Event of Default if undertaken,
caused, approved or voted in favor of by the Holder in his capacity
as an employee, officer or director of the Company; or
(8) 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 or voted
in favor of by the Holder in his capacity as an employee, officer
or director of the Company; provided,
however,
that all obligations under this Note, including without limitation
all principal (including any PIK Interest) and all accrued and
unpaid interest, shall be accelerated, and shall be immediately and
automatically due and payable without any notice to the Company or
other action, upon the occurrence of any Event of Default described
in clause (2) or (3) of this Section 1(c)(i).
(d) Conversion. The Holder may, on the
Maturity Date, in the sole discretion of the Holder, upon written
notice to the Company, elect to convert all or a portion of the
Conversion Amount into shares of the Company’s Common Stock,
$0.001 par value per share (the “Common Stock”), at a price per
share equal to the greater of (i) the closing price per share of
the Common Stock on the last business day immediately preceding the
Maturity Date and (ii) seventeen cents ($0.17), in each case
rounded down to the nearest whole share.
2. Mechanics
and Effect of Conversion.
(a) Effectiveness of Conversion. Upon
conversion of this Note, the Company will be forever released from
all of its obligations and liabilities under this Note with respect
to that portion of the Conversion Amount being converted, including
without limitation the obligation to repay such portion of the
principal amount and accrued and unpaid interest. Principal and
accrued and unpaid interest on this Note will be converted
proportionally unless otherwise specified by the Holder. Upon
conversion of this Note, the Company shall take all such actions as
are necessary in order to ensure that the Common Stock issuable
with respect to such conversion shall be validly issued, fully paid
and nonassessable.
(b) Issuance of Certificates. Upon
conversion of this Note, the Holder shall surrender this Note, duly
endorsed, at the principal offices of the Company or any transfer
agent of the Company. At its expense, the Company shall, as soon as
practicable thereafter, issue and deliver to such Holder, at such
principal office, a certificate or certificates for the number of
shares of Common Stock to which such Holder is entitled upon such
conversion, together with any other securities and property to
which the Holder is entitled upon such conversion under the terms
of this Note, including a check payable to the Holder for any cash
amounts payable as described herein. Upon any partial conversion of
this Note, a new Note containing the same date and provisions of
this Note shall, at the request of the Holder, be issued by the
Company to the Holder for the principal balance of this Note and
interest which shall not have been converted or paid.
(c) Fractional Shares. No fractional shares
of the Company’s Common Stock will be issued upon conversion
of this Note. If any fractional share of Common Stock would, except
for the provisions hereof, be deliverable upon conversion of this
Note, the Company, in lieu of delivering such fractional share,
shall pay an amount in cash equal to the value of such fractional
share, as determined by the per share conversion price used to
effect such conversion.
3. Payment; Prepayment. All payments shall
be made in lawful money of the United States of America at such
place as the Holder hereof may from time to time designate in
writing to the Company. Payment shall be credited first to any fees
and expenses due and payable hereunder, then to accrued and unpaid
interest, and then the remainder shall be applied to principal. The
Company may prepay this Note in whole or in part at any time
following at least fifteen (15) and no more than sixty (60)
days’ advance written notice to the Holder, provided that the
Holder shall retain all rights of conversion until the date of
repayment, notwithstanding the pendency of any prepayment
notice.
4. Adjustment Provisions. If after the
Effective Date the Company shall make or issue, or shall fix a
record date for the determination of eligible holders of its
capital stock entitled to receive, a dividend or other distribution
payable with respect to the Common Stock that is payable in
securities of the Company, assets (including cash), or rights or
warrants to purchase shares of Common Stock or securities
convertible into shares of Common Stock (each, a
“Dividend
Event”), and such dividend or other distribution is
actually made, then, and in each such case, the Holder, upon
conversion of all or a portion of the Conversion Amount into shares
of Common Stock at any time after such Dividend Event, shall
receive, in addition to the Common Stock issuable upon such
conversion of the Note, the securities or other assets, rights or
warrants that would have been issuable to the Holder had the
Holder, immediately prior to such Dividend Event, converted such
Conversion Amount into Common Stock.
5. 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
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; (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 clause (d) above,
provided
that the principal amount is not increased or the terms modified to
impose materially more burdensome terms upon the Company, and (f)
Subordinated Indebtedness incurred after the date of this Note and
approved by a majority of the independent directors of the Board of
Directors of the Company (the “Board”).
(iii) “Subordinated
Indebtedness” means secured and/or unsecured
Indebtedness expressly subordinated to the obligations of the
Company to the Holder hereunder and under the Security Agreement,
including in payment and lien priority.
