REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as
of the 22nd day of December 2008 (this "Agreement") between YA
GLOBAL INVESTMENTS, L.P., a Cayman Islands exempt limited
partnership (the "Investor"), and OMAGINE, INC., a corporation
organized and existing under the laws of the State of Delaware
(the "Company").
WHEREAS:
A. In connection with the Standby Equity Distribution
Agreement by and between the parties hereto of even date
herewith (the "Standby Equity Distribution Agreement"), the
Company has agreed, upon the terms and subject to the conditions
of the Standby Equity Distribution Agreement, to issue and sell
to the Investor that number of shares of the Company's common
stock, par value $0.001 per share (the "Common Stock"), which
can be purchased pursuant to the terms of the Standby Equity
Distribution Agreement for an aggregate purchase price of up to
$5,000,000. Capitalized terms not defined herein shall have the
meaning ascribed to them in the Standby Equity Distribution
Agreement.
B. To induce the Investor to execute and deliver the
Standby Equity Distribution Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities
Act"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Investor hereby agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have
the following meanings:
a. "Commitment Period" has the meaning given
thereto in the Standby Equity Distribution Agreement.
b. "Person" means a corporation, a limited
liability company, an association, a partnership, an
organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.
c. "Prospectus" means the prospectus included
in a Registration Statement (including, without limitation, a
prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated
by reference in such Prospectus.
d. "Registrable Securities" has the meaning
given thereto in the Standby Equity Distribution Agreement.
e. "Registration Statement" means the
registration statement required to be filed hereunder and any
additional registration statements contemplated by Section 2
hereof, including (in each case) the Prospectus, amendments and
supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement.
f. "Rule 415" means Rule 415 promulgated by
the SEC pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same
purpose and effect as such Rule.
g. "SEC" means the United States Securities
and Exchange Commission.
2. REGISTRATION.
a. Filing of a Registration Statement. The
Company shall prepare and file with the SEC a Registration
Statement, or multiple Registration Statements, on Form S-1 (or
if the Company is then eligible, on Form S-3) for the resale by
the Investor of the Registrable Securities. The Company in its
sole discretion may choose when to file such Registration
Statements, provided however, pursuant to the Standby Equity
Distribution Agreement the Company shall not have the ability to
make any Advances until the effectiveness of a Registration
Statement. Each Registration Statement shall contain the "Plan
of Distribution" section in substantially the form attached
hereto as Exhibit A and contain all the required disclosures set
forth on Exhibit B.
b. Maintaining a Registration Statement. The
Company shall use its best efforts to cause any Registration
Statement that has been declared effective to remain effective
at all times until all Registrable Securities contained in such
Registration Statement cease to be Registrable Securities (the
"Registration Period"). Each Registration Statement (including
any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading.
c. Filing Procedures. Prior to the filing of
any Registration Statement with the SEC, the Company shall
furnish a draft of such Registration Statement to the Investor
for its review and comment. The Investor shall furnish comments
on a Registration Statement to the Company within twenty four
(24) hours of the receipt thereof.
3. RELATED OBLIGATIONS.
a. The Company shall, not less than three (3)
business days prior to the filing of a Registration Statement
and not less than one (1) business day prior to the filing of
any related amendments and supplements to all Registration
Statements (except for annual or quarterly reports on Forms 10-K
and 10-Q, respectively), furnish to the Investor copies of all
such documents proposed to be filed, which documents (other than
those incorporated or deemed to be incorporated by reference)
will be subject to the reasonable and prompt review of the
Investor, but under no circumstances shall the Investor have
more than twenty four (24) hours to review the documents. The
Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the
Investors shall reasonably object in good faith; provided that,
the Company is notified of such objection in writing no later
than two (2) business days after the Investors have been so
furnished copies of a Registration Statement.
