Exhibit 10.1

 

 

 
 
 
 
AGREEMENT DATE: OCTOBER 2, 2014
 
DEVELOPMENT AGREEMENT
 
RELATING TO
 
THE OMAGINE PROJECT
 
BETWEEN
 
THE GOVERNMENT OF THE SULTANATE OF OMAN
 
REPRESENTED BY
 
THE MINISTRY OF TOURISM
 
AND
 
OMAGINE LLC
 
 
 
 
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1.
DEFINITIONS AND INTERPRETATION
  1
2.
CONDITIONS PRECEDENT/CERTAIN OBLIGATIONS
15
3.
TERM
15
4.
USUFRUCT AGREEMENT
16
5.
GRANT OF RIGHTS TO THE PROJECT COMPANY
16
6.
PERFORMANCE OF OBLIGATIONS
18
7.
REPORTS AND MEETINGS
24
8.
ENFORCEMENT AGAINST THIRD PARTIES
26
9.
GENERAL RESPONSIBILITIES OF THE GOVERNMENT
27
10.
LAND REGISTRATION OF TITLE TO PLOTS/ UNITS
29
11.
MASTER PLAN AND DEVELOPMENT CONTROL PLAN
30
12.
MBO DAMAGES FOR DELAY
30
13.
PROJECT COMPANY LICENCES AND PERMITS
30
14.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
31
15.
INDEMNIFICATION
32
16.
INSURANCE
33
17.
FORCE MAJEURE
33
18.
GOVERNMENT RISK EVENT
35
19.
CHANGE OF LAW
35
20.
EVENTS OF DEFAULT
37
21.
TERMINATION AND CONSEQUENCES
38
22.
LENDERS SECURITY INTERESTS
40
23.
ACCOUNTING AND AUDITING
41
24.
ASSIGNMENT
41
25.
WAIVER
42
26.
TAXATION
42
27.
NOTICES
42
28.
GOVERNING LAW AND DISPUTE RESOLUTION
42
29.
SOVEREIGN IMMUNITY
43
30.
CAPTIONS
43
31.
ENTIRE AGREEMENT
43
32.
SEVERABILITY
43
33.
CONFIDENTIALITY
43
34.
SCHEDULES
44
35.
NO THIRD PARTY RIGHTS
44
36.
ANTICIPATORY BREACH
44
37.
FURTHER ASSURANCES
44
38.
RELATIONSHIP OF THE PARTIES
44

 
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SCHEDULES
 
 
SCHEDULE 1
KROOKI & MULKIYA
SCHEDULE 2A
USUFRUCT AGREEMENT
SCHEDULE 2B
USUFRUCT AMENDMENT / USUFRUCT TERMS
SCHEDULE 3
INTEGRATED TOURISM COMPLEX LICENSE
SCHEDULE 4
INITIAL MASTER PLAN
SCHEDULE 5
CORPORATE DOCUMENTS OF PROJECT COMPANY
SCHEDULE 6
MINIMUM BUILD OBLIGATION (MBO COMPONENTS) AND PEARL CONTENT DESIGN BRIEF
SCHEDULE 7
TIME SCHEDULES
SCHEDULE 8
GOVERNMENT INFRASTRUCTURE PLAN
SCHEDULE 9
CIVIL DEFENCE FACILITIES
SCHEDULE 10
COMMUNITY DEVELOPMENT PLAN
SCHEDULE 11
OMANISATION PLAN
SCHEDULE 12
COMPENSATION FORMULAE FOR TERMINATION
SCHEDULE 13
DEVELOPMENT CONTROL PLAN
SCHEDULE 14
FREEHOLD ACQUISITION PLAN
SCHEDULE 15
ACCESSION AGREEMENT
SCHEDULE 16
SHAREHOLDERS’ RETENTION DOCUMENT
SCHEDULE 17A
PROJECTED UTILITIES SERVICE REQUIREMENTS
SCHEDULE 17B
PRIVATE SECTOR PUBLIC INFRASTRUCTURE AND UTILITIES
SCHEDULE 18
PROJECT COMPANY INFRASTRUCTURE
SCHEDULE 19
INITIAL BUSINESS PLAN
SCHEDULE 20
PRINCIPLES OF THE DIRECT AGREEMENT
SCHEDULE 21
CODE OF PRACTICE
SCHEDULE 22
UNDERTAKING LETTER
SCHEDULE 23
PRINCIPLES OF ESCROW AGREEMENT
SCHEDULE 24
LANDMARK COMPANY AND COMMERCIAL TERMS

 
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THIS DEVELOPMENT AGREEMENT is made in Muscat in the Sultanate of Oman on the 2nd
day of October, 2014
 
 
BETWEEN:

 
 
1)
THE GOVERNMENT OF THE SULTANATE OF OMAN, as represented by the Ministry of
Tourism (the “Government”); and

 
 
2)
OMAGINE LLC., a limited liability company duly incorporated under the laws of
the Sultanate of Oman, having its registered office at P O Box 708, Madinat
Sultan Al Qaboos, Postal Code 115, Sultanate of Oman (the “Project Company”);

 
The Project Company and the Government are individually referred to herein as a
“Party” and collectively as the “Parties”.
 
 
WHEREAS:

 
 
A.
The Government through the Ministry of Tourism wishes to promote the development
of hotel and tourism facilities in the Sultanate of Oman;

 
 
B.
The Founder Shareholders who, for the purpose of carrying out the Project, have
incorporated the Project Company and wish to utilise their specialised knowledge
of, and expertise and experience in, the development, marketing, operation,
management, construction, planning, sale and leasing of residential and tourist
complexes, hotels, marinas and related facilities for the Project;

 
 
C.
The Government has designated the Project as an Integrated Tourism Complex
development project in accordance with the Law and the Approval for Integrated
Tourism Complex in SCHEDULE 3;

 
 
D.
The Parties have agreed to enter into this Development Agreement to (i) oblige
the Project Company to promote tourism in Oman by completing the Project in
accordance with this Development Agreement, (ii) to complete the Project,
including the Minimum Build Obligations, and (iii) grant the Project Company
sufficient legal rights with respect to the Project Area so that it can fully
utilise, plan and develop the Project and construct, finance, operate, manage,
maintain, market, lease and sell Buildings and Units on the terms and conditions
as set out hereunder and in all cases subject to the Law.

 
 
IT IS HEREBY AGREED AS FOLLOWS:
 
CHAPTER I
 
DEFINITIONS, INTERPRETATION, CONDITIONS PRECEDENT AND TERM
 
1.  
DEFINITIONS AND INTERPRETATION

 
The following capitalised terms when used in this Development Agreement, its
recitals and any Schedule and any amendments hereto shall have the respective
meanings set forth below unless a different meaning shall be expressly stated:
 
 
 
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Abandonment
means, except to the extent permitted or excused hereunder, the cessation of
performance of activities by the Project Company.

 
Accession Agreement
means an agreement with a Third Party Developer substantially in the form
attached at SCHEDULE 15 or in such other form as the Government may reasonably
require.

 
Affiliate
means with respect to any person, any other person that, directly or indirectly,
(a) owns or who has Voting Control over the first person, (b) is owned by the
first person, or such first person has Voting Control over such other person, or
(c) is commonly owned or under common Voting Control with the first person.  For
the purposes of this definition, (a) the term “own” or “owned” means ownership
of more than 50% of the equity interests or rights to distributions on account
of equity of the person in question and (b) the term “Voting Control” means the
power to direct the management or policies of the first person, whether through
the ownership of voting securities, by contract, or otherwise; provided however
that (i) the Project Company shall not be considered to be an Affiliate of any
of the Parties nor shall it be considered to be an Affiliate of an Affiliate of
a Party and (ü) Private Sector Utility Companies providing Private Sector Public
Infrastructure and Utilities shall not be considered Affiliates of the
Government.

 
Anticipatory Breach
has the meaning given such term in Clause 36.

 
Appeal Notice
has the meaning given such term in Clause 17.4.

 
Approvals
means all Project Company Licences and Permits, consents, approvals or
authorizations required to be obtained in writing from the Government or any
Government Authority by the Project Company in respect of the Project and
includes the approval by the Government of the Plans, the Final Master Plan, and
any other approvals required pursuant to this Development Agreement, as such
requirements may be varied from time to time pursuant to this Development
Agreement.  The terms “Approved” and “Approval” shall be construed accordingly.

 
Approval Waiver
means a lawfully granted written waiver by the Government of a Project Company
obligation to obtain an Approval, such that with respect to the subject matter
contemplated by such Approval (the “Matter”), the Project Company:

 
(i)           does not need an Approval to lawfully proceed with such Matter,
and
 
(ii)           has the Right and is permitted pursuant to the Law to proceed as
if an Approval for such Matter had been granted.
 
Best Efforts
means the efforts that could reasonably be expected from a reputed development
company in performing its obligations under the Development Agreement applying
Best International Practices.

 
Best International Practices
means the exercise of that degree of professional skill, diligence, prudence and
foresight as would reasonably and ordinarily be expected from a skilled,
qualified and experienced property development entity responsible for carrying
out responsibilities and discharging operations of a type similar to the Project
Tasks and complying with those practices, methods, equipment, specifications and
standards of management, safety and performance, as the same may change from
time to time, as are commonly used by professional organisations carrying out
such tasks in connection with facilities of a type and size similar to the
Project, which in the exercise of reasonable judgement and in light of the facts
known at the time a decision was made, are considered economically and
financially prudent, safe and professionally acceptable practices.  Best
International Practices are not intended to be limited to the optimum practice
or method to the exclusion of all others, but rather to include all reasonable
and prudent practices and methods.

 
Books and Records
has the meaning given such term in Clause 23.1.

 
 
 
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Building
means any residential, commercial or other type of building, erection or
structures constructed or to be constructed on a Plot.

 
Business Day
means any day, other than a Friday, Saturday or public holiday, on which banks
in Oman are open for business.

 
Change of Control
means the occurrence of any one of the following events without the prior
written approval of the Government:

 
(a)           any sale, transfer or other disposition of beneficial ownership by
the Founder Shareholders of forty nine (49) percent or more (in the aggregate)
of their combined ownership interests in the Project Company;
 
(b)           the Founder Shareholders, in the aggregate, ceasing to have Voting
Control of the Project Company;
 
(c)           any merger, consolidation, combination or similar transaction of
the Project Company with or into any other person, whether or not the Project
Company is the surviving person in any such transaction;
 
(d)           any sale, lease, assignment, transfer or other disposition, other
than a transfer of Freehold Title or a lease, usufruct or other disposition as
provided for in this Development Agreement, of the beneficial ownership in forty
nine (49) percent or more of the property, business or assets of the Project
Company;
 
(e)           a person other than the Founder Shareholders of the Project
Company obtaining, directly or indirectly, the power to direct or cause the
direction of the management or policies of the Project Company, whether through
acquisition of ownership, by contract or otherwise;
 
(f)           with respect to any period of twelve (12) consecutive Months, the
individuals who represent the Founder Shareholders and who were members of the
governing body of the Project Company on the first day of such period cease to
constitute a majority of such governing body at any time during such period;
 
(g)           any liquidation, dissolution or winding up of the Project Company;
or
 
(h)           the execution by the Project Company of an agreement to which the
Project Company is a party or by which it is bound, providing for any of the
events set forth above.
 
Change of Law
means any of the following events occurring after the Execution Date as a result
of any action by the Government affecting all or any part of the Project Area, a
Development, the Project Company or the Project Company’s rights or obligations
under this Agreement:

 
(a)           a change or repeal of any existing Law;
 
(b)           the enactment of any new Law;
 
(c)           a change in interpretation of any Law other than Law, custom or
practice relating to the enforcement of any Law;
 
(d)           a Project Company Licence or Permit being suspended, withdrawn or
amended other than (i) based on a material violation of the Licence or Permit,
or (ü) in accordance with the terms upon which it was originally granted, or
(iii) as a result of any unlawful act or omission of the Project Company or its
agents, employees and Contractors; and
 
(e)           any improper failure by the Government to issue or renew a Project
Company Licence or Permit in accordance with the Law;
 
provided that such event shall affect the legality of the Project or the
legality of the Project Company’s rights and/or obligations hereunder which
prevents the Project Company from performing its obligations.
 
For the avoidance of doubt, any amendments to Royal Decree No. 12/2006 and any
ministerial decisions, rules, regulations or guidelines promulgated pursuant to
such Royal Decree shall not be considered a Change of Law unless such
amendments, ministerial decisions, rules, regulations or guidelines affect the
legality of the Project or the legality of the Project Company’s rights and/or
obligations hereunder and which prevents the Project Company from performing its
obligations.
 
 
 
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Change of Law Notice
has the meaning ascribed to it in Clause 19.1.

 
Change of Law Termination Notice
has the meaning ascribed to it in Clause 19.6 (d).

 
Civil Defence Facilities
means all buildings, equipment, vehicles, and other materials specified in
SCHEDULE 9 (i) which are fully owned by the Government and required for the
purposes of enabling the Civil Defence Services to be provided by the concerned
organisations in respect of the Project, (ii) which shall all be located either
in the vicinity of the Project Area or in the Project Area at the discretion of
the organizations providing the Civil Defence Services, and (iii) which shall be
provided at the expense of the Project Company.

 
Civil Defence Services
means the provision by the Government or (to the extent authorized by the
Government) concerned organisations of Government provided services for the
policing, fire fighting, security, emergency rescue and ambulance services
provided for the benefit of the inhabitants and users of the Project Area and
all facilities situated therein.

 
Claim
has the meaning given such term in Clause 15.10.1.

 
Code of Practice
means the code of conduct, guidelines, practices and procedures in respect of
the exercise of the rights of the Project Company under Clause 5.1.3, the
management by the Project Company of the Contractors and all of the matters
referred to and which are set out in SCHEDULE 21.

 
Commercial Government Properties
means properties owned by the Government and which are utilized for commercial
purposes.

 
Commercial Unit
means any Unit which is not a Residence Unit.

 
Community Development Plan
means the development plan of the Project Company for the development and
promotion of the local community in the vicinity of the Project Area as detailed
in SCHEDULE 10.

 
Community Facilities
means, within the Project Area, any schools, libraries, colleges, museums,
community halls, hospitals, clinics, medical centres, mosques, parks,
landscaping, day care centres or nurseries, play areas and other facilities or
amenities provided for the public, any section of the public or any community
forming part of the population residing, working in or using the Project.

 
Community Support
means the process by which the Project Company and its Affiliates use their Best
Efforts to: (a) give preference to Omani goods and services, (b) carefully
consider those persons and companies who reside in the vicinity of the Project
Area for employment and contracts for the provision of goods and services and
(c) initiate schemes to enhance the business and employment opportunities for
the companies and residents in the vicinity of the Project Area, all as set out
in SCHEDULE 11.

 
Completion Certificate
means a written certificate issued by the Consultant and Approved or granted an
Approval Waiver with respect thereto which attests to the Substantial Completion
of the Minimum Build Obligations, Specific MBOs, Project Company Infrastructure
and Utilities, Building, Unit, Works, or other such construction which is the
subject matter of such certificate.

 
Consequential Loss
means any indirect or consequential loss or damage suffered by a Party,
including loss of operation or down time costs, loss of profit, loss of
opportunity, loss of contract, loss of goodwill, where such loss or damage
liability arises from the conduct of the other Party which is not in accordance
with this Development Agreement.

 
Construction Schedule
means the construction schedule prepared by the Project Company, as may be
updated from time to time, which sets out all the phases of the Project and the
work which shall be undertaken to achieve completion of all the construction
elements of the Project, incorporating all Minimum Build Obligations and all non
Minimum Build Obligations.

 
Contaminants
means any substance alone or in combination with any other substance that is
capable of causing harm to human health, the Environment and which may be in the
fabric of any buildings or other manmade structures in, on or under land
including waste or ordinance.

 
Consultant
means a specialised independent consultant on the one hand appointed by the
Project Company for the verification of the Minimum Build Obligations and on the
other hand appointed by the Project Company for the verification of the Project
Company Infrastructure and Utilities, Buildings, Units and Works, who shall have
a professional duty of care to perform such tasks in accordance with the
professional standards of such consultant’s profession.

 
 
 
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Contractors
means any contractor, construction or project manager, builder, building
contractor, trade contractor, supplier, operator, consultant or other Person and
all of their respective sub-contractors contracting with the Project Company, a
Third Party Developer or a Third Party and carrying out or managing the carrying
out of construction or civil engineering works, any service (consultancy or
otherwise), supply of materials, construction, operation, maintenance or other
activity related to the Development of the Project.

 
Coverage
has the meaning ascribed to it in SCHEDULE 4.

 
Created Waterways
means those canals, water channels and other waterways situated in the Project
Area and which have been or are to be created for the purposes of the Project
and which are identified and described more particularly as such in the Layout
Plan and the Final Master Plan.

 
Customary Rights
means the traditional, cultural and customary rights, practices and activities
enjoyed by the local Omani nationals, including without limitation, fishing
rights, fishing access, rights to fishing grounds; rights to graze animals;
rights to graveyards; rights to waterways; rights to movements and rights to
biological diversity and natural resources in the vicinity of the Project Area
or in the waters of the Sea Area.

 
Day
means a period of twenty-four (24) consecutive hours beginning 00.00 hours and
ending on 24.00 hours in Oman.

 
 
Development Control Plan Framework

or DCPF
means the “Development Control Plan Framework for Tourism Development Projects”
dated 2010 and prepared by the Ministry of Tourism in coordination with other
concerned Government Authorities.

 
Development or Develop
means, in relation to the Project or part thereof, the carrying out and
completion of the works in respect of the development of the Project in
accordance with the Development Control Plan, Final Master Plan and Standards
pursuant to this Development Agreement.

 
Development Control Plan or DCP
means the development control plan as set out in SCHEDULE 13, as amended from
time to time in accordance with this Development Agreement.

 
Direct Agreement
means an agreement entered into between the Government and any Lenders pursuant
to this Agreement, the principles of which are set out in SCHEDULE 20.

 
Dispute
means any dispute, claim, controversy or difference of any kind whatsoever which
arises between the Parties in connection with or arising out of this Development
Agreement, or any breach hereof.

 
Duly Completed
means, in respect of any application to the Government, the completion of the
relevant forms, accompanied by all necessary substantiating documents whether in
original form or copies, as may be required, and the payment of all relevant
fees, levies, costs, expenses or charges.

 
Effective Date
means the date upon which the condition precedent with respect to Ratification
set out in Clause 2 has been satisfied.

 
Encumbrance
means any easement, right, privilege, wayleave, covenant, restrictive covenant,
option, pre-emption, licence, consent, waiver, entitlement, agreement, contract,
usufruct, Tease, tenancy, Security Interest or other encumbrance of whatsoever
kind.

 
Environment
means land, including surface land, sub-surface strata, Sea Bed, Sea Area, river
bed, underwater sea area and natural and manmade structures, water, including
without limitation coastal and inland waters, creeks, surface waters, ground
waters and water in drains and sewers in the Project Area and the vicinity of
the Project Area.

 
Environmental Impact Assessment
means the environmental impact assessment report required by the Law and to be
submitted to the Ministry of Environment and Climate Affairs.

 
Escrow Account
means the escrow account held by a licensed and registered bank in Oman for the
establishment and operation of the Escrow Account, in terms of which payments
made by Third Party Purchasers and lenders to Third Party Purchasers are to be
held and which funds may be utilized by the Project Company for the construction
of Buildings and infrastructure for the Project.

 
Escrow Agreement
means the escrow agreement to be entered into by the Project Company, the
Government and a licensed and registered bank in Oman for the establishment and
operation of the Escrow Account.

 
Event of Default
means a Project Company Event of Default or a Government Event of Default, as
the case may be.

 
Execution Date
means the date upon which this Development Agreement is signed by the Parties.

 
Existing Land
means that part of the Project Area, which, as at the Execution Date, is land
that has the coordinates set out in the Krooki attached as SCHEDULE 1 and, as at
all times subsequent to the Execution Date, is not part of the Sea Bed or
Created Waterways.

 
 
 
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Finance Agreements
means any agreements entered into from time to time by the Project Company with
Lenders for the purpose of raising finance (i) related to the financing or
refinancing of the Project or any Development thereon or thereof; or (ii) for
use by the Project Company in the performance of its obligations or enjoyment of
its rights under this Development Agreement.

 
FM Termination Notice
has the meaning given to such terms in Clause 17.10.

 
Force Majeure
means any event or circumstance (or a combination of events or circumstances)
which is beyond the reasonable control of a Party, resulting in or causing the
failure (whether in whole or in part) of that Party to perform any of the
obligations to be performed by it pursuant to this Development Agreement, which
failure could not, in the case of the Project Company, have been prevented or
overcome by the exercise by it of Best International Practices, and such events
or circumstances shall include without limitation:

 
(a)           war, revolution, riots, insurrection or other civil commotions,
acts of terrorism or sabotage;
 
(b)           nuclear explosion, radioactive, biological or chemical
contamination, ionising radiation or the identification of such contamination or
radiation;
 
(c)           general strikes, work stoppages, working to rule, go slow actions
or lockouts except any such action organised by the contractors, employees or
other agents of the Party claiming Force Majeure;
 
(d)           any effect of nature including lightning, fire, earthquakes,
sandstorms, floods, storms, hurricanes, tsunamis, cyclones, tornadoes, or any
material change in sea level or coastal subsidence;
 
(e)           explosions other than nuclear explosion;
 
(f)           epidemic or plague;
 
(g)           air pressure waves caused by aircraft or other aerial devices
travelling at subsonic or supersonic speeds;
 
(h)           inability to obtain necessary plant, equipment or material due to
blockade, embargo or sanction;
 
and the term “Event of Force Majeure” shall be construed accordingly.
 
Force Majeure Report
has the meaning given to such terms in Clause 17.2.

 
Foreign Currency
means the lawful currency of any country other than Oman.

 
Founder Shareholders
means the shareholders of the Project Company at the Execution Date, namely, the
Office of Royal Court Affairs, Omagine Inc., Journey of Light, Inc.,
Consolidated Contractors Co. Oman LLC and Consolidated Contracting Company, S.A.

 
Freehold Title
means the unrestricted and transferable title to and registered ownership of any
specified part of the Existing Land, Plot or Unit.  For the avoidance of doubt,
investment purposes include residential, commercial and tourism purposes.

 
Government
means the Government of the Sultanate of Oman including all of its ministries or
agencies and organisations and units established pursuant to Royal Decrees 3/72
and 26/75, as amended from time to time.

 
Government Authority
means the Government or any political subdivision thereof or any person
exercising executive, legislative, regulatory or administrative functions on
behalf of the Government, and Government Authority shall include successor
bodies who shall provide public services as a result of privatization or
corporatization.

 
 
 
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Government Event of Default
means the occurrence of an Event of Default as defined in Clause 20.2.

 
Governmentn Event of Default Notice
has the meaning given such term in Clause 21.2.2.

 
Government Infrastructure
means the provision of infrastructure facilities by the Government for the
Project as agreed by the Government and the Project Company and, to the extent
Approved, in accordance with SCHEDULE 8.

 
Government Infrastructure Plan
means that plan for Government Infrastructure set out in SCHEDULE 8, as may be
Approved and varied by the Government from time to time.

 
Government Objection Notice
has the meaning ascribed to it in Clause 19.3.