(iv) “Lien”
shall mean any lien, claim, encumbrance or similar interest in or
on any asset, including without limitation any security interest or
mortgage.
(v) “Permitted Lien” 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
and (g) Liens to secure the obligations under agreements set forth
on the schedule of Permitted Liens attached hereto.
6. 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 Holder. Notwithstanding the foregoing, the Holder
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.
7. 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).
8. Jurisdiction. Each of the Company and
the Holder 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 Holder 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 Holder, 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.
9. Waiver of Jury Trial. Each of the Company and the Holder hereby
irrevocably waives any and all right to trial by jury in any
proceeding.
10. 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 Holder also shall
be provided to the independent directors of the Board.
11. Amendments and Waivers. Any term of this
Note may be amended only with the written consent of the Company
and the Holder. Any amendment or waiver effected in accordance
herewith shall be binding upon the Company, the Holder and each
transferee of this Note.
12. Entire Agreement. This Note, together
with the Security Agreement, constitutes the entire agreement
between the Company and the Holder pertaining to the subject matter
hereof, and any and all other written or oral agreements existing
between the Company and the Holder are expressly
canceled.
13. 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.
14. Action to Collect on Note. The Company
promises to pay all costs and expenses, including reasonable
attorney’s fees, incurred in connection with the collection
or enforcement of this Note or any obligation hereunder, including
without limitation during or in the context of any bankruptcy,
receivership, trusteeship, reorganization or insolvency proceeding
or other proceeding under any other law for the relief of, or
relating to, debtors, now or hereafter in effect, and all such
amounts shall be payable on demand (or, if the Holder is prevented
by applicable law from making demand, as and when incurred by the
Holder) and, if not paid when due, shall be capitalized and become
part of the principal amount of this Note, and interest shall
accrue thereon as set forth for other principal amounts under this
Note.
15. 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.
16. 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 Holder 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 Holder exceeds the Maximum Rate, the
Holder 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.
17. Indemnification. The Company shall, to
the fullest extent permitted by law, indemnify (but only to the
extent of and out of Company assets) the Holder against all
reasonable expenses (including reasonable attorneys’ fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the Holder 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 Holder is involved, as
a party or otherwise, or with which the Holder 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 Holder or a breach by the
Holder of this Note or the Security Agreement. Promptly after
receipt by the Holder of notice of the commencement or threatened
commencement against it of any third party Action, the Holder will
notify the Company. The Company will be entitled to assume the
defense of the Action unless the Holder shall have reasonably
concluded that a conflict may exist between the Company and the
Holder 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 Holder for any legal
or other expenses subsequently separately incurred by the Holder 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.
18. 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.
19. Reaffirmation; Amendment and
Restatement. The Company has created a lien on and security
interest in all of the assets and properties of the Company in
favor of the Holder to secure its obligations hereunder, pursuant
to the Security Agreement. The Company hereby acknowledges that it
has reviewed the terms and provisions of this Note and consents to
the amendment and restatement of the Prior Notes effected pursuant
to this Note. The Company hereby confirms that the Security
Agreement will continue to secure, to the fullest extent possible
in accordance with the Security Agreement, the payment and
performance of the obligations set forth herein, as applicable now
or hereafter existing, and that this Note does not constitute a
novation of the obligations and liabilities existing under the
Prior Notes or the Prior Security Agreement. The Company and the
Holder hereby agree that, on the Effective Date, the terms and
provisions of the Prior Notes shall be and hereby are amended and
restated in their entirety by the terms, conditions and provisions
of this Note, and the terms and provisions of the Prior Notes shall
be superseded by this Note.
[Remainder of Page
Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned have
duly executed this Amended and Restated Convertible Secured
Promissory Note as of the date indicated herein.
MusclePharm
Corporation
Title: Chief
Financial Officer
Acknowledged
and Agreed:
Ryan Drexler
/s/ Ryan Drexler____________________
Execution Date: August 21, 2020______
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 Holder 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 Holder 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.
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 Holder 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).
Exhibit
10.2
Fourth Amended and Restated Security Agreement
This
Fourth Amended and Restated
Security Agreement (this “Agreement”), dated as of August
21, 2020, is entered into between Ryan Drexler, an individual
(“Grantee”), and
MusclePharm Corporation, a
Nevada corporation, as grantor (“Grantor”).