b. The Company shall (i) prepare and file with
the SEC such amendments (including post-effective amendments)
and supplements to a Registration Statement and the Prospectus
used in connection with such Registration Statement, which
prospectus is to be filed pursuant to Rule 424 promulgated under
the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the
Registration Period, and prepare and file with the SEC such
additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to
the terms of this Agreement), and as so supplemented or amended
to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the SEC with
respect to a Registration Statement or any amendment thereto and
as promptly as reasonably possible provide the Investors true
and complete copies of all correspondence from and to the SEC
relating to a Registration Statement (provided that the Company
may excise any information contained therein which would
constitute material non-public information as to any Investor
which has not executed a confidentiality agreement with the
Company); and (iv) comply with the provisions of the Securities
Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have
been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and
supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this
Section 3(b)) by reason of the Company's filing a report on Form
10-K, Form 10-Q, or Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Company shall incorporate such report by reference
into the Registration Statement, if applicable, or shall file
such amendments or supplements with the SEC in a timely manner,
but in any event no longer than three (3) Business Days after
the date on which the Exchange Act report is filed which
created the requirement for the Company to amend or supplement
the Registration Statement.
c. The Company shall furnish to the Investor
without charge, (i) at least one (1) copy of such Registration
Statement as declared effective by the SEC and any amendment(s)
thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and
each preliminary prospectus, (ii) 10 copies of the final
prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of
copies as the Investor may reasonably request) and (iii) such
other documents as the Investor may reasonably request from time
to time in order to facilitate the disposition of the
Registrable Securities owned by the Investor.
d. The Company shall use its best efforts to
(i) register and qualify the Registrable Securities covered by a
Registration Statement under such other securities or "blue sky"
laws of such jurisdictions in the United States as the Investor
reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness
thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to
(w) make any change to its certificate of incorporation or by-
laws, (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section
3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of
process in any such jurisdiction. The Company shall promptly
notify the Investor of the receipt by the Company of any
notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in
the United States or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
e. If, pursuant to Section 3(d) above, the
Company becomes aware of an event or development, the result of
which causes the Prospectus included in the Registration
Statement, as then in effect, to include an untrue statement of
a material fact or omission, to state a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading (provided that in no event shall such
notice contain any material, nonpublic information), as promptly
as practicable after becoming aware of such event or
development, the Company shall notify the Investor in writing of
the happening of such event or development, and promptly
prepare a supplement or amendment to such Registration Statement
to correct such untrue statement or omission, and deliver 10
copies of such supplement or amendment to the Investor. The
Company shall also promptly notify the Investor in writing (i)
when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification
of such effectiveness shall be delivered to the Investor by
facsimile on the same day of such effectiveness), and (ii) of
any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related
information..
f. The Company shall use its best efforts to
prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Securities for sale
in any jurisdiction within the United States of America and, if
such an order or suspension is issued, to obtain the withdrawal
of such order or suspension at the earliest possible moment and
to notify the Investor of the issuance of such order and the
resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
g. If, after the execution of this Agreement,
the Investor believes, after consultation with its legal
counsel, that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the request of the Investor, the
Company shall furnish to the Investor, on the date of the
effectiveness of the Registration Statement and thereafter from
time to time on such dates as the Investor may reasonably
request (i) a letter, dated such date, from the Company's
independent certified public accountants in form and substance
as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given
in an underwritten public offering, addressed to the Investor.
h. If, after the execution of this Agreement,
the Investor believes, after consultation with its legal
counsel, that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the request of the Investor, the
Company shall make available for inspection by (i) the Investor
and (ii) one firm of accountants or other agents retained by
the Investor (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the "Records"), as
shall be reasonably deemed necessary by each Inspector, and
cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request;
provided, however, that each Inspector shall agree, and the
Investor hereby agrees, to hold in strict confidence and shall
not make any disclosure (except to an Investor) or use any
Record or other information which the Company determines in good
faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or
omission in any Registration Statement or is otherwise required
under the Securities Act, (b) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally
available to the public other than by disclosure in violation of
this or any other agreement of which the Inspector and the
Investor has knowledge. The Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a
court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential.
i. The Company shall hold in confidence and
not make any disclosure of information concerning the Investor
provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of
this Agreement or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information
concerning the Investor is sought in or by a court or
governmental body of competent jurisdiction or through other
means, give prompt written notice to the Investor and allow the
Investor, at the Investor's expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order
for, such information.
