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Exhibit
10.1
REVOLVING
CREDIT
LOAN AND SECURITY
AGREEMENT
THIS REVOLVING CREDIT LOAN
AND SECURITY AGREEMENT (the “Loan Agreement”) is made
as of this day of February, 2008,
effective as of February 8, 2008, among FIFTH THIRD
BANK , a Michigan banking corporation, having a mailing address
of 201 East Kennedy Boulevard, Suite 1800, Tampa, Florida 33602
(the “Bank”) and ODYSSEY MARINE EXPLORATION,
INC. , a Nevada corporation, authorized to do business in
Florida, having its principal place of business at 5215 West Laurel
Street, Tampa, Florida 33607 (“Borrower”).
RECITALS:
Borrower has applied to Bank
for a revolving line of credit not to exceed FIVE MILLION DOLLARS
($5,000,000.00) (the “Loan”) to be evidenced by a
revolving credit note (the “Note”) and secured by
inventory consisting of all gold and silver coins recovered from
the S.S. Republic shipwreck.
NOW, THEREFORE, in
consideration of the premises and covenants hereinafter contained,
the parties hereto agree as follows:
SECTION I. RECITALS;
DEFINITIONS
1.1 Recitals .
The foregoing recitals are true and correct and incorporated herein
by reference.
1.2 Defined
Terms . As used in this Loan Agreement, the following terms
shall have the following meanings:
“Advance” shall
mean the amount advanced by the Bank to Borrower under the terms of
this Loan Agreement and the Note.
“Affiliate” shall
mean any person, corporation, association or other business entity
which directly or indirectly controls, or is controlled by, or is
under common control with Borrower.
“Borrowing Base”
shall mean, an amount equal to thirty percent (30.0%) of
Eligible Inventory. The Bank has bargained for and Borrower agrees
and acknowledges that the value of Inventory not included in the
Borrowing Base is a cushion of collateral value in excess of the
Advances.
“Borrowing Base
Certificate” shall mean a certificate prepared by Borrower in
substantially the form attached hereto as Exhibit
“A.”
“Coins” shall
mean all of the all gold and silver coins recovered from the S.S.
Republic shipwreck held primarily by the Custodian under the
Custodial Agreement.
“Collateral”
shall have the meaning provided for such term in
Section 2.1(h) hereof.
“Control
Agreement” shall mean the Collateral Control Agreement
entered into by Borrower, the Bank and the Custodian.
“Custodial
Agreement” shall mean the letter agreement between Borrower
and the Custodian dated December 3, 2003, for the grading,
conservation and imaging of the Inventory.
“Custodian” shall
mean Numismatic Guaranty Corporation of America.
“Default Rate”
shall mean five percent (5%) per annum above the contract rate
as set forth in the Note, but not exceeding 18% per
annum.
“Eligible
Inventory” shall mean, all Coins Inventory and proceeds
therefrom, owned by Borrower and held primarily by the Custodian,
valued on the rolling 12 month wholesale average value of the
Coins, excluding all (a) Inventory used for display or
demonstration purposes and (c) Inventory on consignment with
vendors of the Borrower. The eligibility of Inventory shall be
determined by the Bank in its reasonable commercial
discretion.
“Events of
Default” shall have the meaning ascribed to such term in
Section 7 hereof.
“Generally Accepted
Accounting Principles” shall mean generally accepted
accounting principles, in effect from time to time, applied on a
consistent basis.
“Inventory” shall
mean all of the gold and silver coins recovered by Borrower from
the shipwreck known as the S.S. Republic currently held in
inventory (within the meaning of the Uniform Commercial Code, as
from time to time in effect in the States of Nevada and Florida),
primarily by the Custodian estimated to currently number
approximately 33,000 Coins now or hereafter owned or acquired,
including, without limitation, all Inventory held for sale, all
accessions, additions, substitutions and replacements thereto and
therefore.
“Maturity Date”
shall mean, unless sooner demanded by Bank after the occurrence of
an Event of Default hereunder, 24 months from the date
hereof.
“Permitted Liens”
means: (a) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure
payment of
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utility payments, bids, tenders,
contracts (other than contracts for payment of money), obligations
under workers’ compensation, unemployment insurance or
similar legislation or under surety or performance bonds, in each
case arising in the ordinary course of business; (b) Liens
arising out of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which Borrower is fully protected by
insurance or in respect of which Borrower shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, and as to which
appropriate reserves have been established on the books of
Borrower; (c) 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; (d) 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;
(e) any such permitted encumbrances existing as of the date
hereof; and (f) the lease by Borrower of equipment under
operating and capital lease for which total payments shall not, in
the aggregate, exceed $250,000.00 per year.