 
Government Risk Event (GRE)
means any of the following events:

 
(a)           expropriation, confiscation or nationalisation by the Government
of all or some of the Project Area, the Project Assets, Government
Infrastructure, any shares in the Project Company or any Development or any of
the Project Company’s rights and interests arising under the Development
Agreement;
 
(b)           closure of the Project Area or any part thereof by the Government
other than as a result of a Force Majeure or a consequence of the improper or
unlawful conduct of the Project Company;
 
(c)           inability to import goods, plant, equipment or materials due to a
general blockade, embargo or sanctions imposed by or upon Oman as a result of
any action or inaction by the Government and other than by an Event of Force
Majeure, or as a consequence of the unlawful conduct of the Project Company;
 
provided that, any proper action taken by the Government against the Project
Company in relation to the grant, enforcement or exercise of any rights of the
Government pursuant to a Project Company Licence or Permit (other than as a
result of a Change in Law) shall not constitute a Government Risk Event.
 
Government Termination Notice
has the meaning given such term in Clause 21.1.4.

 
GRE Notice
has the meaning ascribed to it in Clause 18.2.

 
GRE Termination Notice
has the meaning ascribed to it in Clause 18.4.

 
Initial Business Plan
means the Initial Business Plan contained in SCHEDULE 19.

 
Initial Master Plan
means the initial masterplan attached hereto as SCHEDULE 4.

 
Integrated Tourism Complex or ITC
means the Integrated Tourism Complex, as defined in Ministry of Housing Decision
191/07, which will be Developed in accordance with this Development Agreement
and the Law.

 
 
 
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Krooki
means the document issued on June 16 2014 by the Ministry of Housing of the
Government, a copy of which is contained in SCHEDULE 1(A), and which contains
details of the Existing Land as at the Execution Date, including a full set of
coordinates identifying the exact location and boundaries of the Existing Land.

 
Land Price
means the price payable to the Ministry of Housing for Freehold Title to the
Existing Land (or any part thereof) granted pursuant to the Usufruct Agreement,
the value of which shall be twenty-five Omani Rials (OMR 25) per square meter
and increased by six per cent (6%) (or such other percentage as determined by
Law from time to time), each year from the registration date of the Usufruct
Agreement to the end of the month in which the request for registration of
Freehold Title has been submitted to the Ministry of Housing.

 
Law
means any royal decree, ministerial decision, ruling of a court, regulation or
requirement and any amendments thereto or any other instrument issued by the
Government and having the force of law in Oman.

 
Layout Plan
means the layout plan as contained in SCHEDULE 1.

 
Lenders
means the banks and/or other financial institutions, which have or will have
committed to make available certain loan and credit facilities to the Project
Company to fund the performance by the Project Company of its obligations
pursuant to this Development Agreement in accordance with the Finance
Agreements.

 
 Master Plan
means a master plan for the Project prepared to a level of detail satisfactory
to the Government  showing, in relation to the Project as a whole, the:

 
 
(a)
vision and Development concept;

 
 
(b)
overall land uses and Development proposals;

 
 
(c)
densities for different areas;

 
 
(d)
gross floor areas;

 
 
(e)
Plot ratios and the number and types of Plots;

 
 
(f)
built and un-built areas;

 
 
(g)
physical (natural) constraints, drainage, flood protection etc.;

 
 
(h)
the Minimum Build Obligations;

 
 
(i)
the number of Units and Buildings;

 
 
(j)
typical sections showing the relationship of roads to buildings;

 
 
(k)
resident population assumptions and Project employment assumptions;

 
 
(1)
phasing for real estate sales and marketing strategies;

 
 
(m)
estimated annual tourist figures for the MBO tourism and recreational elements
(first five (5) years from MBO Completion Date);

 
 
(n)
Project Company Infrastructure and Utilities plan showing infrastructure works
related to internal road systems, potable water supply network, desalinated
water treatment plant (if applicable) sewage collection, treatment and disposal
systems, refuse collection and compacting areas, treated water supply network,
electricity networks, and telecommunications networks within the Project Area
and the policy on underground service corridors;

 
 
 
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(o)
Created Waterways (if any)

 
 
(p)
Environmental Impact Assessment and alleviating analysis;

 
 
(q)
Community Facilities,

 
 
(r)
housing for the employees of the hotel and other tourism and recreational
elements of the Project;

 
 
(s)
the Private Sector Public Infrastructure and Utilities proposals and locations;

 
 
(t)
the Project Company Infrastructure and Utilities proposals and locations;

 
 
(u)
safety and security provisions;

 
 
(v)
indicative Project and Construction Schedule;

 
 
(w)
indicative Phasing Plan (if any phases are contemplated);

 
 
(x)
aerial perspectives of Master Plan; and

 
 
(y)
any other drawings, information or calculations which the Government may
reasonably request,

 
as revised and updated from time to time in accordance with Clause 11 and the
provisions of the DCPF, and when Approved by the Government in accordance with
the provisions of the DCPF, such master plan shall be the “Final Master Plan” as
that term is defined in the DCPF.
 
Material Change
has the meaning given such term in Clause 11.4.

 
Material Adverse Effect
means a material adverse effect on the Project, or on the ability of the Project
Company to perform its obligations or to exercise its rights under this
Development Agreement or on the ability of the Project Company to carry out a
Development or any Works.

 
MBO Completion Date
means the date upon which the Minimum Build Obligations have achieved
Substantial Completion.

 
MBO Damages for Delay
means the liquidated damages payable by the Project Company to the Government
for delay in achieving Substantial Completion of the Minimum Build Obligation by
the MBO Completion Date.

 
Milestone Dates
shall be the dates specified in SCHEDULE 7.

 
Minimum
means all acts as specified in SCHEDULE 6 to be performed by the Project Company
for the Substantial Completion of the Project, within a specified period of
time, in order to commence commercial operation of the tourism and other
elements of the Project and in order for the Project to constitute an Integrated
Tourism Complex.

 
Month Build Obligations or MBO
means a calendar month according to the Gregorian calendar unless specified
otherwise.

 
Mulkiya
means the Freehold Title document issued by the Ministry of Housing confirming
the legal title to the Existing Land and as set out in Schedule 1(B).

 
Objection Notice
has the meaning given such term in Clause 17.3.

 
 
 
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Oman
means the Sultanate of Oman.

 
Omanisation
means the mandatory obligations in respect of the employment, training and
advancement of Omani nationals, and the use of Omani goods and services, as set
forth in this Development Agreement or required by the Law.

 
Omanisation Plan
means the Plan for the Community Support Program and for human resource
development set out in SCHEDULE 11, as amended from time to time.

 
Omanisation Report
means a report provided to the Government by the Project Company reviewing the
progress related to the provisions of Clause 7, including:

 
(i)           the number of Omani companies contracting with the Project Company
and the percentage of the Project Company’s total such contracted expenditures
they represent, and
 
(ii)           the number of Omani persons employed by the Project Company and
the percentage of the Project Company’s total employees such Omani persons
represent.
 
PC Appeal Notice
has the meaning ascribed to it in Clause 19.4.

 
Phasing Plan
means the plan for phased development of the Project as indicatively shown in
Schedule 4E.

 
Plans
has the meaning given such term in Clause 11.1.

 
Plan of Development or POD
means a plan of development Approved by the Government in accordance with the
Development Control Plan.

 
Plot
means any defined and delineated area within the Project Area, having its own
set of coordinates and being capable of having its own krooki and mulkiya and
identified as such in the Final Master Plan by the Project Company.

 
Plot Plan
means a plan created by the Project Company after the Effective Date showing the
Existing Land or the Project Area subdivided into a number of separate
registered Plots.

 
Plot Plan Meeting
has the meaning assigned to such term in Clause 7.2.3.

 
Presale
means, any off plan sale of a Residence Unit pursuant to a Sales Agreement
entered into before the completion or construction of a Residence Unit.

 
Principal Construction Contract(s)
means all of the main construction contracts which are necessary for the
completion of the Minimum Build Obligations and the Project Company
Infrastructure and Utilities.

 
 
Private Sector Public Infrastructure

and Utilities
means all utilities, including electricity and sewage sludge disposal which are
to be provided to the Project Area, and all associated infrastructure owned
and/or constructed or to be constructed by the relevant Private Sector Utility
Company whether within or outside the Project Area, in accordance with the
requirements set out in SCHEDULE 17.

 
Private Sector Utility Company
means the relevant private sector company licensed by the Government which shall
supply the Private Sector Public Infrastructure and Utilities.

 
Project
means the implementation, planning, design, development, financing, marketing,
sale, leasing, utilisation, management, maintenance and operation by the Project
Company of the Project Area for the purpose of the creation, Development, and
operation of the Integrated Tourism Complex pursuant to the Law and the terms of
this Development Agreement.

 
Project Area
means the area situated at Wilayat of A’Seeb in Oman and which is made up of,
excluding all mineral rights thereto:

 
(a)           the Existing Land having the coordinates described in the Krooki
together with sub-soil;
 
(b)           Reclaimed Land if approved by the Government;
 
(c)           the Sea Area and the Sea Bed;
 
(d)           inland water areas (e.g., marina) adjacent to such Existing Land;
and
 
(e)           all Created Waterways.
 
Project Assets
means all freehold land interests and rights, Usufruct Rights, and all other
assets owned by the Project Company in the Project Area, including but not
limited to any Project Company Infrastructure and Utilities, buildings, roads,
paths, common public spaces such as parks, pipelines, transmissions lines for
electricity and telecommunications, drains, sewers, water transmission
facilities and other similar infrastructure necessary for the use, operation and
occupation of the Project, all buildings and other structures of any type and
configuration constructed on the Project Area, and all other assets owned by the
Project Company.

 
 
 
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Project Company
means Omagine L.L.C., a limited liability company organized and existing under
the laws of the Sultanate of Oman and registered in Oman under commercial
registration number 1080151, and where the context requires, it also means
Omagine S.A.O.C., a closed joint stock company to be organized under the laws of
the Sultanate of Oman which will be the legal successor company to Omagine
L.L.C. pursuant to the Transformation.

 
Project Company Event of Default
means the occurrence of an Event of Default as defined in Clause 20.1.

 
Project Company Event of

Default Notice
has the meaning given such term in Clause 21.1.2.

 
 
 

 
Project Company Infrastructure

and Utilities”
means the civil engineering, building, construction and installation work
relating to any common areas, public areas, utilities, amenities or
infrastructure within the Project Area that is not Government Infrastructure or
Private Sector Public Infrastructure and Utilities and which is Developed and
financed by the Project Company or its Affiliates within the Project Area with a
view to rendering the Project Area capable of beneficial use, occupation or
operation or to provide amenities for users, occupiers or the public and,
without limiting the generality of the foregoing, shall include:

 
(a)           roads and any associated pedestrian walkways, kerbs, hard and soft
landscaping, signage and traffic management systems;
 
(b)           power supply and distribution within the Project Area and the
associated distribution network;
 
(c)           potable water supply and distribution within the Project Area and
the associated distribution network;
 
(d)           sewage treatment plants to service the Project and the associated
pipe network within the Project Area;
 
(e)           waste water treatment facilities and the associated distribution
network;
 
(f)           telecommunications, data transmission and data networking and any
associated networks within the Project Area;
 
(g)           foul and surface water drainage;
 
(h)           substations, pumping stations or the like for the purposes of any
of the aforesaid;
 
(i)           landfill site or sites required for the treatment or accommodation
of solid waste; and
 
(j)           such other utilities or infrastructure in respect of the Project
as the Project Company may from time to time determine with the prior Approval
of the Government.
 
 
 
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Project Company Licences and Permits
means such licences, permits, consents and Approvals from the Government as the
Project Company may require, from time to time, to hold or obtain pursuant to
applicable Law in order for the Project Company to perform its obligations and
benefit from the rights provided under this Development Agreement and the
commercial operation of the Project.

 
Project Tasks
means all acts necessary to be performed by the Project Company in order to
accomplish the tasks listed in and in accordance with the time frames set out in
SCHEDULE 7 and/or the Project Tasks as amended/supplemented in accordance with
the provisions of Clause 6.1.3, and in particular the following:

 
(a)           the exercise of reasonable skill, care, attention and diligence in
complying with its obligations under this Development Agreement;
 
(b)           the undertaking of its obligations and completion of the
Development in a manner consistent with the Final Master Plan, the Development
Control Plan and this Development Agreement;
 
(c)           the periodic review of the Final Master Plan and the Development
Control Plan and submission of variations to the Government for adoption
pursuant to the provisions of Clause 11;
 
(d)           the Substantial Completion of the Minimum Build Obligations;
 
(e)           the completion and operation of the Project Company Infrastructure
and Utilities;
 
(f)           the obtaining of all Project Company Licences and Permits required
for any Development to be undertaken by the Project Company in respect of the
Project;
 
(g)           ensuring that the Community Facilities are sufficient for the
Project;
 
(h)           establishing marketing, branding and public relations strategies
for the Project and the production of any required promotion and sales &
marketing material;
 
(i)           assessing and determining on a regular and frequent basis the
prospects for and the feasibility and viability of Developments in respect of
the Project having regard to market conditions, actual or anticipated occupier
and investor demand and the anticipated requirements of prospective occupiers,
investors, funds, financiers, tenants and owners; and
 
(j)           such other matters as are ancillary or incidental to any of the
tasks set out above.
 
Project Company Termination Notice
has the meaning given such term in Clause 21.2.2(c).

 
Prolonged Event of Force Majeure
has the meaning given such term in Clause 17.10.

 
Ratification / Ratified / Ratify
means the signing and authorisation by the Government of this Development
Agreement in accordance with Royal Decree No. 48/76 as amended.

 
Reclaimed Land
means that part of the Project Area which is land which has been created from
the Sea Area and the Sea Bed by filling and replacing such Sea Area to form
compacted dry land fit for the purpose of construction and in respect of which
an Environmental Impact Assessment has been effected, which shall exclude in all
cases, all mineral rights and archaeological finds.

 
Registration Fee
means the fee payable to the Ministry of Housing pursuant to Law for the
registration with such Ministry for each of:

 
 
(i)
the transfer of the Freehold Title to any part of the Existing Land or a Plot or
Unit; or

 
 
(ii)
the Usufruct Agreement; or

 
 
 
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(iii)
a usufruct agreement for the Reclaimed Land; or

 
 
(iv)
a lease/sub-usufruct agreement for the transfer of any Usufruct Rights; or

 
 
(v)
any Security Interest.

 
Residences
means all villas, town houses, flats, apartments or such other structures meant
for residential purposes, but excluding serviced apartments, in the Project
Area.

 
Residence Unit
means any Unit on which a Residence has been constructed and subject to Freehold
Title.

 
Sales Agreement
means the Approved sales agreement between the Project Company and a Third Party
Purchaser for the sale of a Residence Unit.

 
Sea Area(s)
means those areas within the Project Area which are areas of the sea over the
Sea Bed and which are, at any time, neither Existing Land nor Created Water Ways
and which, subject to the approval of the Ministry of Environment and Climate
Affairs, are limited to one hundred thirty (130) meters measured from the high
high water mark on the shoreline and perpendicular to the Existing Land and as
shown in SCHEDULE 1.

 
Sea Bed
means that part of the Project Area which is under the water and not Existing
Land.

 
Security Interests
means a mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation or other security interest or an agreement or arrangement having
similar effect.

 
Shareholders’ Agreement
means the agreement among the Founder Shareholders of the Project Company with
respect to their equity interests in the Project Company, as may be amended.

 
Social Impact Assessment
means the social impact assessment report, prepared by the Project Company at
its cost, required by the Government and to be submitted to the Ministry of
Tourism in accordance with Clause 5.3.

 
Specific MBO
has the meaning given such term in Clause 5.4.1.

 
Standards
means the rules, standards and specifications set out in the Final Master Plan
and which apply to the Project Area and all activities undertaken in it with
respect to Works, building, design, construction, planning of roads, amenities
and related facilities, commercial areas and all other activities related to the
Development of the Project.

 
Step-in Notice
means a written notice given by a Lender to the Government pursuant to a Direct
Agreement and the Project Company notifying them of such Lender’s exercise of
its Step-in Right.

 
Step-in Right
means the right of a Lender pursuant to a Direct Agreement to:

 
 
(i)
undertake directly, or

 
 
(ii)
novate to any Person

 
 
 
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all or any of the rights and obligations of the Project Company in accordance
with SCHEDULE 20.
 
Substantial Completion
means, that in respect of the Minimum Build Obligations, Specific MBO, Project
Company Infrastructure and Utilities, Buildings, Units or Works that all
necessary work has taken place, Completion Certificates have been issued,
permits and licenses have been granted, the subject matter is both fit for use
and is either able to commence commercial operation or is habitable for its
intended purpose without hindrance, and that only immaterial outstanding or
remedial work remains to be completed.

 
Substantiating Notice
has the meaning ascribed to it in Clause 19.1.

 
Term
has the meaning given such term in Clause 3.1.

 
Third Party
means any person who is not one of the Parties, an Affiliate of a Party or an
Affiliate of a shareholder of a Party, the term “Third Parties” shall be
construed accordingly.

 
Third Party Developer
means the Third Party Developer approved by the Government, undertaking or is to
undertake the first Development of any Unimproved Land for the purposes of the
Minimum Build Obligation, and who has entered into an Accession Agreement.

 
Third Party Purchaser
means any person of any nationality, who may be a Party or an Affiliate of a
Party, who pays the relevant Registration Fee and purchases the Freehold Title
to any specified part of the Existing Land, Plot or Unit.

 
Third Party User
means any person of any nationality, who may be a user of a Commercial Unit, a
Party or an Affiliate of a Party, who utilises any Unit or portion thereof or
any portion of the Project Area and/or the improvements thereon for commercial
or tourism purposes pursuant to a lease, usufruct, sub-usufruct, licence or
similar arrangement or any other agreement with the Project Company.

 
Time Schedule
means the indicative time schedule contained in SCHEDULE 7, which time schedule
shall be updated from time to time, for the performance of the construction of
the Project, including the Minimum Build Obligations.

 
Tourism Vessel
means any watercraft, vessel or boat appropriately licensed for commercial
operation within the Project Area.

 
Transformation
means, pursuant to the Companies Law of Oman, the changing of the corporate form
and structure of the Project Company after the Execution Date, from a limited
liability company to a closed joint stock company.

 
Unimproved Land
means a part of land within the Project Area identified in the Final Master Plan
for Development and which has not yet been Developed.

 
Unit(s)
means any developed Plot, including any improvements thereon or thereto, any
flat, apartment, villa or Residence or commercial Building or any part thereof,
situated within the Project Area.

 
Usufruct Agreement
means the usufruct agreement with respect to the Existing Land, entered into on
the Effective Date by the Government and the Project Company pursuant to Clause
4 and in the form as set out in SCHEDULE 2.

 
Usufruct Fee
has the meaning given such term in Clause 4.1.

 
Usufruct Rights
means all the rights with respect to the Existing Land granted to the Project
Company pursuant to the Usufruct Agreement.

 
Usufruct Term
means fifty (50) years and as set out in the Usufruct Agreement.

 
Voting Control
means the power to direct the management or policies of a company whether
through the ownership of voting securities, by contract, or otherwise.

 
Works
means any construction, building, installation, civil engineering or other like
works which do not comprise the construction of a Building.

 
 
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1.1 In this Development Agreement, except to the extent the context otherwise
requires:
 
1.1.1 the singular includes the plural and vice versa.
 
1.1.2 terms not defined in this Development Agreement shall have the meaning
ordinarily ascribed to them in the Oxford English Dictionary (Second Edition).
 
1.1.3 a “person” includes an individual and a juristic person together with that
person’s legal representatives and successors.
 
1.1.4 references to recitals, Clauses, Schedules and Annexures are, unless the
context otherwise requires, references to recitals and Clauses of and Annexures
and Schedules to this Development Agreement and which shall include all
revisions and amendments as approved, as applicable to such Schedules and
Annexures.  The Schedules specifically provide the details of the commercial
terms agreed between the Parties in respect of the Project.
 
1.1.5 except as specified in this Development Agreement references to any Royal
Decree, ministerial decision, enactment, ordinance or regulation including any
amendment thereof shall be to those issued prior to the Effective Date.
 
1.1.6 in interpreting the provisions of this Development Agreement and in
fulfilling their respective obligations hereunder, the Parties agree to act in
good faith and in such a manner as to give full effect to its spirit and intent.
 
1.1.7 references to the words “include” or “including” shall be deemed to be
followed by “without limitation” or “but not limited to” whether or not they are
followed by such phrases or words of similar effect.
 
1.1.8 references to a Party or Parties shall mean either of the Project Company
or the Government and shall include their successors and permitted assignees and
transferees of their rights and/or obligations.
 
1.1.9 an obligation on a Party to do an act includes an obligation to procure
that it is done.
 
1.1.10 where a Party is placed under a restriction in this Development
Agreement, the restriction includes the obligation on that Party to use
reasonable endeavours not to effect the infringement of that restriction by any
other person.
 
1.1.11 an indemnity given by one Party to another is a full indemnity against
all claims, liabilities and costs except as otherwise stated.
 
1.1.12 references to a “variation” include amendment, addition, omission,
clarification, variation and change to, from or with the thing varied.
 
2.  
CONDITIONS PRECEDENT/CERTAIN OBLIGATIONS

 
2.1 The rights and obligations of the Parties under this Development Agreement
are conditional upon Ratification by the Government, and the Government shall
use its reasonable endeavours to do all things as are necessary to achieve
Ratification within ninety (90) days after the Execution Date. The continued
legal effectiveness of this Development Agreement subsequent to Ratification is
dependent upon the fulfilment of the conditions precedent referred to in Clauses
2.1.1, 2.1.2, 2.1.3 and 2.1.4 below.
 
2.1.1 The Project Company being able to raise financing for the Project. The
Government recognises that the Project Company intends to raise limited recourse
financing in relation to the Project and that Lenders may expect to be afforded
certain rights in relation to it.  Accordingly, the Project Company will by or
before the completion of twelve (12) months from the Execution Date enter into a
written term sheet with the Lenders for the financing of the first phase, any
other phase or all of the Project (a “Term Sheet”).  If the Project Company has
not delivered a copy of such Term Sheet to the Government by or before the
expiry of the twelve (12) month period referred to above, this Development
Agreement then shall have no further effect. The Government however shall in no
way be a party to, or bear any responsibility with respect to, any such Term
Sheet.
 
2.1.2 The Government approving in writing within twelve (12) months of the
Execution Date the Social Impact Assessment, as referred to in Clause 5.3 below,
which shall be submitted to the Ministry of Tourism within eight (8) months of
the Execution Date.
 
2.1.3 The Government approving in writing within twelve (12) months of the
Execution Date the Development Control Plan referred to in Clause 11.
2.1.4           The Transformation referred to in Clause 14.1.1 occurring within
twelve (12) months after the Execution Date.
 
2.2 If any of the conditions precedent referred to in Clauses 2.1.1, 2.1.2,
2.1.3 or 2.1.4 are not fulfilled within the time periods mentioned or within
such extended period as may be agreed between the Parties, then this Development
Agreement shall thereupon terminate.
 
3.  
TERM

 
3.1 This Development Agreement and the rights and obligations of the Parties
hereunder shall commence upon Ratification and shall continue (unless terminated
earlier pursuant to this Development Agreement) in full force and effect for a
period of twenty (20) years (the “Term”).
 
