EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, made this 24th day of June, 2004, by and
between ODYSSEY MARINE EXPLORATION, INC., a Nevada corporation, whose address
is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower"), and THE BANK OF
TAMPA, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Lender").
W I T N E S S E T H:
WHEREAS, Borrower desires to borrow money for business purposes, and
Borrower has requested a line of credit from Lender, and Lender is willing to
loan certain sums to Borrower from time to time on the terms set forth herein;
and
WHEREAS, certain capitalized terms used in this Agreement are defined in
Section 10 hereof;
NOW, THEREFORE, it is agreed as follows:
1. Revolving Credit Loan.
(a) Revolving Credit Commitment. Subject to the terms and
conditions hereof, Lender agrees to make Advances to Borrower against Eligible
Collateral from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the lesser of (i)
FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) (the "Commitment"), or (ii)
the amount equal to twenty-five percent (25%) of the Appraised Value of the
Eligible Collateral (the "Borrowing Base"). As long as no Event of Default
has occurred hereunder and no Default has occurred that, with the passage of
time, the giving of notice, or both, shall constitute an Event of Default
hereunder, Borrower shall be entitled to borrow, repay or prepay and reborrow,
by delivering to Lender a Borrowing Base Certificate in the form of Exhibit
"A" attached hereto ("Borrowing Base Certificate").
(b) Revolving Credit Note. The Revolving Credit Loan shall be
evidenced by a promissory note of Borrower payable to the order of Lender
substantially in the form of Exhibit "B" attached hereto ("Revolving Credit
Note").
(c) Interest. The Revolving Credit Loan shall accrue interest as
provided in the Revolving Credit Note.
(d) Principal Reduction Payment. The Borrower shall make a
principal reduction payment immediately upon demand of the Lender at any time
that the aggregate Advances outstanding exceeds the Borrowing Base.
(e) Borrower's Loan Account. Lender shall enter in its records of
this Revolving Credit Loan all Advances under the Revolving Credit Loan and
all payments made by or on behalf of Borrower on account thereof. Except for
the principal reduction payments required under Section 1(d) (which shall be
applied to reduce principal), any payments shall be credited first to payment
of any late charges, fees or expenses, if any, then to accrued and unpaid
interest and the balance, if any, ("Credit") to principal. Lender shall
provide Borrower a monthly accounting of transactions under the Revolving
Credit Loan. Each such accounting shall be deemed final, binding and
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conclusive upon Borrower in all respects as to all matters as reflected
therein, unless Borrower, within thirty (30) days after the date the
accounting is rendered, notifies Lender in writing of any objections,
describing the basis for such objections with specificity. In such event,
only those items expressly objected to in the notice shall be deemed disputed
by Borrower.
(f) Revolving Credit Commitment Period. The Commitment Period
shall terminate on June 24, 2005 (the "Termination Date") unless Borrower
shall earlier terminate the Commitment.
(g) Termination or Reduction of Commitment. Borrower shall have
the right, upon not less than five (5) Business Days' written notice to
Lender, to terminate or reduce the Commitment at any time, provided that any
notice of termination shall be accompanied by payment in full of the Revolving
Credit Loan and the Advances outstanding thereunder and provided that any
notice of reduction shall be accompanied by payment in full of the Revolving
Credit Loan balance that exceeds the reduced Commitment.
(h) Commitment Fee. Borrower hereby agrees to pay Lender a
Commitment Fee equal to Twenty Thousand and 00/100 Dollars ($20,000.00),
one-half of which ($10,000.00) has been paid in connection with the execution
by the Borrower of that certain commitment letter from the Lender to the
Borrower dated May 3, 2004, with the balance to be paid at Closing.
(i) Mandatory Payments. In the event that Lender shall notify
Borrower that the current Revolving Credit Loan balance exceeds the lesser of
(i) the Commitment, or (ii) the Borrowing Base, Borrower shall immediately
repay the Revolving Credit Loan by the amount of such excess.
(j) Permissive Prepayments. Borrower may, at any time and from
time to time, pay or prepay the Revolving Credit Loan, in whole or in part,
without payment of any premium or penalty.
(k) Use of Proceeds. The proceeds of the Revolving Credit Loan
shall be used by Borrower for working capital requirements.
2. Security. As security for the Loan, Borrower shall at Closing
execute and deliver to Lender the Security Agreement, granting to Lender a
lien and security interest on, in and to all of the assets described on
Exhibit "D" which is attached hereto and made a part hereof, now owned or
hereafter acquired, and the proceeds and products thereof ("Collateral") free
of all claims, liens and encumbrances except for claims, liens and
encumbrances, if any, listed on Exhibit "D," except for liens and encumbrances
in favor of Lender, and except for Permitted Liens (as defined below).
Borrower authorizes the filing by Lender, in form and substance satisfactory
to Lender, of UCC-1 financing statements describing the Collateral and
determined by the Lender to be desirable to perfect the liens and security
interests referred to in this paragraph.
As further security for the Loan, Borrower hereby assigns and grants to
Lender a security interest in and to all property of Borrower which is or may
hereafter be in Lender's possession (by deposit, assignment, purchase or
otherwise) in any capacity including but not limited to all monies owed or to
be owed by Lender to Borrower, deposits (whether or not Lender has possession
of any certificate of deposit or other indicia of ownership), and stocks,
bonds or other securities held in any securities trading account, custodial
account or otherwise; and with respect to all such property, Lender shall have
the same rights as it has to any Collateral.
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3. Representations and Warranties of Borrower. In order to induce
Lender to make the Loan, Borrower makes the following representations and
warranties:
(a) Corporate Status. Borrower (i) is duly incorporated, validly
existing and in good standing under the laws of the State of Nevada; (ii) has
qualified as a foreign corporation to transact business and is in good
standing in Florida; (iii) has qualified as a foreign corporation to transact
business and is in good standing in every other jurisdiction in which any
Collateral is located or the nature of its business or properties makes such
qualification necessary or Borrower owns or leases material properties or
conducts material business; (iv) has the requisite corporate power and
authority to own, pledge and operate its properties, to lease the properties
it operates under lease and to conduct its business as it is now being
conducted; and (v) is in compliance in all material respects with its articles
of incorporation and bylaws.
(b) Authorization; No Default. The execution, delivery and
performance by Borrower of this Agreement and each Loan Document to which it
is or will become a party (i) has been duly authorized on behalf of Borrower
by all necessary corporate action; (ii) does not contravene any law, statute,
rule or regulation or any judgment, decree or order of any court or
governmental agency by which Borrower is bound, or Borrower's articles of
incorporation, bylaws, or any preference stock provisions; (iii) shall not
result in or constitute a default under any agreement, contract, indenture,
mortgage, deed of trust, security agreement or other instrument to which
Borrower is a party or by which Borrower or any of its property, including any
Collateral, is bound; and (iv) shall not result in the creation or imposition
of (or the obligation to create or impose) any lien, charge or encumbrances
upon any assets or property of Borrower or upon any Collateral.
(c) Validity. When executed and delivered by the parties hereto and
thereto, this Agreement and the Loan Documents shall be valid and binding
obligations of Borrower, and shall be enforceable against Borrower in
accordance with their terms, except as enforceability may be limited by
equitable principles or by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
(d) Financial Statements. Borrower has delivered or otherwise made
available to Lender: (i) an audited consolidated balance sheet of Borrower
and its Subsidiaries as of February 28, 2003, and the related audited
consolidated statements of operations, changes in stockholders' equity and
cash flows for the fiscal year then ended, including in each case the notes
thereto, and (ii) the unaudited consolidated balance sheets of Borrower and
its Subsidiaries as of May 31, August 31, and November 30, 2003, and the
related unaudited statements of operations and cash flows for the three-, six-
and nine-months, respectively, then ended, including in each case the notes
thereto. Such financial statements (x) fairly present, in all material
respects, the consolidated financial condition of Borrower and its
Subsidiaries as of the dates thereof and the results of Borrower's and its
Subsidiaries' consolidated operations for the periods covered thereby and (y)
have been prepared in accordance with GAAP, consistently applied in the
various statements throughout the periods involved, except as otherwise
expressly stated therein, and show all known material liabilities of Borrower
and its Subsidiaries, including contingent liabilities, long-term leases and
unusual commitments as of the dates thereof. Since the date of the balance
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sheet included in the most recent financial statements, there has been no
adverse material change in the consolidated financial condition of Borrower.
