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Exhibit
10.3
MORTGAGE AND SECURITY
AGREEMENT
THIS MORTGAGE AND SECURITY
AGREEMENT (the “Mortgage”) is executed this 11
th
day of July, 2008, by
ODYSSEY MARINE EXPLORATION, INC. , a Nevada corporation (the
“Mortgagor”), whose address is: 5215 West Laurel
Street, Tampa, Florida 33607, in favor of FIFTH THIRD BANK ,
a Michigan banking corporation (the “Bank”), whose
address is: 201 East Kennedy Boulevard, Tampa, Florida 33602, and
is made in reference to the following facts:
(A) Mortgagor is indebted to
Bank in the principal sum of $2,580,000.00 as evidenced by a
promissory note (the “Note”) of even date herewith
executed by Mortgagor, the terms and conditions of which are
incorporated in and made a part hereof. The Note bears interest at
the rate(s) stated therein, provides for payment of principal and
interest in the manner stated therein and has a maturity date of
July 11, 2013. The Note is an adjustable rate note based on
the Bank’s prime rate plus a premium.
(B) Bank is desirous of
securing the prompt payment of the Note amount and any additional
indebtedness accruing to Bank on account of any future payments,
advances, or expenditures made by Bank in connection with the Note
or this Mortgage or any other instrument securing the Note as set
forth herein.
NOW, THEREFORE, for and in
consideration of Bank making the aforesaid loan to Mortgagor and
for other good and valuable consideration, and to secure the
payment of the aforesaid indebtedness Mortgagor does hereby grant,
bargain, sell, alien, remise, convey and confirm unto Bank all that
certain land of which Mortgagor is now seized and in possession,
situate in Hillsborough County, Florida, more particularly
described in Exhibit “A” attached hereto and by
this reference incorporated herein.
TOGETHER WITH all and
singular the tenements, hereditaments and appurtenances and all
structures, buildings and improvements of every kind and
description now or hereafter on said land, and all heretofore or
hereafter vacated lands adjoining or adjacent to said land which
have or may revert to Mortgagor, and all riparian and littoral
rights, easements, rights, rents, royalties, mineral, oil and gas
rights
Prepared by and Return to:
Kenneth E. Thornton, Esq.
Fisher & Sauls, P.A.
100 Second Avenue S. #701
St. Petersburg, FL 33701
and profits, water, water rights and
water stock appurtenant to the said land, and all fixtures,
machinery, equipment, building materials, appliances and goods of
every nature whatsoever now or hereafter located in, or on, or
used, or intended to be used in connection with the said land,
improvements and appurtenances including, but not limited to, those
for the purposes of supplying or distributing heating, cooking,
electricity, gas, water, air and light; and all elevators and
related machinery and equipment, plumbing, bathtubs, water heaters,
sinks, and other plumbing fixtures, ranges, stoves, refrigerators,
dishwasher, disposals, washers, dryers, awnings, storm windows,
storm doors, screens, blinds, shades, curtains, carpet, attached
floor covering, furniture, antennae, trees, crops and plants, now
or hereafter located in, upon or under said land or any part
thereof and used or usable in connection with any present or future
operation of said land, all of which, including replacements and
additions thereto, shall be deemed to be and remain a part of the
real property covered by this Mortgage.
FURTHER TOGETHER WITH
Mortgagor’s interest as lessor in and to all rents, issues,
income, profits and all accounts receivable generated through the
use by Mortgagor or others of the real or personal property
encumbered by this Mortgage, including any such rents, issues,
income, profits and all accounts receivable of any business
activity conducted by Mortgagor on or through the use of such
property; and the proceeds of all of the foregoing.
All of the above described
property and interests encumbered by this Mortgage being
collectively referred to herein as the
“Property”.
TO HAVE AND TO HOLD the
Property unto the Bank and its successors and assigns
forever.