SECTION 2. THE
LOAN
2.1 Revolving
Loan .
(a) Advances .
Subject to the Borrowing Base limitations and subject to
Bank’s receipt of a completed Borrowing Base Certificate,
Bank agrees to make Advances to Borrower in accordance with the
terms and conditions of this Loan Agreement, at any time and from
time to time, on or after the date hereof until the Maturity Date,
or until the occurrence of an event which with the giving of notice
or the passage of time, or both, shall constitute an Event of
Default. Such Advances may be borrowed, re-paid and re-borrowed,
provided, however, the aggregate outstanding principal amount of
all Advances shall not exceed $5,000,000.00. On or after the date
hereof until the Maturity Date, or until the occurrence of an event
which with the giving of notice or the passage of time, or both,
shall constitute an Event of Default, Borrower shall be entitled to
borrow, repay or prepay and reborrow, by delivering to the Bank a
request for Advance in accordance with Section 2.1(d)
hereof.
(b) Interest .
The Bank shall make appropriate debits and credits to the loan
account of Borrower corresponding to each Advance to reflect the
Advances to, prepayments, payments by and other disbursements for
the account of Borrower. Each such entry shall be prima facie
evidence of the principal amount of Advances hereunder at any time
outstanding. Each Advance shall bear interest from the date such
Advance is made on the aggregate unpaid principal amount thereof
until such principal amount is paid or shall become due and payable
(whether at the stated maturity or by acceleration) pursuant to the
terms of and at a rate per annum as set in the Note.
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(c) Calculation
. Interest on principal outstanding from time to time shall be paid
monthly, and shall be calculated on the basis of a 360-day year for
the actual days elapsed as provided in the Note.
(d) Requests for
Advances . Borrower shall request Advances under the Loan
by delivering to the Bank a notice in writing, in form and
substance reasonably satisfactory to the Bank, together with any
supporting information it may reasonably request, at the above
address. Advances may also be automatically initiated by overdrafts
under the daily sweep provisions of Borrower’s primary
depository account as required hereunder.
(e) Commitment
. The giving of notice as aforesaid shall irrevocably commit
Borrower to accept the requested Advances under the
Loan.
(f) Unused Line
Fee . Commencing at the end of 12 months from the date
hereof, on the 15th day following the end of each calendar quarter,
Borrower shall pay to the Bank an unused line fee equal to 50 basis
points (0.50%) per annum times the difference between: (i) $5
million, and (ii) the average daily balance of the Loan
outstanding during the immediately preceding calendar
quarter.
(g) Limitation
. In no event shall any interest charge, collected or reserved
hereunder exceed the maximum rate then permitted by applicable
law.
(h) Collateral
. From the date hereof as security for the payment and the
performance of the Loan, Borrower extends, sells, assigns, conveys,
mortgages, pledges, transfers, grants, and re-grants to the Bank a
continuing, first priority security interest in and to all of its
respective rights, title and interest in, to and under all
(A) Coins Inventory; (B) books and records regarding the
Collateral; (C) all interest of Borrower under the Custodial
Agreement; and (D) all other property and money of Borrower
now or hereafter in the possession, custody or control of the Bank
excluding investment accounts; and as to each of the foregoing, the
products and proceeds thereof, replacements and accessions thereto;
all of which shall constitute the
“Collateral.”
(i) Loan
Subordinations . Any related party notes payable by
Borrower to related parties, now existing or hereafter made are and
shall be subordinated to the lien of the Loan granted herein.
Borrower confirms that all related party debts are fully disclosed
on the financial statements provided to the Bank and in the event
the Bank so requires, such related parties shall enter into
subordination agreements to evidence the requirements of this
Section 2.1(i).
SECTION 3. REPRESENTATIONS
AND WARRANTIES
Borrower represents and
warrants to the Bank as follows:
3.1 Organization,
Standing, Corporate Powers
(a) Duly
Organized . Borrower (i) is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Nevada and is authorized to do business in the
State of Florida; (ii) has all requisite power and authority,
corporate or otherwise, to conduct its business as now being
conducted and to own its properties and assets; and (iii) is
duly qualified to do business in every jurisdiction wherein the
failure to so qualify would have a material adverse
effect.
(b) Powers .
Borrower has all requisite power and authority, corporate or
otherwise, to execute, deliver, and to perform all of its
obligations under this Loan Agreement and under other documents or
agreements relating to the transactions contemplated herein to
which it is a party.