Background
WHEREAS,
Grantor and Grantee previously entered into (i) a secured revolving
promissory note dated as of October 4, 2019, $1,348,216 of which is
outstanding as of the date hereof (the “Revolver Note”), (ii) a collateral
receipt and security agreement dated as of December 27, 2019,
$252,500 of which is outstanding as of the date hereof (the
“Bond”), and
(iii) a convertible secured promissory note dated as of November 8,
2017, $1,134,483 of which is outstanding as of the date hereof (the
“Convertible
Note”, together with the Revolver Note and the Bond,
the “Prior
Notes”);
WHEREAS,
as a condition precedent to the advancement of funds to Grantor
under certain of the Prior Notes, the parties entered into the
Third Amended and Restated Security Agreement, dated as of November
3, 2017 (the “Third Amended
and Restated Security Agreement”), to grant a security
interest in respect of the obligations under certain of the Prior
Notes, as applicable;
WHEREAS,
Grantor and Grantee have agreed to amend and restate the Prior
Notes to make certain amendments as set forth in that certain
Amended and Restated Convertible Secured Promissory Note, issued on
the date hereof by Grantor to Grantee (the “Note”); and
WHEREAS,
as a condition precedent to such restructuring of the Prior Notes,
the parties now desire to amend and restate the Third Amended and
Restated Security Agreement to reaffirm Grantee’s continuing
first priority lien and make certain other amendments as set forth
herein.
Agreement
NOW
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Grantor and Grantee
hereby amend and restate the terms of, and supersede in their
entirety, the Third Amended and Restated Security Agreement, and
Grantor hereby agrees, for the benefit of Grantee, as
follows:
Certain
Definitions
Section
1.01. Definitions.
The
terms “Account,”
“Equipment,”
“Inventory,” and
“Proceeds” shall
have the meanings ascribed to such terms in the UCC.
As used
herein:
“Collateral” shall have the meaning
set forth in Section 2.01.
“Dispute” means any pending,
decided or settled opposition, injunction, action, claim,
counterclaim, lawsuit, proceeding, hearing, investigation,
complaint, arbitration, mediation, demand, decree or formal
enquiry, or any other dispute, disagreement, or claim of any
kind.
“Excluded Property” means (i) any
permit, license, contract or lease to the extent that (and in each
case only for so long as) such grant of a security interest therein
or assignment thereof is prohibited by any applicable laws or is
prohibited by, or constitutes a breach or default under or results
in the termination of or gives rise to a right on the part of the
parties thereto other than Grantor to terminate, such permit,
license, contract or lease, except to the extent that such laws or
the term in such permit, license, contract or lease providing for
such prohibition, breach, default or right of termination are
ineffective or rendered unenforceable under applicable laws
(including the UCC), and (ii) any property owned by Grantor on the
date hereof or hereafter acquired that is subject to a lien
permitted to be incurred pursuant to clause (e) of the definition
of Permitted Liens contained in the Note.
“Governmental Authority” means the
government of the United States or any other country, any state or
other political subdivision thereof, any supranational or
multinational authority, and any entity, body or authority
exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any of the
foregoing.
“Intellectual Property” means (a)
any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or
hereafter existing, created, acquired or held (collectively, the
“Copyrights”);
(b) any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products
now or hereafter existing, created, acquired or held; (c) any and
all design rights that may be available, now or hereafter existing,
created, acquired or held; (d) all patents, patent applications and
like protections including, without limitation, improvements,
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same (collectively, the
“Patents”); (e)
any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like
protections, and the entire goodwill connected with and symbolized
by such trademarks, other than any intent-to-use United States
trademark applications for which an amendment to allege use or
statement of use has not been filed under 15 U.S.C.
§ 1051I or 15 U.S.C. § 1051(d), respectively,
or if filed, has not been deemed in conformance with 15 U.S.C.
§ 1051(a) or examined and accepted, respectively, by the
United States Patent and Trademark Office, provided that, upon such filing
and acceptance, such intent-to-use applications shall be included
in the definition of Collateral (collectively, the
“Trademarks”);
(f) all mask work registrations or applications therefor or similar
rights, now owned or hereafter acquired (collectively, the
“Mask Works”);
(g) any and all claims for damages by way of past, present and
future infringements of any of the rights included above, with the
right, but not the obligation, to sue for and collect such damages
for said use or infringement of the intellectual property rights
identified above; (h) all licenses or other rights to use any of
the Copyrights, Patents, Trademarks, or Mask Works and all license
fees and royalties arising from such use to the extent permitted by
such license or rights; (i) all amendments, extensions, renewals
and extensions of any of the Copyrights, Trademarks, Patents, or
Mask Works; and (j) all proceeds and products of the foregoing,
including without limitation all payments under insurance or any
indemnity or warranty payable in respect of any of the
foregoing.
“Secured
Obligations” means all obligations of Grantor under or
in respect of the Note and this Agreement.
“UCC” means the Uniform Commercial
Code as in effect on the date hereof in the State of New York, as
amended from time to time, and any successor statute; provided that
if by reason of mandatory provision of law, the perfection or the
effect of perfection or non-perfection of the security interest in
the Collateral is governed by the Uniform Commercial Code of
another jurisdiction, “UCC” means the Uniform
Commercial Code as in effect in such other jurisdiction for
purposes of the provision hereof relating to such perfection or
effect of perfection or non-perfection.
Section
1.02. Note Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in
this Agreement, including its preamble and recitals, have the
meanings provided in the Note.
Section
1.03. UCC Definitions. Unless otherwise
defined herein or the context otherwise requires, terms for which
meanings are provided in the UCC are used in this Agreement,
including its preamble and recitals, with such meanings; provided,
however, that the term “instrument” shall be such term
as defined in Article 9 of the UCC rather than Article 3 of the
UCC.
Section
1.04. Interpretation; Headings. Each term used
in any exhibit to this Agreement and defined in this Agreement but
not defined therein shall have the meaning set forth in this
Agreement. Unless the context otherwise requires,
(i) “including” means “including, without
limitation” and (ii) words in the singular include the
plural and words in the plural include the singular. A reference to
any party to this Agreement, the Note, or any other agreement or
document shall include such party’s successors and permitted
assigns. A reference to any agreement or order shall include any
amendment of such agreement or order from time to time in
accordance with the terms hereof and thereof. A reference to any
legislation, to any provision of any legislation or to any
regulation issued thereunder shall include any amendment thereto,
any modification or re-enactment thereof, any legislative provision
or regulation substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto. The
headings contained in this Agreement are for convenience and
reference only and do not form a part of this Agreement. Section,
article and exhibit references in this Agreement refer to sections
or articles of, or exhibits to, this Agreement unless otherwise
specified.
ARTICLE II
Security
Interest
Section
2.01. Grant
of Security Interest.
(a) As collateral
security for the Secured Obligations, Grantor hereby grants to
Grantee a continuing Lien on and a continuing first priority
security interest in and lien and mortgage on all of
Grantor’s and Grantor’s subsidiaries’ right,
title, and interest in each and all of its assets and properties,
wherever the same may be now or hereafter located, whether now
owned by or owing to, or hereafter existing or hereafter acquired
by or arising in favor of, Grantor or its subsidiaries (including
under any trade name or derivations thereof), whether tangible or
intangible, and all products and Proceeds thereof (together, the
“Collateral”),
including all of the following and all products and Proceeds
thereof:
(i) all Intellectual
Property (the “Intellectual
Property Collateral”);
(ii) all
goods and Equipment, including all laboratory equipment, computer
equipment, office equipment, machinery, fixtures, vehicles
(including motor vehicles and trailers), and any interest in any of
the foregoing, and all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of
the foregoing, wherever located;
(iii) all
Inventory, including all merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and
finished products including such inventory as is temporarily out of
Grantor’s custody or possession or in transit and including
any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any
of the foregoing and any documents of title representing any of the
above, and Grantor’s books relating to any of the
foregoing;
(iv) all
Accounts (including healthcare receivables), all contract rights or
rights to payment of money, leases, license agreements, franchise
agreements, commercial tort claims, documents, instruments
(including any promissory notes), chattel paper (whether tangible
or electronic), cash and cash equivalents, insurance policy claims
and proceeds, all general intangibles (including payment
intangibles), all letters of credit, certificates of deposit,
letters of credit rights (whether or not the letter of credit is
evidenced by a writing), securities, material intercompany notes,
and all other investment property, supporting obligations, and
financial assets, in each case, unless otherwise defined in this
Agreement, as defined in the UCC;
(v) all books, records,
databases, customer lists, credit files, computer files, programs,
printouts and other computer materials and records, and all other
information relating to the foregoing and any general intangibles
at any time evidencing or relating to any of the foregoing;
and
(vi) any
and all claims, rights and interests in any of the above and all
substitutions for, additions, attachments, accessories, accessions
and improvements to and replacements, products, proceeds and
insurance proceeds of any or all of the foregoing.