Mortgagor does hereby
covenant and agree with and promise to the Bank as
follows:
1. Covenants and
Warranties of Title . Mortgagor hereby covenants and agrees
with and warrants to the Bank as follows: (A) that Mortgagor
is the absolute fee simple owner of the Property; (B) that the
Property is and will remain free and clear of all encumbrances
excepting those encumbrances, covenants, restrictions, easements
and reservations set forth in a loan title commitment delivered to
Bank by Mortgagor on the date of delivery of this Mortgage (the
“Permitted Title Exceptions”); (C) that Mortgagor
has full power and lawful right to mortgage and convey the
Property; (D) that no delinquency exists with respect to the
payment of any taxes, assessments, water or sewer charges or other
governmental impositions of any kind levied or assessed on the
Property; (E) that it shall be lawful for Bank at all times to
peacefully enter upon, hold, occupy and enjoy the Property and
every part thereof; (F) that Mortgagor will make such further
assurances to protect the fee simple title to the Property or any
part thereof in the Bank as may be reasonably required; and
(G) that Mortgagor does hereby fully warrant the title to the
Property and will defend the same against the lawful claims of all
persons whomsoever.
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2. Payment . Mortgagor
shall strictly and fully comply with all provisions of this
Mortgage and of the Note secured hereby and with the provisions of
any other instrument securing the Note. Mortgagor shall promptly
pay Bank all sums of money evidenced by the Note as well as all
sums of money required by this Mortgage and in any other instrument
securing the Note, when the same severally become due.
3. Escrow for Taxes and
Insurance . After any default not cured within any applicable
notice and curative periods in this Mortgage or any of the other
documents that evidence and secure the Note, Bank may require at
any time that escrow payments as to taxes, assessments and
insurance be paid to it by Mortgagor, during the term of this
Mortgage. In such event, Mortgagor shall pay to Bank, to the extent
requested by Bank, on dates upon which interest is payable or as
otherwise directed by Bank such amounts as Bank from time to time
estimates is necessary to create and maintain a reserve fund from
which to pay, before the same become due, all insurance premiums,
taxes and governmental assessments relating to the Property as
additional security for the debt secured by this Mortgage. Said
payments may be, at the discretion of Bank, a monthly sum and
amount equal to one-twelfth of the estimated annual insurance
premiums and taxes and assessments upon the Property. In the event
such monthly escrow payments are insufficient to pay for said
insurance premiums, taxes and assessments when due, Bank may demand
of Mortgagor that the amount of such payments be increased and/or
Bank may demand that the difference be paid to it by Mortgagor, and
Mortgagor shall immediately comply with such demands. There shall
be no interest due to Mortgagor on such deposits. Payments from the
reserve fund for these purposes may be made by Bank at its
discretion even though subsequent owners of the Property described
herein may benefit thereby. In the event of any default under this
Mortgage which is not cured within the curative period set forth
herein, Bank, at its discretion and option, may apply all or any
part of the reserve fund to the indebtedness hereby secured. In
refunding any part of the reserve fund, Bank may deal with
whomsoever is represented to be the owner of the Property at that
time.
4. Taxes . Mortgagor
will pay all the taxes, assessments, levies and encumbrances of
every nature on the Property, and upon this Mortgage and Note, or
the money secured or evidenced thereby, before delinquency thereof,
and receipts evidencing payment of said taxes, assessments, levies
and encumbrances shall be exhibited to Bank on or before
March 31 of each succeeding year during the term of this
Mortgage. If the same be not promptly paid when due, Bank may
(without obligation to do so) pay the same, or become purchaser of
any lawful evidence thereof, or certificate therefor, without
waiving or affecting any right under this Mortgage, or the Note
contained, and such payments or expenditures so made shall bear
interest from the date thereof at the maximum rate of interest
permitted by law, from time to time, to be charged by Bank, or if
no specific maximum rate is applicable hereto, at the rate of
18% per annum (such rate hereinafter referred to as the
“Default Rate”) until paid, and any of the sums shall
be repaid to Bank forthwith upon its demand and be in addition to
the payments provided by the Note. All such sums advanced by Bank
shall be secured by the lien of this Mortgage, and Bank shall be
the sole judge of any such tax, assessment, claim, lien or
encumbrance and of the amount necessary to be paid in satisfaction
thereof.