All other information submitted by Borrower in support of the application for
the Loan is true and correct in all material respects as of the date of this
Agreement, except to the extent that such information expressly relates to an
earlier date, and no material adverse change has occurred.
(e) Property and Assets. Borrower has good and marketable title to
all of Borrower's properties reflected in its balance sheets and financial
statements (except such as have been disposed of in the ordinary course of
business since the date of such balance sheets or financial statements),
including without limitation the Collateral described on Exhibit "D," and such
properties are free and clear of all liens, charges and encumbrances, except
for liens for taxes and assessments not yet due and except such liens, charges
and encumbrances, if any, on properties acquired subsequent to such balance
sheets or financing statements and disclosed to Lender. It is acknowledged by
Borrower that the only liens, encumbrances and charges permitted under this
Agreement with respect to the Collateral are the Permitted Liens, as defined
in Section 5(a).
(f) Coins. All of the Collateral consisting of Coins, as described
in Exhibit D (the "Coins"), was recovered by the Borrower from the coordinates
described in the Judgment entered by the United States District Court for the
Middle District of Florida on March 24, 2004, in the case styled Odyssey
Marine Explorations, Inc. v. The Unidentified Shipwrecked Vessel or Vessels,
et al., Case No. 8:03-CV-1668-T-24TBM (the "Case"). The coordinates described
in the Case are not within any state or national boundaries. No persons other
than Atlantic Mutual Insurance Company and the United States Government have
provided notice to Borrower of any claims to any interest in or to the Coins.
Borrower has not assigned, conveyed or otherwise transferred any of its rights
to the Collateral to any Person, except pursuant to this Agreement and the
Collateral Control Agreement.
(g) Loss. No substantial loss, damage, destruction or taking of any
of the real or personal property of Borrower or of the real or personal
property leased by Borrower has occurred which has not been fully restored or
replaced or which is not fully covered by insurance, less applicable
deductibles, and neither such property nor the business of Borrower has been
adversely affected in any substantial way as the result of any theft,
accident, strike, lockout, embargo, riot, war, or act of God, or the public
enemy.
(h) Litigation. There are no investigations, actions, suits, or
proceedings by any federal, state or local government body, agency or
authority, or by any person, pending, or to the knowledge of Borrower,
threatened against Borrower or its Subsidiaries, or other proceedings to which
Borrower or its Subsidiaries are a party (including administrative or
arbitration proceedings), (i) which involve the possibility of any judgment or
liability not fully covered by insurance or by adequate reserves established
by Borrower, (ii) which may result in any material adverse change in the
business or condition, financial or otherwise, of Borrower, or in any right,
interest or title Borrower has in the Collateral, (iii) which involves any
claim of title to the Collateral, or (iv) which, to the knowledge of Borrower,
seek to restrain, enjoin, prohibit or obtain damages or other relief with
respect to the Borrower's conduct of its Business or the transaction
contemplated by this Agreement, including, but not limited to, the denial of
any necessary permit, license or certificate.
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(i) Contracts; No Defaults. Borrower is not a party to any
contract, agreement, lease or other instrument which would materially and
adversely affect the Collateral, Borrower's property, the Business, operations
or financial condition or Borrower's ability to perform its obligations under
this Agreement or any other Loan Document. Borrower is not in default under
any contract, agreement, lease or other instrument to which is a party and
which is material to its property, the Business, prospects, operations or
financial condition. No event of default or occurrence that, with the giving
of notice, the passage of time, or both, would constitute an event of default
thereunder has occurred and is continuing.
(j) Governmental Approvals. Borrower has complied in all material
respects with all applicable laws and requirements of governmental authorities
including those governing Borrower's conduct of its Business. No
authorization or approval or other action by, and no notice to or filing with,
any federal, state or local government body, agency or authority is required
for the due execution, delivery and performance by Borrower of this Agreement
or any other Loan Document.
(k) Subsidiaries. Borrower has no subsidiaries (including
subsidiaries of Borrower and/or one or more subsidiaries) except Odyssey
Marine, Inc., a Florida corporation; OVH, Inc., a Nevada corporation; Odyssey
Marine Services, Inc., a Nevada corporation; and Odyssey Retriever, Inc., a
Nevada corporation (collectively, the "Subsidiaries").
(l) Securities Laws. No proceeds of the Loan will be used to
acquire any security in any transaction which is subject to Sections 13 and 14
of the Securities Exchange Act of 1934, as amended. Borrower is not an
"investment company" or a company "controlled" by an "investment company"
(within the meaning of the Investment Company Act of 1940, as amended).
(m) Margin Regulations. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System). No proceeds of the Loan will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
(n) Taxes. Borrower has filed all federal, state, local and foreign
income tax returns, which to its knowledge, Borrower is required to file, and
has paid all taxes as shown on said returns and all assessments received by
Borrower to the extent that such taxes have become due.
(o) ERISA.
(i) All pension or welfare benefit plans within the respective
meanings of Section 3(2) and 3(1) of ERISA other than multiemployer plans
(within the meaning of Section 3(37) of ERISA), to which Borrower is a party
or to which Borrower makes any employer contributions with respect to
employees, are set forth on Exhibit "E" which is attached hereto and made a
part hereof. With regard to the current or prior plan years of each plan
referred to in Exhibit "F," all contributions required to meet the employer
contribution obligations of Borrower under Section 412 of the Code, Part 3 of
Title I(B) of ERISA, the terms of the plan itself, or any applicable
collective bargaining agreement, with respect to the elapsed portion of the
current and previous plan years, have been duly made, and such plan and its
related trust have not incurred any accumulated funding deficiency (within the
meaning of Section 412(a) of the Code and Section 302 of ERISA) since the
effective date of ERISA.
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(ii) Borrower is not a party to any multiemployer plans
(within the meaning of Section 3(37) of ERISA). In addition, Borrower has not
incurred any withdrawal liability under Title IV of ERISA (as amended by the
Multiemployer Pension Plan Amendments Act of 1980) with respect to any
multiemployer plan.
(iii) Neither Borrower nor any Subsidiary or affiliate of
Borrower has engaged in any "prohibited transactions" within the meaning of
Section 4975 of the Code or Section 406 of ERISA, which could subject Borrower
or such subsidiary or affiliate, or any other party, to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Code. The execution,
delivery and performance of this Agreement and the other instruments,
documents and agreements contemplated hereby, and the making of the borrowing
contemplated hereby by Borrower will not constitute such a "prohibited
transaction" (assuming that the funds used by Lender to make the Loan are
disbursed from Lender's general funds and not from any separate fiduciary or
other account maintained by Lender).
(iv) No reportable event (as such term is defined in Title IV
of ERISA) has occurred with respect to, nor has there been terminated, any
plans subject to Title IV of ERISA and maintained for any employees of
Borrower or any member of any "controlled group of corporations" (as such term
is defined in Section 1563 of the Code) of which Borrower is a member.
(v) Borrower has paid all premiums due to the PBGC with
respect to each plan identified in Exhibit "F" and no premium, late payment
charge, premium penalty or interest thereon is due. The PBGC has made no
demand on Borrower for payment of any liability, including interest, arising
under Title IV(D) of ERISA, and no lien exists in favor of the PBGC upon any
real or personal property or rights to such property belonging to.