(b) With respect to the
Intellectual Property Collateral, Grantor hereby grants to Grantee
all of Grantor's and Grantor’s subsidiaries’ right,
title and interest in, to and under the Intellectual Property
Collateral, including, without limitation, the
following:
(i) Any and all claims
for damages by way of past, present and future infringements of any
of the rights in the Intellectual Property Collateral, with the
right, but not the obligation, to sue for and collect such damages
for said use or infringement of the rights in the Intellectual
Property Collateral;
(ii) All
licenses or other rights to use any of the Intellectual Property
Collateral and all license fees and royalties arising from such use
to the extent permitted by such license or rights;
(iii) All
amendments, extensions, renewals and extensions of any of the
Intellectual Property Collateral; and
(iv) All
proceeds and products of the Intellectual Property Collateral,
including without limitation all payments under insurance or any
indemnity or warranty payable in respect of any of the
foregoing.
Notwithstanding the
foregoing, in no event shall the Collateral include any Excluded
Property; provided that, notwithstanding the foregoing, a security
interest shall be, and is hereby, granted in (A) any property
immediately upon such property ceasing to be Excluded Property and
(B) any and all proceeds, products, substitutions and replacements
of Excluded Property to the extent such proceeds, products,
substitutions and replacements do not themselves constitute
Excluded Property.
(c) Grantor shall, and
shall cause its subsidiaries to, take such commercially reasonable
steps as Grantee reasonably requests in writing to obtain the
consent of, or waiver by, any person whose consent or waiver is
necessary, by contract or law, for the grant of the security
interest in the Collateral or any portion thereof, including any
license or other contract, whether now existing or entered into in
the future.
Section
2.02. Continuing
Security Interest.
(a) This Agreement
creates a continuing security interest in the Collateral and shall:
(i) remain in full force and effect until the date on which the
Secured Obligations are paid and performed in full; (ii) be binding
upon Grantor and its successors, transferees and assigns; and (iii)
inure, together with the rights and remedies of Grantee, to the
benefit of Grantee and its successors and assigns.
(b) Grantee shall have
all rights to perfect, continue, maintain, and protect
Grantee’s interest and rights under the Note.
(c) Upon the date on
which the Secured Obligations are paid and performed in full, the
security interest granted herein shall automatically terminate and
all rights to the Collateral, in each case to the extent the
Collateral has not been previously disposed of or dealt with in
accordance with this Agreement or otherwise, shall revert to
Grantor. Upon any such termination, and from time to time following
such termination, Grantee will, at Grantor’s sole expense,
promptly execute and deliver to Grantor such instruments and
documents necessary and as Grantor shall reasonably request to
evidence such termination.
Section
2.03. Grantor Remains Liable. Anything herein
to the contrary notwithstanding: (a) Grantor shall remain liable
under the contracts included in the Collateral to the extent set
forth therein and as to all other Collateral, and shall perform all
of its duties and obligations under such contracts and other
Collateral to the same extent as if this Agreement had not been
executed; (b) the exercise by Grantee of any of its rights and
remedies hereunder shall not operate to release Grantor from any of
its duties or obligations under any contracts included in the
Collateral and as to any other Collateral; and (c) Grantee shall
not have any obligation or liability under any such contracts
included in the Collateral or as to any other Collateral by reason
of this Agreement, and Grantee shall not be obligated to perform or
fulfill any of the obligations or duties of Grantor thereunder or
to take any action to collect or to (i) make any inquiry as to
the nature or sufficiency of any payment Grantor may be entitled to
receive thereunder, (ii) present or file and claim or
(iii) enforce any claim for payment assigned
hereunder.
Section
2.04. Authorization
to File Financing Statements.
(a) Grantor hereby
irrevocably appoints Grantee its attorney-in-fact and authorizes
Grantee at any time and from time to time, without notice to
Grantor, to file in any UCC jurisdiction or other appropriate
location any financing statements or other appropriate documents
and any amendments thereto and continuations thereof that: (i)
describe or indicate the Collateral (x) as all assets of
Grantor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope
of Article 9 of the UCC or such jurisdiction, or (y) with
greater detail; and (ii) contain any other information required by
Article 9 of the UCC or other applicable law or as otherwise
appropriate for the sufficiency or filing office acceptance of any
financing statement or other document or amendment or continuation,
including, as applicable, whether Grantor is an organization, the
type of organization and any organization identification number
issued to Grantor.
(b) Grantor agrees to
furnish any such information required for purposes of
Section 2.04(a) to Grantee promptly upon request.
Section
2.05. Recordation. Grantor authorizes the
Commissioner for Patents, the Commissioner for Trademarks and the
Register of Copyrights and any other government officials to record
and register this Agreement upon request by Grantee.