(c) Binding
Obligation . This Loan Agreement and all corporate notes,
guarantees, assignments, security agreements and all other loan and
security agreements executed in connection therewith are legal,
valid and binding obligations of Borrower and enforceable in
accordance with their respective terms, subject to the enforcement
of remedies to bankruptcy, insolvency and other laws affecting
creditors’ rights generally and to moratorium laws, from time
to time in effect, and to general equitable principles which may
limit the right to obtain the remedy of specific
performance.
3.2 Authorization of
Borrowing. The execution, delivery and performance of this
Loan Agreement and the borrowings hereunder: (a) have been
duly authorized by all requisite corporate action; (b) will
not violate any provision of applicable law, any governmental rule
or regulation, any order of any court or other agency of government
to which Borrower is subject or the articles of incorporation or
by-laws of Borrower; or (c) do not violate any provision of
any indenture, agreement or other instrument to which Borrower is a
party or by which Borrower or its properties or assets are bound
and which is material to the conduct or operation of
Borrower’s business and financial affairs, or conflict with,
result in a breach of or constitute (with due notice or lapse of
time or both) a default under any provision of such indenture,
agreement or other instruments, or result in the creation or
imposition of any lien, charge or encumbrance of any nature
whatsoever upon the property or assets of Borrower, other than as
provided herein.
3.3 Financial
Statements . Borrower has heretofore furnished to the Bank
financial statements which fairly present the financial condition
and the results of operations of Borrower as of the date and for
the period indicated, show all known material liabilities, direct
or contingent, as of the respective dates thereof, and were
prepared in accordance with Generally Accepted Accounting
Principles applied on a consistent basis.
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3.4 Adverse Change,
etc. There has been no material adverse change in the
business, properties or condition (financial or otherwise) of
Borrower since the date of the most recent of the financial
statements delivered to the Bank.
3.5 Litigation
. Except as described in the reports (the “SEC
Reports”) filed by Borrower with the Securities and Exchange
Commission (the “SEC”), there are no actions, suits or
proceedings pending or, to the knowledge of Borrower, overtly
threatened against or affecting any of them, at law or in equity,
or before or by any Federal, state, municipal or other governmental
court, tribunal, department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which involve any of the
transactions herein contemplated or the possibility of any judgment
or liability which would result in any material adverse change in
the business, operations, properties or assets or in the financial
condition of any of them, or materially and adversely affect the
ability of any of them to perform hereunder. Borrower is not in
default with respect to (a) any judgment, order, writ,
injunction or decree; or (b) any rule or regulation of any
court or Federal, state, municipal or other governmental court,
tribunal, department, commission, board, bureau, agency or
instrumentality, domestic or foreign which would have a material
adverse effect on its business, properties or condition (financial
or otherwise).
3.6 Payments of
Taxes . Borrower has filed or caused to be filed all
Federal, state and local tax returns that are required to be filed
and has paid or caused to be paid all taxes as shown on such
returns or on any assessment received by it, to the extent that
such taxes have become due, except taxes the validity of which is
being contested in good faith by appropriate proceedings and for
which, in the exercise of reasonable business judgment, there have
been set aside adequate reserves with respect to any such tax or
assessment so contested the tax or assessment so contested shall
not materially affect its ability to perform hereunder.
3.7 Priority of
Security Interest . Subject (a) to filing and
recordation of the appropriate instruments in the appropriate
offices of the proper jurisdiction or possession by the Bank or its
agent where perfection is based upon possession; (b) to the
enforcement of remedies to bankruptcy, insolvency, and other laws
affecting creditors’ rights generally and to moratorium laws,
from time to time in effect; and (c) to general equitable
principles which may limit the right to obtain the remedy of
specific performance, each of the security interests granted to the
Bank as identified under Section 2 of this Loan Agreement
constitutes a valid first priority security interest or lien in and
to the Collateral, granting all rights and remedies to a secured
party under the Uniform Commercial Code, as in effect in the States
of Nevada and Florida, as the same may be modified or amended from
time to time, except as otherwise permitted hereunder.
3.8 Eligible
Inventory . All Eligible Inventory included in the
Borrowing Base meets the criteria for Eligible
Inventory.
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3.9 Location of
Collateral . All of the Collateral is used or held for use
by Borrower at the following locations: (a) the Custodian:
5501 Communication Parkway, Sarasota, Florida 34240; (b) the
Borrower: 5215 West Laurel Street, Tampa, Florida 33607; and
(c) the Bank of Tampa, 4600 West Cypress Street, # 100, Tampa,
Florida 33607.