3.2 Notwithstanding Clause 3.1, Clauses 5.1.2, 5.1.3, 5.1.6, 5.1.9, 5.1.10,
5.1.12, 5.1.14, 6.4.5, 6.10, 6.11, 8, 10, 12, 15, 16, 22.5, 23, 24, 28, 32 and
33 of the Agreement shall survive the Term and continue to be legally binding
and enforceable obligations of the Parties until the expiry of the Usufruct
Term.
 
 
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CHAPTER II
 
PROJECT COMPANY RIGHTS
 

 
4.  
USUFRUCT AGREEMENT

 
4.1 On the Effective Date, the Government and the Project Company shall enter
into the Usufruct Agreement pursuant to the provisions of this Development
Agreement granting Usufruct Rights to the Project Company over the Existing Land
for a term (the “Usufruct Term”) and for a fee payable by the Project Company
(the “Usufruct Fee”) in accordance with the Usufruct Agreement.  The Usufruct
Agreement shall be consistent in its terms and conditions with this Development
Agreement.
 
4.2 Upon the expiry of the Usufruct Term, all Usufruct Rights to and over the
Existing Land not disposed of at such expiry date shall revert to the Government
in accordance with the Usufruct Agreement and the Law.
 
4.3 In the event of any inconsistency between the Usufruct Agreement or the
Usufruct Amendment and this Agreement, the terms and conditions of this
Agreement shall prevail.
 
4.4 For the avoidance of doubt the Usufruct Agreement shall survive the expiry
of the Term.
 
5.  
GRANT OF RIGHTS TO THE PROJECT COMPANY

 
5.1 The Government hereby grants to the Project Company all rights to perform
the Project Tasks in accordance with and subject to this Development Agreement
and the Law, under the supervision and control of the relevant Government
Authorities, including:
 
5.1.1 the right to use, design, plan, construct and Develop the Existing Land
subject to the Usufruct Agreement, and this Development Agreement, provided that
Coverage of the Development shall not exceed thirty percent (30%) of the
Existing Land, of which a maximum of fifty percent (50%) of the Development
shall be for non-tourism purposes and the balance of the Development shall be
for tourism purposes;
 
5.1.2 subject to obtaining the requisite Approvals and an Environmental Impact
Assessment relating to the Environment by the Project Company, the right to the
design, plan, construct, build, create, operate, manage, own and control the
Created Waterways including the right to construct marinas, pontoons, docks,
walkways and other similar structures over and upon such waterways and to derive
income therefrom by selling the same or entering into lease or similar
arrangements with respect thereto;
 
5.1.3 subject to and in accordance with the Code of Practice, the right to
charge such reasonable fees or service charges, as the Project Company may deem
appropriate for the purpose of the proper upkeep, maintenance, operation and
management of or the provision of services in respect of all or part of the
Project Assets, the Project Area, Project Company Infrastructure & Utilities,
Civil Defence Services, and Civil Defence Facilities if such Civil Defense
Facilities are required by the Government;
 
5.1.4 the right to connect to, have access to, use and utilise the Government
Infrastructure in accordance with this Development Agreement;
 
5.1.5 with respect to Third Party Purchasers, Third Party Developers and
Affiliates thereof, the right to impose and to procure compliance with the
Standards, the Final Master Plan, the Development Control Plan and the
timeframes set forth within SCHEDULE 7 within the Project Area and with respect
to any activity relating to the Project undertaken in accordance with this
Development Agreement;
 
5.1.6 the right to use and manage the Sea Area within the area of a marina,
including the right to design, plan, construct, build, create, operate, control
and manage piers, walls, pontoons, walkways and berths for Tourism Vessels as
provided in the Final Master Plan and to derive income therefrom by selling,
leasing, renting, hiring out or by similar arrangements with respect to the
same, provided that this right shall not impinge upon the sovereign right of the
Government to levy taxes and fees;
 
5.1.7 notwithstanding the Usufruct Agreement and the rights granted to the
Project Company pursuant to this Development Agreement, the right to do all such
things as are necessary, in accordance with the Approved Final Master Plan, so
as to create one or more Plots and to subdivide any part or all of the Project
Area into Plots and to obtain from the relevant Government Authorities
confirmation of separate freehold title (either in the name of the Project
Company or a Third Party Purchaser, as the case may be) in respect of all
Developed Plots, Buildings and Units; and
 
5.1.8 the right, pursuant to the terms of the Usufruct Agreement, Escrow
Agreement and this Development Agreement, to market, contract to sell, lease,
mortgage, utilize or undertake dealings in respect of Units, Plots or any part
of the Project Area including any Building, improvements thereon or Unimproved
Land to or with (as the case may be) Third Party Purchasers, Third Party Users,
Third Party Developers or Affiliates and to receive funds and receipts in
respect of any such dealings and disposals and use such funds and receipts for
the Project Company’s own benefit and to have the exclusive right to sell the
Freehold Title in any Plot or Unit to any person pursuant to the Law, provided
that any Unimproved Land or undeveloped Plot shall not be disposed of by sale to
any person by the Project Company.
 
 
 
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5.1.9 the exclusive right to grant exclusive and non-exclusive commercial
licences (not licences usually granted by the regulatory authorities) and/or
contracts to Third Parties, who are licensed to do business in Oman, on
commercial terms selected by the Project Company, by tender or otherwise, for
the provision of any relevant services or to carry out commercial activities
which the Project Company may determine to be necessary or desirable within the
Project Area and which may benefit the Project Company, Third Party Purchasers,
or Third Party Users or any other Third Party, which may include a Party or its
Affiliate, which may participate in such licences or contracts in terms of an
arm’s length commercial basis and the Code of Practise.
 
5.1.10 the exclusive right to levy such fees on Third Party Purchasers or Third
Party Users or any Third Party who are granted rights of usage, usufruct or any
sort of occupation of parts of the Project Area as are deemed in its sole
discretion necessary or desirable (subject to the Code of Practice) to maintain,
operate and manage the Project Assets, the Project Area generally or to benefit
from the Project pursuant to the terms of this Development Agreement provided
that this right shall not exclude or impinge upon the sovereign right of the
Government to levy taxes and fees;
 
5.1.11 the right to create an encumbrance by way of Security Interest for the
purpose of securing finance for the Project, over the whole or part of the
Project Area, which encumbrance will exclude any Freehold Title to Plot or Unit
transferred to a Third Party or Third Party Purchaser or Third Party Developer
from the Existing Land.
 
5.1.12 the exclusive right to lease, sell, market, utilize and/or operate
hotels, restaurants, golf courses and other tourism facilities within the
Project Area, which are built in accordance with the Development Control Plan;
 
5.1.13 the right, subject to Law to use and/or reclaim such areas of the Sea Bed
and Sea Area as is necessary and to acquire the Usufruct Rights or Freehold
Title to the Reclaimed Land, subject to the Government approval;
 
5.1.14 the right to develop, build, and operate on the Project Area a sewage
treatment plant, including waste water treatment, water clarification,
purification, a desalination and/or demineralization plant, with adjacent
electric power generating plant, and all other plants and connected systems,
pipelines, access points etc. which are typically necessary to operate a project
of similar dimension, subject to applicable Law and obtaining appropriate
licenses granted by the appropriate Government Authority;
 
5.1.15 the right to dispose solid waste/garbage in designated land fill sites
provided by the Government, or other concerned Government Authorities in
accordance with the Government Infrastructure Plan; and
 
5.1.16 the right to access the Project Area and to grant access to Third Party
Purchasers, Third Party Users and Third Party Developers.
 
5.2 Without prejudice to the rights and entitlements of the Project Company over
the Project Area and notwithstanding that the Project Company shall primarily
operate and benefit from the Project through the sale of, or the granting of
leases or similar property rights with respect to, Plots, Buildings or Units,
the Project Company shall, through its rights granted to it under this
Development Agreement, have the exclusive right to construct, Develop, build,
benefit from, operate and manage any Project Company Infrastructure and
Utilities and provide any services in and with respect to the Project Area it
deems appropriate in accordance with the Law, and Code of Practice, and the
provisions of this Development Agreement.
 
5.3 If, in the exercise of any of the rights contained in this Development
Agreement, the Project Company shall affect any of the Customary Rights
identified in a Government approved Social Impact Assessment for the Project
Area then the Project Company shall pay all such compensation as shall be
required or decided by Law for any claim in respect of such Customary
Rights.  For all other claims in respect of Customary Rights, the Government
shall be liable and shall indemnify the Project Company from and against any
losses, cost, claim, liability or expense.
 
5.4 The following terms shall apply with regard to a Third Party Developer:
 
5.4.1 Should the Project Company consider that it would be beneficial that a
qualified, experienced, reputable and credit worthy development company be
nominated as a Third Party Developer for a specific element of the Minimum Build
Obligations (“Specific MBO”) or, with Approval, for any other touristic or
non-MBO element, then the Project Company shall, prior to the selection of such
Third Party Developer, notify the Government of its intention to engage a Third
Party Developer and the reasons the Project Company considers that it is
commercially preferable for the Third Party Developer to perform the Specific
MBO rather than the Project Company.
 
5.4.2 The Project Company shall provide the Government with the name, corporate
identity, the last three (3) years audited accounts, financial standing, bankers
references, qualifications and a list with details of all similar types of
Integrated Tourism Complexes and construction projects previously undertaken by
the intended Third Party Developer.  In the event that the Third Party Developer
is a consortium of companies, then the relevant details for each company shall
be submitted, provided that they hold at least ten percent (10%) of the equity
in the Third Party Developer.  The Project Company shall specify in detail the
Specific MBO that is proposed to be performed by the Third Party Developer.
 
5.4.3 The appointment of a Third Party Developer shall be subject to the written
Approval of the Government, which shall be granted in its sole discretion and
such approval, rejection and the procedure therefore shall not be the basis for
any claim or appeal by the Project Company nor shall any delay in considering
the application or rejection of the Third Party Developer by the Government be
considered to be a Dispute subject to the provisions of Clause 28.
 
 
 
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5.4.4 Should the Government issue a written Approval as provided for in Clause
5.4.3 above for a Specific MBO, the Project Company shall remain fully liable
for the completion of such Specific MBO in accordance with this Development
Agreement and the Project Company shall continue to be the sole point of contact
with the Government regarding all matters concerning the Specific MBO as if the
Specific MBO was being performed by the Project Company.
 
5.4.5 The Project Company shall apprise the Government of any material change in
relation to the Third Party Developer or the Specific MBO.
 
5.5 In the event the Project Company enters into a Sales Agreement for the
Presale of a Residence Unit, the Project Company shall complete the construction
of a Residence Unit within three (3) years from the date of the signature of the
Sales Agreement.
 
CHAPTER III
 
PROJECT COMPANY OBLIGATIONS
 
6.  
PERFORMANCE OF OBLIGATIONS

 
6.1 Project Tasks
 
6.1.1 The Project Company shall, from the Effective Date, carry out the
Development of the Project in accordance with this Development Agreement and the
Law.
 
6.1.2 In furtherance of Clause 6.1.1, the Project Company shall discharge and
perform the Project Tasks in accordance with the requirements set out in
SCHEDULE 7.
 
6.1.3 The Project Tasks may be reviewed and revised by the Project Company from
time to time and any proposed changes thereto shall be submitted to the
Government for written Approval.  Upon any such changes being submitted to the
Government, the Parties shall in good faith discuss them during the forty-five
(45) Days following such submission.
 
6.1.4 Subject to the provisions of Clause 11 relating to the Development Control
Plan, in deciding whether to Approve the proposed changes to the Project Tasks,
the Government will consider primarily the effect of the proposed changes on the
achievement of the Minimum Build Obligations and the performance of Project
Company’s other obligations under this Development Agreement, provided that (i)
the Government will endeavour to give its decision within the discussion period
specified in Clause 6.1.3, failing which the matter shall be resolved as a
Dispute pursuant to Clause 28.2 of this Development Agreement.
 
6.1.5 Upon the changes being Approved in accordance with Clause 6.1.3 or 6.1.4
or pursuant to Clause 28.2, the Project Tasks shall be amended accordingly and
the so amended Project Tasks shall replace the originals and shall be applicable
as between the Parties as if they were the original Project Tasks.
 
6.2 Law, Environment and Best International Practice
 
6.2.1 In carrying out its obligations and in exercising its rights under this
Development Agreement, the Project Company shall at all times act in accordance
with the Law. All taxes, fees, charges, levies and payments to be made by the
Project Company to the Government in accordance with the Law shall be payable by
the Project Company.
 
6.2.2 Without prejudice to Clause 6.2.1, the Project Company shall conform to
Best International Practices and shall ensure the protection of the Environment
within the Project Area in accordance with the Law.
 
 
 
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6.3 Insurance
 
The Project Company shall be responsible for procuring and maintaining all
insurance pursuant to Clause 16 and the processing of any claims thereunder.
 
6.4 Omanisation, Training and Community Support
 
6.4.1 The Project Company shall exercise its Best Efforts to ensure that the
Project Company, its Affiliates, Third Party Developers and Contractors,
maximise the number of Omanis that they each employ, subject always to:
 
(a)  
the needs of the Project;

 
(b)  
the skills that will be needed in respect thereof; and

 
(c)  
the availability of Omanis who have the experience, qualifications, training and
skills to meet such needs.

 
6.4.2 The Project Company shall submit to the Government for Approval, within
one year from the Effective Date, the Omanisation Plan set out in SCHEDULE 11
and, upon Approval, shall implement forthwith the training programmes as set
forth in SCHEDULE 11.
 
6.4.3 The Project Company shall submit Omanisation Reports and attend
Omanisation Meeting as specified in Clause 7.2.4.
 
6.4.4 The Project Company shall ensure that the Project Company, its Affiliates,
and Third Party Developers and Contractors, shall implement programmes for
Community Support and shall as soon as practicable, but not later than sixty
(60) Days after the Effective Date, provide to the Government a detailed policy
document together with implementation documents showing how such programmes for
Community Support shall be achieved.
 
6.4.5 The Project Company shall, within one (1) year of the Effective Date,
submit to the Government for Approval, the Community Development Plan in
accordance with SCHEDULE 10 and, upon Approval, implement forthwith the Approved
Community Development Plan for the benefit and welfare of the local community
situated in the vicinity of the Project Area.
 
6.4.6 The Project Company and its Affiliates shall, when considering
applications from Third Parties for Units for commercial purposes, in order to
support the local economy, give priority to allocate a certain percentage of
such Units, not less than twenty percent (20%), for Omani companies, in
particular, whose principal owners are residents in the Wilayat of the Project
and, in the absence of requisite percentage of such owners, principal owners who
are residents of other Wilayats, it being understood that all commercial terms
and conditions shall be the same as that for any other Third Party Users. The
Project Company shall ensure that any Third Party Developers shall have the same
obligations placed upon them.
 
6.4.7 The Project Company, and its Affiliates involved in the Project shall,
where practicable, cost efficient and quality driven, give preference to Omani
goods and services and carefully consider those persons and companies who reside
in the vicinity of the Project Area for employment and contracts for the
provision of goods and services and, where feasible, attempt to impose this
obligation on its Contractors and sub-contractors. The Project Company shall
ensure that any Third Party Developer shall have the same obligation placed upon
them.
 
6.5 Retention of Shares in the Project Company and Change to the Constitution of
the Project Company
 
6.5.1 The Project Company and the Founder Shareholders covenant and agree that
prior to the MBO Completion Date, neither shall there be affected a Change of
Control, nor shall the Founder Shareholders transfer more than twenty five
percent (25%) of their original shareholding to a third party and that any such
proposed transfer shall be subject to the approval of the Government, which
shall not be unreasonably withheld. The Government shall only consider third
parties who are qualified and experienced in projects which are similar to the
Project and financially sound.
 
 
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For the avoidance of doubt, prior to the MBO Completion Date, any transfer of
twenty five per cent (25%) or less of the Founder Shareholders’ original
shareholding to a third party will not require Government’s approval, provided
that the Government shall be notified by the Project Company within ten (10)
Business Days of any transfer of shareholding by the Founder Shareholders.
 
6.5.2 Any breach of the above undertaking by the Project Company or by any of
the Founder Shareholders shall be deemed to be a breach of this Agreement and
shall entitle the Government to any one or more of the following remedies:
 
(a)  
to terminate this Agreement in accordance with Clause 21; and

 
(b)  
to claim appropriate compensation; and to any such other remedies as may be
available under the Law.

 
6.5.3 The Project Company’s corporate documents are annexed in SCHEDULE 5 to the
Development Agreement. After the MBO Completion Date, the Project Company shall
supply to the Government a copy of all proposed amendments to the Articles of
Association of the Project Company or Shareholders’ Agreement that will effect a
Change of Control prior to their submission to an Extraordinary General Meeting
of the shareholders of the Project Company.
 
6.6 Minimum Build Obligations
 
6.6.1 The Project Company shall discharge, complete and fully perform the
Minimum Build Obligations as set out in SCHEDULE 6, provided that the Project
Company shall continue to be responsible for the performance of all of its
obligations under the Development Agreement notwithstanding any sales or
transfers of title of Existing Land, Plots or Units to Affiliates, Third Parties
or Third Party Developers.
 
6.6.2 The Project Company shall achieve the MBO Completion Date within five (5)
years of the Effective Date. The indicative Time Schedule with Milestone Dates
for Substantial Completion of the various components of the Minimum Build
Obligations is set forth in SCHEDULE 7.
 
6.6.3 In the event that the Project Company has not executed the Principal
Construction Contracts by the Milestone Date stated in SCHEDULE 7 (such date
being the last date by which it is practicable for the Contractor to achieve
Substantial Completion of the Minimum Build Obligations by the MBO Completion
Date), then the Government shall have the right to declare a Project Company
Event of Default in accordance with Clause 21.1.2.
 
6.6.4 Upon the execution of the Principal Construction Contracts, which shall be
within one year from the Effective Date or such later date as set out in
SCHEDULE 7, the Minimum Build Obligation Milestone Dates shall be finalised and
linked to the Contractor’s construction programme dates and a revised SCHEDULE 7
shall be issued by the Project Company. The Government in accordance with Clause
21.1.2 shall have the right to declare a Project Company Event of Default and
terminate the Agreement in accordance with Clause 21.1.4 should the Project
Company consistently exceed the Milestone Dates so that in the written opinion
of the Consultant there is no probable basis that the Minimum Build Obligations
will achieve Substantial Completion by the Minimum Build Obligations Completion
Date plus the fifty-two (52) weeks cure period stated in Clause 12.2.
 
6.6.5 The Project Company shall promptly inform the Government by written notice
of:
 
(a)  
any change in a Milestone Date or any circumstance that would result in the
achievement of Substantial Completion of work to occur more than sixty (60) Days
after the Milestone Date provided under SCHEDULE 7; and

 
(b)  
any material breach of a Principal Construction Contract and the action being
taken by the Project Company to rectify and remedy the same, including the
appointment of a replacement Contractor; and

 
(c)  
any financial claims by Contractors performing Principal Construction Contracts
in excess of twenty-five percent (25%) of the agreed contract sum and, at the
same time, the Project Company shall promptly provide written confirmation of
the continuing financial capacity of the Project Company to meet such claims (to
the extent such claims are not being contested in good faith);

 
(d)  
any claim for an extension of time by a Contractor performing a Principal
Construction Contract which, if proven or agreed, would result in the
achievement of Substantial Completion of work to occur more than sixty (60) Days
after the Milestone Date provided under SCHEDULE 7;

 
(e)  
the appointment of a replacement Contractor by the Project Company for any
significant portion of the Project, with a revised indicative Time Schedule and
completion date, and confirmation of the continuing financial capacity of the
Project Company to meet such new commitments;

 
and any such notice shall be given to the Government as soon as possible, but in
any event not more than thirty (30) Days alter the Project Company became aware
of any of the occurrences as referred to in (a) to (e) above or received notice
thereof.
 
 
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6.6.6 The Project Company shall submit the MBO Report to the Government in
accordance with Clause 7.1.3.
 
6.6.7 When the Project Company believes it has achieved Substantial Completion
of the Minimum Build Obligations, the Project Company shall send written notice
thereof to the Government, together with documentation satisfactory to the
Government and sufficient for independent verification of such Substantial
Completion. The Government shall accept or reject the Project Company’s notice
in writing within thirty (30) Days after receipt thereof. If the Government
accepts the Project Company’s notice, then the date of the Substantial
Completion of the Minimum Build Obligations shall be the date of receipt of the
Project Company’s notice by the Government.
 
6.6.8 If the Government rejects the Project Company’s notice, then the
Government shall provide its reasons in detail and sufficient for independent
verification for the rejection and thereafter the Project Company shall: (i)
take prompt corrective action, as necessary, to satisfy the Minimum Build
Obligations, and submit a new notice thereof to the Government together with
documentation sufficient for independent verification and the provisions of
Clause 6.6.7 shall apply or (ii) disagree with the Government’s reasons for such
rejection, promptly notify the Government in writing, and the Parties shall
attempt to resolve the disagreement without delay. If the disagreement cannot be
resolved within thirty (30) Business Days, then any ensuing disagreement may be
referred by either Party for determination in accordance with Clauses 28.2 and
28.3.
 
6.6.9 The Government and its representatives at Government’s expense shall have
the right at all reasonable times to inspect the Works in relation to the
Minimum Build Obligations and all non-MBO elements. The Project Company shall
provide, or cause to be provided, access and adequate, safe and proper
facilities for such inspections. Neither such inspection nor the failure to make
such inspection or to discover any deficiencies shall prejudice in any manner
the rights of the Government under this Development Agreement.
 
6.6.10 The Project Company or, as the case may be, any Third Party Developer
shall procure that the Contractors shall comply with the specifications
stipulated in the Approved Development Control Plan while executing the Works in
respect of the MBO.

6.7 First Property Title Transfer
 
6.7.1 No Freehold Title to a Plot or Unit shall be registered in the name of a
Third Party Purchaser, Third Party Developer or any Third Party unless the
Project Company has:
 
(a)  
satisfied the Government that it has duly executed the Principal Construction
Contract(s) by providing the Government with full copies of each of the
Principal Construction Contract(s) duly executed by the Contractor. The
Principal Construction Contract(s) shall be irrevocable, contain fixed
completion dates, which shall be in accordance with the Time Schedule stated in
SCHEDULE 7 and prior to the MBO Completion Date, and provide for appropriate
penalties for delay to be paid by the Contractor to the Project Company for
failure to achieve Substantial Completion;

 
(b)  
provided a resolution of its board of directors confirming that it has the
financial capacity to meet all the commitments to undertake and complete all of
the Minimum Build Obligations and to pay for each of the Principal Construction
Contracts;

 
(c)  
provided to the Government a copy of the Term Sheet or other document from
Lenders containing a binding financial commitment covering the Minimum Build
Obligations and the Principal Construction Contract(s);

 
(d)  
has satisfied the Government that it has achieved Substantial Completion of all
material Project Company Infrastructure and Utilities works to the boundary of
the Plot or sub-Plot of land that is the subject of such transfer (namely
internal roads, pavements, street lighting, electricity, telecommunications,
water and sewerage); and

 
(e)  
where applicable, has satisfied the Government that it has achieved Substantial
Completion of the relevant Unit and that such Unit complies with the Plan of
Development, and the Unit is fit for occupation in accordance with the terms and
conditions agreed by the Project Company and the Third Party Purchaser pursuant
to the relevant Sales Agreement.