Section
2.06. Other Actions. Without limiting any
other obligations of Grantor in respect of the Collateral set forth
herein or in the Note, Grantor hereby agrees to take any action
reasonably requested by Grantee to effect the attachment,
perfection and first priority of (subject to any Permitted Liens
(as such term is defined in the Note)), and the ability of Grantee
to enforce, Grantee’s security interest in any and all of the
Collateral (and to pay all reasonable documented out-of-pocket
expenses incurred in connection therewith), including any of the
following: (a) comply with any provision of any law as to any
Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of Grantee to
enforce, Grantee’s security interest in any material portion
of the Collateral; (b) obtain Governmental Authority and all other
third party consents and approvals, including without limitation
any consent of any licensor, lessor or other person obligated on
the Collateral, to the extent such consent or approval is a
condition to attachment, perfection or priority of, or ability of
Grantee to enforce, Grantee’s security interest in any
material portion of the Collateral; (c) furnish to Grantee, from
time to time, statements and schedules further identifying and
describing the Collateral and such other reports in connection with
the Collateral as Grantee may reasonably request, and all in
reasonable detail; and (d) at Grantee’s request, appear in
and defend any Dispute that may affect Grantor’s title to or
Grantee’s security interest in any material portion of the
Collateral.
ARTICLE III
Representations
and Warranties
Grantor
represents and warrants to Grantee as follows:
Section
3.01. Grantor’s Legal Status. (a) Except
as set forth in Schedule 3.01, Grantor’s exact legal name is
that indicated in the preamble hereto, Grantor has not, during the
past five years, been known by or used any other corporate or
fictitious name, nor been a party to any merger, acquisition or
consolidation; and (b) Grantor is an organization of the type and
organized in the jurisdiction set forth in the preamble
hereto.
Section
3.02. Ownership; No Liens. Grantor owns the
Collateral free and clear of any liens, security interests, or
other encumbrances, except for the security interest created by
this Agreement and any Permitted Liens. No effective security
agreement, financing statement, assignment, equivalent security,
lien or other instrument similar in effect covering all or any part
of the Collateral is on file or of record in any public office,
except such as may have been filed in favor of Grantee relating to
this Agreement or in connection with any Permitted
Liens.
Section
3.03. Validity.
(a) Except as set forth
on Schedule 3.03, Grantor has good title to, has
rights in, and has the power to transfer each item of the
Collateral, free and clear of any and all liens, security
interests, and other encumbrances except any Permitted Liens, and
has full power and authority to grant to Grantee the security
interest in such Collateral pursuant to this
Agreement.
(b) Subject to
Permitted Liens, this Agreement creates a valid security interest
in the Collateral securing the payment and performance in full of
the Secured Obligations. Upon filing appropriate financing
statements in the applicable filing offices, all filings,
registrations and recordings presently necessary to create and
perfect the first priority security interest granted to Grantee in
the Collateral for which a security interest may be perfected by
filing will have been taken.
Section
3.04. Authorization; Approval. No
authorization or approval by, and no notice to or filing with, any
Governmental Authority or any person: (a) is required for the grant
by Grantor of the security interest granted hereby (except as to
any later arising or acquired commercial tort claims) or for the
execution, delivery, and performance of this Agreement by Grantor;
or (b) is required for the perfection of the security interest of
Grantee in the Collateral or exercise by Grantee of its rights and
remedies hereunder, other than the filing of financing statements
in the appropriate offices, to the extent that the security
interest in the Collateral can be perfected by the filing of
financing statements.
Section
3.05. Enforceability. This Agreement is the
legal, valid and binding obligation of Grantor, enforceable against
Grantor in accordance with its terms, subject, as to enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally or general
equitable principles.
ARTICLE IV
Covenants
Section
4.01. Covenants.
(a) For so long as this
Agreement shall remain in effect, Grantor hereby covenants and
agrees to abide by and perform all obligations and covenants set
forth in the Note and herein, including, without limitation, the
conversion obligations (as applicable) and restrictions on
indebtedness and liens set forth in the Note.
(b) Grantor agrees that
it will not interfere with any right, power and remedy of Grantee
provided for in this Agreement or now or hereafter existing at law
or in equity or by statute or otherwise, or the exercise or
beginning of the exercise by Grantee of any one or more of such
rights, powers or remedies.
(c) Without limiting
any of the foregoing covenants, Grantor agrees (i) not to use
or permit any of the Collateral to be used unlawfully in any
material respect or in material violation of any provision of the
Note or any applicable law or any policy of insurance covering the
Collateral and (ii) to pay promptly when due all taxes now or
hereafter imposed upon or affecting any of the
Collateral.