(p) Environmental Matters.
(i) Borrower and all of its Subsidiaries, if any, are in
compliance in all material respects with all provisions of the Environmental
Laws, and with any rules, regulations, and administrative orders of any
governmental agency, and with any judgments, decrees or orders of any court of
competent jurisdiction with respect thereto.
(ii) None of Borrower or its Subsidiaries, if any, has
received from any governmental agency any written assessment, notice of
(primary or secondary) liability or notice of financial responsibility, or any
notice of any action, claim or proceeding to determine such liability or
responsibility, or the amount thereof, or to impose civil penalties with
respect to a site listed on any federal or state listing of sites containing
or believed to contain Hazardous Wastes, nor has any of Borrower or its
Subsidiaries, if any, received written notification from any governmental
agency that any hazardous substances (as defined under CERCLA) that it has
disposed of have been found in any site at which any governmental agency is
conducting an investigation or other proceeding under any Environmental Law.
(iii) To the knowledge of Borrower, no part of the real
property leased by Borrower in its business or any building, structure or
facility located thereon or improvement thereto contains or contained asbestos
or polychlorinated biphenyls (PCBs); have or have had asbestos-containing
materials or electrical transformers, fluorescent light fixture ballasts or
other equipment containing PCBs installed thereon or therein; is or has been
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used for the handling, processing, storage or disposal of Hazardous Wastes; or
contain or contained above-ground or underground storage tanks or other
storage facilities for Hazardous Wastes.
(iv) Borrower has paid any environmental excise taxes imposed
pursuant to Sections 4611, 4661, or 4681 of the Code.
(q) Minimum Wages; Overtime. Borrower is in compliance in all
material respects with all provisions of the Fair Labor Standards Act, as
amended, and regulations promulgated thereunder.
(r) Employee Wage Withholding. Borrower has paid or made provision
for the payment of all applicable federal, state and local employees' income,
social security and unemployment taxes.
4. Affirmative Covenants of Borrower. Borrower covenants and agrees
that, from the date hereof until the Loan is paid in full, Borrower shall:
(a) Reporting Requirements. Furnish to Lender:
(i) as soon as available, but in any event not later than
forty-five (45) days after the end of each of the first three (3) quarterly
periods of each fiscal year of Borrower, unaudited consolidated financial
statements of Borrower and its Subsidiaries, including balance sheets and the
related statements of operations and cash flows, for such quarterly period and
for Borrower's fiscal year-to-date, with the corresponding figures for
Borrower's previous fiscal year. These financial statements shall be prepared
in accordance with GAAP, consistently applied.
(ii) as soon as available, but in any event not later than
ninety (90) days after the end of each fiscal year of Borrower, audited
consolidated financial statements of Borrower and any Subsidiaries, including
balance sheets and the related statement of operations, changes in
stockholders' equity and cash flow, together with the report thereon of
Borrower's independent certified public accountants, for such fiscal year,
with the corresponding figures for Borrower's previous fiscal year. These
financial statements shall be prepared in accordance with GAAP, consistently
applied, and such report shall state that such financial statements fairly
present, in all material respects, the consolidated financial position of
Borrower and the results of its operations and the changes in its financial
position for the year then ended. Concurrently with the delivery of such
audited financial statements, the independent certified public accountant
shall furnish Lender a certificate stating that in making the examination
necessary for auditing such financing statements, no knowledge was obtained of
any Event of Default or of any Default which, with the giving of notice, the
passage of time, or both, would constitute an Event of Default hereunder,
except as specifically described by said accountant.
(iii) concurrently with the delivery of the financial
statements described in this Section 4(a), Borrower shall deliver a
certificate addressed to Lender and signed by its president (or chief
executive officer) and treasurer (or chief financial officer) acknowledging
that the financial statements fairly present, in all material respects, the
consolidated financial position of Borrower and the results of its operations
for the period covered thereby and (i) certifying that no Event of Default and
no Default which, with the giving of notice, the passage of time, or both,
would constitute an Event of Default has occurred and is continuing, or (ii)
describing the nature and duration of any such Event of Default and the steps
that Borrower is taking to remedy such Default.
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(iv) deliver to Lender such other audited and unaudited
financial statements, profit and loss statements, and other accounting data,
including but not limited to supporting documentation for financial statements
provided Lender under other clauses of this Section 4(a), as may be reasonably
requested by Lender from time to time concerning Borrower and any
Subsidiaries.
(v) deliver to Lender promptly upon receipt any "Management
Letter" received from Borrower's independent certified public accountant,
together with any comments made by Borrower in respect thereto, if the letter
addresses matters which adversely affect the financial condition of Borrower
or matters which constitute an Event of Default or any Default which, with the
giving of notice, the passage of time, or both, would become an Event of
Default.
(vi) deliver to Lender any annual, quarterly or other reports
to Borrower's stockholders and filings with the Securities and Exchange
Commission and with any federal, state or local governmental agency, body or
authority which regulates Borrower's business.
(b) Inspection. Permit any person designated by Lender to visit
and inspect Collateral, and the business premises and books and records of
Borrower and discuss Borrower's affairs and finances with Borrower at
reasonable times (and in a manner that will not unreasonably interfere with
normal business operations) and as often as Lender may reasonably request.
(c) Books and Records. Maintain its books of accounts in
accordance with sound business practices.
(d) Service of Process. Deliver to Lender, within ten (10) days
after the service of process or equivalent notice, written notice of any
litigation, arbitration proceeding or government investigation where the
amount involved would reasonably be expected to exceed $10,000, concerns title
to the Collateral or the conduct of Borrower's Business, or may, if determined
adversely to the Borrower, have a material adverse effect upon the Borrower or
its property or the Business.
(e) Bank Accounts. Maintain its principal bank accounts with
Lender.
(f) Maintenance of Property. Maintain its properties in good
condition, subject to normal wear and tear, and make all necessary
replacements, additions and improvements thereto.
(g) Insurance. Maintain and provide Lender with evidence of
insurance in such amounts and against such liabilities and hazards as required
by the Security Agreement to be executed in connection with the Loan, and,
together with each delivery of annual financial statements, and more
frequently upon request, shall deliver a certificate signed by Borrower
specifying the details of such insurance then in effect.
(h) Taxes and Obligations. Pay and discharge or cause to be paid
and discharged, all taxes, assessments, levies, fees, and charges and all
other governmental charges, general and special, ordinary and extraordinary,
whether or not within the contemplation of the parties hereto, which are at
any time levied upon or assessed against Borrower or its property or any part
thereof, whether or not the failure to pay such tax, assessment, levy, fee, or
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charge might result in the creation of a lien upon such properties or any part
thereof, when the same shall become due and payable, except for such items the
validity of which is being contested in good faith by appropriate proceedings;
and all income, excess profits, excise, sales, gross receipts, and other
taxes, duties or imposts, whether of a like or different nature, assessed,
levied or imposed by governmental authority on Borrower or Borrower's
properties or any part thereof when the same shall become due and payable,
except for such items the validity of which is being contested in good faith
by appropriate proceedings.
(i) Corporate Status. Maintain its existence as a corporation in
good standing under the laws of Nevada and qualified to transact business as a
foreign corporation in Florida.
(j) Maintenance of Rights. Do or cause to be done all things
necessary to preserve and to keep in full force and effect its rights and
privileges of a public or private nature, its franchises, trade names,
trademarks, service marks and patents and its permits which are material and
necessary for the continuance of its Business, and continue to engage
principally in the Business currently operated by Borrower.
(k) Borrowing Base. Maintain Collateral in such quantities that
Borrower's outstanding obligations to Lender under the Revolving Credit Loan
shall not exceed the sum of Twenty-Five percent (25%) of the Appraised Value
of the Eligible Collateral.