 
6.7.2 Prior to the MBO Completion Date, no transfer of any Usufruct Rights for a
Unit, Plot or sub-Plot of land may be registered in the name of a Third Party
Developer, unless:
 
(a)  
the Project Company considers that it would be beneficial that a qualified,
experienced and reputable development company be nominated as Third Party
Developer with a written approval from the Government, and

 
 
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(b)  
the appointment of the Third Party Developer is approved in writing by the
Government, which shall be subject to the provisions of Clause 5.4.3; and

 
(c)  
the Third Party Developer enters into and delivers an Accession Agreement
undertaking to assume and discharge in accordance with the Accession Agreement
the Project Company’s obligations in respect of the development of that Unit,
Plot or sub-Plot of land;

 
it being acknowledged that no Usufruct Rights shall be created in favour of a
Third Party Purchaser for any Unit, Plot or sub-Plot of land which has a
residential purpose.
 
6.7.3 No Freehold Title shall be registered for the sale and transfer of a Plot
or sub-Plot of Unimproved Land by the Project Company to Third Parties where
such Unimproved Land has been identified in the Final Master Plan as being for
residential purposes, or mixed use commercial and residential purposes, and the
Project Company shall only be permitted to transfer Freehold Title for Residence
Units in accordance with Clause 6.7.1 and specifically sub-Clause 6.7.1(e).
 
6.7.4 For the avoidance of doubt, the Government confirms that the restrictions
related to the transfer of Unimproved Land as set out in Article 3 of Royal
Decree No. 12/2006 shall apply to Third Parties and Third Party Developers.

CHAPTER IV
 
PROJECT MANAGEMENT
 

6.8 Project Area Control
 
6.8.1 The Project Area shall be a private Development and the roads, parks,
waterways, and other common usage areas, and traffic passage and parking therein
shall be subject to the Project Company’s control and security, save and except
for traffic accidents, crime, public order and Civil Defence Services that shall
be the responsibility of the relevant Government Authority.
 
6.8.2 Nonetheless, any Government Authority may agree to provide services to the
Project Company by mutual agreement from time to time and at a cost stipulated
by Law or in the absence of such legislated cost then as may be agreed between
the Project Company and such Government Authority, however, in the absence of
such agreement or an obligation under the Law to provide such services, there
shall be no obligation upon the Government to provide such services.
 
6.8.3 For all security services, the Project Company shall engage Security and
Safety Services LLC alone or with such other company as may be nominated by the
Government and licensed by the Royal Oman Police to provide such services. The
Project Company shall be responsible for the infrastructure and operational cost
of such security services.
 
6.9 Solid Waste
 
The Project Company is responsible for arranging for the collection and
transportation of all solid waste arising in the Project Area to the Government
and /or Government Authority designated waste disposal sites in accordance with
the Law. The Government shall provide a waste disposal site outside of and in
the reasonable vicinity of the Project Area in accordance with the Law at a cost
customarily charged by the Government and /or Government Authority for such
areas.
 
6.10 Security for Payments
 
6.10.1 All payments made by Third Party Purchasers and lenders to Third Party
Purchasers pursuant to Sales Agreements for the purchase of Residence Units will
be deposited into an Escrow Account.
 
6.10.2 Subject to the Escrow Agreement and the Law, the Project Company shall be
entitled to utilize the payments made into the Escrow Account by Third Party
Purchasers for the construction cost of the Works of the Project.
 
 
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6.11 Assignment of Claims
 
6.11.1 The Project Company shall, to the extent permitted or required by Law,
assign to Third Parties, the Project Company’s rights under (i) any relevant
claims against its contractors, and (ii) the ten (10) year guarantees for latent
defects affecting the structure or safety of the building works constructed by
them.
 
6.11.2 All contracts with construction Contractors (but not contracts with
Consultants, design consultants or engineering consultants or Contractors)
carrying out building works shall carry a ten (10) year guarantee in a form
which shall be approved by the Government. The Project Company shall keep
available for inspection during normal business hours by the Government upon
reasonable notice, a file containing extracts from such contracts of all such
guarantees.
 
6.12 Civil Defence Facilities
 
6.12.1           The Project Company shall at its own cost provide the Civil
Defence Facilities and the following provisions shall apply:
 
(a)  
all of the assets required for the Civil Defence Facilities within the Project
Area, being the number of buildings required and the gross external area of the
buildings required, including all internal fittings, furnishings, equipment,
furniture, specialist and other vehicles and related equipment to be provided to
the Government shall be agreed by the concerned Government Authorities and the
Project Company;

 
(b)  
the Project Company shall prepare and submit plans and specifications to a
reasonable level of detail showing the location and finishes of the buildings so
specified in SCHEDULE 9 for approval by the Government (which such approval
shall not be unreasonably withheld) and such plans and specifications shall be
submitted to the Government within ninety (90) Days of the Effective Date;

 
(c)  
within a further ninety (90) Days of the submission of plans and specifications
referred to in sub-paragraph (b) above, the Government shall notify the Project
Company whether or not it has approved the said plans and specifications, and if
said plans and specifications are not approved in full, then the Government
shall specify in reasonable detail the portion that is not approved and requires
changes;

 
(d)  
if the plans and specifications are not approved in full, the Project Company
shall resubmit plans and specifications within forty - five (45) Days of such
notification by the Government that reflect the changes required by the
Government and the Government shall approve or reject the resubmitted plans and
specifications within forty - five (45) days after the date of the resubmission;

 
(e)  
upon approval of the plans and specifications in respect of the Civil Defence
Facilities, then such plans and specifications shall thereupon be applicable and
enforceable as between the Parties;

 
(f)  
the plans and specifications with respect to the Civil Defence Facilities once
approved may be varied and the provisions of Clause 11 shall apply mutatis
mutandis as if references to the Final Master Plan and Development Control Plan
were instead a reference to the plans and specifications for the relevant Civil
Defence Facilities;

 
(g)  
the Project Company shall construct the Civil Defence Facilities in accordance
with the approved plans and specifications relating to them and required  by the
Government Authorities; and

 
(h)  
the Project Company shall ensure that adequate sites and units are made
available within the Project Area for the provision of the Civil Defence
Services subject to the requirements of the Final Master Plan in order to meet
the needs of the Project Area and its occupiers.

 
 
(i)
the Project Company will ensure that adequate Unit(s) are made available for
internal security personnel to be posted by the Government. The standards of
such Unit(s) with regard to number, description, rooms, facilities, area and
location shall be determined by the competent authority. The selling price
charged by the Project Company to the Government for such Unit(s) shall be equal
to the cost of construction thereof and shall not include any cost for the
Existing Land underlying such Unit(s) and the Project Company shall be exempted
from paying the Land Price to the Government with respect to such Existing Land
underlying such Unit(s).

 
6.12.2 The Government, its employees, agents, contractors or officials shall be
granted access to the Civil Defence Facilities to operate, repair, service,
replace, maintain, upgrade or improve the Civil Defence Facilities, which shall
be at the Government’s cost and to carry the same out (as the case may be)
without prejudicing the safety of the Project Area and its occupiers.
 
6.12.3 The Government and its representatives shall have the right at all
reasonable times to inspect the construction work of the Civil Defence
Facilities. The Project Company shall provide, or cause to be provided, access
and sufficient, safe and proper facilities for such inspections. Neither such
inspection nor the failure to make such inspection or to discover any
deficiencies shall prejudice in any manner the rights of the Government under
this Development Agreement.
 
 
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6.12.4 The Project Company shall not own the Civil Defence Facilities
irrespective of whether it has created or constructed the same pursuant to the
Development Agreement. All Civil Defence Facilities shall be sold to the
Government by the Project Company at a selling price which is equal to the cost
of construction thereof and shall not include any cost for the Existing Land
underlying such Civil Defence Facilities. Upon completion of the Civil Defence
Facilities, the Project Company shall, at the Government’s expense, transfer to
the Government the freehold title to the land upon which the relevant Civil
Defence Facilities rest and the Project Company shall be exempted from paying
the Land Price to the Government with respect to such Existing Land underlying
such Civil Defence Facilities.
 
6.12.5 The Project Company shall have no liability to any person in relation to
the existence, use, operation, repair, servicing, replacement, maintenance,
upgrading or improvement of the Civil Defence Facilities or of any other
facilities retained by the Government within or with respect to the Project
Area.
 
6.12.6 The Government shall have no liability to the Project Company or to any
Third Party, or third party in relation to the existence, use or operation of
the Civil Defence Facilities or of any other facilities retained by the
Government within or with respect to the Project Area save as shall be provided
by Law.
 
6.12.7 The Project Company shall not (i) pledge or otherwise create an
Encumbrance on the Civil Defence Facilities in connection with any Financial
Agreements or Lenders requirements or (ii) permit the Civil Defence Facilities
to be the subject of any Security Interest granted by any party except the
Government.
 
6.13 Initial Business Plan
 
6.13.1 The initial business plan supplied by the Project Company attached in
SCHEDULE 19 shall set out the basis of the financial viability for the
Development of the Project.
 
6.13.2 In the event of any change or variation of the business model on which
the initial business plan was formulated or which change or variation would
materially affect the implementation of the Time Schedule set forth in SCHEDULE
7 with regard to the overall Development of the Project, then within thirty (30)
Business Days of such change or variation, the Project Company shall comply with
the provisions of Clause 7.1.3 and Clause 23.
 
6.14 Management and operation of the Project
 
6.14.1 The Project Company and, where relevant, its appointed agents shall carry
out the Development, Project Tasks and all the services relating to the Project
(other than Civil Defence Services or such other services specifically
identified in this Development Agreement as not dischargeable by the Project
Company).
 
6.14.2 All hotel or specialist tourism or recreational operators engaged by the
Project Company for the Minimum Build Obligations shall be qualified,
internationally experienced, reputable, credit worthy with a strong brand name
and marketing skills and the Project Company shall provide to the Government the
name, corporate identity, financial standing, experience and qualifications and
a list with details of all the hotels or specialist tourism attractions that the
proposed operator has undertaken.
 
6.14.3 The appointment of any agents shall not relieve the Project Company of
any liability, obligation or responsibility arising under this Development
Agreement.
 
7.  
REPORTS AND MEETINGS

 
The Parties shall exercise their Best Efforts to cooperate with each other to
assure that the Development of the Project is achieved in a timely manner. In
this regard the Project Company hereby agrees to deliver such reports as are
indicated below and the Parties agree to meet at the times and for the purposes
indicated below.
 
7.1 Reports
 
7.1.1 Infrastructure and Utilities Liaison Meeting Report (IULM Report):
 
(a)  
From the Effective Date until agreement is reached with all relevant Private
Sector Utility Companies, the Project Company shall submit a Monthly written
report to the Government on the status of the supply of the Private Sector
Public Infrastructure and Utilities. The report shall include any material
change in the indicative time schedules for such supply and detail any and all
impediments arising with regard to the Project which it believes are directly or
indirectly the responsibility of the Private Sector Utility Companies.

 
(b)  
In the event of any delay or inaction on the part of a Private Sector Utility
Company, the Project Company shall promptly inform the Government in writing of
the reasons for such delay or inaction and what action is required to be taken
by the Private Sector Utility Companies to overcome such delay or inaction.

 
 
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7.1.2 Omanisation Report:
 
(a)  
Within ten (10) Days after the end of each three (3) Months period after the
Effective Date, the Project Company shall provide an Omanisation Report to the
Government.

 
(b)  
Within one (1) year of the Effective Date the Project Company shall provide a
report, policy statement and implementation documents to the Government
indicating how the program for Community Support is planned to achieve its
objectives.

 
7.1.3 MBO Report:
 
Within ten (10) Days after the end of each three (3) Month period after the
Effective Date and until the MBO Completion Date, the Project Company shall
submit a report an (“MBO Report”) to the Government containing a detailed review
of the progress of the MBO, the MBO Time Schedule and such MBO Report shall
identify any and all impediments arising with regard to the Project, together
with those which the Project Company believes are the responsibility of the
Government.
 
7.2 Meetings
 
The Project Company shall give notice to the appropriate persons regarding the
time and place of any meeting and shall include a proposed agenda for such
meeting if applicable. The Project Company shall keep written minutes of all
meetings and shall deliver copies thereof to the persons attending such
meetings.
 
7.2.1 Infrastructure and Utilities Liaison Meeting (IULM):
 
(a)  
Until the Substantial Completion of all Private Sector Public Infrastructure and
Utilities, Government Infrastructure and Project Company Infrastructure and
Utilities, the Project Company shall, unless agreed by the Parties otherwise,
arrange a liaison meeting with the relevant Government Authorities and Private
Sector Utility Companies at least once every three (3) Months beginning ninety
(90) Days after the Effective Date to review the IULM Reports, the overall
progress of the Private Sector Public Infrastructure and Utilities, Government
Infrastructure and Project Company Infrastructure and Utilities and the current
indicative time schedules and completion dates for the Private Sector Public
Infrastructure and Utilities, Government Infrastructure and Project Company
Infrastructure and Utilities.

 
7.2.2 Approval Meetings:
 
(a)  
The Parties shall hold Approval Meetings from time to time as may be required or
agreed by them or within five (5) Days after a notice is given by one Party to
the other Party requesting such an Approval Meeting.

 
(b)  
With respect to the matters discussed at such Approval Meeting, the Government
shall, in its sole discretion, take such action it considers appropriate to:

 
(i)  
         grant any Approval Waiver, or

 
(ii)  
         eliminate any impediment to the granting of its Approval, and

 
(iii)  
         ameliorate any negative effect on the Project Company of any
impediment.

 
 
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7.2.3 Plot Plan Meetings:
 
To effect the registration of Freehold Title to Plots and Units and to allow the
Project Company to enjoy its rights to enter into Sales Agreements, the Parties
hereby agree to meet within two (2) years after the Effective Date, but, not
before the Project Company has complied with sub-clauses (a), (b) and (c) of
Clause 6.7.1 (a “Plot Plan Meeting”) and agree on the following:
 
(a)  
the precise form, format and content of a typical Plot Plan, and

 
(b)  
all other procedures and documentation required to ensure the timely procurement
by the Government of all required tasks, signing of documents and the like by
the relevant Government Authorities as are necessary to effect the timely
issuance by the Ministry of Housing of krookis and mulkiyas for each Plot or
Unit, and

 
(c)  
all other procedures and documentation required to ensure the timely
procurement:

 
(i)  
         by the Project Company of payment of the relevant Registration Fee upon
any Freehold Title transfer, and

 
(ii)  
         by the Government of all required tasks, signing of documents and the
like by the relevant Government Authorities necessary to effect any Freehold
Title transfer.

 
The Parties shall hold Plot Plan Meetings from time to time as may be required
or agreed by them.
 
7.2.4 Omanisation Meetings:
 
The Project Company and the Government shall meet at the end of each six (6)
Month period after the Approval date of the Omanisation Plan, or at such other
time as the Parties may mutually agree, to discuss the Omanisation Plan, the
Omanisation Reports and the levels of Omani employment and training outlined
therein, and:
 
(a)  
ways in which the Project Company can increase such levels, and

 
(b)  
any difficulties the Project Company may be facing in achieving such levels, and

 
(c)  
appropriate revisions to the Omanisation Plan.

 
7.3 Confidentiality
 
The Parties acknowledge and agree that the reports mentioned in Clause 7.1 and
any other reports given to the Government by the Project Company pursuant to
this Agreement (collectively, the “Reports”) and the discussions at the meetings
and any written minutes of such meetings mentioned in Clause 7.2 and any
discussions or minutes of any other meetings between the Government and Project
Company pursuant to this Agreement (collectively the “Meetings”) together with
all information or materials supplied or made available in connection with any
Report or Meeting, are all proprietary confidential information of the Project
Company (“Confidential Information”) and the disclosure to any Third Party of
any Confidential Information could have a material adverse effect on the Project
Company and is strictly prohibited by this Agreement. The Government shall treat
as confidential and shall not disclose to any Person any Confidential
Information without the prior written consent of the Project Company except as
may be required by Law, judicial decision or Government regulation or to comply
with any such Law, judicial decision or Government regulation. No Third Party
shall be given Confidential Information by the Government unless it has entered
into a written confidentiality agreement with the Project Company with respect
to such Confidential Information. This provision shall not apply to any
information which is freely available to the public and in the public domain.
The Government covenants and agrees with the Project Company that any employee
or consultant of the Government disclosing any Confidential Information shall be
thereafter prevented and forbidden from receiving any further Confidential
Information.
 
8.  
ENFORCEMENT AGAINST THIRD PARTIES

 
8.1 Subject to the rights granted to the Project Company pursuant to Clause 5,
and the limitations imposed by Clause 6.7, in respect of any dealings or
transfers with and/or to (as the case may be) Third Parties regarding (as the
case may be) a Unit or Plot, Unimproved Land, a Building or any land within the
Project Area, such dealings shall not take place unless the Project Company
imposes upon the counterparty in such dealings an obligation to act at all times
in accordance with the Standards, the Final Master Plan, Development Control
Plan, Minimum Build Obligations and the Milestone Dates as set out in SCHEDULES
4, 13 and 6 respectively.
 
8.2 No transfer of any Usufruct Rights to Plots and Plots of Unimproved Land for
the benefit of a Third Party Developer shall take place until the conditions
stipulated in Clause 6.7 have been satisfied and unless prior to such transfer
and at the expense of the Project Company:
 
 
(a)
such Third Party Developer has been approved in accordance with Clause 5.4;

 
 
(b)
such Third Party Developer enters into an Accession Agreement in relation to the
land so transferred; and

 
 
(c)
the Project Company provides an irrevocable and unconditional guarantee of such
Third Party Developer’s obligations under the Accession Agreement in form and
substance satisfactory to the Government.

 
In accordance with the Accession Agreement with the Project Company, the Third
Party Developer shall undertake the Project Company’s obligations in respect of
the Development of that Plot arising under this Development Agreement to the
extent that such Project Company obligations have not been satisfied as at the
date of such transfer by the Project Company.
 
 
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CHAPTER V
 
GOVERNMENT RESPONSIBILITIES AND PRIVATE SECTOR PUBLIC
 
INFRASTRUCTURE AND UTILITIES
 

 
9.  
GENERAL RESPONSIBILITIES OF THE GOVERNMENT

 
9.1 Government Infrastructure
 
9.1.1 The Government, at its expense, shall make available or cause to be made
available to the Project Area the Government Infrastructure in the locations,
form, quantity, specification and quality and listed or described in the
Government Infrastructure Plan.
 
9.1.2 The Government shall promptly and at its own expense, maintain or cause to
be maintained the Government Infrastructure as may be required from time to
time, it being acknowledged that the Government may also charge from time to
time for connection, consumption and other charges in accordance with the Law.
 
9.1.3 The Project Company shall at its own expense be responsible for
facilitating the provision, maintenance and upkeep of all navigational aids that
are required for the navigation of any vessels into, out of and within the
Project Area in accordance with the Law by the current national concessionaire
known as the “Arabian Maritime and Navigation Aids Services LLC.” (“AMNAS”).
AMNAS or any successor appointed by the Government, as the case may be, may
agree to provide services to the Project Company by mutual agreement from time
to time. For the avoidance of doubt, the Government shall continue its rights
under the Law to levy and collect applicable fees from boat owners and users.
 
9.1.4 The Government shall allow the Project Company and any Contractors, Third
Party Developers, Third Party Purchasers, Third Party Users or Third Parties, if
authorized by the Project Company, to use the Government Infrastructure to
enable it to perform the Minimum Build Obligations and all other obligations it
must comply with under this Development Agreement without the Government
charging a connection fee but subject to the user paying customary charges as
are in effect from time to time for the services supplied.
 
9.2 Private Sector Public Infrastructure and Utilities
 
9.2.1 The Project Company shall enter into contracts with the appropriate
Private Sector Utility Companies to make available to the Project Area the
Private Sector Public Infrastructure and Utilities and, subject to Clause 9.2.3,
shall pay any applicable fees and charges for consumption and services. For the
avoidance of doubt, the Project Company shall not bear any costs related to the
provision of the Private Sector Public Infrastructure and Utilities up to the
designated entry point of the boundary of the Project Area (as shown in the
Final Master Plan). It is furthermore understood that the responsibility for
distributing, operating and maintaining the Private Sector Public Infrastructure
and Utilities inside the Project Area remains the sole responsibility of the
Project Company.
 
9.2.2 Without prejudice to Clause 9.2.1, the Project Company shall rely upon the
Private Sector Utility Companies to promptly, and at such companies’ own cost,
maintain or cause to be maintained the Private Sector Public Infrastructure and
Utilities outside the boundary of the Project Area as may be required from time
to time in accordance with this Development Agreement and the Law.
 
9.2.3 The Project Company shall rely upon the Private Sector Utility Companies
to allow the Project Company and any Contractors or Third Parties to use the
Private Sector Public Infrastructure and Utilities to enable it to perform the
Minimum Build Obligations, Project Tasks and its other obligations under this
Development Agreement without the Private Sector Utility Companies paying of
access fee to or charging an access fee to the Project Company or to such
Contractors or Third Parties but subject to the final user paying a customary
connection, service, consumption,  and other charges as are in effect from time
to time for the services supplied.
 
9.2.4 In the event that the development of the Project Area exceeds the
assumptions set out in SCHEDULE 17A and 17B and as contained in the Final Master
Plan, which extra development creates additional demand unable to be supplied
from the Private Sector Public Infrastructure and Utilities constructed as
required by this Clause 9.2, the Private Sector Utility Companies shall, at the
request of the Project Company and at the cost of the Project Company, carry out
all works located outside the Project Area as are necessary to expand the
Private Sector Public Infrastructure and Utilities in so far as this is
necessary to satisfy the additional demand from within the Project Area.
 
 
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9.2.5 The Government undertakes that the Private Sector Utility Companies shall
comply with the applicable Law and shall not unlawfully discriminate against or
favour the Project Company or provide terms, or charges that are more or less
favourable than those granted to other Integrated Tourism Complexes located
within the Governorate of Muscat.
 
9.2.6 The Project Company shall use its best endeavours to enter into contracts
for the supply of the Private Sector Public Infrastructure and Utilities by a
date not later than one hundred and twenty (120) Days after the Effective Date.
In the event of any delays or inaction on the part of a Private Sector Utility
Company, then the Project Company shall promptly inform the Government in
writing of the reasons for the delay or inaction and what action is necessary to
be taken by the Private Sector Utility Company to overcome the problem. In the
event that the Project Company and the appropriate Private Sector Utility
Company have not reached agreement under Clauses 9.2.1 through 9.2.5, on or
before one hundred and eighty (180) Days after the Effective Date, the
Government shall assume full responsibility for the provision of the required
Private Sector Public Infrastructure and Utilities at its own cost. In the event
that Government fails to procure such supply at its own cost in accordance with
the timetable agreed in accordance with SCHEDULE 17, such may be considered by
the Project Company as a Government Event of Default but the Government shall
continue to be obliged to provide such supply.  Provided that if the Government
provides the Private Sector Public Infrastructure and Utilities pursuant to this
Clause 9.2.6, then the Government shall assume all the rights and obligations of
the Private Sector Utility Companies under this Development Agreement.
 