j. The Company shall use its best efforts
either to cause all the Registrable Securities covered by a
Registration Statement (i) to be listed on each securities
exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such
exchange or to secure the inclusion for quotation on the
National Association of Securities Dealers, Inc. OTC Bulletin
Board for such Registrable Securities. The Company shall pay
all fees and expenses in connection with satisfying its
obligation under this Section 3(j).
k. The Company shall cooperate with the
Investor, to the extent applicable, to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to
be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case
may be, as the Investor may reasonably request and registered in
such names as the Investor may request.
l. The Company shall use its best efforts to
cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.
m. The Company shall otherwise use its best
efforts to comply with all applicable rules and regulations of
the SEC in connection with any registration hereunder.
n. Within three (3) business days after a
Registration Statement which covers Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and
shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to
the Investor) confirmation that such Registration Statement has
been declared effective by the SEC in the form attached hereto
as Exhibit C.
o. The Company shall take all other reasonable
actions necessary to expedite and facilitate disposition by the
Investor of Registrable Securities pursuant to a Registration
Statement.
4. OBLIGATIONS OF THE INVESTOR.
a. The Investor agrees that, upon receipt of any
notice from the Company of the (i) the happening of any event or
development, following which the prospectus included in a
Registration Statement, as then in effect, includes an untrue
statement of a material fact or fails to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading, or (ii) the issuance of any stop
order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction within the
United States of America, the Investor will immediately
discontinue disposition of Registrable Securities pursuant to
any Registration Statement(s) covering such Registrable
Securities until the Investor's receipt of written notice from
the Company indicating that such event has been cured and
confirming that re-sales may be made pursuant to such
Registration Statement. Notwithstanding anything to the
contrary, the Company shall cause its transfer agent to deliver
unlegended certificates for shares of Common Stock to a
transferee of the Investor in accordance with the terms of the
Standby Equity Distribution Agreement in connection with any
sale of Registrable Securities with respect to which the
Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company described in
this section and for which the Investor has not yet settled.
b. The Investor covenants and agrees that it will
comply with the prospectus delivery requirements of the
Securities Act as applicable to it or an exemption therefrom in
connection with sales of Registrable Securities pursuant to the
Registration Statement.
5. EXPENSES OF REGISTRATION.
All expenses incurred in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and
qualifications fees, printers, legal and accounting fees shall
be paid by the Company.
6. INDEMNIFICATION.
With respect to Registrable Securities which are included
in a Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the
Company will, and hereby does, indemnify, hold harmless and
defend the Investor, the directors, officers, partners,
employees, agents, representatives of, and each Person, if any,
who controls the Investor within the meaning of the Securities
Act or the Exchange Act (each, an "Indemnified Person"), against
any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, reasonable attorneys' fees, amounts
paid in settlement or expenses, joint or several (collectively,
"Claims") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or
the SEC, whether pending or threatened, whether or not an
indemnified party is or may be a party thereto ("Indemnified
Damages"), to which any of them may become subject insofar as
such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable
Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; (ii) any untrue statement or alleged untrue
statement of a material fact contained in any final prospectus
(as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or
regulation there under relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). The Company shall reimburse the
Investor and each such controlling person promptly as such
expenses are incurred and are due and payable, for any legal
fees or disbursements or other reasonable expenses incurred by
them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section
6(a): (x) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in
writing to the Company by such Indemnified Person expressly for
use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto;
(y) shall not be available to the extent such Claim is based on
a failure of the Investor to deliver or to cause to be delivered
the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section
3(e); and (z) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer
of the Registrable Securities by the Investor.
b. In connection with a Registration
Statement, the Investor agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each
Person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act (each an "Indemnified
Party"), against any Claim or Indemnified Damages to which any
of them may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such Claim or Indemnified
Damages arise out of or is based upon any Violation, in each
case to the extent, and only to the extent, that such Violation
occurs in reliance upon and in conformity with written
information furnished to the Company by the Investor expressly
for use in connection with such Registration Statement; and,
subject to Section 6(d), the Investor will reimburse any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and
the agreement with respect to contribution contained in Section
7 shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of
the Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable
under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to the
Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall
remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive
the transfer of the Registrable Securities by the Investor.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with
respect to any prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of
material fact contained in the prospectus was corrected and such
new prospectus was delivered to the Investor prior to the
Investor's use of the prospectus to which the Claim relates.