(l) Ordinary Course of Business. Sell its inventory and collect
its accounts only in the ordinary course of business and, without the prior
written consent of Lender, shall not sell or lease Collateral which does not
constitute inventory, or pledge, transfer, assign, deliver, donate, gift or
otherwise dispose of any Collateral or any interest therein.
(m) Lock Box Account. Deposit with Lender all moneys, checks,
notes, drafts, wire transfers, other payment media or other property
(including goods acquired through barter, swap or exchange) representing the
proceeds of any Collateral which comes into the possession or control of
Borrower immediately in the exact form received in a special account.
Borrower grants Lender a security interest in such account to secure all of
Borrower's liabilities and, unless otherwise authorized by Lender, Lender
alone shall have power of withdrawal.
(n) Borrowing Base Certificate. Provide to Lender, at the time of
each borrowing and at such other times as Lender may from time to time
prescribe a Borrowing Base Certificate showing the Appraised Value of the
Coins against which Borrower may borrow hereunder.
(o) Segregation of Collateral. Keep Collateral separate and
distinct from other property of Borrower and third parties pursuant to a
custodial agreement with a custodian (the "Custodian") acceptable to the
Lender in its reasonable discretion.
(p) Defaults by Custodian. Notify Lender immediately of any
default by Custodian known to Borrower in the performance of Custodian's
obligations with respect to any Collateral.
(q) Reduction of Borrowing Base. Pay Lender on demand any Advances
in excess of the Borrowing Base.
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(r) Merchantable Inventory. Maintain inventory of Coins which are
good and merchantable, with an Appraised Value at least equal to four (4)
times the outstanding principal balance of the Loan, and shall not be
encumbered by the security interest, chattel mortgage or lien of any person
other than Lender.
(s) Compliance With Laws. Comply in all material respects with all
applicable existing and future federal, state and local statutes, laws and
ordinances applicable to Borrower's Business and to the Collateral, any rules,
regulations or orders of any governmental body, agency or authority
promulgated thereunder, and any orders or judgments of any court of competent
jurisdiction, including, but not limited to, such statutes, laws, ordinances,
rules, regulations or orders relating to land use, building, zoning,
occupational health and safety, employee pension and benefit plans, employee
wage withholding, the environment and Hazardous Wastes and the preservation
and protection of sites and artifacts of historical significance.
(t) Financing Statements, Etc. Authorize the Lender to record and
file, at the Borrower's cost and expense, such financing statements describing
the Collateral as Lender may reasonably determine to be desirable in
connection with this Agreement, the Loan and the Collateral, execute and
deliver such further documents and agreements as Lender may reasonably request
in connection with this Agreement, the Loan and the Collateral, and defend any
action, proceeding or claim affecting the Collateral.
(u) Filing Fees; Taxes. Pay and discharge when due any and all
additional documentary stamp taxes or intangible taxes, levies or other
charges in connection with the Loan and the promissory note(s) executed in
connection herewith, together with all modifications, renewals and advances
heretofore or hereafter made, together with any interest or penalty incident
thereto, and Borrower agrees to indemnify and save harmless Lender from and
against all loss, cost, expense and attorneys' fees (as defined herein) that
may be incurred by Lender in connection with any such assessment, tax, levy or
other charge, or any interest or penalty resulting therefrom which may be
incurred by Lender in connection therewith.
(v) Management. Maintain in office and with their current
responsibilities the following individuals: ▇▇▇▇ ▇. ▇▇▇▇▇▇ (President and
CEO).
(w) Minimum Wages; Overtime. Pay employees wages and overtime in
compliance with the Fair Labor Standards Act, as amended, and regulations
promulgated thereunder.
(x) Employee Wage Withholding. Pay or make provision to pay all
applicable federal, state and local employees' income, social security and
unemployment taxes.
5. Negative Covenants of Borrower. Borrower covenants and agrees that
from the date hereof until the Loan is paid in full, Borrower shall not:
(a) Liens. Without first having obtained the written consent of
Lender, which consent shall not be unreasonably withheld, conditioned, or
delayed, mortgage, pledge, grant or permit to exist, any lien, security
interest or encumbrance upon any of Borrower's assets (or the assets of any
Subsidiary) of any kind, real or personal, tangible or intangible, used in the
Business, whether now owned or hereafter acquired, including any lease or
purchase money security interests or any other "off balance sheet"
10
indebtedness, except for the following ("Permitted Liens"): (i) liens for
taxes, assessments and similar charges which are not delinquent or are being
contested in good faith, and as to which Borrower shall have set aside on its
books adequate reserves; (ii) non-consensual liens imposed by law, such as
landlord's, mechanic's, carrier's, warehousemen's, materialmen's and vendor's
liens, incurred in good faith in the ordinary course of business; (iii) liens
incurred or pledges and deposits in connection with workmen's compensation,
unemployment insurance, old-age pensions and other social security benefits or
securing the performance of bids, tenders, contracts (other than for the
repayment of borrowed money), statutory obligations, surety and appeal bonds
and other obligations of like nature, incurred as and incident to, and in the
ordinary course of business; (iv) any such permitted encumbrances existing as
of the date hereof; and (v) the lease by Borrower of equipment under operating
and capital lease for which total payments shall not, in the aggregate, exceed
$250,000 per year. Lender's consent to any further encumbrance under this
Section 5(a) shall be deemed to be reasonably withheld if (x) such further
encumbrance is to attach to the Collateral, or (ii) a default or Event of
Default has occurred and is continuing.
(b) Defaults Under Other Agreements. Commit or fail to commit any
act which constitutes an event of default under the terms of any other
agreement, contract, indenture, mortgage, deed of trust, security agreement or
other instrument executed or to be executed by it, except those defaults that
are being contested in good faith and would not, if settled unfavorably,
materially and adversely affect Borrower's consolidated financial condition.
(c) Dividends. Declare any cash dividend on any class of its
stock, make any other distribution on account of any class of its stock or
redeem, purchase or otherwise acquire, directly or indirectly, any shares of
its stock, in any fiscal year of Borrower except to the extent such dividend
or other distribution described herein shall be less than 20% of Borrower's
net income after taxes for the fiscal year in which such dividend or similar
distribution is made.
(d) Investment Securities. Purchase any stock, securities, or
evidence of investment or acquire any interest in any other person or
corporation, except direct obligations of the United States government or its
agencies, or engage in any speculative transactions involving commodity
options or futures contracts.
(e) Change of Name or Business; Merger. Change its name; merge
into, consolidate with, or sell or transfer all or substantially all of its
assets to any other person; otherwise change its structure or identity; or
materially change the nature of its business or that of any Subsidiary as now
conducted; or enter any new business.
(f) Loans to Third Parties. Loan or otherwise advance any sum to
any person, except for normal trade credit on the sale of inventory in the
normal course of business and except for expense advances to employees of
Borrower in the normal course of business.
(g) Guaranty Debts of Others. Guaranty or otherwise in any manner
become responsible for the obligations of any other person or corporation,
directly or indirectly, whether by agreement to purchase the indebtedness of
any other person or corporation or otherwise, except by endorsements of
negotiable instruments for collection in the ordinary course of business.
11
(h) Other Borrowings. Borrow any sum of money or incur any other
indebtedness, except for Advances under the Revolving Credit Loan and normal
trade credit on open accounts.
(i) Notes, Accounts Receivable. Sell, assign, transfer, discount
or otherwise dispose of notes, accounts receivable, instruments, chattel paper
or other rights to receive payment, with or without recourse, except for the
purpose of collection in the ordinary course of business.
(j) Disposition of Assets. Sell, lease, transfer or otherwise
dispose of any of its assets, except inventory in the normal course of
business, unless it shall substitute assets having equal or greater value or
utility, which substituted assets, if they are Collateral, shall be subject to
a first, perfected security interest in favor of Lender and shall be free of
all other liens and encumbrances.