9.3 Exercise of Project Company Rights
 
9.3.1 The Government shall carry out its obligations as are required by this
Development Agreement so as to enable the Project Company to exercise the rights
granted to it pursuant this Development Agreement, including upon a Duly
Completed application being made by the Project Company, granting to the Project
Company all such Approvals and Project Company Licences and Permits as are
required with respect to the Project Area for carrying out its obligations and
enjoying its rights under this Development Agreement; and
 
9.3.2 The Government has designated the Project as an Integrated Tourism
Complex, a copy of which is attached hereto as SCHEDULE 3 pursuant to Royal
Decree No. 12/2006; and
 
9.3.3 The Government Approved Initial Master Plan in SCHEDULE 4 shall constitute
the development vision to be observed by the Project Company for the
implementation of the Project; and
 
9.3.4 The Development Control Plan which is to be created pursuant to the
provisions of the DCPF and SCHEDULE 13, together with the Final Master Plan
shall constitute the principles and guidelines to be observed by the Project
Company for the implementation of the Project.
 
9.4 Foreign Currency
 
The Government, for a period of up to the earlier of ten (10) years from the
Effective Date and the MBO Completion Date, hereby guarantees within  Oman,
subject to the Law (including Central Bank of  Oman directives), the
availability of Foreign Currency for purchase by the Project Company, for use in
the Project to service debt and project finance, and the Government shall not
take any action during such period which may directly or indirectly impede or
restrict the Project Company from (i) purchasing any Foreign Currency in the
open market, (ü) transferring abroad any foreign currency; (iii) maintaining
foreign currency bank accounts in the Sultanate of  Oman. In the event that any
action is taken by the Government in breach of these guarantees, then the
Government shall reimburse the Project Company for all actual direct financial
loss, damage and expenses incurred by the Project Company (including interest
payable).
 
9.5 Other Government Services
 
9.5.1 The Government shall by itself or by some other persons licensed by it:
 
(a)  
provide Civil Defence Services within and for the benefit of the Project Area;
and

 
(b)  
deploy, operate and maintain the Civil Defence Services as it deems appropriate.

 
9.5.2 Notwithstanding Clause 9.5.1, the Government may in its complete and
absolute discretion at any time in the future impose a direct levy upon the
Project Company for the Civil Defence Services and other similar services,
provided that the Government shall impose such levies in a non-discriminatory
manner on other ITCs. The Project Company may pass on the actual cost of the
levy to the Third Parties and other third parties by way of the annual service
and maintenance charges payable to the Project Company.
 
9.6 Reclaimed Land, and Land Title
 
9.6.1 Subject always to Clause 9.6.4 below upon the formation of dry land for
the Reclaimed Land, the Government shall after receiving proper notification
from the Project Company that the works necessary for the creation of such
Reclaimed Land, including an Environmental Impact Assessment, the survey
thereof, together with a certificate from a professional engineering firm
licensed to practice in the Sultanate of Oman that the compacted land is fit for
the purpose of construction, have been duly completed in accordance with the DCP
and Law (such notice to be given not earlier than the point in time when the
Reclaimed Land is created), grant a Usufruct right for the remainder of the
Usufruct Term to such land to the Project Company on the terms as set out herein
and upon request from the Project Company or do all such things as are necessary
so as to transfer and register the necessary Freehold Title thereto in the name
of the Project Company (or directly to a third party if so requested by the
Project Company) in a timely manner.
 
 
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9.6.2 The payment of the Usufruct Fee and Registration Fee shall be applicable
in respect of Reclaimed Land for which Usufruct Rights are granted.
 
9.6.3 Should the Project Company require Freehold Title to or to pass transfer
thereof to Third Parties, the Reclaimed Land or any portion thereof, the Project
Company shall pay to the Government the Land Price.
 
9.6.4 Within forty-five (45) Days after receipt by the Government of the notice
specified in Clause 9.6.1, the freehold title to the Reclaimed Land shall be
registered in the name of the Ministry of Tourism, and the Government and the
Project Company shall enter into a written amendment to this Development
Agreement and the Usufruct Agreement (the “Amendment”). The Amendment shall
grant a usufruct to the Project Company over all Reclaimed Land for the
remainder of the Usufruct Term and such usufruct shall, except for its date of
grant, be identical to that usufruct which the Project Company has over the
Existing Land pursuant to the Usufruct Agreement. The term “Usufruct Rights”
shall thereafter mean all the rights with respect to the Existing Land and the
Reclaimed Land granted to the Project Company pursuant to the Usufruct
Agreement, the Amendment and this Development Agreement.
 
9.6.5           The Project Company shall not proceed with any land reclamation
without the prior written approval of the Ministry of Tourism. Such an approval
shall be given only after the Project Company has submitted an application for
land reclamation supported by adequate documents which shall include, but not be
limited to, the following:
 
1.  
Detailed objectives and justifications for the required land reclamation,

 
2.  
Detailed maps showing the present land area, and the area and limits of the
required land reclamation,

 
3.  
Environmental studies and analyses of the reclamation activities including an
“Environmental Impact Assessment” report documenting all studies and analyses
and providing mitigating measures of potential impacts,

 
4.  
The approval of the Ministry of Environment of the above mentioned
“Environmental Impact Assessment” report.

 
9.6.6           Completed land reclamation works, and the total reclaimed land,
shall be surveyed and certified, by a registered specialized engineering firm,
to have been carried out to the highest engineering standards and satisfy all
safety codes. The results of the survey and the engineering certificate must be
approved by the Ministry of Housing. The Ministry of Housing must issue a new
krooki of the land showing the new land added by land reclamation and the
boundaries of the new site.
 
10.
LAND REGISTRATION OF TITLE TO PLOTS/ UNITS

 
10.1 It is agreed by the Parties that, notwithstanding the Usufruct Rights, the
Project Company shall, subject to SCHEDULE 4 and Clause 6, be permitted to sell
Units located on the Existing Land pursuant to the Sales Agreement in accordance
with the Law, and that the Project Company shall procure the transfer of the
Freehold Title to any part of the Existing Land, Plots or Units, upon the
payment of the Land Price and the Registration Fee, to the Ministry of Housing
by the Project Company or by a Third Party Purchaser for residence or investment
purposes in accordance with the Freehold Acquisition Plan contained in SCHEDULE
14.
 
10.2 Subject to Clause 6.7, (First Property Transfers), the Government shall,
subject to the Law and upon a Duly Completed application being made by the
Project Company, do all such things as are necessary so as to procure that where
required by the Project Company, the Project Area is subdivided into separate
identifiable Plots and Units with separate registered legal Freehold Title in
respect of each such Plot and Unit in the name of, as the case may be, the
Project Company, or a Third Party Purchaser and in accordance with the Final
Master Plan.
 
10.3 The Parties shall do all such things as are required so as to ensure that
the subdivision and issuance of relevant title registration documentation for
Plots in the name of, as the case may be, the Project Company or a Third Party
Purchaser (where applicable and required by the Project Company) shall take
place such that the ability of the Project Company to satisfy its obligations,
including its obligations with respect to Third Party Purchasers, shall not be
adversely affected in any way.
 
10.4 The Government shall, subject to the Law and upon a Duly Completed
application being made, do all such things as are necessary so as to enable the
Project Company to sell, lease or otherwise dispose of and have dealings in
respect of Plots, Buildings and Units and in particular:
 
 
(a)
to have the transfer of any Freehold Title in respect of any Plot or Units for
residence or investment purposes which might be necessary, registered with the
Ministry of Housing;

 
 
(b)
to register any leases or other similar documentation with the relevant
Government Authority; and

 
 
(c)
in respect of any Plots, Buildings or Units that are to be sold to a Third Party
Purchaser or Third Party Developer who is a non-Omani natural or juristic person
pursuant to Royal Decree No.12/2006 and as amended by Royal Decree No. 65/2007,
to ensure that (where applicable) the permissions, approvals and licences that
may be required at that time to enable such foreign entity to purchase a Plot,
Building or Unit and any other rights which it is entitled to pursuant to Royal
Decree No.12/2006 and as amended by Royal Decree No. 65/2007 shall be confirmed
as soon as practicable;

 
 
(d)
in respect of any Plots, Buildings or Units that are sold to Third Party
Purchaser or Third Party Developer for residential or investment purposes, to
ensure that residence visas are issued to such Third Party Purchaser or Third
Party Developer, in accordance with the provisions of MD 191/2007.

 
10.5 Upon the Sea Bed becoming Reclaimed Land in accordance with Clause 9.6 the
Parties shall comply with the requirements for the grant of Freehold Title to
the Reclaimed Land and the payment of the Registration Fee and Land Price,
subject to Clause 10.2 and pursuant to Schedule 14 hereof.
 

 
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CHAPTER VI
 
CONSTRUCTION OBLIGATIONS AND LICENCES

 
11.  
MASTER PLAN AND DEVELOPMENT CONTROL PLAN

 
11.1 The Parties agree on the Execution Date, that the Initial Master Plan
attached as SCHEDULE 4 and the Development Control Plan to be submitted and
Approved pursuant to the terms and conditions of the DCPF and SCHEDULE 13 are
collectively the “Plans” and, subject to the provisions of the DCPF, such Plans
will be the preliminary principles and guidelines to be subject to Clause 11.2,
observed by the Project Company for the implementation of the Project.
 
11.2 After the Execution Date, the Development Control Plan as proposed by the
Project Company and Approved by the concerned authorities shall be issued by
Ministerial Decision.
 
11.3 After the Effective Date, the Plans will be reviewed, elaborated and
revised by the Project Company pursuant to the process outlined in the DCPF in
order to create the DCP and the Approved Final Master Plan and (subject to
Clause 11.4) any variation thereto shall be submitted to the Government for its
Approval, which Approval shall not be unreasonably withheld.
 
11.4 Any variation to the Plans or Final Master Plan which affects the form and
substance of the Minimum Build Obligations herein agreed by the Government (a
“Material Change”) shall be subject to the written Approval of the Government.
 
11.5 The Project Company shall submit all proposed changes to the Plans, Final
Master Plan or the DCP to the Government and the Parties shall in good faith
discuss them and have agreed upon them within sixty (60) Days of their receipt
by the Government, save that the Government is under no obligation to agree a
Material Change. In the event that agreement as referred to above is not reached
within the time specified, provided that the change does not constitute a
Material Change, the matter shall be resolved as a dispute pursuant to Clause
28.2.
 
11.6 Upon the changes being agreed in accordance with Clauses 11.4 and 11.5, the
Final Master Plan and Development Control Plan shall be amended by the Project
Company accordingly and the so amended Final Master Plan and Development Control
Plan, after being issued by a Ministerial Decision of Amendment, shall replace
and substitute the originals.
 
12.  
MBO DAMAGES FOR DELAY

 
12.1 The Government has entered into this Development Agreement for the
principal purposes of obtaining the Minimum Build Obligations for the benefit of
the tourism industry and the creation of employment for Omanis. In consideration
of the objectives of the Government as stated herein, if the Project Company
fails to achieve the MBO Completion Date, as such date may be extended under
this Development Agreement, the Project Company shall pay to the Government MBO
Damages for Delay to a maximum of (Rials Omani Thirty Thousand) (RO 30,000) per
week of delay. Notwithstanding, such payment of MBO Damages for Delay is without
prejudice to any other legal remedy that the Government may legally be entitled
to under Clause 21.1.6.
 
For the avoidance of doubt, the MBO Damages for Delay shall be calculated by
discounting the value of the uncompleted MBO against the value of the completed
MBOs.  Accordingly, if fifty per cent (50%) of the MBOs have been completed then
the MBO Damages for Delay shall be fifty per cent (50%) of Rials Omani thirty
thousand (RO 30,000) per week of delay.
 
12.2 Should the number of such weeks of delay exceed fifty-two (52) weeks, the
Government, may either (i) terminate this Development Agreement in accordance
with Clause 21.1 without prejudice to any other rights the Government may have
under this Development Agreement or (ii) continue to collect the MBO Damages for
Delay specified in Clause 12.1 and the Project Company shall continue to perform
its obligations hereunder and the Project Company shall not be liable for any
other damages under this Clause; provided, that in the event the Government
elects to proceed under sub-clause (ii) of this Clause 12.2, then the Government
shall have the right to cancel this Development Agreement upon thirty (30) Days
written notice to the Project Company without prejudice to any other rights the
Government may have under this Development Agreement, less the amount of MBO
Damages for Delay actually received by the Government pursuant to this Clause
12.
 
12.3 Payment of the MBO Damages for Delay shall not:
 
12.3.1 relieve the Project Company from its obligation to complete the Minimum
Build Obligations, or from any other duties, obligations, responsibilities or
liabilities which it may have under this Development Agreement; and
 
12.3.2 prejudice any of the other rights and remedies of the Government, whether
hereunder or otherwise.
 
13.  
PROJECT COMPANY LICENCES AND PERMITS

 
13.1 Subject to the Government obligations in respect of the Project Company
Licenses and Permits, the Project Company shall, at its cost and expense, obtain
and maintain in effect the Project Company Licences and Permits.
 
 
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13.2 The Parties shall agree to the procedures so as to ensure that the Project
Company shall submit timely and Duly Completed applications for the Project
Company Licences and Permits. The Project Company shall ensure that such
applications are always Duly Completed upon submission.
 
13.3 Upon a Duly Completed application being made, the Government shall, subject
to the Law, do all such things as are necessary to ensure that the Project
Company Licences and Permits are granted so as to enable the Project Company to
comply with all of its obligations under this Development Agreement, in
particular the Project Tasks.
 
13.4 With regard to the Project Company Licences and Permits which relate to the
operation of the tourism components of the Project (e.g. hotels, restaurants,
musical and other entertainment and bars selling alcohol), the Project Company
acknowledges that the issuance and conditions relating to all such Project
Company Licences and Permits shall take into account the customs and practices
of the Omani society, issues of public policy and the Law. The Project Company
shall make itself aware of all the customs and practices of the Omani society,
issues of public policy and the Law relating to the tourist components when
designing these tourist components and shall specifically address such matters
in the Final Master Plan.
 
13.5 In the event that the Project Company is delayed in obtaining, or cannot
obtain or maintain one or more of the Project Company Licences and Permits
within sixty (60) Business Days of a Duly Completed application being submitted
due to an act or omission of the Government, then the Project Company shall
promptly notify the Government in writing to that effect. The Government shall
then within thirty (30) Business Days from receipt of such notice investigate
the matter and either clarify why in accordance with the Law such Project
Company Licences and Permits was not issued or renewed or remedy the act or
omission complained of or procure that the requirement for such regarding the
Project Company Licence and Permit is either waived or granted in such a way as
to allow the Project Company to proceed as if it had been duly issued on time.
If the Project Company does not accept the Government’s reason for not issuing
the Project Company Licences and Permits or the act or omission continues
un-remedied, then the Project Company, provided that the absence of the Project
License or Permit has a Material Adverse Effect on the Project and the ability
of the Project Company to satisfy its obligations under this Development
Agreement, may then further notify the Government in writing that if after the
expiry of an additional ten (10) Business Day period, the applicable Project
Company Licence and Permit has not been issued, the Project Company shall
consider the act or omission to be Government Event of Default under Clause
20.2(a); it being understood that if the Government disagrees that the act or
omission constitutes a Government Event of Default under Clause 20.2(a), then
such disagreement shall constitute a Dispute subject to the provisions of Clause
28.
 
13.6 The provisions of Clause 13.5 shall endure for the Term set out in Clause
3.1 and thereafter the Project Company shall be entitled to any and all remedies
that are allowed under the Law.
 

 
CHAPTER VII
 
REPRESENTATIONS, WARRANTIES, INDEMNITY AND INSURANCE
 

 
14.  
REPRESENTATIONS, WARRANTIES & COVENANTS OF THE PARTIES

 
14.1 The Project Company represents, warrants and covenants that:
 
14.1.1 the Project Company is an Omani limited liability company, duly
incorporated and validly existing under the Law with all requisite corporate
power and authority to enter into, and carry on, the business and activities
contemplated in this Development Agreement and within one year after the
Execution Date, the Project Company will transform its corporate status (the
“Transformation”) from an Omani limited liability company (LLC) to an Omani
closed joint stock company (SAOC);
 
14.1.2 upon the Effective Date, the execution and delivery of this Development
Agreement and the performance of the Project Company’s obligations hereunder
will have been duly authorised and all necessary actions to consummate the
transactions and actions contemplated hereunder will have been taken; and
 
14.1.3 the Project Company and/or its Affiliates are fully qualified,
experienced and have the necessary office support, human resources and financial
support to perform all the responsibilities stated in this Development
Agreement.
 
14.2 The Government represents, warrants and covenants that:
 
14.2.1 it has all requisite power and authority to enter into this Development
Agreement and to comply with and perform in accordance with its terms;
 
14.2.2 it holds Freehold Title to the Existing Land, that the Government will
transfer and the Project Company and Third Party Developers may acquire and hold
Usufruct and Freehold Title to any parts of the Existing Land subject to the
provisions of this Development Agreement and the Law and the Government will
grant Usufruct Rights and/ or Freehold Title to the Reclaimed Land upon
notification of its satisfactory reclamation;
 
 
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14.2.3 upon Ratification, the execution and delivery of this Development
Agreement, the Usufruct Agreement and the performance of the Government’s
obligations thereunder shall have been duly authorised by the Government in
accordance with the Law, and all necessary actions to consummate the
transactions and actions contemplated hereunder shall have been taken.
 
15.  
INDEMNIFICATION

 
15.1 The Government shall be liable for and shall indemnify the Project Company
from and against any loss, cost, claim, liability or expense (collectively the
“Expenses”) arising out of any material breach of this Development Agreement or
in respect of any Contaminants or environmental damage for which the Government
is responsible in cases other than by Event of Force Majeure (whether to the
land, the water or the marine environment) which relates to the Project
Area  and which:
 
 
(a)
has existed in relation to activities carried out in respect of the Project Area
prior to the Effective Date; or

 
 
(b)
relate to the operation of Government owned assets within the Project Area;
provided, however, that the relevant environmental or other damage did not occur
as a result of any negligence or wilful misconduct on the part of the Project
Company or any of its agents, employees or servants; or

 
 
(c)
relate to Expenses arising from Customary Rights, but, which are not Customary
Rights identified in the Social Impact Assessment as referred to in Clause 5.3.

 
15.2 The Project Company shall be liable for and shall fully indemnify the
Government from and against Expenses which relate to:
 
15.2.1 non-Governmental activities carried out in the Project Area during the
Term;
 
15.2.2 Customary Rights identified in the Social Impact Assessment referred to
in Clause 5.3.
 
15.2.3 any breach of its obligations under this Development Agreement.
 
15.3 The Government shall be liable for and shall indemnify the Project Company
from and against any losses, cost, claim, liability or Expense (the
“Liabilities”) in respect of:
 
 
(a)
any existing Third Party rights affecting the Existing Land, save for those
rights identified under this Development Agreement, or any claim in respect
thereof;

 
 
(b)
any claim in respect of any action taken, undertaken or performed by the Project
Company pursuant to an Approval Waiver (“Waived Action”) where such claim is
based upon any person claiming that such Waived Action was not Approved by the
Government for the full amount of Liabilities.

 
15.4 In the event that any portion of the Project Area reverts to the Government
as provided in this Agreement as a result of a Project Company Event of Default,
the Project Company shall be liable for and shall indemnify the Government from
and against any Expenses which result from activities carried out within the
Project Area after the Effective Date and prior to the date of reversion for the
full amount of such Expenses.
 
15.5 Each Party shall, subject to Clause 15.7 below, indemnify, hold harmless
and release from any Expenses the other Party, their employees, agents and
contractors, for loss resulting from any breach of this Development Agreement,
or any gross negligence or wilful default or omission from and against all
liabilities for:
 
 
(a)
death or personal injury;

 
 
(b)
loss of or damage to property;

 
 
(c)
breach of any laws; and

 
actions, claims, demands, costs, charges and expenses (including legal expenses
on an indemnity basis), which may arise out of or in consequence of the
performance by a Party of its obligations pursuant to this Development
Agreement.
 
15.6 Neither Party shall be responsible or be obliged to indemnify the other if:
15.6.1 any of Clauses 15.5(a) to 15.5(d) inclusive arises as a direct result of
such Party acting on the instruction of the other; or
 
15.6.2 any injury, loss, damage, cost and expense is caused by the default,
fraud, negligence or wilful misconduct of the Party claiming Expenses, or its
officers, employees, agents or contractors of its obligations under this
Development Agreement.
 
15.7 Each Party shall be responsible and be obliged to indemnify the other Party
for any injury, loss, damage, cost and expense caused by the default, fraud,
negligence or wilful misconduct of the indemnifying Party, its officers,
employees, agents or contractors or by the breach of the indemnifying Party of
its obligations under this Development Agreement.
 
15.8 Any indemnity by either of the Parties under any provision of this Clause
15 shall be without limitation to any indemnity by that Party under any other
provision of this Development Agreement.
 
15.9 Neither Party (including its officers, employees or agents) shall in any
circumstances whatsoever (including circumstances arising due to or caused by
the defaults or acts or omissions causing loss to that Party) be liable to the
other Party under or in connection with this Development Agreement for any
indirect or Consequential Loss, or punitive or exemplary damages, or losses
arising out of any contract with Third Parties.
 
 
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15.10 In respect of any claim arising under any indemnity in favour of a Party
contained in this Development Agreement, such Party shall:
 
15.10.1 as soon as reasonably possible, the Party seeking indemnification (the
“Indemnitee”) shall give to the other Party, in writing, notice of the claim,
circumstance or matter (collectively the “Claim”) against which it is seeking to
be indemnified together with all details of such Claim by or known to it at the
time of giving such notice; and
 
15.10.2 if such Claim relates to a claim by any Third Party:
 
(a)  
the Indemnitee shall not, absent the prior written consent of the other Party
(which shall not be unreasonably withheld or delayed), admit liability or make
any offer, promise, compromise or settlement with a Third Party in respect of
such Claim; and

 
(b)  
at the request of the other Party and at such other Party’s cost the Indemnitee
shall, cooperate with the other Party and its insurers and attorneys, in the
defence, or settlement of such Claim or in any counterclaim thereof.

 
(c)  
Each Party shall be obligated to take such reasonable actions and precautions
and to institute such reasonable procedures so as to minimize, as far as
reasonably practicable, the damages or losses suffered by the Parties, or either
of them, with respect to any such Claim.

 
15.11 Notwithstanding the foregoing, the Project Company shall be deemed to have
conducted a thorough and complete independent investigation of the Project Area
before the Effective Date and is fully satisfied itself of the suitability of
the Project Area for the Project. No claim for indemnification shall be
entertained against the Government on the non-suitability of the Project Area
from the Project Company or any Third Party.
 
15.12 In the event that the Project Company deviates, modifies or alters the
natural course of any waterway within the Project Area resulting in damage or
loss to any persons or properties, the Project Company shall be liable for and
shall indemnify such persons suffering damage or loss to person or property due
to such deviation, modification or alteration.
 
16.  
INSURANCE

 
16.1 The Project Company shall take out and maintain, or procure the maintenance
of, any insurance as may be required by the Law in connection with the Project
or the Project Company’s personnel.
 
16.2 The Parties shall not take any action or fail to take any reasonable
action, or (insofar as it is reasonably within its power) permit anything to
occur in relation to it, which would entitle any insurer to refuse to pay any
claim under any insurance policy in which that Party is insured, a co-insured or
additional insured person.
 