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5. Insurance .
Mortgagor shall keep the buildings and other improvements which are
now, or which hereafter may be erected on the Property, including
any personal property and fixtures described above, constantly
insured for the benefit of Bank against loss by fire and other
losses normally covered by an extended coverage endorsement in an
amount not less than full insurable value so as to preclude any
claims on the part of the insurer for co-insurance, and in addition
shall keep in full force and effect policies of insurance insuring
against such other hazards, casualties, and contingencies as may be
from time to time required by Bank including, but not limited to,
flood insurance if required under the National Flood Insurance Act
of 1968, as amended, public liability insurance, and insurance
against loss of rentals due to any of the foregoing causes. All
insurance required by Bank hereunder shall be subject to the
following:
(A) Policies shall be on such
forms, for such periods, and in such amounts as Bank may require
with companies acceptable to Bank;
(B) All policies shall be
deposited with Bank with premiums fully prepaid;
(C) All policies which insure
against any loss or damage to the Property shall provide for loss
payable to Bank, without contribution by Bank, pursuant to New York
Standard or other mortgagee clause acceptable to Bank, which shall
include a minimum of 30 days advance notice of cancellation of such
policies;
(D) Mortgagor shall deliver
to Bank renewal or replacement policies where necessary in the
performance of this covenant, at least 15 days prior to the
expiration of existing policies together with a paid receipt for
the premium. In the event Mortgagor shall for any reason fail to
comply with and abide by this covenant or any part hereof, Bank may
place and pay for such insurance or any part thereof without
waiving or affecting any option, lien, equity or right under or by
virtue of this Mortgage, and the full amount of each and every such
payment shall be immediately due and payable and shall bear
interest from the date thereof until paid at the Default Rate and
together with such interest shall be secured by the lien of this
Mortgage;
(E) In the event of loss,
Mortgagor shall give immediate notice by mail to Bank, and in the
event Mortgagor shall fail to agree with the insurance companies
involved as to the amount and terms of any loss within 60 days of
the happening of such loss, then Bank may negotiate with and settle
such loss with such insurance companies and neither Bank nor the
insurance companies involved shall, upon such settlement being
made, be liable in any manner to Mortgagor; the right to any return
or refund premiums on any insurance policies is hereby assigned to
Bank as additional security for the Note;
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(F) Bank shall have the
right, in its sole discretion, to apply any proceeds received from
insurance policies, or any part thereof, to the payment of the Note
or other sums secured hereby, provided however, the Bank may apply
such amounts toward the repair or restoration of the damaged
Property on terms and conditions acceptable to and prescribed by
Bank, if in the Bank’s reasonable discretion it is determined
that: (1) there is not an existing event under the Loan
Documents which is a default or which, with notice or the passage
of time could be a default under the Loan Documents; (2) the
damage from the loss is thirty percent (30%) or less than the
structural value of the improvements on the Property; (3) the
insurance proceeds together with any other funds available to the
Mortgagor are sufficient to allow complete reconstruction of the
damage; (4) the improvements as reconstructed will have equal
or greater economic value than the value of improvements prior to
the damage; and, (5) the reconstruction can be completed
within ninety (90) days from commencement. The Bank shall
permit utilization of the loss proceeds for reconstruction with
proceeds and any additional required funds to be held and
distributed by the Bank on such terms as Bank in its discretion
determines, as reconstruction progresses.
(G) In the event of a
foreclosure of this Mortgage, the purchaser of the Property shall
succeed to all the rights of Mortgagor, including any rights to the
proceeds of insurance and to unearned premiums, in and to all
policies of insurance assigned and delivered to Bank pursuant to
this paragraph.
