MEMORANDUM OF UNDERSTANDING Omagine, Inc. Journey of Light, Inc. Consolidated Contractors International Company, S.A.
Exhibit 10.7
Journey
of Light, Inc.
Consolidated
Contractors International Company, S.A.
and
Xxxxxxxx
Xxxxxx Al Khasibi
Dated:
May 26, 2008
This
memorandum of understanding (“MOU”) is signed this 26th day of May 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
Xxxxxxxx Xxxxxx Al-Khasibi, an
individual and Omani national (“MNK”), on the other hand.
OMAG, JOL
and CCIC are collectively referred to herein as the Founder Shareholders. The
Founder Shareholders and MNK are referred to herein individually as a “Party”
and collectively as the “Parties”.
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1
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BACKGROUND.
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1.1
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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”).
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1.2
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A
draft copy of the Development Agreement including its Schedules and
Appendix A, all of which are dated June 1, 2008 and marked Omagine V.18,
(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.
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1.3
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MNK
is fully aware of the details of the Draft Agreement and is hereby acting
in reliance thereon.
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1.5
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Capitalized
terms in this MOU shall unless otherwise specified herein have the
meanings that shall be assigned to them in the Development
Agreement.
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2
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THE
SHARES / SHAREHOLDERS’ AGREEMENT.
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2.1
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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,
MNK shall:
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a)
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execute
and deliver a subscription agreement (“Subscription Agreement”) whereby
MNK subscribes for twenty-five thousand (25,000) shares of the capital
stock of the Project Company (the “Shares”). The Shares shall be equal to
five percent (5%) of the issued share capital of the Project Company and
the date of such execution and delivery of the Subscription Agreement by
MNK is hereby defined as the “Subscription Date”,
and
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b)
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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 three million seventy one
thousand two hundred fifty Omani Rials (OMR 3,071,250) [the “MNK
Investment”] for the Shares.
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2.2
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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.
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2.3
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The
Parties hereby agree that MNK shall pay the MNK Investment to the Project
Company and the Project Company shall issue the Shares to MNK in
accordance with, as the case may be, the following schedule or the
provisions of paragraph 2.4:
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a)
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On
the Subscription Date and on the first Business Day of each of the five
(5) Months next following the Subscription Date, MNK shall pay three
hundred eighty three thousand nine hundred six Omani Rials and two hundred
fifty xxxxx (OMR 383,906.250) to the Project Company for a total six (6)
Month aggregate amount of two million three hundred three thousand four
hundred thirty seven Omani Rials and five hundred xxxxx (OMR
2,303,437.500) and the Project Company shall issue three thousand one
hundred twenty five (3,125) of the Shares to MNK 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 eighteen thousand seven hundred fifty
(18,750) of the Shares, and
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b)
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On
the Financial Closing Date, MNK shall pay seven hundred sixty seven
thousand eight hundred twelve Omani Rials and five hundred xxxxx (OMR
767,812.500) to the Project Company and the Project Company shall issue
six thousand two hundred fifty (6,250) of the Shares to
MNK.
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2.4
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The
Parties agree that the schedule of payments for the MNK 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 MNK 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 MNK of the entire remaining balance of the un-issued Shares as of such
Financial Closing Date.
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2.5
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The
terms and conditions in respect of the MNK Investment and the 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 MNK (“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 MNK
and the Parties agree to negotiate and execute the Shareholders’ Agreement
within thirty (30) Days after the Effective
Date.
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2.6
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The
Founder Shareholders and MNK 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) MNK 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.
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2.7
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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 MNK.
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3
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GENERAL
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3.1
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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.
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3.2
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Neither
Party may assign any of its rights or obligations conferred by this MOU
without the prior written consent of the other
Party.
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3.3
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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.
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3.4
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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.
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3.5
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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.
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Signed for and on behalf of the Founder Shareholders and the Project Company
| Omagine, Inc. | Journey of Light, Inc. | ||||
| By: |
/s/
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By: |
/s/
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Xxxxx
X. Xxxxxx
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Xxxxx
X. Xxxxxx
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Chairman
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Chairman
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Consolidated
Contractors International Company, S.A.
| By: |
/s/
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Xxxxx X. Alaaiddin, P.O.A
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As Attorney-in-Fact
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Signed
for and on behalf of MNK
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/s/
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Xxxxxxxx
Xxxxxx Al Khasibi
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