16.3 The insurances referred to in Clauses 16.1 and 16.2 shall:
 
 
(a)
subject to Clause 16.4 below, name the Government (until the MBO Completion
Date) and the Project Company as co-insured with any other party maintaining the
insurance;

 
 
(b)
contain a clause waiving the insurer’s subrogation rights against the Government
and the Project Company and their respective agents, servants and employees;

 
 
(c)
provide for sixty (60) Days prior written notice of their cancellation,
non-renewal or amendment to be given to the Government.

 
16.4 The Project Company shall provide to the Government:
 
 
(a)
copies on request of all insurance policies referred to in Clause 16.1 and the
Government shall be entitled to inspect them during ordinary business hours; and

 
 
(b)
evidence of the premiums payable under all insurance referred to in Clause 16.1
have been paid and that the insurances are in full force and effect in
accordance with the requirements of this Clause 16.

 
16.5 If the Project Company fails to maintain or procure the maintenance of the
insurances referred herein, then the Government may pay any premiums required to
keep such insurance in force or itself procure such insurance and in either case
recover the amounts thereof on demand from the Project Company.
 
16.6 The Project Company shall, within thirty (30) Days after receipt of any
claim in excess of Rial Omani one hundred thousand (RO 100,000), give the
Government written notification of such claim accompanied by full details of the
incident giving rise to such claim. The Project Company shall provide to the
Government full details of any claims made in relation to a death within the
Project Area.
 
16.7 Neither failure to comply nor full compliance with the insurance provisions
of this Development Agreement shall limit or relieve the Project Company from
its liabilities and obligations under this Development Agreement.
 
16.8 The cost and payment of premiums in respect to insurance referred to in
this Clause 16 shall be the responsibility of the Project Company.
 
17.  
FORCE MAJEURE

 
17.1 The Parties shall be excused from performing part or all of their
obligations under this Development Agreement and shall not be liable for the
imposition of any penalties or be liable for damages (except for any penalties
or damages then due and owing) if, and to the extent that, they are unable to
perform or are prevented from performing their respective obligations by an
Event of Force Majeure, provided that the Party claiming an Event of Force
Majeure shall as promptly as practicable after becoming aware of the occurrence
of an Event of Force Majeure, but in no event later than thirty (30) Days
thereafter, give the other Party written notice describing the particulars of
the occurrence and its effect upon its performance under this Development
Agreement and, to the extent known, the expected duration of the Event of Force
Majeure and its effects; and provided, further, that the suspension of
performance is of no greater scope and of no longer duration than that caused by
the Event of Force Majeure.
 
 
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17.2 Within thirty (30) Days after giving notice under Clause 17.1 above, the
Party claiming an Event of Force Majeure shall prepare and deliver to the other
Party an appraisal report of the effects of the Event of Force Majeure (the
“Force Majeure Report”). The Force Majeure Report shall:
 
 
(a)
specify the Event of Force Majeure;

 
 
(b)
describe the damage and/or other effects resulting from the Event of Force
Majeure;

 
 
(c)
provide a good faith estimate (in each case to the extent applicable in the
circumstances) of:

 
 
i.
where appropriate, the costs to restore affected part or parts of the Project
Area to its or their condition immediately prior to the Event of Force Majeure
and the associated costs of delay;

 
 
ii.
the time which it will take to restore the affected part or parts of the Project
Area to such condition;

 
 
iii.
the liquidated damages and/or the insurance proceeds, if any, that may be
recovered, the date or dates on which such proceeds may be recovered and the
particular purposes for which such proceeds are required to be applied; and

 
 
(d)
include all relevant supporting documentation.

 
17.3 The Party not claiming the Event of Force Majeure shall, within thirty (30)
Days of receipt of the Force Majeure Report, notify the other Party of its
agreement or objection to the terms of the Force Majeure Report (the “Objection
Notice”).
 
17.4 The Party claiming an Event of Force Majeure shall have thirty (30) Days
from the date of an Objection Notice to appeal the Objection Notice by notice in
writing (an “Appeal Notice”) to the other Party, failing which notification, the
Objection Notice shall be final and binding.
 
17.5 Following receipt of an Appeal Notice, the Parties shall negotiate in good
faith to determine the applicability of the nature and effect of the Event of
Force Majeure. If the Parties cannot reach agreement within thirty (30) Days of
the Appeal Notice, then either Party may refer the disagreement to arbitration
in accordance with the provisions of Clause 28.
 
17.6 Following the occurrence of an Event of Force Majeure, the Parties shall:
 
 
(a)
make all reasonable efforts to prevent and reduce to a minimum and mitigate the
effect of any delay or cost increase occasioned by any Event of Force Majeure;
and

 
 
(b)
use their Best Efforts to ensure resumption of normal performance under this
Development Agreement after the occurrence of any Event of Force Majeure and
perform their obligations hereunder to the maximum extent practicable.

 
17.7 The Party claiming any Event of Force Majeure shall give written notice to
the other of:
 
 
(a)
the cessation of the relevant Event of Force Majeure; and

 
 
(b)
the cessation of the effects of such Event of Force Majeure on the performance
by such Party of its obligations under this Development Agreement,

 
as soon as practicable after becoming aware of each of such cessation but in
each case within thirty (30) Days after becoming so aware.
 
17.8 Upon the notification of the cessation of the Event of Force Majeure, the
Parties agree that a reasonable period shall be granted to the Party which
invoked the Event of Force Majeure before the said Party is required to start or
resume performance under this Development Agreement.
 
17.9 Notwithstanding the provisions of Clause 17.1, no relief shall be granted
to a Party pursuant to this Clause 17 to the extent that such failure or delay
is not attributable to the relevant Event of Force Majeure and would have been
experienced by such Party even if the relevant Event of Force Majeure or its
effects had not occurred.
 
 
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17.10 If the period of Force Majeure continues for a period exceeding three
hundred and sixty-five (365) Days and a Party’s performance of its obligations
under this Development Agreement is delayed, hindered or prevented for that
three hundred and sixty-five (365) Day period and beyond, and such Party
determines that the resumption of the performance of its obligations under this
Development Agreement is not possible within any reasonable period of time or
that the Project will be permanently impeded as a result of an Event of Force
Majeure (“Prolonged Event of Force Majeure”), then such Party shall notify the
other in writing of such determination and its intention to terminate this
Development Agreement in whole or in part (in respect of the part affected by
the Force Majeure) as a result thereof (“FM Termination Notice”).
 
17.11 The Party receiving the FM Termination Notice shall respond to it within
thirty (30) Days of such receipt (such date being deemed to be the date of the
FM Termination Notice) by either agreeing or disagreeing with such notice.
 
17.12 If the Party receiving the FM Termination Notice agrees with it, this
Development Agreement shall terminate to the extent set out in such notice
effective as of the date of the FM Termination Notice and the provisions of
Clause 21.1.6 and SCHEDULE 12 shall apply.
 
17.13 If the Party receiving the FM Termination Notice is not in agreement with
it and the Parties cannot resolve such disagreement within sixty (60) Days of
the date of the FM Termination Notice, then such failure to resolve this
disagreement shall be a Dispute which shall be dealt with in accordance with
Clause 28.
 
18.  
GOVERNMENT RISK EVENT

 
18.1 The Project Company shall not be responsible for any delay or failure to
perform any of its obligations under this Development Agreement and shall be
entitled to compensation in the event of a Government Risk Event.
 
18.2 The Project Company shall as soon as reasonably practicable, but not later
than twenty one (21) Days, after the occurrence of the Government Risk Event
provide to the Government written notice of such Government Risk Event (“GRE
Notice”) together with details of its direct impact upon the Project Company’s
costs, losses and liabilities, its rights hereunder and its ability to perform
its obligations.
 
18.3 As soon as reasonably practicable, but not later than twenty one (21) days,
following the service of such GRE Notice, the Parties shall meet and use all
reasonable efforts to agree upon an appropriate adjustment to the Project
Company’s obligations or to agree upon a fair and reasonable compensation but
which shall not include any Consequential Losses, punitive damages or exemplary
damages.
 
18.4 In the event the Parties are unable to agree upon appropriate compensation
within sixty (60) Days of the date of the GRE Notice, the Project Company may
(i) elect that such disagreement be determined in accordance with the provisions
of Clause 28; or (ii) serve the Government written notice of its intent to
terminate this Development Agreement (a “GRE Termination Notice”).
 
18.5 If the Government does not object to the GRE Termination Notice within
thirty (30) Days of its receipt thereof, this Development Agreement shall
terminate effective as of the date of the GRE Termination Notice and the Project
Company shall be entitled to damages for the loss suffered by the Project
Company due to Government Risk Event and such termination, the quantum of which
shall be assessed in accordance with SCHEDULE 12 and the Law.
 
18.6 If the Government objects to the GRE Termination Notice within the thirty
(30) Days period referred to in Clause 18.5 and the Parties cannot resolve such
objection by agreement within sixty (60) Days of the date of the GRE Termination
Notice, such matter shall be a dispute which shall be dealt with in accordance
with Clause 28.
 
19.  
CHANGE OF LAW

 
19.1 If a Change of Law occurs, within ten (10) years of the Effective Date the
Project Company may give written notice (the “Change of Law Notice”) to the
Government as soon as practicable of the occurrence of such Change of Law, but
in any event not later than three (3) months after the Change of Law. The
Project Company shall within thirty (30) Days of the Change of Law Notice
provide the Government with a further written notice substantiating the Change
of Law and detailing its anticipated effect on, and financial implications for
the Project Company (the “Substantiating Notice”). The Substantiating Notice
shall also include such remedies as the Project Company claims are appropriate
in order to relieve, prevent or mitigate the effects of the Change of Law and to
compensate it for the effects and financial consequences of the Change of Law.
The Substantiating Notice shall explicitly state that the Government shall reply
to such notice within thirty (30) Days of its receipt and the Substantiating
Notice shall repeat in full the provisions of Clause 19.4 and 19.6. In addition
to the Substantiating Notice, the Project Company shall provide all such further
information as the Government may reasonably require to substantiate the Change
of Law and support the contents of the Substantiating Notice as to its effect.
 
 
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19.2 A Change of Law shall relieve the Project Company from performance of its
obligations under this Development Agreement to the extent that a Change of Law
directly prevents performance of a particular obligation hereunder and shall
also entitle it to appropriate compensation provided that the Project Company
will not be entitled to any Consequential Losses, punitive damages or exemplary
damages. For the avoidance of doubt, Change of Law shall not relieve the Project
Company from its obligation(s) where such obligation(s) can be performed at an
additional cost and the Government has agreed to bear such cost or if the matter
is referred to arbitration pursuant to Clause 28 the arbitral tribunal has
decided that the Government is to bear such cost.
 
19.3 The Government shall within thirty (30) Days of receipt of the
Substantiating Notice notify the Project Company in writing of its objection
(the “Government Objection Notice”) or agreement to the Substantiating Notice.
 
19.4 The Project Company shall have ninety (90) Days from the date of the
Government Objection Notice to appeal the Government Objection Notice by notice
in writing (a “PC Appeal Notice”) failing which the Government Objection Notice
shall be final and binding.
 
19.5 Following receipt of a PC Appeal Notice, the Parties shall negotiate in
good faith to determine the applicability of the nature or effect of the Change
of Law. If the Parties cannot reach agreement within thirty (30) Days of the PC
Appeal Notice, the Project Company may refer the disagreement to be resolved in
accordance with the provisions of Clause 28.
 
19.6 In the event that a notice from the Government is delivered to the Project
Company agreeing to the Substantiating Notice pursuant to Clause 19.3 hereof, or
in the event that the Government does not deliver any such notice or a
Government Objection Notice in accordance with that clause, then the Project
Company shall, subject to provisions of this Clause 19.6 below, receive the
relief from performance of its obligations under this Development Agreement and
compensation specified in the Substantiating Notice. The Project Company shall
receive such relief and compensation in accordance with the following
provisions:
 
 
(a)
with the Substantiating Notice, the Project Company shall have given full
details of the relief and the compensation sought:

 
 
(b)
the Project Company must demonstrate that the Change of Law was or shall be the
direct cause of the partial or full inability to perform its obligations
hereunder and the subject of the relief and compensation sought by it; and

 
 
(c)
subject to Clause 19.6 (d) below, the Parties shall use their best endeavours to
agree an appropriate relief and/or compensation within sixty (60) Days of the
conclusion of the thirty (30) Day period referred to in Clause 19.5 and failing
such agreement the matter shall be a dispute which shall be dealt with in
accordance with Clause 28.

 
 
(d)
should the Change of Law result in the Project Company full inability to proceed
with or perform the Project Tasks, the Project Company shall be entitled to
terminate this Development Agreement by delivering to the Government a Change of
Law Termination Notice, in which instance the compensation provisions set out in
SCHEDULE 12 will apply, provided that should the Government dispute the Project
Company’s entitlement to terminate this Development Agreement, which should be
included in the Government’s Notice as referred to in Clause 19.3 above, such
dispute shall be resolved in accordance with Clause 28.

 
19.7 It is acknowledged and agreed by the Project Company that it assumes full
commercial market risk and that the concept of the Change of Law does not
encompass or protect against commercial market risk.
 
19.8 Without prejudice to the foregoing the following shall not be considered to
be a Change of Law:
 
 
(a)
increase in the duty payable on alcohol or special tax on alcohol;

 
 
(b)
changes in laws of general application to persons and businesses which are
resident or doing business in Oman;

 
 
(c)
company tax rates increased;

 
 
 
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(d)
increase in the Tourism tax or the Municipal tax;

 
 
(e)
limitation on discounts from published tariffs of hotel rooms;

 
 
(f)
introduction of personal income tax;

 
 
(g)
introduction of charges for property owners, tenants, residences or businesses
for public services;

 
 
(h)
increase in charges or introduction of new categories of charges for sales and
transfers of property, mortgages, registration, authentication, certification,
and leasing properties;

 
 
(i)
changes in health, safety, environmental, criminal and public policy laws;

 
 
(j)
changes in laws which are not specifically discriminatory against the Project or
the Project Company;

 
 
(k)
changes in labour law, charges and percentages for Omanisation;

 
 
(l)
changes in customs duties for importation of goods;

 
 
(m)
changes in the cost of gas, petrol, diesel;

 
 
(n)
changes in electricity and water charges;

 
 
(o)
changes in vehicle registration tax and other transportation taxes; and

 
 
(p)
changes in visa fees, airport departure, arrivals, taxes and charges.

 
CHAPTER VIII
 
EVENTS OF DEFAULT AND TERMINATION
 

 
20.  
EVENTS OF DEFAULT

 
20.1 The following shall constitute a Project Company Event of Default:
 
 
(a)
any material breach by the Project Company of any material term or condition of
this Development Agreement, including without limitation, the breach of any
representation or warranty made in this Development Agreement which has a
Material Adverse Effect on the ability of the Project Company to perform the
Project Tasks;

 
 
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(b)
any material breach by the Project Company of its obligations under this
Development Agreement;

 
 
(c)
any material breach by the Project Company of its obligations to perform the
Minimum Build Obligations;

 
 
(d)
any gross negligence, misrepresentation or wilful misconduct by the Project
Company which has had or is likely to have a material adverse effect on the
Project;

 
 
(e)
any assignment of rights by the Project Company in violation of this Development
Agreement;

 
 
(f)
Abandonment of the Project at any time;

 
 
(g)
a resolution is passed or court order issued to wind up or liquidate the Project
Company whether voluntarily or compulsorily;

 
 
(h)
a material breach under the Usufruct Agreement; and

 
 
(i)
any material breach by a Third Party Developer of the Accession Agreement which
has not been remedied by the Project Company.

 
20.2 The following shall constitute Government Events of Default:
 
 
(a)
any Project Company Licence and Permit not being issued in accordance with
Clause 13 and which has a Material Adverse Effect on the Project and the ability
of the Project Company to satisfy its obligations under this Development
Agreement;

 
 
(b)
any Project Company Licence and Permit ceasing to remain in full force and
effect, upon a Duly Completed application being made by the Project Company, not
being renewed in accordance with Clause 13 and which has a material adverse
effect on the Project and the ability of the Project Company to satisfy its
obligations under this Development Agreement;

 
 
(c)
a material breach by the Government of any material term or condition of this
Development Agreement which has a Material Adverse Effect on the Project and the
ability of the Project Company to satisfy its obligations under this Development
Agreement;

 
 
(d)
any assignment of rights by the Government in violation of this Development
Agreement;

 
 
(e)
a failure by the Government to satisfy, within a reasonable time, its
obligations with respect to the Government Infrastructure pursuant to this
Development Agreement and which cannot be compensated by the payment of damages.

 
21.  
TERMINATION AND CONSEQUENCES

 
21.1 Termination by the Government
 
21.1.1 The Government may terminate this Development Agreement if:
 
(a)  
a Project Company Event of Default has occurred in respect of Clause 20.1(c),
(f), (g) or a material breach of any of its obligations which cannot be
adequately recompensed by the payment of compensation; and

 
(b)  
the Government first follows the procedure set out in this Clause 21.1.

 
 
 
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21.1.2 If the Government wishes to terminate this Development Agreement pursuant
to Clause 21.1.1, it shall first serve notice (a “Project Company Event of
Default Notice”) on the Project Company, stating:
 
(a)  
details regarding the Project Company Event of Default being complained of;

 
(b)  
the steps which the Government reasonably considers are necessary to remedy the
Project Company Event of Default; and

 
(c)  
the Government’s intention to serve notice terminating this Development
Agreement (a “Government Termination Notice”).

 
If the Project Company Event of Default referred to in a Project Company Event
of Default Notice has not been remedied or commenced to be remedied after sixty
(60) days from the service of the Project Company Event of Default Notice, then
the Government may terminate this Development Agreement by serving a Government
Termination Notice on the Project Company and on the Project Company’s receipt
of the Government Termination Notice, this Development Agreement shall
immediately thereupon terminate.
 
21.1.3 During the period following delivery of the Project Company Event of
Default Notice, the Project Company may undertake efforts to cure the relevant
Event of Default, and if the relevant Event of Default is cured prior to
delivery of a Government Termination Notice pursuant to Clause 21.1.4, then the
Government shall be prohibited from issuing a Government Termination Notice or
otherwise proceeding with termination of this Development Agreement for such
Event of Default.
 
21.1.4 If the Project Company Event of Default referred to in a Project Company
Event of Default Notice has not been remedied within ninety (90) Days after the
service of the Project Company Event of Default Notice, then the Government may
terminate this Development Agreement by serving a Government Termination Notice
on the Project Company and, on the Project Company’s receipt of such Government
Termination Notice, this Development Agreement shall be terminated. To the
extent that financing institutions or Lenders have been granted and elect to
exercise their Step-In Rights, the Government shall not terminate the
Development Agreement.
 
21.1.5 The Project Company may refer any disputed matters relating to a Project
Company Event of Default Notice or Government Termination Notice for
determination under Clause 28.
 
21.1.6 On termination of this Development Agreement under this Clause 21.1 the
following provisions shall apply:
 
(a)  
the Project Company’s entitlement to sell or transfer any Plots or to commence
or continue Development work shall immediately cease;

 
(b)  
the Project Company shall, and shall procure that its Affiliates, immediately
thereupon re-transfer back to the Government all land in the Project Area, any
Freehold Title, Usufruct Rights, sub-Usufruct Rights, leases, licenses,
beneficial interests, etc. to which is vested in the Project Company, including
any improvements thereof or structures thereon;

 
(c)  
the Parties shall act reasonably in arranging for an orderly wind down of the
arrangements between them;

 
(d)  
determination shall be without prejudice to any claims by either Party for
antecedent breach.

 
21.1.7           the Project Company shall be liable for any damages suffered by
the Government the quantum of which shall be assessed in accordance with
SCHEDULE 12 and the Law.
 
21.2 Termination by the Project Company
 
21.2.1 Without prejudice to Clause 18.5 and 19.6(d) above, the Project Company
may only terminate this Development Agreement if:
 
(a)  
a Government Event of Default has occurred;

 
(b)  
as a result of the Government Event of Default either (i) the Project cannot
proceed materially in the manner contemplated by this Development Agreement or
(ii) compensation would not adequately recompense the Project Company; it being
agreed that if the requirements of this sub-cause (b) are not satisfied, then
the Project Company shall retain all rights under this Development Agreement to
seek recompense for the alleged Government Event of Default (but excluding any
Consequential Loss) and resolution of any related dispute pursuant to Clause 28;
and

 
(c)  
the Project Company first follows the procedure set out in this Clause 21.2.

 
 
 
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21.2.2 If the Project Company wishes to terminate this Development Agreement,
pursuant to Clause 21.2.1, then it shall first serve written notice (“Government
Event of Default Notice”) on the Government stating:
 
(a)  
details regarding the Government Event of Default being complained of;

 
(b)  
the steps which the Project Company reasonably considers are necessary to remedy
Government Event of Default; and

 
(c)  
the Project Company’s intention to serve a written notice terminating this
Development Agreement (“Project Company Termination Notice”).

 
21.2.3 If the Government Event of Default referred to in a Government Event of
Default Notice has not been remedied or commenced to be remedied after sixty
(60) Days from the service of the Government Event of Default Notice, then the
Project Company may terminate this Development Agreement by serving a Project
Company Termination Notice on the Government and, on the Government’s receipt of
the Project Company Termination Notice, this Development Agreement shall
immediately thereupon terminate.
 
21.2.4 The Government may refer any disputed matters relating to a Government
Event of Default Notice or Project Company Termination Notice for determination
under Clause 28.
 
21.2.5 On termination of this Development Agreement for a Government Event of
Default, the following provisions shall apply:
 
(a)  
the Project Company’s entitlement to sell or transfer any Plots or to commence
or continue Development work shall immediately cease;

 
(b)  
the Project Company shall, and shall procure that its Affiliates, immediately
thereupon re-transfer back to the Government all land in the Project Area, any
freehold titles, Usufruct Rights, sub-Usufruct Rights, leases, licenses,
beneficial interests, etc. to which is vested in it, including any improvements
thereof and structures thereon;

 
(c)  
the Parties shall act reasonably in arranging for an orderly wind down of the
arrangements between them; and

 
(d)  
termination shall be without prejudice to any claims by either Party for
antecedent breach.

 
21.2.6 The Project Company shall be entitled to claim damages for the loss
suffered by the Project Company due to a Government Event of Default the quantum
of which shall be assessed in accordance with SCHEDULE 12 and the Law provided
that such quantum shall be reduced to the extent that (a) any component of the
Project is not feasible or commercially viable and/or (b) loss is not
attributable to the Government Event of Default.

 
CHAPTER IX
 
GENERAL PROVISIONS
 
22.  
LENDERS SECURITY INTERESTS

 
22.1 This Development Agreement shall not be assigned, transferred, pledged, or
otherwise encumbered or disposed of by either Party hereto without the prior
written consent of the other Party.
 
22.2 It is acknowledged and accepted by the Government that the Lenders may be
granted certain security interests over certain assets of the Project Company
including this Development Agreement, other related agreements and the Project
Assets which, inter alia, may entitle them to exercise Step In Rights. The
Government agrees that it will acknowledge the rights of the Lenders in this
regard direct to such Lenders as requested by the Project Company in a form
according to the principles agreed between the Parties and attached hereto as
SCHEDULE 20. Subject to the Government’s written consent to the terms and
conditions thereof (which shall not be unreasonably withheld), the Government
will permit such Lenders to exercise their rights granting such security
interests without interference. Any assignment by the Project Company by way of
security shall not relieve or in any way discharge it from the performance of
its duties and obligations under this Development Agreement.
 