(k) Sale-Leaseback Transactions. Enter into any sale and leaseback
agreement with respect to any of its fixed assets.
(l) Sale of Stock in Subsidiaries. Sell or otherwise dispose of
any shares of the stock or securities exchangeable for or convertible into
shares of the stock (or options or warrants to acquire any stock or securities
exchangeable for or convertible into such stock) of any Subsidiary or permit
any of its Subsidiaries to issue, sell or otherwise dispose of any shares of
such Subsidiary's stock, securities exchangeable for or convertible into
shares of such Subsidiary's stock, or options or warrants to purchase any of
the foregoing.
(m) Leases. Lease or commit to lease real or personal property
under operating or capital leases having unpaid lease payments, the cost of
which to Borrower, in the aggregate, would exceed $250,000 per year.
(n) Accounting Practices. Change its accounting methods or
practices, its depreciation or amortization policy or rates or its fiscal year
end from that in existence as of the date hereof, except as required to comply
with law or with GAAP.
(o) Amend Articles of Incorporation. Amend its articles of
incorporation except as required to comply with law.
(p) Affiliate Transactions. Directly or indirectly, purchase,
acquire or lease any property or asset to (i) any director or officer, or (ii)
any business entity, corporation, partnership or association in which
directors or officers have a controlling interest, except upon terms and
conditions not less favorable to such person than if no such relationship
existed.
6. Conditions Precedent to First Advance under Revolving Credit Loan.
Lender shall have no obligation to make any Advances to Borrower under the
Revolving Credit Loan until Lender has received the items listed below and/or
the events described below have occurred, as the case may be:
(a) Loan Documents. The following documents duly executed:
(i) this Agreement;
(ii) the Revolving Credit Note of Borrower;
(iii) the Security Agreement of Borrower;
12
(iv) the Unlimited Continuing Guaranty Agreement of the
Subsidiaries in the form of Exhibit "G" (the "Subsidiary Guaranty"); and
(v) the Collateral Control Agreement among Lender, Borrower
and Numismatic Guaranty Corporation of America.
(b) Financial Statements. Current financial statements of
Borrower, in form and substance satisfactory to Lender and certified as
provided in Section 3(d) hereof.
(c) Insurance Policies. Original, duplicate original or copy of
original which has been certified as true and complete of insurance policy or
policies evidencing (i) comprehensive, all-risk hazard insurance coverage for
the full insurable value of the Collateral; (ii) public liability coverage in
amounts as may be required by or acceptable to Lender; (iii) Workers'
Compensation, if required by law; and (iv) flood insurance, if required by
Lender. All insurance coverage shall be written through a company or
companies reasonably satisfactory to Lender, shall insure against such risks
as may be specified by Lender, including specifically any loss from any act or
neglect of Borrower, and such policy or policies shall incorporate a New York
standard mortgagee clause or other loss payee clause in form and substance
satisfactory to Lender evidencing that Lender is a loss payee thereunder to
the extent of its interest and providing that such policy or policies shall
not be canceled or modified without thirty (30) days' prior written notice to
Lender.
(d) Opinion of Counsel. An opinion letter of ▇▇▇▇▇▇ White ▇▇▇▇▇
Banker P.A., counsel to Borrower, substantially in the form of Exhibit "H"
attached hereto.
(e) Borrowing Resolutions. A copy of the resolution of the Board
of Directors of Borrower certified by Borrower's duly elected or acting
corporate secretary authorizing the execution of this Agreement and other Loan
Documents and authorizing specific officers to execute and deliver this
Agreement and the other Loan Documents.
(f) Certificate of Incumbency. A certificate of incumbency showing
the present officers of Borrower and specimen signatures of said officers.
(g) Certificate of Good Standing; Articles of Incorporation;
Bylaws. A copy of the articles of incorporation and all amendments thereto
together with a certificate of good standing for Borrower certified by the
Secretary of State of the State of Nevada; a certificate of qualification as a
foreign corporation and good standing for Borrower certified by the Secretary
of State of the State of Florida; and a copy of the Bylaws of Borrower
certified by its duly elected or acting corporate secretary.
(h) UCC and Judgment Search. A UCC search from the Nevada
Secretary of State and the Florida Secured Transactions Registry and Clerk of
Circuit Court of the county or counties in which Borrower has a place of
business, showing that the personal property of Borrower is free and clear of
all encumbrances, except security interests in favor of Lender or Permitted
Liens.
(i) Appraisal. A current appraisal of the Collateral, as set forth
in more detail in the Commitment Letter, prepared by an appraiser acceptable
to Lender and showing said Collateral to have a value acceptable to Lender.
13
(j) Schedule of Collateral. A list in form and substance
reasonably satisfactory to Lender of all Collateral, setting forth Appraised
Value and Release Prices.
(k) Other Conditions. Any other documents, or conditions,
described in the Commitment Letter.
7. Conditions to Revolving Credit Advances. On the date of the first
and each subsequent Advance, Borrower shall deliver to Lender a Borrowing Base
Certificate stating the value of the Eligible Collateral as of such date, the
amount of the requested Advance and such other information as Lender shall
require, and the following statements shall be true:
(a) Representations and Warranties. All of the representations and
warranties set forth in Section 3 of this Agreement or in any other Loan
Documents shall be correct on and as of the date of such Advance as though
made on and as of such date, except to the extent that such representations
and warranties expressly relate to an earlier date.
(b) No Default. Borrower shall have observed and performed in all
material respects all of the terms, conditions and agreements set forth herein
or in any other Loan Documents on its part to be observed or performed and no
Event of Default and no Default that, with the giving of notice, passage of
time, or both shall constitute an Event of Default shall have occurred and be
continuing.
(c) Financial Statements. All financial statements, information
and other data furnished by Borrower to Lender are, in all material respects,
accurate and correct; the financial statements have been prepared in
accordance with GAAP, consistently applied, and fairly present in all material
respects the consolidated financial condition of Borrower and its
Subsidiaries; no material adverse changes have occurred since the date of said
statements; and no material liabilities, contingent or otherwise, not shown on
said financial statements, exist.
(d) Liens. No liens, security interests or encumbrances shall have
been filed or recorded against any Collateral, other than liens in favor of
Lender and Permitted Liens, and Borrower has no notice of any intention by any
person to file or record any such liens, security interests or encumbrances
against any Collateral.
(e) Litigation. There are no actions, suits, proceedings, or
claims pending or threatened against or affecting Borrower or any Collateral
or the Borrower's conduct of the Business of the types described in Section
3(h).
8. Default. The happening of one or more of the following events (an
"Event of Default") shall constitute a default of this Loan:
(a) Non-Payment. Nonpayment when due, whether at maturity, on
demand, after acceleration or otherwise, of any payment of principal or
interest.
(b) Non-Performance. Failure by Borrower to perform any agreement,
covenant or obligation under this Agreement or any other Loan Document which
is not cured within thirty (30) days following written notice from the Lender.
14
(c) Other Defaults. Occurrence of an event of default under any
other Loan Document now or hereafter evidencing or securing payment of the
Loan which is not cured within thirty (30) days following written notice from
the Lender.
(d) Misrepresentation. Material falsity of any representation or
warranty made by Borrower in this Agreement or any other Loan Document or in
any certificate, statement, representation, warranty, report, audit or other
writing furnished at any time to Lender by or on behalf of Borrower in
connection with or pursuant to this Agreement or otherwise, or omission of any
material fact necessary in order to make the statements made in any of the
foregoing, in light of the circumstances under which they were made, not
misleading.
(e) Material Adverse Change. The occurrence of a material adverse
change in the consolidated financial condition of Borrower.
(f) Loss of Collateral. The material loss or destruction of or
injury to any Collateral securing payment of the Loan, which loss or
destruction is not covered by insurance, or the condemnation or seizure of any
Collateral without compensation equal to the applicable Release Prices.