SECTION 4. CONDITIONS OF
LENDING
The obligation of the Bank to
extend credit hereunder is subject to the following
conditions:
4.1 Representations and
Warranties . At the date of each Advance, the
representations and warranties set forth in Section 3 hereof
shall be true and correct on and as of such date, with the same
effect as though such representations and warranties had been made
on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier
date.
4.2
Certificates . On or before the date hereof, the Bank
shall have received from Borrower (a) a copy of its
certificate of corporate status and Articles of Incorporation with
all amendments, certified by the Secretary of State of Nevada and
certificate of registration to do business from the Secretary of
State of Florida, dated as of a recent date; (b) the
certificate of its secretary or assistant secretary, dated the date
hereof and certifying that attached thereto is a true and complete
copy of its Bylaws prior to the adoption of the resolutions by its
Board of Directors authorizing the execution, delivery and
performance of this Loan Agreement; and certification that its
articles of incorporation have not been amended since the date of
the last amendment thereof, if any, indicated on the certificate of
the Secretary of State of Nevada; and (c) such other documents
as the Bank may reasonably request.
4.3 No Default
. At the date of each Advance no Event of Default, or event which
with the giving of notice or of the passage of time, or both, would
constitute an Event of Default, shall have occurred and be
continuing, and the representations and warranties of Borrower
contained herein shall remain true and correct as of such date,
except to the extent that such representations and warranties
relate to an earlier date. Each request for an Advance shall
constitute the confirmation by Borrower that at the date thereof
the conditions contained in this Section 4.3 shall have been
satisfied.
SECTION 5. AFFIRMATIVE
COVENANTS
From the date hereof and so
long as the Loan shall be unpaid or unperformed, Borrower
will:
5.1 Existence and
Properties. To the extent that the same are necessary for
the proper and advantageous conduct of its business, do or cause to
be done all things necessary to preserve, renew and keep in full
force and effect its corporate existence, rights, licenses and
permits and comply with all laws and regulations applicable to it
and conduct and operate its business in substantially the manner in
which it is presently conducted and operated.
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5.2 Insurance .
Have and maintain with financially sound and reputable insurers,
insurance satisfactory in all respects to the Bank covering the
Collateral against risk of fire, theft, and such other risks as the
Bank may reasonably require, including standard extended coverage
in an amount at least equal to the value of the Collateral.
Policies evidencing any such property insurance shall contain a
standard loss payee provision providing for payment of any loss to
Bank and shall provide for a minimum of thirty (30) days prior
written notice to the Bank of any cancellation. At any time after
the occurrence of an Event of Default or the occurrence of an event
which with the giving of notice or the passage of time, or both,
shall constitute an Event of Default, the Bank may act as
attorney-in-fact for Borrower in obtaining, adjusting, settling,
and canceling such insurance and endorsing any drafts representing
payments of claims under such policies. Borrower hereby assigns to
the Bank all rights to receive proceeds of such insurance and
directs any insurer to pay all proceeds directly to the Bank, for
application in the Bank’s sole discretion to the payment of
the Secured Obligations or to the restoration or repair of the
Collateral. If Borrower at any time fails to maintain the insurance
required hereunder, the Bank may purchase the same and charge
Borrower for such amount, which amount shall be payable upon
demand, and if unpaid, shall constitute a secured obligation
hereunder. Borrower shall furnish the Bank with certificates or
other evidence of compliance with these insurance
provisions.
5.3 Obligations, Taxes
and Laws . Pay or cause to be paid all indebtedness and
obligations promptly and in accordance with their respective terms,
including, without limitation, sales, use and personal property
taxes as the same may be imposed upon Borrower from time to time,
and pay and discharge or cause to be paid and discharged promptly
all taxes, assessments, and governmental charges or levies imposed
upon it or in respect of its property before the same shall become
in default, as well as all lawful claims for labor, materials, and
supplies or otherwise which, if unpaid, might become a lien or
charge upon such property or any part thereof, and timely comply
with all applicable laws and governmental rules and regulations;
provided, however, that Borrower shall not be required to pay or
discharge or cause to be paid or discharged any such tax,
assessment, charge, lien or claim, or timely comply with the laws
and governmental rules so long as the validity thereof shall be
contested by appropriate legal proceedings timely initiated and
conducted in good faith, and (a) in the case of an unpaid tax,
assessment, governmental charge or levy, lien, encumbrance, charge
or claim, such proceedings shall be effective to suspend the
collection thereof from the Borrower and its property;
(b) neither such property nor any part thereof, nor any
interest ther
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