 
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22.3 At the reasonable request of the Project Company, the Government shall
enter into Direct Agreements with any Lender acknowledging their rights by way
of security over this Development Agreement, the Project Assets and/or the
Project. In such a Direct Agreement, the Government will agree to such Step In
Rights according to the principles agreed between the Parties and attached
hereto as SCHEDULE 20.
 
22.4 By providing reasonable assurance and co-operation or by entering into one
or more Direct Agreements pursuant to Clause 22.3, the Government shall not be
required or deemed to assume any obligations under such Direct Agreements
additional to those already contained under the Development Agreement.
 
22.5 All reasonable costs, expenses or other obligations (including all
attorneys and experts fees) incurred by the Government in providing such
assistance and in reviewing and executing all necessary documents shall be
reimbursed to it in full by the Project Company without set-off or deduction
promptly upon receipt of the Government’s invoice, but in any event not later
than thirty (30) Days from such receipt.
 
22.6 All charges and fees which may apply for the registration of the Direct
Agreement shall be payable by the Project Company.
 
22.7 This Development Agreement shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the Parties.
 
23.  
ACCOUNTING AND AUDITING

 
23.1 The Project Company or its authorised agents shall maintain accurate books
of account and records (“Books and Records”) in accordance with the Law. The
Project Company shall maintain the Books and Records at a location in Oman
during the performance of the Development Agreement and for such period as may
be required by the Law, but in any event not less than five (5) years after the
completion of the Minimum Build Obligations.
 
23.2 Notwithstanding the above, Books and Records which relate to disputes,
appeals, arbitrations, litigation of claims shall be maintained until any such
matters have been fully resolved. Such Books and Records shall present all
costs, expenses, income and revenue utilised either directly or indirectly in
computing any charges or payments under this Development Agreement.
 
23.3 The Project Company shall at each anniversary of the Execution Date and
prior to the completion of the MBO provide a written notice to the Government
that it has sufficient financial means to carry out the performance of the MBO
and the Project that it is not aware of any circumstances which would affect the
financing of the MBO and the Project.
 
23.4 If at any time prior to the completion of the MBO there is a breach of any
provision in the finance agreements, then the Project Company shall promptly
inform the Government of the breach and what steps it is taking to remedy the
breach.
 
23.5 If at any time prior to the completion of the MBO there is a material
negative financial effect on the performance by the Project Company of the MBO
or the Project then the Project Company shall promptly inform the Government of
the material negative financial effect and what steps it is taking to remedy the
situation.
 
23.6 The accounts of the Project Company shall be audited by an internationally
recognised firm of auditors in accordance with the International Financial
Reporting Standards, or similar internationally accepted standards recognized by
the Law.
 
24.  
ASSIGNMENT

 
24.1 This Development Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto and their successors, transferees and assigns.
 
24.2 Except as otherwise provide in Schedule 14 and 24 hereto, the Project
Company shall not transfer or assign this Development Agreement or rights or
obligations hereunder without prior written consent of the Government. Upon
providing notice to the Government, the Project Company may assign its  rights
under this Development Agreement for the purpose of providing security to
Lenders but shall not otherwise dispose of or encumber any of its interest in
the Project except that, as specifically permitted pursuant to the provisions of
Schedule 14 and 24, the Project Company may, without notice to or consent from
the Government, assign its right to acquire Freehold Title to any person at any
time after the Effective Date.
 
24.3 The Government may not assign, novate or otherwise transfer the whole or
any part of its rights or obligations under this Development Agreement unless
the Government shall have previously entered into a guarantee of all of the
obligations of the assignee, transferee or other successor to the Government in
a form satisfactory to the Project Company.
 
 
 
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25.  
WAIVER

 
The failure of a Party to enforce a right under this Agreement shall not be
construed as a waiver unless the same has been expressly waived in writing. Any
written waiver at any time by a Party of its rights with respect to an Event of
Default under this Development Agreement or with respect to any other matters
arising in connection with this Development Agreement shall not be deemed a
waiver with respect to any subsequent Event of Default or other matter. Any
delay, short of the statutory period of limitations, in asserting or enforcing
any right under this Development Agreement shall not be deemed a waiver of such
right.
 
26.  
TAXATION

 
The Government shall grant the Project Company an exemption in respect of income
taxes, corporate taxes and capital gains taxes, provided that the Project
Company is entitled to such exemption in accordance with the Law. The Project
Company shall assist the Government by making the application or filing required
by the Government under the Law.
 
27.  
NOTICES

 
27.1 Any notice or other communication to be given under or in connection with
this Development Agreement shall be in writing and signed by or on behalf of the
Party giving it. Such notices or communications shall be delivered as indicated
in Clause 27.3 hereof either: (i) by hand; (ii) by pre-paid, recorded courier or
postal delivery; or (iii) by telefax. In the event that a document is sent by
telefax, a copy thereof also shall promptly thereafter be delivered to the
addressee by hand or by pre-paid recorded, courier or postal delivery in
accordance with Clause 27.3; provided, however that a failure to send such a
duplicate thereof shall not, in itself, invalidate delivery of a notice which
was actually received by the recipient.
 
27.2 Any notice so served by hand, post or telefax shall be deemed to have been
delivered:
 
 
(a)
in the case of telefax, at the time when transmission is completed and an
electronic answerback or other reply confirmation (which may include
acknowledgement of receipt from the recipient) is received by the sending party
indicating successful receipt by the receiving party of the document to be
delivered; and

 
 
(b)
in the case of delivery by hand or pre-paid, recorded courier or postal
delivery, when actually delivered; provided, however, that in each case where
the application of this Clauses 27.2 (b) would otherwise result in delivery on a
Day which is not a Business Day or at a time after 5:00 PM on a Day which is a
Business Day, then delivery shall be deemed to have occurred at 9:00 AM on the
next following Business Day. All references to time and date in this Clause are
to the local time and date in the location of delivery.

 
27.3 For purposes of this Clause 27, the addresses, and telefax numbers of the
Parties for delivery of notices and other communications shall be as follows
(unless and until a Party shall have otherwise directed the sending Party by
notice delivered in accordance with the provisions of this Clause):
 
To Project Company:
 
Omagine LLC
P O Box 708
Madinat Sultan Al Qaboos
Postal Code 115
Sultanate of Oman
Attention:                      The Managing Director
Fax:           +968-2449-9846
 
To the Government:
 
Ministry of Tourism,
P.O. Box 200
Muscat
Postal Code 115
Sultanate of Oman
Attention:                      H.E. the Undersecretary for Tourism
Fax:           +968-2458-8909
 
28.  
GOVERNING LAW AND DISPUTE RESOLUTION

 
28.1 Governing Law
 
This Development Agreement shall be governed by and construed in accordance with
the Laws of the Sultanate of Oman
 
28.2 Dispute Procedure
 
Any dispute arising from or in respect of the interpretation and/or application
of this Development Agreement shall be resolved amicably in direct and open
negotiations and discussions between the Parties and if no amicable settlement
is reached then either party shall have the accordance with the Oman Law of
Arbitration issued by the Royal Decree No. 47/97 (as amended) on giving the
other party a written notice of his intention to go to arbitration.
 
 
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28.3 Arbitration Procedure
 
The arbitration shall be venued and seated in Oman and shall be conducted by
single arbitrator to be agreed by the Parties and in case of non-agreement then
each Party shall nominate one arbitrator and the two arbitrators shall then
appoint the chairman of the tribunal. The arbitration shall be conducted in the
English language.
 
28.4 All expenses and costs of the arbitration shall be borne by the parties in
the manner to be determined by the arbitrator (s) except the expenses of
experts, evidence, legal counsel which shall be borne by each party.
 
29.  
SOVEREIGN IMMUNITY

 
29.1 The Government hereby unconditionally and irrevocably agrees for now and
hereafter not to claim, invoke or permit to be invoked on its behalf or for its
benefit any right it may have under the Law, or the laws of any other state or
jurisdiction, to prevent, delay, hinder, nullify or in any other way obstruct
the Resolution of any Dispute. Each of the Parties hereby unconditionally and
irrevocably agrees to accept any judgment rendered by a court of competent
jurisdiction as final and binding and not to claim, invoke or permit to be
invoked on its behalf or for its benefit any right it may have under the Law, or
the laws of any other state or jurisdiction, to prevent, delay, hinder, nullify
or in any other way obstruct the enforcement or execution of any judgment of any
such court of competent jurisdiction.
 
29.2 Save and except for Commercial Government Properties, to the extent that
the Government or any of its Commercial Government Properties may in any state
or jurisdiction claim or benefit from any immunity (whether characterized as
state immunity, sovereign immunity, act of state or otherwise) [an “Immunity”]
from jurisdiction, suit, action, service, execution, attachment, set off,
provisional measures or orders, or other legal process whether in aid of
execution (before award or judgment or otherwise) [collectively “Actions”], or
to the extent that there may be attributed to the Government or any of its
properties any such Immunity from Actions (whether or not claimed), the
Government hereby expressly, unconditionally and irrevocably agrees to the
extent permitted by Law not to claim, invoke or permit to be invoked on its or
its Commercial Government Properties’ behalf or for its or its properties’
benefit any such Immunity from Actions, and hereby expressly, unconditionally
and irrevocably waives, any such Immunity from Actions.
 
29.3 The Government acknowledges that all of the transactions and actions
contemplated and effected by this Agreement and the Usufruct Agreement are
commercial transactions.
 
30.  
CAPTIONS

 
All subject headings and Clause titles are provided for the purpose of reference
and convenience, and are not intended to be inclusive or definitive, or to
affect the meaning of the contents or scope of this Development Agreement.
 
31.  
ENTIRE AGREEMENT

 
The terms and provisions contained in this Development Agreement constitute the
entire agreement between the Parties on the matters addressed in this
Development Agreement and shall supersede any memorandum of understanding,
letter of intent, all previous communications, representations, or agreements,
either verbal or written, between the Parties with respect to the Project and
this Development Agreement. No termination, variation or modification of this
Development Agreement shall be valid unless it is in writing and signed by the
Parties hereto in accordance with Royal Decree No.48/76 as amended.
 
32.  
SEVERABILITY

 
If any of the provisions of this Development Agreement are held to be invalid or
unenforceable under the Law, the remaining provisions shall not be affected, and
any such invalidity or unenforceability shall not invalidate or render
unenforceable that provision in any other jurisdiction. In such event, the
Parties agree that the provisions of this Development Agreement shall be
modified and amended so as to effect the original intent of the Parties as
closely as possible with respect to those provisions that were held to be
invalid.
 
33.  
CONFIDENTIALITY

 
Each Party shall treat as confidential and shall not disclose to any person the
terms of this Development Agreement or any information or materials supplied or
made available in connection herewith without the prior written consent of the
other Party; provided, however, either Party may disclose such information (i)
as required by Law or the rules and regulations of any recognized securities
exchange or as may be required by judicial decision, requirements of applicable
law or governmental regulation or administrative process, or to comply with any
such laws or regulations to which such Party is subject; (ii) for the purposes
of financing the Project, to any Lenders and prospective Lenders; (iii) to its
or such Lenders’ professional advisers, consultants and employees and (iv) to
prospective Third Party Developers approved by the Government and who have
agreed to enter into an Accession Agreement, provided however, that no Third
Party shall be given confidential information pursuant to this Clause unless it
agrees to enter into a similar confidentiality agreement with respect to such
information. The provisions hereof shall not apply to (a) the Development
Control Plan, or (b) any other document referred to herein which is available to
the general public as a matter of Law or otherwise, and (c) shall survive
termination of this Development Agreement.
 
 
 
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34.  
SCHEDULES

 
All schedules referred to in this Development Agreement are attached to this
Development Agreement and such schedules are incorporated herein by reference as
though fully set forth at length wherever so referenced in this Development
Agreement.
 
35.  
NO THIRD PARTY RIGHTS

 
A person who is not a Party to this Development Agreement shall have no rights
or privileges whatsoever under this Development Agreement and shall not be
deemed a third party beneficiary hereof.
 
36.  
ANTICIPATORY BREACH

 
36.1 The Parties agree that, where before the time of performance is due under
this Development Agreement, a Party either indicates in writing that at that
time it will not perform or disables itself from so performing, such Party shall
have committed an anticipatory breach hereof (an “Anticipatory Breach”).
 
36.2 An Anticipatory Breach will be subject to the following options:
 
36.2.1
the other Party may either continue to seek performance or

 
36.2.2 
can declare the first Party to be in breach. If such declaration is made, the
Party making the declaration becomes immediately entitled to damages (subject to
a duty to mitigate) calculated by reference to the time when performance was
due.

 
37.  
FURTHER ASSURANCES

 
The Parties shall do all such further acts and execute and deliver such further
documents as shall be reasonably required in order to perform and carry out the
provisions of this Development Agreement and the Usufruct Agreement.
 
38.  
RELATIONSHIP OF THE PARTIES

 
This Development Agreement does not, and shall not be interpreted or construed
to, create a joint venture or partnership between the Parties or to impose any
partnership obligation or liability upon them. Except as expressly provided
herein or otherwise agreed in writing, neither Party shall have any right,
power, or authority to enter into any agreement or undertaking for, to act on
behalf of, to act as, or be an agent or representative of, or to otherwise bind,
the other Party and neither Party shall hold itself out or describe itself as
having any such right, power or authority.
 

 
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IN WITNESS whereof the Parties have entered into this Development Agreement on
the date first above written.
 
SIGNED for and on behalf of THE GOVERNMENT OF THE SULTANATE OF OMAN, pursuant to
Royal Decree No. 48/76 as amended,
 

By:
His Excellency Ahmed bin Nasser bin Hamed Al Mahrizi

Minister of Tourism
    /s/ H. E. Ahmed bin Nasser bin Hamed Al Mahrizi

--------------------------------------------------------------------------------

Ratified pursuant to Royal Decree No. 48/76 as amended
 

 
By:
His Excellency Darwish bin Isma’eel bin Ali Al Balushi

 
Minister Responsible for Financial Affairs

 

--------------------------------------------------------------------------------

SIGNED for and on behalf of Omagine LLC by
 

By:
/s/ Frank J. Drohan

--------------------------------------------------------------------------------

Frank J. Drohan
Managing Director

 
 
 
 
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Schedule 1
 

 
 
Krooki; Mulkiya; Sea Area; Layout

 
Notwithstanding anything to the contrary contained anywhere else in this
Development Agreement or in the Schedules to this Development Agreement, the
Parties hereby agree that:

i.  
the Krooki dated June 16, 2014 as defined in Clause 1 and shown below as Part A
of this Schedule 1 is the Krooki for the Existing Land, and

 
ii.  
any diagrams, drawings, photographs or the like contained in any Schedule to
this Development Agreement showing boundaries of the Existing Land different
from the boundaries shown in the Krooki are indicative only and are hereby
amended to represent and mean the boundaries of the Existing Land as
definitively shown in the June 16, 2014 Krooki.

 

 
SC-1/1

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Part A
 
Krooki dated June 16, 2014
 
GRAPHIC [exsc1.jpg]

 
SC-1/2

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Part B
Mulkiya
 
(Attached separately hereto as Schedule 1B)

GRAPHIC [exsc1b.jpg]

 
SC-1/3

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Part C
The Sea Area

The Parties hereby agree as follows:
 
The area constituting the Sea Area, in respect of which an Environmental Impact
Assessment has been effected, will evolve and change shape as the Project is
Developed and Reclaimed Land and Created Waterways come into existence.
 
The dimensions and location of the Sea Area are indicatively shown in the
drawing below and the Ministry of Tourism (“MOT”) hereby agrees and consents to
the final dimensions and location of the Sea Area, provided that, the Project
Company receives the prior written Approval for such final dimensions and
location from the Ministry of Environment and Climate Affairs within 12 Months
after the Effective Date.
 
Subject always to this Development Agreement and the Law the Project Company
shall have no claim or right of action against the MOT in the event that the
Ministry of Environment and Climate Affairs does not Approve the dimensions and
location of the Sea Area as contemplated by this Development Agreement as stated
below in this Part C of Schedule 1.
 
The Sea Area at any time is never Reclaimed Land or Created Waterways and it
will be that rectangular area of the Gulf of Oman indicatively shown below and
which rectangle:
 
(i)
has a side (the “First Side”) that is co-existent with that line in the Gulf of
Oman which is the high high water mark (“HHWM”) adjacent to the Krooki boundary
line facing the Sea Area (the “Outer Boundary”), and

 
(ii)
has an opposite and parallel side (the “Second Side”) the coordinates of which
are perpendicular to the First Side and subject to the approval of the Ministry
of Environment and Climate Affairs, is one hundred thirty (130) meters in a
north-easterly direction from the First Side, and

 
(iii)
is bounded on its other two sides by:

 
 
a)
a side (the “Third Side”) which is that line originating at the point that is
the north-western boundary point of the Krooki and running perpendicular to and
through the First Side up to that point where it intersects the Second Side, and

 
 
b)
a side (the “Fourth Side”) which is parallel to the Third Side and which Fourth
Side is that line originating at the point that is the south-eastern boundary
point of the Krooki and running perpendicular to and through the First Side up
to that point where it intersects the Second Side.

 
The Sea Area on the Execution Date is indicated by the drawing below in Part C
of this Schedule 1 and the Parties hereby agree that the “Sea Bed” means that
part of the Project Area that at any time has the same coordinates as the Sea
Area and which is under the Sea Area.
 
 
SC-1/4

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GRAPHIC [exsc1c.jpg]
(All dimensions shown are indicative only)
 

 

 

 

 
SC-1/5

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GRAPHIC [exsc1d.jpg]
 
 
 
SC-1/6

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GRAPHIC [exsc1d2.jpg]
 
 
 
 
 
SC-1/7

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Schedule 2A
 
 

  graphic [exualogo.jpg]  
Sultanate of Oman
Muscat
Ministry of Tourism

Contract No.:
Name of Project: Omagine Project
    Governorate/State/District: Muscat
Name of Investment Company (Beneficiary): Omagine LLC
 
USUFRUCT CONTRACT
 
THIS USUFRUCT CONTRACT (“Contract”) is made and entered into on the ____ day of
August 2014, BETWEEN
 
THE Government of the Sultanate of Oman, represented in this Contract by the
MINISTRY OF TOURISM
Address: P.O. BOX 200, P.C. 115, Madinat Al-Sultan Qaboos, Sultanate
of Oman, referred to hereinafter as (the “First Party”); and
 
Omagine LLC, a limited liability company registered under the laws of Oman and
having commercial registration number 1080151. Address: PO Box 708, Madinat Al
Sultan Qaboos, PC 115, Sultanate of Oman, Referred to hereinafter as the “Second
Party”
 
Preamble
 
Whereas, the First Party owns the plot of land No. (1) in Block No. (74SW)
located in Al Hail North, Governorate/State/District of Al Seeb, with a total
area of (1000000 square meters) shown in the attached drawing referred to
hereinafter (the “Land”).
Whereas, the First Party has agreed to award the Second Party the rights of
Usufruct over the Land in order to implement the works set out in (a) the master
plan of the Project approved by the First Party pursuant to the Development
Agreement and (b) the Development Agreement,
Whereas the First Party and the Second Party have signed a Development Agreement
setting out in detail the terms and conditions governing the development, use
and sale of the Land.
 
Therefore, the Parties agreed to conclude this Contract according to the
following terms and conditions :

 
 
 
SC-2/1

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ARTICLE 1
 
1. The foregoing Preamble, the Laws and Regulations governing lands held in
Usufruct in the Sultanate of Oman shall be part and parcel of this Contract, and
shall be concurrently read and interpreted with them.  This Contract shall also
be an integral part of the Development Agreement entered into between the
Parties, together with the schedules thereto. In case of any conflict between
this Usufruct Contract and the Development Agreement, the provisions of the
Development Agreement shall prevail.
2. The Second Party acknowledges     to have lawfully inspected the Land held in
Usufruct in a manner that excludes ignorance, and agrees to hold it in Usufruct,
without any right of recourse on the First Party with respect to rights other
than those provided for in the Development Agreement.
3. The Second Party shall be entitled to divide the Land into separate parcels,
blocks, units or parts and to assign all or part of its rights hereunder to
third parties pursuant to the Law promulgated by Royal Decree 12/2006 and its
Executive Regulations on   ownership of real estate in integrated tourism
complexes.
 
ARTICLE 2: TERM OF USUFRUCT
 
1. The First Party  shall, pursuant to this Contract, grant the Second
Party,  the Usufruct rights over  the Land for a period of fifty years  (the
“Usufruct Term”), renewable subject to  a written agreement between the Parties
2. The Usufruct Term shall commence from the date of registration of this
Contract.
 
ARTICLE 3: OBLIGATIONS OF THE FIRST PARTY
 
1. The First Party shall deliver the Land free of any encumbrances or rights
limiting the Usufruct and warrants that no government body or third party will
obstruct the Second Party during the Term of Usufruct; failing which, the Second
Party shall have the right to terminate this Contract without prejudice to his
right to demand payment of damages as set out in the Development Agreement.
2 The First Party shall register this Contract with the Real Estate Registry at
the Ministry of Housing, Sultanate of Oman on or immediately after ratification
of the Development Agreement. The registration charges shall be at the expense
of the Second Party.
3 The Second Party shall be granted exemption from payment of Usufruct rates and
incentives and concessions in accordance with pertinent regulations as set out
in the Development Agreement.
4. The Second Party shall be exempted from payment of the Annual Usufruct Rent
during the first five (5) years of this Contract starting from the date of the
registration of the Usufruct Rights in the name of the Second Party
 

 
 
SC-2/2

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ARTICLE 4: OBLIGATIONS OF THE SECOND PARTY
 
The Second Party commits to:
 
1. Pay an annual usufruct fee being(0.300 Omani Riyals multiplied by the
Existing Land (in square meters) X 30%), provided that the Annual Usufruct Fee
shall be reduced in proportion with any part of the Existing Land that the
Government has received the Land Price for.
2. Pay to the First Party a delay penalty equivalent to six percent (6%) per
annum of the unpaid balance of the Annual Usufruct Rent. This penalty shall
apply from the due date through the date of settlement.
3. Pay all chargeable taxes and levies as they fall due, unless fully or partly
exempted from them pursuant to the provisions of laws and regulations prevailing
in the Sultanate.
4. Take all necessary measures to protect the boundaries of the Land from any
trespassing and maintain the Land, buildings and installations constructed by
the Second Party or over which the Second Party has usufruct rights pursuant to
this Contract and which were constructed pursuant to the Development Agreement
and strictly use it for the intended purpose only.
5. Comply with the terms and conditions of the Development Agreement and all
applicable laws and regulations in the Sultanate of Oman.
6. The Second Party shall begin executing the Project according to the
provisions of the Development Agreement.
7. The Second Party shall not take any legal or physical action in relation to
the Land subject of Usufruct for a period beyond the expiry date of the
Usufruct.
8. Insure the buildings and installations together with fixed and movable assets
constructed pursuant to the Development Agreement and owned by the Second Party
or over which the Second Party has usufruct rights pursuant to this Contract
(collectively, “Installations”) during the Contract Term against any “Insurable
Risk” with respect to losses or damages to such Installations regardless of how
they are caused, subject always to the reasonable  exclusions of the insurance
coverage in force as agreed, provided that the insurance covers the value of
such Installations. In the event that such Installations are destroyed or
damaged as a result of an Insurable Risk, the Second Party shall file an
insurance claim with respect to such damage or destruction (an “Installation
Claim”). Upon obtaining the necessary permits and approvals from the First
Party, the Second Party shall apply the proceeds, if any, received from an
insurer with respect to any such Installation Claim (“Proceeds”) to the
reconstruction and restoration of the damaged or destroyed Installations that
are the subject matter of such Installation Claim. The Second Party shall use
its best efforts to repair such Installations such that they are returned to the
state they were in immediately prior to the occurrence of such damage or
destruction.
 