(g) Dissolution. Dissolution, whether by voluntary act,
involuntarily, by operation of law or otherwise, of Borrower, and such
dissolution is not cured within thirty (30) days of its occurrence.
(h) Sale of a Majority of Assets. Sale or transfer by Borrower of
all or substantially all of its assets.
(i) Cease Doing Business. If Borrower ceases doing business as a
going concern or substantially changes the nature of its business or commences
the liquidation of its business or its assets.
(j) Change in Control. If the Board of Directors of the Borrower
is changed such that the directors in office as of the date of this Agreement
cease to be a majority of the Board of Directors.
(k) Default under Other Loans. Failure by Borrower or any
Subsidiaries to make any payment of principal or interest, when due, on any
other obligation to pay money to Lender or to any other person, other than
amounts being contested in good faith by appropriate proceedings, or default
by Borrower or any Subsidiaries in the performance of any terms and conditions
of any agreement under which such obligation was created if the effect of such
failure to pay or of such default is to permit the holder(s) to accelerate the
stated maturity of such obligation.
(l) Voluntary Bankruptcy. Filing by Borrower or any Subsidiaries
of a petition in voluntary bankruptcy or seeking relief under any provision of
any bankruptcy, reorganization, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter
in effect, or consenting to the filing of any petition against it under any
such law, or taking any corporate action to authorize such action.
(m) Involuntary Bankruptcy. Filing of a petition against Borrower
or any Subsidiaries under any bankruptcy, reorganization, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, which petition is not
dismissed within sixty (60) days after such filing.
15
(n) Adjudication of Bankruptcy. Adjudication of Borrower or any
Subsidiaries as bankrupt or insolvent.
(o) General Assignment. Making a general assignment by Borrower or
any Subsidiaries for the benefit of its creditors or admitting in writing of
its inability to pay its debts generally as they become due or taking any
corporate action to authorize such action.
(p) Judgments Not Satisfied. Entry of a final judgment for the
payment of money against Borrower or any Subsidiaries in an amount in excess
of $250,000, which judgment is outstanding for more than ninety (90) days from
the date of entry or lifting of any stay unless such judgment is discharged.
(q) Receiverships. Appointment of a receiver, liquidator or
trustee of Borrower or any Subsidiaries, or of any material portion of their
property, or of any Collateral, by court order, which order remains in effect
for more than ninety (90) days; or any Collateral or material portion of the
properties of Borrower or any Subsidiaries is attached or sequestered by court
order, which order remains in effect for more than ninety (90) days.
(r) ERISA. If any fact or circumstance occurs (which occurrence
shall have been continuing for fifteen (15) days) which Lender determines in
good faith constitutes any one of the following:
(i) grounds for the termination of any employee benefit plan
or other plan maintained for employees of Borrower and covered by Title IV; or
(ii) the appointment of a trustee by the appropriate United
States District Court to administer any such plan; or
(iii) the termination of any such plan within the meaning of
such Title IV other than a "standard termination" within the meaning of
Section 4041(b) of ERISA; or
(iv) the institution of proceedings by the PBGC to terminate
any such plan or to appoint a trustee to administer any such plan; or
(v) a material outstanding liability of Borrower which has
resulted from the prior occurrence of any of the events enumerated in clauses
(i) through (iv) above.
(s) Insecurity. If any condition or situation occurs, which, in the
sole determination of Lender, constitutes a danger or impairment to the
security and/or repayment of the Loan, and such condition or situation is not
remedied within thirty (30) days after written notice to Borrower to remedy
such condition or situation.
9. Remedies for Default.
(a) Termination of Advances. Upon the occurrence of any Event of
Default or Default that, with the giving of notice, passage of time, or both,
shall constitute an Event of Default, Lender may, without notice, terminate
this facility with respect to further Advances under the Revolving Credit
Loan, in which event Lender shall have no further obligation to make Advances
as long as said Event of Default or Default shall continue.
(b) Acceleration and Setoff. Upon the occurrence of any Event of
Default, Lender may, by written notice, declare the entire principal and all
interest on the Loan and all other indebtedness of Borrower to Lender, whether
16
Borrower's liability for payment thereof is primary or secondary, direct or
indirect, sole, joint, several, or joint and several, or whether the
indebtedness is matured or unmatured, due or to become due, fixed, absolute or
contingent, to be immediately due and payable and the Loan and all such
indebtedness thereupon shall be and become immediately due and payable, and
Lender may proceed to collect the same by foreclosure, at law, or as otherwise
provided in the instruments, documents and/or agreements signed by Borrower;
provided, however, that in the event that the Loan or any other such
indebtedness is payable on demand, Borrower expressly waives the foregoing
requirement for written notice. In addition, without limiting any other right
of Lender, whenever Lender has the right to declare any indebtedness to be
immediately due and payable (whether or not it has so declared), Lender may
set off against the indebtedness without notice any amounts then owed to
Borrower by Lender in any capacity, whether due or not due, including without
limitation deposits, stocks, bonds and other securities and other assets held
in any custodial accounts, and Lender shall be deemed to have exercised its
right to set off immediately at the time its right to such election accrues.
(c) Cumulative Remedies. All rights, remedies or recourses of
Lender under this Agreement, the Note or any other Loan Documents, under the
Uniform Commercial Code or other law, in equity or otherwise, are cumulative,
and exercisable concurrently, and may be pursued singularly, successively or
together and may be exercised as often as occasion therefor shall arise. No
act of commission or omission by Lender, including, but not limited to, any
failure to exercise, or any delay, forbearance or indulgence in the exercise
of, any right, remedy or recourse hereunder or any other Loan Document shall
be deemed a waiver, release or modification of that or any other right, remedy
or recourse, and no single or partial exercise of any right, remedy or
recourse shall preclude Lender from any other or future exercise of the right,
remedy or recourse or the exercise of any other right, remedy or recourse. No
waiver or release of any such rights, remedies and recourses shall be
effective against Lender unless in writing and manually signed by an
authorized officer on Lender's behalf, and then only to the extent recited
therein. A waiver, release or modification with reference to any one event
shall not be construed as continuing or constituting a course of dealing, nor
shall it be construed as a bar to, or as a waiver, release or modification of,
any subsequent right, remedy or recourse as to a subsequent event.
10. Definitions.
(a) Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Advance" shall mean any disbursement of funds by Lender to or for
the account of Borrower under the Revolving Credit Loan pursuant to Borrower's
request as provided herein.
"Agreement" shall mean this Revolving Credit Agreement, as the same
may be amended, supplemented or modified, in writing, from the time to time.
"Appraised Value" shall mean the appraised value of the Coins as set
forth on Exhibit "D."
"Available Commitment" at a particular time, shall mean an amount
equal to the difference between (a) the amount of the Commitment at such time,
and (b) the aggregate unpaid principal amount of the Revolving Credit Loan
outstanding at such time under the Commitment.
17
"Borrower" shall mean Odyssey Marine Exploration, Inc., a Nevada
corporation and any successor or assign thereof.
"Borrowing Base" shall have the meaning ascribed thereto in Section
1(a)(ii).
"Borrowing Base Certificate" shall mean that certificate of
Borrower described in Section 1(a) hereof.
"Business" shall mean Borrower's operations of locating shipwrecks,
recovering coins and other artifacts and selling coins and other artifacts
recovered from such shipwrecks.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in the State of Florida are authorized or
required by law to close.
"Closing" shall occur on June 24, 2004, at 2:00 P.M. at the offices
of ▇▇▇▇▇ & Lardner LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, or such other place as the parties hereto may agree.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Coins" shall mean the coins recovered by Borrower from the
shipwreck known as "SS Republic," as specifically listed on Exhibit "D."
"Collateral" shall have the meaning ascribed thereto in Section 2
hereof.
"Collateral Control Agreement" shall mean the Collateral Control
Agreement in the form attached hereto as Exhibit "E."
