Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On October 1, 2016, Odyssey Marine Exploration, Inc. (Odyssey) and Odyssey Marine Enterprises, Ltd., an indirect, wholly owned
subsidiary of Odyssey (OME), entered into an Amended and Restated Note Purchase Agreement (the Restated Note Purchase Agreement) with Epsilon Acquisitions LLC (Epsilon). Epsilon is an investment vehicle controlled
by Mr. Alonso Ancira.
Pursuant to the Restated Note Purchase Agreement, Epsilon agreed to lend an aggregate of $6.0 million to OME,
$3.0 million of which has already been advanced. Subject to the satisfaction or waiver of the conditions set forth in the Restated Note Purchase Agreement, Epsilon will lend the remaining $3.0 million to OME upon request by OME. The indebtedness is
evidenced by an amended and restated secured convertible promissory note (the Restated Note) and bears interest at a rate equal to 10.0% per annum. Unless otherwise converted as described below, the entire outstanding principal
balance under the Restated Note and all accrued interest and fees are due and payable on March 18, 2017. Odyssey unconditionally and irrevocably guaranteed all of OMEs obligations under the Restated Note Purchase Agreement and the
Restated Note.
Epsilon has the right to convert all amounts outstanding under the Restated Note into shares of Odyssey common stock upon
75 days notice to OME or upon a merger, consolidation, third party tender offer, or similar transaction relating to Odyssey at the applicable conversion price, which is (a) $5.00 per share with respect to the $3.0 million already advanced
under the Restated Note and (b) with respect to additional advances under the Restated Note, the five-day volume-weighted average price of Odysseys common stock for the five trading day period ending on the trading day immediately prior
to the date on which OME submits a borrowing notice for such advance. Upon the occurrence and during the continuance of an event of default, the conversion price will be reduced to one-half of the otherwise applicable conversion price. Pursuant to
an Amended and Restated Waiver and Consent (the Restated Waiver) to the Stock Purchase Agreement, dated as of March 11, 2015 (as amended, the Stock Purchase Agreement), among Odyssey, Penelope Mining LLC
(Penelope), and Minera del Norte, S.A. de C.V. (Minosa) executed in connection with the Restated Note Purchase Agreement, following any conversion of the indebtedness evidenced by the Restated Note, Penelope may elect to
reduce its commitment to purchase preferred stock of Odyssey under the Stock Purchase Agreement by the amount of indebtedness converted by Epsilon.
Pursuant to the Restated Waiver, Odyssey agreed to waive its rights to terminate the Stock Purchase Agreement in accordance with the terms
thereof until March 31, 2017. The obligations under the Restated Note may be accelerated upon the occurrence of specified events of default including (a) OMEs failure to pay any amount payable under the Restated Note on the date due
and payable; (b) OMEs or Odysseys failure to perform or observe any term, covenant, or agreement in the Restated Note or the related documents, subject to a five-day cure period; (c) the occurrence and expiration of all
applicable grace periods, if any, of an event of default or material breach by OME, Odyssey or any of their affiliates under any of the other loan documents; (d) the termination of the Stock Purchase Agreement; (e) commencement of certain
specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions by or against OME or any of its subsidiaries, in specified circumstances unless dismissed or stayed within 60 days; (f) the entry of a
judgment or award against
OME or any of its subsidiaries in excess of $100,000; and (g) the occurrence of a change in control (as defined in the Restated Note).
Pursuant to amended and restated pledge agreements (the Restated Pledge Agreements) entered into by Odyssey, OME, and Marine
Exploration Holdings, LLC (collectively, the Odyssey Pledgors) in favor of Epsilon, the Odyssey Pledgors pledged and granted security interests to Epsilon in (a) the 54 million quotas (a unit of ownership under Panamanian law)
of Oceanica Resources S. de R.L. (Oceanica) held by OME, (b) all notes and other receivables from Oceanica and its subsidiary owed to the Odyssey Pledgors, and (c) all of the outstanding equity in OME.
In connection with the execution and delivery of the Restated Note Purchase Agreement, Odyssey and Epsilon entered into an amended and
restated registration rights agreement (the Restated Registration Rights Agreement) pursuant to which Odyssey agreed to register the offer and sale of the shares (the Conversion Shares) of Odyssey common stock issuable upon
the conversion of the indebtedness evidenced by the Restated Note. Subject to specified limitations set forth in the Restated Registration Rights Agreement, including that Odyssey is eligible to use Form S-3, the holder of the Restated Note can
require Odyssey to register the offer and sale of the Conversion Shares if the aggregate offering price thereof (before any underwriting discounts and commissions) is not less than $3.0 million. In addition, Odyssey agreed to file a registration
statement relating to the offer and sale of the Conversion Shares on a continuous basis promptly (but in no event later than 60 days after) after the conversion of the Restated Note into the Conversion Shares and to thereafter use its reasonable
best efforts to have such registration statement declared effective by the Securities and Exchange Commission.
In connection with the
execution and delivery of the Restated Note Purchase Agreement, Odyssey also delivered to Epsilon a common stock purchase warrant (the Warrant) pursuant to which Epsilon has the right to purchase up to 120,000 shares of Odysseys
common stock at an exercise price of $3.52 per share, which exercise price represents the five-day volume-weighted average price of Odysseys common stock for the five trading day period ending on the trading day immediately prior to the day on
which the Warrant was issued. Epsilon may exercise the Warrant in whole or in part at any time during the period ending October 1, 2021. The Warrant includes a cashless exercise feature and provides that, if Epsilon is in default of its
obligations to fund any advance pursuant to and in accordance with the Restated Note Purchase Agreement, then, thereafter, the maximum aggregate number of shares of common stock that may be purchased under the Warrant shall be the number determined
by multiplying 120,000 by a fraction, (a) the numerator of which is the aggregate principal amount of advances that have been extended to the OME by Epsilon pursuant to the Restated Note Purchase Agreement on or after the date of the Warrant
and prior to the date of such failure and (b) the denominator of which is $3.0 million.
The Restated Note Purchase Agreement, the
Restated Note, the Restated Pledge Agreements, the Restated Registration Rights Agreement, and the Warrant include representations and warranties and other covenants, conditions, and other provisions customary for comparable transactions.
The foregoing descriptions of the Restated Note Purchase Agreement, the Restated Note, the Restated Waiver, and the Warrant are summaries and
do not purport to be complete descriptions of all of the terms of such documents and are qualified in their entirety by reference to such documents, which are attached hereto as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively.