| Item 1.01. | Entry Into a Material Definitive Agreement. |
As previously reported, as of January 31, 2020, Odyssey Marine Exploration, Inc. (“Odyssey”), Exploraciones Oceánicas S. de R.L. de C.V., a Mexican company (“ExO” and, together with Odyssey, the “Claimholder”), and Poplar Falls LLC (the “Funder”) entered into an Amended and Second Restated International Claims Enforcement Agreement (the “Original Agreement”), pursuant to which the Funder agreed to provide and has provided financial assistance to the Claimholder to facilitate the prosecution and recovery of the claim by the Claimholder against the United Mexican States under Chapter Eleven of the North American Free Trade Agreement (“NAFTA”) for violations of the Claimholder’s rights under NAFTA related to the development of an undersea phosphate deposit off the coast of Baja Sur, Mexico (the “Project”), Odyssey Marine Exploration, Inc. on its own behalf and on behalf of Exploraciones Oceánicas S. de R.L. de C.V. and United Mexican States (the “Subject Claim”). Pursuant to the Original Agreement, the Funder agreed to pay for the purpose of funding specified fees and expenses regarding the Subject Claim (the “Claims Payments”) incrementally and at the Funder’s sole discretion.
On December 12, 2020, the Claimholder and the Funder entered into a Second Amended and Restated International Claims Enforcement Agreement (the “Second Restated Agreement”) relating to the Subject Claim. Under the terms of the Second Restated Agreement, the Funder has made and agreed to make Claims Payments in an aggregate amount not to exceed $20,000,000 (the “Maximum Investment Amount”). The Maximum Investment Amount has been or will be made available to the Claimholder as set forth below:
(a) a first phase, in which the Funder made Claims Payments in an aggregate amount of $1,500,000 for the payment of antecedent and ongoing costs (“Phase I Investment Amount”);
(b) a second phase, in which the Funder made Claims Payments in an aggregate amount of $6,300,000 for the purposes of pursuing the Subject Claim to a final award (“Phase II Investment Amount”);
(c) separate and apart from Phase I Investment Amount and Phase II Investment Amount, the Claimholder had the option to request up to US $2,200,000 (“Arbitration Support Amount”) for the purpose of paying the Claimholder’s litigation support costs in connection with the Subject Claim (“Arbitration Support Funds”); and
(d) a third phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than $10,000,000 for the purposes of pursuing the Subject Claim to a final award (“Phase III Investment Amount”).
As of the effective date of the Second Restated Agreement, each of the Phase I Investment Amount, the Phase II Investment Amount, and the Arbitration Support Amount has been funded in full. The Phase III Investment Amount is a new feature not included in the Original Agreement. As of the effective date of the Second Restated Agreement, the Funder has retained closing fees in an aggregate amount equal to $560,000 from the Phase I Investment Amount, the Phase II Investment Amount, the Arbitration Support Amount, and the Phase III Investment Amount to pay third parties in connection with due diligence and other administrative and transaction costs incurred by the Funder prior to and in furtherance of execution of the Second Restated Agreement. The retained closing fees are included in the amounts stated as funded above.
