MEMORANDUM OF UNDERSTANDING Omagine, Inc. Journey of Light, Inc.
Exhibit 10.8
Journey
of Light, Inc.
Consolidated
Contractors International Company, S.A.
and
Royal
Court Affairs
Dated:
June 26, 2008
This
memorandum of understanding (“MOU”) is signed this 26th 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
Royal Court Affairs, an Omani
organization (“RCA”), on the other hand.
OMAG, JOL
and CCIC are collectively referred to herein as the Founder Shareholders. The
Founder Shareholders and RCA 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 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.
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1.3
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RCA
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,
RCA shall:
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a)
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execute
and deliver a subscription agreement (“Subscription Agreement”) whereby
RCA subscribes for sixty two thousand five hundred (62,500) shares of the
capital stock of the Project Company (the “Shares”). The date of such
execution and delivery of the Subscription Agreement by RCA is hereby
defined as the “Subscription Date”. The Shares shall be equal to twelve
and one-half percent (12.5%) of the issued share capital of the Project
Company on the Financial Closing 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 seven million six hundred
seventy eight thousand one hundred twenty five Omani Rials (OMR
7,678,125) [the “RCA 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 RCA shall pay the RCA Investment to the Project
Company and the Project Company shall issue the Shares to RCA 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, RCA shall pay nine
hundred fifty eight thousand two hundred thirty Omani Rials (OMR 958,230)
to the Project Company for a total six (6) Month aggregate amount of five
million seven hundred forty nine thousand three hundred eighty Omani Rials
(OMR 5,749,380) and the Project Company shall issue seven thousand eight
hundred (7,800) of the Shares to RCA 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 forty six thousand eight hundred (46,800) of the
Shares, and
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b)
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On
the Financial Closing Date, RCA shall pay one million nine hundred twenty
eight thousand seven hundred forty five Omani Rials (OMR 1,928,745) to the
Project Company and the Project Company shall issue fifteen thousand seven
hundred (15,700) of the Shares to
RCA.
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2.4
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The
Parties agree that the schedule of payments for the RCA 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 RCA 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 RCA 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 RCA 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 RCA (“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 RCA
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 RCA 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) RCA 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 RCA.
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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 Royal Court Affairs
| By: |
/s/
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