c. Promptly after receipt by an Indemnified
Person or Indemnified Party under this Section 6 of notice of
the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party
under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying
party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses of not more
than one counsel for such Indemnified Person or Indemnified
Party to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The
Indemnified Party or Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party
and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified
Person which relates to such action or claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or
any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of
the Indemnified Party or Indemnified Person, consent to entry of
any judgment or enter into any settlement or other compromise
which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to
such claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to
the matter for which indemnification has been made. The failure
to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced
in its ability to defend such action.
d. The indemnification required by this
Section 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as
and when bills are received or Indemnified Damages are incurred.
e. The indemnity agreements contained herein
shall be in addition to (i) any cause of action or similar right
of the Indemnified Party or Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law
f. The obligations of the parties under this
Section 6 and the below Section 7 to indemnify or make
contributions to the payment and satisfaction of each of the
Claims Section 5.01shall survive the termination of this
Agreement.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees
to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that: (i) no
seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to
the net amount of proceeds received by such seller from the sale
of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investor the
benefits of Rule 144 promulgated under the Securities Act or any
similar rule or regulation of the SEC that may at any time
permit the Investor to sell securities of the Company to the
public without registration ("Rule 144") the Company agrees to:
a. make and keep public information available,
as those terms are understood and defined in Rule 144;
b. file with the SEC in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act so long as the Company
remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under
Section 6.3 of the Standby Equity Distribution Agreement) and
the filing of such reports and other documents is required for
the applicable provisions of Rule 144; and
c. furnish to the Investor so long as the
Investor owns Registrable Securities, promptly upon request, (i)
a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the
Exchange Act and (ii) any such other information as may be
reasonably requested to permit the Investor to sell such
securities pursuant to Rule 144 without registration.
9. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the
observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively),
only by a written agreement between the Company and the
Investor. Any amendment or waiver effected in accordance with
this Section 9 shall be binding upon the Investor and the
Company. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration
also is offered to all of the parties to this Agreement.
10. MISCELLANEOUS.
a. A Person is deemed to be a holder of
Registrable Securities whenever such Person owns or is deemed to
own of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two
or more Persons with respect to the same Registrable Securities,
the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable
Securities.
b. Any notices, consents, waivers or other
communications required or permitted to be given under the terms
of this Agreement must be in writing and will be deemed to have
been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation
of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day
after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive
the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company, to: Omagine, Inc.
Empire State Building
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
Att: Xxxxxxx Xxxxxxx
00 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention:
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investor(s): YA Global Investments, LP
000 Xxxxxx Xxxxxx -Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a Copy to: Yorkville Advisors, LLC
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address by providing written notice to
the other parties hereto at least five days prior to the
effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or
other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page
of such transmission or (C) provided by a courier or overnight
courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause
(i), (ii) or (iii) above, respectively.
c. Failure of any party to exercise any right
or remedy under this Agreement or otherwise, or delay by a party
in exercising such right or remedy, shall not operate as a
waiver thereof.
d. The corporate laws of the State of New
Jersey shall govern all issues concerning the relative rights of
the Company and the Investor. All other questions concerning
the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the
State of New Jersey, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of
New Jersey or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State
of New Jersey. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the Superior Courts of the State
of New Jersey, sitting in Xxxxxx County, New Jersey and the
Federal District Court for the District of New Jersey sitting in
Newark, New Jersey, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision
of this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement shall inure to the benefit
of and be binding upon the permitted successors and assigns of
each of the parties hereto.
f. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
g. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement. This
Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this
Agreement.
h. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.
i. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent and no rules of strict construction will be
applied against any party.
j. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of day and year first above written.
OMAGINE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxx
Vic-President & Secretary
YA GLOBAL INVESTMENTS, L.P.
