Muscle Pharm Corporation (MSLPQ)

[jeff_green]

Here is the kicker. FACT on why the supplier was forced to cut MSLP off. The supplier was restricted from filing a lien and was entitled to no sufficient legal recourse.

Certain loan documents governing our indebtedness contain various covenants limiting the discretion of our management in operating our business.
Certain loan documents we have entered into with third parties contain, subject to certain carve-outs, various restrictive covenants that limit our management's discretion in operating our business. In particular, these instruments limit our ability to, among other things:
·
incur additional debt;
·
grant liens on assets;
·
make investments, including capital expenditures;
·
sell or acquire assets outside the ordinary course of business;
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·
engage in transactions with affiliates; and
·
make fundamental business changes.
Certain of such loan documents require us to (i) maintain certain financial ratios and (ii) limit our capital expenditures (to the extent we require additional financings). If we and our subsidiaries fail to comply with the restrictions in such loan documents, a default may allow the creditors under the relevant instruments to accelerate the related debt and to exercise their remedies under these agreements, which will typically include the right to declare the principal amount of that debt, together with accrued and unpaid interest and other related amounts, immediately due and payable, to exercise any remedies the creditors may have to foreclose on assets that are subject to liens securing that debt and to terminate any commitments they had made to supply further funds.