ARTICLE V
Rights
and Duties of Grantee
Section
5.01. Grantee
Appointed Attorney-in-Fact.
(a) Grantor, on behalf
of itself and its subsidiaries, hereby irrevocably appoints Grantee
(and each of Grantee’s designees) as Grantor’s and such
subsidiaries’ true and lawful attorney-in-fact, with full
authority and power in the place and stead of Grantor and such
subsidiaries and in the name of Grantor, such subsidiaries, Grantee
or otherwise, from time to time in Grantee’s discretion from
and after the occurrence and during the continuation of an Event of
Default, to take any appropriate action and to execute any
instrument that Grantee may deem reasonably necessary or advisable
to accomplish the purposes of this Agreement, including: (i) to
ask, demand, collect, enforce, sue for, recover, compromise,
receive, and acquit and receipts for monies due and to become due
under or in respect of any of the Collateral; (ii) to receive,
endorse, and collect any checks, drafts or other instruments,
documents, and chattel paper in connection with clause (a)
above; (iii) to file any claims or take any action or institute any
proceedings (or to settle, adjust or compromise any such
proceeding) that Grantee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the
rights of Grantee with respect to any of the Collateral; (iv) to
perform the affirmative obligations of Grantor hereunder; (v) to
execute and deliver, for and on behalf of Grantor and such
subsidiaries, any and all instruments, documents, agreements, and
other writings necessary or advisable for the exercise on behalf of
Grantor and its subsidiaries of any rights, benefits or options
created or existing under or pursuant to the Collateral (including
but not limited to executing and delivering to any Governmental
Authority any correspondence or other documentation necessary or
advisable to effect a transfer of any regulatory approval); and
(vi) to execute endorsements, assignments, or other instruments of
transfer with respect to the Collateral.
(b) Notwithstanding the
foregoing, Grantee shall not be obligated to and shall have no
liability to Grantor or any third party for failure to take any of
the actions described in Section 5.01(a).
(c) Grantor hereby
acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 5.01 is irrevocable and
coupled with an interest.
Section
5.02. Grantee May Perform. If Grantor fails to
perform any agreement or covenant contained herein, Grantee may
itself (but shall not be obliged to) perform, or cause performance
of, such agreement or covenant, and in connection therewith Grantee
shall be entitled to act as Grantor’s true and lawful
attorney-in-fact and with the full benefits of Section 5.01
hereof.
ARTICLE VI
Remedies
Section
6.01. Certain Remedies. If any Event of
Default shall have occurred and is continuing: (a) Grantee may
exercise in respect of the Collateral, in addition to other rights
available to it at law or in equity or otherwise, or under the
Note, all the rights and remedies of a secured party on default
under the UCC (whether or not the UCC applies to the affected
Collateral) or any other applicable law, and also may: (i) require
Grantor to, and Grantor hereby agrees that it shall, at
Grantor’s expense and promptly upon request of Grantee,
assemble all or part of the Collateral as directed by Grantee and
make it available to Grantee at a place to be designated by Grantee
that is reasonably convenient to both parties; (ii) exercise any
and all rights and remedies of Grantor under or in connection with
the Collateral; (iii) foreclose or otherwise enforce
Grantee’s security interest in any manner permitted by law or
provided for in this Agreement, and sell any of all of the
Collateral in any commercially reasonable manner; and (iv) without
notice or demand of legal process, all of which are hereby
expressly waived by Grantor, enter into property where any of the
Collateral is located and take possession thereof; provided,
however, that notwithstanding the foregoing, Grantee may transfer
the Collateral or any portion thereof without any preparation or
processing; and (b) Grantor, on behalf of itself and its
subsidiaries, specifically waives (to the extent permitted by law)
all rights of redemption, stay or appraisal which it has or may
have under any law now existing or hereafter adopted.
ARTICLE VII
Miscellaneous
Section
7.01. Assignments. Grantor and Grantee shall
not be permitted to assign this Agreement without the prior written
consent of the other party and any purported assignment in
violation of this Section 7.01 shall be null and void.
Section
7.02. Successors and Assigns. The provisions
of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns.
Section
7.03. Notices. All notices and other
communications shall be given as set forth in the
Note.
Section
7.04. Entire Agreement. This Agreement and the
Note of even date herewith by and between Grantor and Grantee
contain the entire agreement between the Parties relating to the
subject matter hereof and supersede all oral statements and prior
writings with respect thereto.
Section
7.05. Modification. No provision hereof may be
amended or modified except by an agreement or agreements in writing
executed by Grantor and Grantee.