By: Yorkville Advisors, LLC
Its: Investment Manager
By: /s/ Xxxx Xxxxxx
------------------------
Name: Xxxx Xxxxxx
Title: Portfolio Manager
EXHIBIT A
PLAN OF DISTRIBUTION
Each Selling Stockholder (the "Selling Stockholders") of
the common stock and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all
of their shares of common stock on the __________ or any other
stock exchange, market or trading facility on which the shares
are traded or in private transactions. These sales may be at
fixed or negotiated prices. A Selling Stockholder may use any
one or more of the following methods when selling shares:
* ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
* block trades in which the broker-dealer will attempt to
sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;
* an exchange distribution in accordance with the rules of
the applicable exchange;
* privately negotiated transactions;
* broker-dealers may agree with the Selling Stockholders to
sell a specified number of such shares at a stipulated price per
share;
* through the writing or settlement of options or other
hedging transactions, whether through an options exchange or
otherwise;
* a combination of any such methods of sale; or
* any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule
144 under the Securities Act of 1933, as amended (the
"Securities Act"), if available, rather than under this
prospectus.
Broker-dealers engaged by the Selling Stockholders may
arrange for other brokers-dealers to participate in sales.
Broker-dealers may receive commissions or discounts from the
Selling Stockholders (or, if any broker-dealer acts as agent for
the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction not in excess
of a customary brokerage commission in compliance with NASDR
Rule 2440; and in the case of a principal transaction a markup
or markdown in compliance with NASDR IM-2440.
In connection with the sale of the common stock or
interests therein, the Selling Stockholders may enter into
hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the
Common Stock in the course of hedging the positions they assume.
The Selling Stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which
require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to
reflect such transaction).
The Selling Stockholders and any broker-dealers or agents
that are involved in selling the shares may be deemed to be
"underwriters" within the meaning of the Securities Act in
connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Each Selling Stockholder has informed the Company that it does
not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed
eight percent (8%).
The Company is required to pay certain fees and expenses
incurred by the Company incident to the registration of the
shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act, they
will be subject to the prospectus delivery requirements of the
Securities Act including Rule 172 thereunder. In addition, any
securities covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under
Rule 144 rather than under this prospectus. There is no
underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the Selling Stockholders.
We agreed to keep this prospectus effective until the
earlier of (i) the date on which the shares may be resold by the
Selling Stockholders without registration and without regard to
any volume limitations by reason of Rule 144 under the
Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to this prospectus or Rule
144 under the Securities Act or any other rule of similar
effect. The resale shares will be sold only through registered
or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the
resale shares may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available
and is complied with.
Under applicable rules and regulations under the Exchange
Act, any person engaged in the distribution of the resale shares
may not simultaneously engage in market making activities with
respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of
the distribution. In addition, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including Regulation M, which
may limit the timing of purchases and sales of shares of the
common stock by the Selling Stockholders or any other person.
We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a
copy of this prospectus to each purchaser at or prior to the
time of the sale (including by compliance with Rule 172 under
the Securities Act).
EXHIBIT B
OTHER DISCLOSURES
See attachment provided separately.
EXHIBIT C
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
Attention:
Re: OMAGINE, INC.
Ladies and Gentlemen:
We are counsel to Omagine, Inc. (the "Company"), and have
represented the Company in connection with that certain Standby
Equity Distribution Agreement (the "Standby Equity Distribution
Agreement") entered into by and between the Company and YA
Global Investments, LP (the "Investor") pursuant to which the
Company issued to the Investor shares of its Common Stock, par
value $0.001 per share (the "Common Stock"). Pursuant to the
Standby Equity Distribution Agreement, the Company also has
entered into a Registration Rights Agreement with the Investor
(the "Registration Rights Agreement") pursuant to which the
Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement)
under the Securities Act of 1933, as amended (the "Securities
Act"). In connection with the Company's obligations under the
Registration Rights Agreement, on ____________ ____, the Company
filed a Registration Statement on Form ________ (File No. 333-
_____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities which names the Investor as a selling
stockholder thereunder.
In connection with the foregoing, we advise you that a
member of the SEC's staff has advised us by telephone that the
SEC has entered an order declaring the Registration Statement
effective under the Securities Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no
knowledge, after telephonic inquiry of a member of the SEC's
staff, that any stop order suspending its effectiveness has been
issued or that any proceedings for that purpose are pending
before, or threatened by, the SEC and the Registrable Securities
are available for resale under the Securities Act pursuant to
the Registration Statement.
Very truly yours,
By: _____________________________
cc: YA Global Investments, L.P.