6. Condemnation . In
the event Mortgagor is served with process or otherwise notified of
a condemnation action or any other action which involves a taking
of the Property or any part thereof, Mortgagor shall notify Bank in
writing of such within five (5) days from the date of service
of process or such other notification. Mortgagor hereby authorizes
Bank as attorney-in-fact for Mortgagor to, at Bank’s option
commence, appear in and prosecute, in Bank’s or
Mortgagor’s name, any action or proceeding relating to such
taking of the Property and to settle or compromise any claim in
connection with such condemnation or taking. All sums paid by the
Bank in connection with any condemnation actions or proceedings,
including reasonable attorney fees and costs, shall be paid by
Mortgagor, and any such fees and costs if not promptly paid with
interest thereon at the Default Rate, shall be secured by the lien
of this Mortgage. The proceeds of any award or claim for damages,
direct or consequential, in connection with any condemnation or
other taking of the Property or any part thereof, or for conveyance
in lieu of condemnation, are hereby assigned and shall be paid to
Bank. Bank shall not be held responsible for any failure to collect
any award or awards, regardless of the cause of such failure. Any
such award or awards received by Bank may, at its option, be used
in restoring the Property on terms and conditions acceptable to and
prescribed by the Bank or be held as security for the Note. In the
event any part of the improvements located on the Property are
included in the condemnation, then Bank may, at its option, expend
such portion of the award as may be necessary to protect the
improvements remaining after the condemnation from physical damage
resulting therefrom.
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7. Alteration and Use of
the Property . Unless required by applicable law or unless Bank
has otherwise agreed in writing, Mortgagor shall not allow changes
in the nature of the occupancy for which the Property was intended
at the time this Mortgage was executed. Mortgagor shall not
initiate or acquiesce in a change in the zoning classification of
the Property without Bank’s written consent. Mortgagor shall
not make any change in the use of the Property which will create a
fire or other hazard not in existence on the date hereof, nor shall
Mortgagor in any way increase any hazard. Without the prior written
consent of Bank, no building or improvement may be erected on the
Property, nor may Mortgagor structurally remove, demolish or
materially alter any building or improvement, in any way that would
change the use of the Property or that would decrease its value,
nor shall any fixture or personal property covered by this Mortgage
be removed at any time unless simultaneously replaced by an article
of equal kind, quality and value owned by Mortgagor, and which is
unencumbered except by the lien of this Mortgage and other
instruments of security securing the Note.
8. Surface Alteration and
Mineral Rights . Mortgagor shall not consent to, permit or
indulge in any entry, either by itself or by any others, upon the
surface of the Property for the purpose of exploration, drilling,
prospecting, mining, excavation or removal of any earth, sand,
dirt, rock, minerals, oil or any other substance without the
Bank’s approval and written consent.
9. Repair, Waste and
Construction Lien . Mortgagor shall keep the Property, and all
equipment, appurtenances and accessories constantly in good order
and repair; shall comply with all laws, ordinances, and regulations
now or hereafter affecting the Property or any part thereof; and
shall not permit, suffer or commit any waste, impairment or
deterioration of the Property, or any part thereof. Bank may demand
the immediate repair of the improvements, or any appurtenances, or
any seawall on or protecting the Property. Failure of Mortgagor to
comply with the demand of Bank for a period of 30 days after
receipt of written notice shall constitute a breach of this
Mortgage, and at the option of Bank and the Bank may, without
notice, institute proceedings to foreclose this Mortgage and apply
for the appointment of a Receiver, as hereinafter provided. In
addition, in the event any construction liens are filed against the
Property, or any part thereof, Mortgagor shall cause the same to be
discharged, paid, bonded or otherwise satisfied so that it no
longer affects the Property within 30 days after receipt of notice
by Mortgagor of the filing thereof, or within ten days after a suit
for the foreclosure thereof has been filed, whichever date is
earlier. Should Mortgagor fail to comply with this covenant, Bank
may, at its option, advance funds to repair and protect the
Property, or to remove uncontested construction liens without
waiving or affecting any option, lien, equity or right under or by
virtue of this Mortgage, and the full amount of such payment shall
be immediately due and payable and shall bear interest from the
date thereof until paid at the Default Rate and together with such
interest shall be secured by the lien of this Mortgage.
10. Assignment of
Rents . Mortgagor, as additional security does hereby assign,
transfer and set over
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