"Commitment" shall mean the maximum amount of the Revolving Credit
Loan that Lender is obligated to make to Borrower pursuant to Section 1(a)
hereof.
"Commitment Fee" shall mean that fee defined in Section 1(h)
hereof.
"Commitment Period" shall mean the period from and including the
date of this Agreement to but not including the Termination Date, or such
earlier date as the Commitment shall terminate as provided herein.
"Consolidated Subsidiaries" shall mean, at any date, all
Subsidiaries of Borrower, the accounts of which have been, or which, in
accordance with GAAP, should be, consolidated with the accounts of Borrower.
"Contingent Liabilities" shall mean operating leases of, and any
third party indebtedness guarantied by, Borrower and its Consolidated
Subsidiaries.
"Credit" shall mean any payment, prepayment or repayment to Lender
by or on behalf of Borrower under the Revolving Credit Loan as provided
herein.
"Custodian" shall mean Numismatic Guaranty Corporation of America,
or any successor or substitute custodian approved in writing by the Lender.
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"Default" shall mean any of the events specified in Section 8
herein, whether or not any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Eligible Collateral" shall mean such good and merchantable Coins,
at Appraised Value, which are not encumbered by the security interest, chattel
mortgage or lien of any person other than Lender, and which are in the custody
of the Custodian.
"Environmental Laws" shall mean any of the Water Pollution Control
Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or
"Superfund Act"), the Superfund Amendments and Reauthorization Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Solid Waste Disposal Act, or any similar laws imposing liability on any person
for the generation, storage, impoundment and disposal, discharge, treatment,
release, seepage, emission, transportation or destruction of any Hazardous
Waste or of any garbage, sewage, effluent, smoke, dust or any other form of
pollution (whether or not denominated as a Hazardous Waste), as the same may
be amended from time to time, and any rules, regulations, or administrative
orders thereunder and any state statutes, laws, rules, regulations, or
administrative orders addressing the same or similar subjects as the foregoing
federal laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" shall mean any of the events specified in Section
8 herein, provided that any requirement for the giving notice, the lapse of
time, or both, or any other condition, has been satisfied.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"Hazardous Waste" shall mean any hazardous, toxic or radioactive
substance, materials or products as defined under any Environmental Laws,
including, but not limited to, petroleum products, ammonia, chlorine,
derivatives of petroleum products, ammonia or chlorine, pesticides, asbestos
and asbestos-containing materials, and polychlorinated biphenyls (PCBs).
"Lender" shall mean THE BANK OF TAMPA, and its successors and
assigns.
"Loan" shall mean the sum of the aggregate principal amount of all
outstanding Advances under the Revolving Credit Loan on any given date, which
Revolving Credit Loan shall be deemed to be a single obligation of Borrower,
secured by all Collateral.
"Loan Document" shall mean any of this Agreement, the Revolving
Credit Note, the Security Agreement, the Collateral Control Agreement, any UCC
Financing Statements, and any other agreements, documents or instruments
relating to the Loan, whether executed prior to, at or after the Closing
hereof, as the same may be amended, supplemented or modified, in writing, from
time to time; and "Loan Documents" shall mean any and all of the foregoing.
"Note" shall mean the Revolving Credit Note.
19
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor agency of the federal government.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity or a government or any agency or political subdivision
thereof.
"Security Agreement" shall mean the Security Agreement in the form
attached hereto as Exhibit "C."
"Revolving Credit Loan" shall mean the aggregate principal amount of
all Advances under Section 1 of this Agreement which are outstanding on any
date.
"Revolving Credit Note" shall be as defined in Section 1(b) hereof.
"Subsidiary" shall mean any corporation of which more than fifty
percent (50%) of the outstanding shares of stock of each class having ordinary
voting power (other than stock having such power only by reason of the
happening of a contingency) is at the time owned by Borrower or by one or more
Subsidiaries; or by Borrower and one or more of its Subsidiaries.
"Termination Date" shall mean June 24, 2005. If such day is not a
Business Day, the preceding Business Day shall be the Termination Date.
(b) Other Definitional Provisions. All terms defined in or
incorporated into this Agreement shall have the same defined meanings when
used in the other Loan Documents or any certificate or other instrument made
or delivered pursuant hereto unless the context otherwise requires. Each
accounting term used but not defined herein, shall have the meaning given to
it under GAAP.
11. Miscellaneous.
(a) Complete Agreement; Conflict Between Loan Documents. This
Agreement, the Note, the Commitment Letter, if any, and any other Loan
Documents executed in connection with this transaction or pursuant to this
Agreement or said Commitment Letter constitute the complete agreement between
the parties hereto with respect to the Loan, and shall be read together, and
the provisions of each shall be deemed supplemental and not in conflict with
each other; however, in the event a court of competent jurisdiction determines
that a direct or unreconcilable conflict exists, the provisions of the Note
and Security Agreement shall prevail over the other documents, and this
Agreement shall prevail over the Commitment Letter and any other prior written
or oral agreements or understandings.
(b) Amendments. No amendment or waiver of any provision of this
Agreement or the Note, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Lender and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(c) Survival of Closing. All representations and warranties
contained herein or made in writing by Borrower and Guarantor in connection
herewith shall survive the execution and delivery of this Agreement and of any
other Loan Documents.
20
(d) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of Borrower and Lender and their respective
successors and assigns, heirs, and personal representatives. Notwithstanding
the foregoing, no part of this Agreement or the obligations hereunder shall be
assigned by Borrower without the prior written consent of Lender.
(e) No Third Party Beneficiaries. This Agreement is a contract
between Lender and Borrower for their mutual benefit and no third person shall
have any right, claim or interest against either Lender or Borrower by virtue
of any provision hereof.
(f) Construction. This Agreement shall not be construed more
strictly against Lender than against Borrower merely by virtue of the fact
that this Agreement has been prepared by counsel for Lender, it being
acknowledged that Borrower has been represented by counsel in the negotiation
and review hereof.
(g) Florida Law. This Agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and governed by
the laws of the State of Florida without regard to the principles of the
conflict of laws of Florida.
(h) Closing Costs and Expenses. Borrower shall pay all costs and
expenses of the Loan, including, but not limited to, filing and recording
fees, documentary stamps, intangible tax, and Lender's attorney's fees and
costs, including any sales or use taxes thereon.
(i) Paragraph Headings. Paragraph headings are for the purpose of
identification only and are not considered as a substantive part of this
Agreement.
(j) Gender; Etc. Whenever the context so requires, the neuter
gender includes the feminine and/or masculine, as the case may be, and the
singular number includes the plural, and the plural number include the
singular.
(k) Severability. Each paragraph, provision, sentence and part
thereof of this Agreement shall be deemed separate from each other paragraph,
provision, sentence or part thereof, and the invalidity or unenforceability
for any reason or to any extent, of any such portion of this Agreement shall
not affect the enforceability of the remaining portions of this Agreement or
of any other Loan Document, or the application of such paragraph, provision,
sentence or part thereof to other persons and circumstances.
(l) Patent Errors. Borrower hereby authorizes and directs Lender
and its agents and employees to correct patent errors and to fill in any
blanks in this Agreement and/or in any exhibit, instrument, document or
agreement related hereto and to attach hereto or thereto any exhibits which
are a part hereof or thereof.
(m) Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately,
constitute a single agreement.
12. Further Assurances. Borrower agrees that, at any time and from time
to time after the execution and delivery of this Agreement, it shall, upon
request of Lender, execute and deliver such further instruments and documents,
including, but not limited to appraisals and proofs of insurance, and do such
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further acts and things as Lender may reasonably request in order to fully
effect the purposes of this Agreement and to protect Lender's interest in the
Collateral.
