MEMORANDUM OF UNDERSTANDING Omagine, Inc. Journey of Light, Inc. Consolidated Contractors International Company, S.A. and Omani Union Real Estate Development Company LLC Dated: June 8, 2008
Exhibit
10.6
|
MEMORANDUM
OF UNDERSTANDING
|
|
Journey
of Light, Inc.
|
|
Consolidated
Contractors International Company,
S.A.
|
|
and
|
|
Omani
Union Real Estate Development Company
LLC
|
|
Dated:
June 8, 2008
|
1
Memorandum
of Understanding
This
memorandum of understanding (“MOU”) is signed this 8th day of June 2008 by and
between:
Omagine
Inc., a Delaware USA corporation (“OMAG”), Journey of Light, Inc., a New York
USA corporation (“JOL”) and Consolidated Contractors International Company,
S.A., a Panamanian corporation (“CCIC”) on the one hand,
|
and
|
Omani
Union Real Estate Development Company LLC , an Omani limited liability company
(“ORDC”), on the other hand.
OMAG, JOL
and CCIC are collectively referred to herein as the Founder Shareholders. The
Founder Shareholders and ORDC are referred to herein individually as a “Party”
and collectively as the “Parties”.
|
1
|
BACKGROUND.
|
|
1.1
|
The
Founder Shareholders expect that a development agreement will be signed
soon between Omagine SAOC, a closed joint stock company of the Sultanate
of Oman currently under formation by the Founder Shareholders (the
“Project Company”) and the Government of Oman (the “Development
Agreement”).
|
|
1.2
|
A
draft copy of the Development Agreement including its Schedules and
Appendix A, all of which are dated June 2008 and marked Omagine
V.21, (the “Draft Agreement”) is attached hereto as Exhibit A. The Draft
Agreement sets out in detail the terms and conditions governing the
development, management, operation and implementation of the Omagine
Project on the one million (1,000,000) square meter plot of land
identified by Schedule 2.1.1 of the Draft
Agreement.
|
|
1.3
|
ORDC
is fully aware of the details of the Draft Agreement and is hereby acting
in reliance thereon.
|
|
1.4
|
Capitalized
terms in this MOU shall unless otherwise specified herein have the
meanings that shall be assigned to them in the Development
Agreement.
|
|
1.5
|
The
Government requires that the Project Company have at least thirty percent
(30%) of the shares of the capital stock of the Project Company (the
“Shares”) owned by Omani Persons (the “Omani Shareholder
Obligation”).
|
|
2
|
THE
SHARES / SHAREHOLDERS’ AGREEMENT.
|
|
2.1
|
The
Parties hereby agree that within thirty (30) Days after the latter of (i)
the Effective Date or (ii) the Corporate Formation of the Project Company,
ORDC shall:
|
|
|
a)
|
execute
and deliver a subscription agreement (“Subscription Agreement”) whereby
ORDC subscribes for one hundred thousand (100,000) Shares (the “ORDC
Shares”). The ORDC Shares shall be equal to twenty percent (20%) of the
issued share capital of the Project Company and the date of such execution
and delivery of the Subscription Agreement by ORDC is hereby defined as
the “Subscription Date”, and
|
|
|
b)
|
agree
in the Subscription Agreement to pay an investment amount of one hundred
twenty-two Omani Rials and eight hundred fifty Xxxxx (OMR 122.850) for
each Share for a total aggregate amount of twelve million two hundred
eighty-five thousand Omani Rials (OMR 12,285,000) [the “ORDC Investment”]
for the ORDC Shares.
|
2
Memorandum
of Understanding
|
2.2
|
Subsequent
to the Effective Date, the Project Company will do all things necessary to
(i) arrange with the Lenders the necessary construction financing for the
Project, and (ii) arrive at that date (the “Financial Closing Date”) on
which the legally binding documents providing such construction financing
are executed and delivered by the Project Company and the
Lenders.
|
|
2.3
|
The
Parties hereby agree that ORDC shall pay the ORDC Investment to the
Project Company and the Project Company shall issue the ORDC Shares to
ORDC in accordance with, as the case may be, the following schedule or the
provisions of paragraph 2.4:
|
|
|
a)
|
On
the Subscription Date and on the first Business Day of each of the five
(5) Months next following the Subscription Date, ORDC shall pay one
million five hundred thirty five thousand six hundred twenty five Omani
Rials (OMR 1,535,625) to the Project Company for a total six (6) Month
aggregate amount of nine million two hundred thirteen thousand seven
hundred fifty Omani Rials (OMR 9,213,750) and the Project Company shall
issue twelve thousand five hundred (12,500) of the ORDC Shares to ORDC on
the Subscription Date and on the first Business Day of each Month of such
five Month period for a total six Month aggregate of seventy five thousand
(75,000) of the ORDC Shares, and
|
|
|
b)
|
On
the Financial Closing Date, ORDC shall pay three million seventy one
thousand two hundred fifty Omani Rials (OMR 3,071,250) to the Project
Company and the Project Company shall issue twenty five thousand (25,000)
of the ORDC Shares to ORDC.