Section
7.06. No
Delay; Waivers; etc.
(a) No failure to
exercise and no delay in the exercise, on the part of Grantee, of
any right, remedy, power or privilege hereunder and no course of
dealing with respect thereto shall impair such right, remedy, power
or privilege or be construed to or operate as a waiver thereof, nor
shall any single or partial exercise of any power or right
hereunder preclude other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. Grantee
shall not be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by Grantee.
(b) Grantor waives any
right to require Grantee to proceed against any person or to
exhaust any of the Collateral or to pursue any remedy in such
Grantee’s power.
Section
7.07. Severability. If any provision of this
Agreement shall be held to be invalid, illegal or unenforceable,
then, to the fullest extent permitted by law, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section
7.08. Governing Law. This Agreement and the
Note 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.).
Section
7.09. Jurisdiction. Grantor 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 own corporate domicile with respect to actions or
proceedings brought against it as a defendant, for purposes of all
proceedings. Grantor 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 Grantor
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 Note.
Section
7.10. Waiver of Jury Trial. Grantor hereby irrevocably waives any and all
right to trial by jury in any proceeding.
Section
7.11. Waiver of Immunity. To the extent that
Grantor has or hereafter may be entitled to claim or may acquire,
for itself or any of its assets, any immunity from suit,
jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment
in aid of execution, or otherwise) with respect to itself or any of
its property, Grantor hereby irrevocably waives such immunity in
respect of its obligations hereunder to the fullest extent
permitted by law.
Section
7.12. Counterparts; Facsimile Signatures. This
Agreement may be executed and delivered by facsimile signature
(including PDF) and in any number of counterparts, each of which
shall be deemed an original but all of which together shall
constitute one and the same instrument.
Section
7.13. Rights Not Exclusive. The rights, powers
and remedies of Grantee under this Agreement are cumulative and are
not exclusive of, and shall be in addition to, all rights, powers
and remedies given to Grantee by virtue of any law and/or the Note,
all of which rights, powers and remedies shall be cumulative and
may be exercised successively or concurrently without impairing
Grantee’s security interest in the Collateral.
Section
7.14. Indemnification. Grantor shall, to the
fullest extent permitted by law, indemnify (but only to the extent
of and out of Grantor assets) Grantee against all reasonable
expenses (including reasonable attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by Grantee 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 Grantee is involved, as a
party or otherwise, or with which Grantee may be threatened,
arising in connection with the Prior Notes, the Note or this
Agreement (each, an “Action”), except to the extent the
same has been finally adjudicated to constitute fraud, gross
negligence or willful misconduct of Grantee or a breach by Grantee
of the Prior Notes, the Note or this Agreement. Promptly after
receipt by Grantee of notice of the commencement or threatened
commencement against it of any third party Action, Grantee will
notify Grantor. Grantor will be entitled to assume the defense of
the Action unless Grantee shall have reasonably concluded that a
conflict may exist between Grantor and Grantee in conducting the
defense of the Action. If Grantor assumes the defense of any Action
in accordance with the provisions of this Section, it will not be
liable to Grantee for any legal or other expenses subsequently
separately incurred by Grantee in connection with the defense of
such Action. Grantor shall not be liable for any settlement of a
third-party Action effected without its written consent, which
consent may not be unreasonably withheld.
Section
7.15. Amendment and Restatement;
Reaffirmation. Grantor hereby acknowledges that it has
reviewed the terms and provisions of this Agreement and consents to
the amendment and restatement of the Third Amended and Restated
Security Agreement effected pursuant to this Agreement. Grantor
hereby confirms that this Agreement will continue to secure, to the
fullest extent possible in accordance with the terms hereof, the
payment and performance of the obligations set forth herein and in
the Note, as applicable now or hereafter existing, and that this
Agreement does not constitute a novation of the obligations and
liabilities existing under the Third Amended and Restated Security
Agreement or the Prior Notes. Grantor and Grantee hereby agree
that, on the date hereof, the terms and provisions of the Third
Amended and Restated Security Agreement shall be and hereby are
amended and restated in their entirety by the terms, conditions and
provisions of this Agreement, and the terms and provisions of the
Third Amended and Restated Security Agreement shall be superseded
by this Agreement.
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IN
WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
Ryan Drexler, an individual
as Grantee
/s/
Ryan Drexler_________________
MusclePharm Corporation, a Nevada corporation
as Grantor
By:
/s/ Allen
Sciarillo____________
Name: Allen
Sciarillo
Title: Chief
Financial Officer