13. Notices. Notices under this Agreement (and, unless specified
otherwise therein, under any instrument, document or other agreements executed
in connection herewith) shall be sent, postage prepaid, or otherwise delivered
to:
BORROWER: Odyssey Marine Exploration, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
LENDER: THE BANK OF TAMPA
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
or such other addresses as are from time to time furnished in writing by a
party hereto. Such notices shall be deemed received if sent, postage prepaid,
by certified or registered mail, three (3) days after the mailing thereof
(unless earlier received) and otherwise such notices shall be deemed received
upon actual receipt thereof.
14. Jurisdiction and Venue. In the event that legal action is
instituted to enforce or interpret this Agreement or any Loan Document
executed in connection herewith, or to collect the Loan or any other amounts
due from Borrower, Borrower, on behalf of itself and its assigns and
successors, consents to and by execution of this Agreement submits itself to,
the jurisdiction of the courts of the State of Florida, and, notwithstanding
the place of residence of any of them or the place of execution of this
Agreement or such other instrument, document or other agreement, any
litigation relating to this Agreement and to any other Loan Document, whether
arising in contract or tort, by statute or otherwise, shall be brought in
(and, if brought elsewhere, shall be transferred to) a State court of
competent jurisdiction in Hillsborough County, Florida.
15. Attorneys' Fees. In the event the Loan or any other amounts due
Lender under this Agreement or under any other Loan Document executed in
connection herewith is collected by law or through attorneys at law, or under
advice therefrom, Borrower agrees to pay all reasonable costs of collection,
including reasonable attorneys' fees, whether or not suit is brought, and
whether incurred in connection with collection, trial, appeal, bankruptcy or
other creditors' proceedings or otherwise.
16. WAIVER OF JURY TRIAL. BORROWER, BY EXECUTING THIS AGREEMENT OR ANY
OTHER DOCUMENT CREATING SUCH LIABILITY, WAIVES ITS RIGHTS TO A TRIAL BY JURY
IN ANY ACTION, WHETHER ARISING IN CONTRACT OR TORT, BY STATUTE OR OTHERWISE,
IN ANY WAY RELATED TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR LENDER'S EXTENDING CREDIT TO BORROWER AND NO WAIVER OR LIMITATION OF
LENDER'S RIGHTS UNDER THIS PARAGRAPH SHALL BE EFFECTIVE UNLESS IN WRITING AND
MANUALLY SIGNED ON LENDER'S BEHALF.
Borrower acknowledges that the above paragraph has been expressly
bargained for by Lender and that, but for Borrower's agreement thereto, Lender
would not extend the Loan to Borrower for the term and interest rate provided
in the Note.
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17. Closing. The closing of this transaction shall be held upon the
fulfillment of all the conditions and agreements contained herein at the law
offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be designated by Lender.
18. Waiver of Conflicts. Each part to this Agreement acknowledges that
▇▇▇▇▇▇ White ▇▇▇▇▇ Banker P.A. ("▇▇▇▇▇▇ White"), counsel for Borrower, has in
the past and may continue to perform legal services for Lender or its
affiliates in matters unrelated to the transactions described in this
Agreement. Accordingly, each party to this Agreement hereby: (1)
acknowledges that it has had an opportunity to ask for information relevant to
this disclosure; (2) acknowledges that ▇▇▇▇▇▇ White has represented Borrower
in the transactions contemplated by this Agreement and has not represented
Lender in connection with such transactions; and (3) gives its informed
consent to ▇▇▇▇▇▇ White's representation of Lender or its affiliates in such
unrelated matters and to ▇▇▇▇▇▇ White's representation of Borrower in
connection with this Agreement and the transactions contemplated hereby. The
parties further acknowledge that, in the event of any dispute with respect to
the transactions contemplated by this Agreement, ▇▇▇▇▇▇ White may continue to
represent Borrower in such dispute.
EXHIBITS
"A" -- Borrowing Base Certificate
"B" -- Revolving Credit Note
"C" -- Security Agreement
"D" -- Description of Collateral
"E" -- Collateral Control Agreement
"F" -- Pension Plans
"G" -- Subsidiary Guaranty
"H" -- Form of Legal Opinion
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement the
day and year first above written.
WITNESSES: ODYSSEY MARINE EXPLORATION,
INC., a Nevada corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
/s/ R. ▇▇▇▇ ▇▇▇▇▇▇
"BORROWER"
THE BANK OF TAMPA
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice
President
/s/ R. ▇▇▇▇ ▇▇▇▇▇▇
"LENDER"
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EXHIBIT "A" ATTACHED TO AND MADE A PART OF THAT CERTAIN REVOLVING CREDIT
AGREEMENT DATED JUNE 24, 2004, BY AND BETWEEN ODYSSEY MARINE EXPLORATION, INC.
("BORROWER") AND THE BANK OF TAMPA AND ITS SUCCESSORS OR ASSIGNS ("LENDER")
BORROWING BASE CERTIFICATE
The Bank of Tampa Date ______________, 20__
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Pursuant to the Revolving Credit Agreement between us, the undersigned hereby
certifies to you, as of the above date, the following:
1. (A) Appraised Value of Eligible Collateral
consisting of Coins $__________
(B) 25% of Item 1(A) $__________
(A) CURRENT BORROWING BASE $
==========
2. (A) The aggregate unpaid principal Revolving
Credit Loan we now owe Lender is $__________
(B) Less payment included herewith $__________
(C) New unpaid Revolving Credit Loan Balance $__________
(D) Principal amount of Advance now desired,
if any, is $__________
(E) Total of (C) and (D) which will not exceed the
maximum loan limit or 1(C) above $__________
The undersigned hereby certify, represents and warrants to The Bank of Tampa
and its successors or assigns, as follows:
1. All of the representations and warranties contained in the
Revolving Credit Agreement or in any other Loan Document are true
and correct in all material respects on the date hereof, except
to the extent such representations and warranties expressly relate
to an earlier date.
2. No event has occurred, or would result from the Advance made in
connection herewith, that constitutes an Event of Default or a
Default that, with the giving of notice, the passage of time, or
both would constitute an Event of Default under the Revolving
Credit Agreement or any other Loan Document.
3. The description of Eligible Collateral consisting of Coins and the
Appraised Values assigned thereto are true and correct in all
material respects.
4. The aggregate unpaid principal balance of the Revolving Credit Loan
after giving effect to the Advance made in connection herewith does
not exceed the lesser of (i) the Commitment or (ii) the Borrowing
Base.
Unless the context otherwise requires, all capital terms used in this
Certificate if not separately defined herein, shall have the meanings assigned
to them in the Revolving Credit Agreement.
ODYSSEY MARINE EXPLORATION, INC.
By:_______________________________
Its:______________________________
EXHIBIT "D" ATTACHED TO AND MADE A PART OF THAT CERTAIN REVOLVING CREDIT
AGREEMENT DATED JUNE 24, 2004, BY AND BETWEEN ODYSSEY MARINE EXPLORATION, INC.
("BORROWER"), AND THE BANK OF TAMPA AND ITS SUCCESSORS OR ASSIGNS ("LENDER")
DESCRIPTION OF COLLATERAL
1. All of the numismatic quality gold Coins now or hereafter recovered
by Borrower from the shipwreck known as SS Republic (the "Coins"), as
specifically listed on this Exhibit "D," together with additions.
2. All accounts, contract rights, documents, chattel paper (including
electronic chattel paper), instruments, and general intangibles, and all
returned or repossessed goods arising from sales of the Coins (the
"Accounts");
3. All supporting obligations that support the payment or performance of
any of the Coins or Accounts ("Supporting Obligations");
4. All proceeds of insurance policies insuring any of the Coins against
loss (whether or not the Secured Party is a loss payee or additional insured
thereof) and any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to the Coins;
5. All salvage rights of the Borrower with respect to its services in
recovering the Coins; and
6. All proceeds of the foregoing and all rights and privileges incident
to, any of the foregoing.