|
|
2.4
|
The
Parties agree that the schedule of payments for the ORDC Investment as
outlined in paragraph 2.3 of this MOU has been agreed based upon the
assumption (which is unlikely to be accurate) that the Financial Closing
Date will occur six (6) Months after the Effective Date. Notwithstanding
anything to the contrary contained in paragraph 2.3 of this MOU, the
Parties hereby covenant and agree with each other that on the Financial
Closing Date (whenever that date may occur) the entire unpaid balance of
the ORDC Investment as of such Financial Closing Date (whatever that
amount turns out to actually be) shall be paid to the Project Company on
such Financial Closing Date in exchange for the issuance by the Project
Company to ORDC of the entire remaining balance of the un-issued ORDC
Shares as of such Financial Closing
Date.
|
|
2.5
|
The
terms and conditions in respect of the ORDC Investment and the ORDC Shares
as indicated in Paragraphs 2.1, 2.2, 2.3 and 2.4 hereof shall be
incorporated into a shareholders’ agreement among the Founder
Shareholders, other shareholders and ORDC (“Shareholders’ Agreement”). All
other details, terms and conditions of the Shareholders’ Agreement shall
be subject to agreement among the Founder Shareholders, the other
shareholders and ORDC and the Parties agree to negotiate and execute the
Shareholders’ Agreement within thirty (30) Days after the Effective
Date.
|
|
2.6
|
The
Founder Shareholders and ORDC shall agree in the Shareholders’ Agreement
that (i) the Project Company’s corporate governance shall comply with the
rules and regulations of the Sultanate of Oman, (ii) the Project Company
will be managed by its Board of Directors which shall be elected by the
shareholders of the Project Company, (iii) ORDC shall have representation
on the Board of Directors of the Project Company proportionate to its
ownership of and in accordance with its rights pursuant to the laws of
Oman as an owner of Shares in the Project Company and (iv) the Project
Company shall have a professional management team to develop and implement
the Omagine Project which shall be appointed by and be responsible to the
Board of Directors.
|
3
Memorandum
of Understanding
|
2.7
|
Promptly
after the Execution Date, OMAG will engage BankMuscat to update the
financial model of the Omagine Project and, upon it being delivered to
OMAG, will promptly thereafter deliver a copy of such updated financial
model to ORDC.
|
|
3
|
GENERAL
|
|
3.1
|
This
MOU does not create a partnership or otherwise bind the Parties and only
the Shareholders’ Agreement, if and when executed by the Parties, shall be
a definitive legally binding
agreement.
|
|
3.2
|
Neither
Party may assign any of its rights or obligations conferred by this MOU
without the prior written consent of the other
Party.
|
|
3.3
|
This
MOU and the agreements contemplated hereby will automatically terminate
(i) upon the mutual written consent of the Parties, or (ii) on July 31,
2008 if the Execution Date has not occurred on or before July 31, 2008, or
(iii) ninety Days after the Effective Date (the “Delivery Period”) if the
Execution Date occurs on or before July 31, 2008 and for any reason the
Shareholders’ Agreement has not been signed within such Delivery Period,
or (iv) upon the execution by the Parties of the Shareholders’
Agreement.
|
|
3.4
|
The
Parties may execute this MOU by means of the exchange of signed copies
which are scanned and then e-mailed to the other Party or via
facsimile.
|
|
3.5
|
The
Parties may execute this MOU in counterparts that shall, in the aggregate,
when signed by both Parties constitute one and the same instrument and
thereafter each counterpart shall be deemed to be an original instrument
as against the Party that has signed
it.
|
|
4.
|
CONDITION
PRECEDENT
|
|
|
The
Parties acknowledge and agree that in order to satisfy the Omani
Shareholder Obligation, the Founder Shareholders have held discussions
with the Royal Court Affairs (“RCA”) and are awaiting RCA’s decision
before June 18, 2008 (the “Decision Date”) regarding RCA subscribing for
ten percent (10%) of the Shares (the “RCA Shares”). If RCA decides not to
subscribe for the RCA Shares or fails to respond to the Founder
Shareholders on or before the Decision Date then this MOU shall govern the
understanding between the Parties. The Parties hereby agree however that
if RCA decides to subscribe for the RCA Shares then the number of ORDC
Shares mentioned in this MOU shall be reduced to 50,000 Shares and the
ORDC Investment and the payments mentioned in Clause 2.3 and Clause 2.4
shall be proportionately adjusted.
|
4
Memorandum
of Understanding
Signed for and on behalf of the Founder Shareholders and the Project Company
| Omagine, Inc. | Journey of Light, Inc. | ||||
| By: |
/s/
|
By: |
/s/
|
||
|
Xxxxx
X. Xxxxxx
|
Xxxxx
X. Xxxxxx
|
||||
|
Chairman
|
Chairman
|
||||
Consolidated
Contractors International Company, S.A.
| By: |
/s/
|
|||
|
Xxxxx X. Alaaiddin, P.O.A
|
||||
|
As Attorney-in-Fact
|
||||
Signed
for and on behalf of Omani Union Real Estate Development Company
LLC
Omani
Union Real Estate Development Company LLC
| By: |
/s/
|
|||
|
Xxxxxxx
Xxxxx
|
||||
|
Chairman
|
||||
5