ARTICLE 5: DISPOSAL OF THE USUFRUCT
 
1. Subject to Article 2 of the Royal Decree No. 12/2006, the Second Party, in
order to finance the Project, shall have the right to assign all or part of the
rights granted to it by virtue of this Contract to another party, or to mortgage
the Usufruct right applicable to the Land and all the structures existing
thereon as set out in the Development Agreement.
 
2.The deed of assignment or mortgage shall stipulate that the rights and
obligations of the Second Party, as stipulated under this  Contract shall apply
to the transferee or the mortgagee in lieu of the Second Party, even in the
event that the Second Party ceases to exist as a legal entity.
3. In accordance with the provisions of the law promulgated by Royal Decree No.
(12/2006) and its Executive Regulations, the Second Party shall be entitled to
sell the Land pursuant to the terms and conditions stipulated in the referred to
Law and its Executive Regulations as well as the provisions of the Development
Agreement
 
ARTICLE 6: OBLIGATORY SUSPENSION OF THE PROJECT DUE TO A FORCE MAJEURE
 
In cases of Force Majeure that prevent any of the parties to perform their
duties, the pertinent provisions in the Development Agreement shall apply.

 
 
SC-2/3

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ARTICLE 7: TERMINATION OF CONTRACT
 
In the event that the Second Party fails to complete the Minimum Build
Obligations as set out in the Development Agreement, the First Party may
terminate this Contract provided that the First Party also terminates the
Development Agreement. Repossession and compensation shall be governed by the
Development Agreement.
 
ARTICLE 8: General Provisions
 
1. Upon expiry of this Contract and unless it has been renewed or extended by
the Parties, the buildings and structures on the Land which have not yet been
duly transferred from Usufruct to freehold title (i.e. if transfer of title has
not been duly registered with the government or for which the right to acquire
freehold title has not been validly assigned), shall become the property of the
First Party, all subject to the provisions of Development Agreement.
2. The termination of this Contract in line with Article seven shall be without
prejudice to the registered rights of third parties in connection with the
Usufruct, such as mortgage, or any other usufruct right accruing during the
Usufruct Term.
 
ARTICLE 9: APPLICABLE LAW AND DISPUTE RESOLUTION
 
1. This Contract shall be governed by the Laws, Rules and regulations applicable
in the Sultanate of Oman.
2. Any dispute arising between the Parties in connection with any of the terms
of this Contract shall be settled in accordance with the dispute resolution
mechanism and arbitration as set out in the Development Agreement.
3. The Parties agree that in case of any conflict between this Contract and the
Development Agreement, the Development Agreement shall prevail.
4. All provisions of the Development Agreement shall survive the termination of
the Development Agreement to the extent they are applicable to the Usufruct.
 
ARTICLE 10: NOTICES
 
1. Both Parties have designated the addresses shown in the Preamble of this
Contract as their addresses. Each Party shall notify the other Party in case of
a change in address and no correspondence shall be valid unless sent to this
address.
2. This Contract has been drawn in five (5) original copies signed by the
Parties, a copy of which is delivered to the Second Party, two copies to the
First Party, and a copy to each of the Ministry of Finance and the Real Estate
Registry within the Ministry of Housing.

 
 
SC-2/4

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ARTICLE 11: CONTROLLING LANGUAGE
 
In the event that this Contract is read in a language other than the Arabic
language, the Parties hereto acknowledge and agree that the Arabic language
version hereof shall prevail in case of inconsistency or contradiction in
interpretation or translation of this Contract. 
 
First Party(Ministry)
 
SIGNED for and on behalf of THE MINISTRY OF TOURISM OF THE SULTANATE OF OMAN:
 
Signature:
Stamp:
   
SIGNED for and on behalf of Omagine LLC:
 
Signature:
Stamp:
 

 
SC-2/5

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GRAPHIC [exsc2.jpg]
 
 
 
SC-2/6

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Schedule 2B
 
Usufruct Amendment / Usufruct Terms

The Parties hereby agree as follows:
 

 
1.
Usufruct Fee / Usufruct Rent.

 
 
1.1
The Usufruct Fee shall be equal to  three hundred  Baisa (RO 0.300) per square
meter.

 
 
1.2
A Plot which has its freehold title registered in the name of the Ministry of
Tourism and a Substantially Completed Building which is not a Residence situated
upon it is hereby defined as a “Rentable Plot” and the sum of all Rentable Plots
is hereby defined as the “Rentable Area”.

 
 
1.3
The Project Company shall pay the Government a sum per year (the “Annual
Usufruct Rent”) that is arrived at by multiplying (x) the Usufruct Fee, by (y)
the total number of square meters of Reclaimed Land and Existing Land that is in
existence and constituting the Rentable Area on the 31st Day of December of the
year immediately prior to the year for which such Annual Usufruct Rent is being
calculated.

 
 
1.4
The sum of all Existing Land and Reclaimed Land other than the Rentable Area
(and including all Plots of open area plus any Plot upon which is situated a
Building which is not Substantially Completed) is hereby defined as the
“Non-Rentable Area”. There shall never be any Usufruct Rent due or owing to the
Government for the Non-Rentable Area.

 
 
1.5
The Project Company shall pay Usufruct Rent to the Government during each year
within the Usufruct Term except for that time period beginning on the Effective
Date and ending five (5) Years thereafter (the “Rent Free Period”). No such rent
is payable during the Rent Free Period.

 
 
1.6
Each Annual Usufruct Rent payment shall be paid in full, in advance to the
Government on or before January 15th of the year for which it is due and shall
be proportionally adjusted for any short year or Rent Free Period.

 
2.
Registration Fees / Usufruct / Usufruct Amendment.

 
2.1
The Parties hereby agree that  the Registration Fee to be paid by the Project
Company to the Ministry of Housing for the registration of the Usufruct
Agreement shall be calculated based upon the Annual Usufruct Rent relevant to
the Existing Land and in accordance with the Law.

 
2.2
The Parties hereby agree that  the Registration Fee to be paid by the Project
Company to the Ministry of Housing for the registration of the Amendment (as
that term is defined in Clause 9.6.4 of this Development Agreement) shall be
calculated based upon the Annual Usufruct Rent relevant to the Reclaimed Land
and in accordance with the Law.

 
2.3
Such Registration Fees shall be paid at the time of the registration of the
Usufruct Agreement or the Amendment, as the case may be.

 
2.4
The Usufruct Agreement shall be registered with the Ministry of Housing as soon
as possible after its execution by the Parties and subsequent to the
Ratification of the Development Agreement. The Amendment shall be registered
with the Ministry of Housing as soon as possible after its execution by the
Parties pursuant to Clause 9.6.4 of the Development Agreement.

 
3.
All provisions of the Usufruct Agreement and of the Amendment, and all
provisions of this Development Agreement relevant to the Usufruct Agreement, the
Amendment and the Usufruct Rights, shall survive the expiry of the Term and
continue in full force and effect as legally binding and enforceable obligations
of the Parties until the expiry of the Usufruct Term.

 
4.
The freehold title to the Existing Land is registered in the name of the
Ministry of Tourism as of the Execution Date, and upon the formation of
Reclaimed Land, the freehold title to all such Reclaimed Land will be registered
in the name of the Ministry of Tourism. The Project Company will create Plot
Plans subdividing the Existing Land and the Reclaimed Land into sub-Plots
(“Separately Registered Plots”) and the Government will do all things necessary
to register each Separately Registered Plot in the name of the Ministry of
Tourism. Each Separately Registered Plot of Existing Land shall continue to be
subject to the Usufruct Agreement and after the Amendment is executed by the
Parties each Separately Registered Plot of Reclaimed Land shall be subject to
the Usufruct Agreement as amended by the Amendment. Any Sales Agreements for the
sale of a Plot, Residence Unit or Commercial Unit and any sub-usufruct agreement
and/or lease may be entered into by the Project Company and any person in the
sole discretion of the Project Company and without the requirement for any
Government Approval. The Government hereby grants to the Project Company such
easements and rights of way from and after the Execution Date as may be
necessary or convenient for the Project Company to access the Existing Land to
fulfill its obligations and exercise its rights in accordance with and pursuant
to the Development Agreement. From and after the Execution Date, the Government
hereby grants to the Project Company, its Affiliates and any of the Project
Company’s consultants, Contractors, architects or other service providers or
vendors, access to all parts of the Project Area to enable the finalizing of the
Development Control Plan, the Final Master Plan and any and all other plans,
studies, surveys, testing or assessments referred to in this Agreement or
required or desired to be performed by the Project Company. The Government also
undertakes not to lease, transfer or otherwise deal with, or create any
Encumbrance over, any part of the Project Area prior to the execution of the
Usufruct Agreement and Amendment.

 
 
 
SC-2/7

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Schedule 3
 
 
Mr. Frank G. Drohan
Adminst. Manager
Omagine LLC
P. O. Box 708, PC 115

After Compliments:

Grant Omagine Project Permit of Recipe integrated tourism complexes

Reference to your letter dated 28.05.2014 to us to grant Omagine Project
permit/licence of recipe integrated tourism complexes which suggested to
construct on Government tourism plot No. 1 SQ (74 SW) located at North Hail in
Wilayat Al Seeb of Muscat Governorate with total area 1,000,000 Sq. M.

We inform you that the Ministry agreed to grant your project the recipe of
Integrated Toursim Complexes according to the following terms:

1.  
 Commitment with items of implementing regulation of the owner of real estate in
the integrated Tourism complexes issued by Ministry decision No. 191/2007
(enclosed).

2.  
Comitment of No. (1) item of Ministry decision No. 98/2009 of amendment of the
implement of regulations of the owner of real estate in the integrated tourism
complexes issued Ministry’s decision No. 191/2007 which state “The number of
residential units should not exceed the number of hotel units” (Enclosed).

 
With best regards

Sd/-

Ahmed bin Nasser Al Mahrzi
The Minister of Tourism
 
 
SC-3/1

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Schedule 4
 

 
The Parties hereby agree as follows:
 
1.           The Initial Master Plan attached hereto as Schedule 4A is the
Initial Master Plan referred to in Clause 11.1 and it, and all the terms and
conditions contained in this Schedule 4, shall be incorporated into and form the
basis for the Final Master Plan. The Final Master Plan will be prepared by the
Company and reviewed and Approved by the Government in accordance with the
provisions of the DCPF.
 
2.           The Krooki and Sea Area as specified in Schedule 1, the Project
Company Infrastructure and Utilities as specified in Schedule 18, the Projected
Utilities Service Requirements and the Private Sector Public Infrastructure and
Utilities as specified in Schedule 17, the Government Infrastructure as
specified in Schedule 8 and the Content Design Brief specified in Schedule 6B
are all hereby incorporated into the Initial Master Plan by reference thereto as
if fully set forth in this Schedule 4.
 
Part A.
Initial Master Plan Drawing – See Schedule 4A attached

 
Part B.
Reclaimed Land

 
Part C.
Perimeter Landscaped Area

 
Part D. 
Coverage / Variations / DCP Changes

 
Part E.  
Phasing Strategy – See Schedule 4E attached

Part B
Reclaimed Land
 
The dimensions and location of the Reclaimed Land are indicatively shown in the
drawing below and the Ministry of Tourism (“MOT”) hereby agrees and consents to
the creation by the Project Company of such Reclaimed Land, provided that, the
Project Company receives the prior written Approval for the final dimensions and
location of such Reclaimed Land from the Ministry of Environment and Climate
Affairs.
 
Subject always to this Development Agreement and the Law the Project Company
shall have no claim or right of action against the MOT in the event that the
Ministry of Environment and Climate Affairs does not Approve the dimensions and
location of the Reclaimed Land as contemplated by this Development Agreement.

 
SC-4/1

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GRAPHIC [exsc4.jpg]

(All dimensions shown are indicative only)

1.           Reclaimed Land Registration /Rights.
 
 
1.1
Upon the formation of the Reclaimed Land, the Government shall no later than
forty-five (45) Business Days after receiving from the Project Company the
written notice thereof referred to in Clause 9.6.1, procure the registration of
the title to the Reclaimed Land in the name of either:

 
 
a)
the Ministry of Tourism, and grant a usufruct right to the Project Company for
the remainder of the Usufruct Term in respect of such Reclaimed Land upon the
same terms as the Usufruct Agreement and the Parties agree that the Usufruct
Agreement shall be amended accordingly so as to properly reflect such grant of
the Usufruct Rights in respect of the Reclaimed Land; or

 
 
b)
the Project Company or a Third Party pursuant to Clause 9.6.1.

 
 
1.2
The Government agrees that (i) all rights and Usufruct Rights granted to the
Project Company in respect of the Existing Land pursuant to this Development
Agreement are hereby and shall also be granted to the Project Company in respect
of the Reclaimed Land, and (ii) all references in this Development Agreement to
the Existing Land are, where the context requires, also references to the
Reclaimed Land.

 
 
SC-4/2

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Part C
 
The Perimeter Landscaped Area
 
Subject to the appropriate approvals being obtained as and when they are
required in accordance with the Law from the relevant Government Authorities in
respect of the matters dealt with below, the Parties hereby agree as follows:
 
1.  
The Perimeter Landscaped Area is that area of land between the Krooki boundary
line facing the Main Road (the “Inner Boundary”) and the Main Road (as that term
is defined in Schedule 8). The Perimeter Landscaped Area is not within the
Project Area and is indicatively shown in the drawing below in this Part C of
this Schedule 4.

 
2.  
The Project Company and the Government agree that the Project Company
shall  undertake and perform such landscaping activities within and upon the
Perimeter Landscaped Area as the Project Company, in its sole discretion, deems
necessary, convenient or desirable to perform in order to beautify, maintain and
clean the Perimeter Landscaped Area (the “Landscaping Activities”) at the sole
cost and expense of the Project Company and the Project Company will not seek
reimbursement from the Government for any such Landscaping Activities.

 
3.  
The Parties agree that no activities, development or buildings of any kind or
nature other than as contemplated by this Development Agreement or as agreed in
writing by the Parties will be permitted by the Government or carried out by the
Project Company within the Perimeter Landscaped Area at any time after the
Execution Date or during the Usufruct Term or any extension thereof, except on
those two (2) Plots within the Perimeter Landscaped Area which as of the
Execution Date have been registered with the MOH and on which there is located
(i) electric power infrastructure, and (b) a football field (collectively, the
“Exempted Plots”). Notwithstanding the foregoing sentence, the Government hereby
agrees to permit the Project Company, at the Project Company’s sole expense, to
erect and maintain such directional, advertising and marketing signage relevant
to the Omagine Project (the “Omagine Signage”) within and upon the Perimeter
Landscaped Area as the Project Company, in its sole discretion, deems necessary
or convenient.

 
4.  
The Government hereby grants the Project Company an easement right from and
after the Execution Date and during the Usufruct Term and any extension thereof
to (i) enter upon the Perimeter Landscaped Area at any time, (ii) perform the
Landscaping Activities, and (iii) erect and maintain the Omagine Signage.

 
5.  
The Government will not charge the Project Company any access, use or other such
fee or tax of any nature (i) for its Landscaping Activities, or (ii) for, or in
respect of, the Omagine Signage, or (iii) in any other respect of the Perimeter
Landscaped Area. There shall never be any Usufruct Fee, easement fee or tax due
or owing to the Government from the Project Company with respect to the
Perimeter Landscaped Area.

 
6.  
The Project Company agrees that the restrictions on development within the
Perimeter Landscaped Area shall be subject to:

 
 
(i)
any Encumbrance existing as of the Execution Date with respect to the Perimeter
Landscaped Area, and

 
 
(ii)
the right of the Government and/or the relevant Private Sector Public Utility
Company (“PSUC”) to install any public utility infrastructure, equipment or
distribution apparatus (collectively “Public Infrastructure”) in a location
beneath the Perimeter Landscaped Area (an “Underground Location”).

 

 
SC-4/3

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7.  
The Government hereby agrees that it and/or the relevant PSUC shall:

 
 
(i)
be responsible to procure and maintain that any Public Infrastructure is
installed in an Underground Location, and

 
 
(ii)
be responsible to maintain all Public Infrastructure existing on the Execution
Date within, beneath or upon the Perimeter Landscaped Area, and

 
 
(iii)
within twenty-four (24) Months after the Execution Date, remove all above ground
poles (“Utility Poles”) carrying telephone or electricity transmission wires,
which Utility Poles are, as of the Execution Date, located within the Perimeter
Landscaped Area or the Project Area, and

 
 
(iv)
move the electricity and telephone wires presently strung overhead on such
Utility Poles to an Underground Location.

 

(All dimensions shown are indicative only)
GRAPHIC [exsc4a.jpg]
 
 
 
SC-4/4

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Part D
 
Coverage / Variations / DCP Changes
 

 
Subject to the appropriate approvals being obtained as and when they are
required in accordance with the Law from the relevant Government Authorities the
following shall apply in respect of Coverage, Variations, and DCP Changes:
 
1.  
Coverage.

 
Notwithstanding Clause 5.1.1, the Parties hereby agree as follows:
 
The total combined area of the Existing Land at the Execution Date plus the
Reclaimed Land after it comes into existence is hereby defined as the “Project
Land”. The square meter area of Project Land enclosed by a Building as measured
at finished ground level and from the perimeter external walls of such Building
is hereby defined as the “Building Footprint”. Residences are the non-tourism
components of the Project and Buildings other than Residences are the tourism
components of the Project.
 
“Coverage” means the sum of all Building Footprints in the Project Area and such
Coverage shall not exceed thirty percent (30%) of the Project Land.
 
The percentage of Project Land used for the non-tourism components of the
Project shall not exceed fifty percent (50%) of such Project Land and the
remaining Project Land shall be utilized for the tourism components of the
Project.
 
2.  
Monitoring and review of the Plans.

 
Pursuant to Clause 11.1 of the Development Agreement, the Initial Master Plan
which is attached hereto as Schedule 4A is the Initial Master Plan. The Final
Master Plan shall be subject to the Approval of the Government pursuant to the
provisions of the DCPF and Clause 11.3 of the Development Agreement. Any change
to the Plans or to the Final Master Plan (a “Variation”) may be brought forth to
the Government by application pursuant to Clause 11.5. Any Variations to the
Final Master Plan shall be subject to the Approval of the Government pursuant to
the provisions of Clause 11.4 and 11.5 and section 2.2 of this Part D of
Schedule 4.
 
This DCP will be prepared by the Project Company and Approved by the Government
pursuant to the provisions of the DCPF and Clause 11.2 and Schedule 13. Any
change to the Approved DCP (a “DCP Change”) may be brought forth to the
government by application pursuant to Clause 11.5. Any DCP Changes shall be
subject to the Approval of the Government pursuant to the provisions of Clause
11.4 and 11.5 and section 2.1 of this Part D of Schedule 4.
 
DCP Changes or Variations will be permitted in accordance with the terms of
Clause 11. Variations and DCP Changes will be deemed by the Project Company to
be either a minor change or a major change. An application to vary any major
provision of the DCP must be supported by a written statement demonstrating how
the objectives and performance criteria have been satisfied. A minor change does
not require Approval from the government. A major DCP change or any Variation
that affects the form and substance of the Minimum Build Obligations (a
“Material Change”) requires the written approval of the Government. The Project
Company may approve minor modifications to the DCP without the need to formally
amend the DCP. Major modifications to the DCP will require the Approval of the
Project Company and the Government, except that the Government may make
amendments to the DCP (“Government DCP Amendments”) to assure that the DCP is
consistent with the Law or the interests of health, safety, security,
environmental or public policy. Any application for major DCP Changes made by
the Project Company to the Government will clearly demonstrate that:
 
A) 
the application meets the goals and objectives of the DCP; and

 
B)
compliance with the relevant provision or criteria contained in the DCP is
unreasonable or unnecessary in the circumstances that apply.

 
Formal Approval from the Government of any DCP Change or Variation will be as
contemplated by clause 11.5 and section 2.1 or section 2.2 respectively of this
Part D of Schedule 4.
 
 
 
SC-4/5

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2.1           DCP Changes
 
2.1.1
The Parties agree that they foresee the likelihood of DCP Changes occurring as
the final detailed design of the Project unfolds.

 
 
2.1.2
The Parties agree therefore that if the Project Company wishes to implement a
DCP Change it shall give a notice (a “DCP Change Notice”) to the Government
requesting Approval of such DCP Change together with a reasonable amount of
detail to substantiate such DCP Change (a “DCP Proposal”) and the following
shall apply:

 
 
A)
if such DCP Change will not have a Material Adverse Effect upon any development
already constructed on land adjoining the Project Area, or is not a Material
Change, then the Government shall:

 
 
(i)
Approve such DCP Change, and

 
 
(ii)
issue any relevant Ministerial Decision of Amendment to the DCP as required by
Clause 11.6, and

 
 
(iii)
take the necessary action to publish any such Ministerial Decision of Amendment
as Law, and

 
 
(iv)
not unreasonably withhold its Approval of any such DCP Change, or

 
 
B)
if such DCP Change is a Material Change, then the Government shall not have any
obligation to approve such Material Change but, subject to the Law, shall not
unreasonably withhold its Approval of any such Material Change, and

 
 
C)
the Government shall ensure that its written response (“Response”) to such DCP
Change Notice is given within the sixty (60) day period specified in Clause 11.5
(the “Response Period”) including ensuring that all relevant Government
Authorities analyze any such DCP Proposal and provide their comments, if any,
prior to the end of such Response Period, and

 
 
D)
within the Response Period, the Government shall give a Response informing the
Project Company of its Approval or rejection of such DCP Change or of its
granting of an Approval Waiver with respect to such DCP Change, and

 
 
E)
if a Response is not received within the Response Period, or if the Government
gives a Response which is a rejection, then such shall be a Dispute which shall
be resolved pursuant to the provisions of Clause 28.2.

 
2.1.3
If at any time, based solely on ensuring that the Development Control Plan is
consistent with the Law, or the interests of health, safety, security,
environmental or public policy (collectively, the “Public Policy Issues”), the
Government considers that the Public Policy Issues require a change to the DCP
(a “Government DCP Amendment”), then any such proposed Government DCP Amendment
may be made by the Government through a decision of the Government. No
Government DCP Amendment shall be implemented or made unless and until the
Project Company:

 
 
 
SC-4/6

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A)
receives prior written notice thereof (a “Government DCP Change Notice”)
together with the exact wording of such proposed Government DCP Amendment, and

 
 
B)
has further been given ninety (90) Business Days from the date it receives such
Government DCP Change Notice to give a written Response to the Government with
its comments in respect thereof (“Project Company Comments”).

 
2.1.4
The Project Company Comments shall be limited to the effects the proposed
Government DCP Amendment or the proposed timing for the implementation thereof
shall have upon:

 
 
A)
the ability of the Project Company to perform its obligations; or

 
 
B)
the losses of revenue or other losses or costs incurred by the Project Company
which may arise as a result of such Government DCP Amendment being implemented
and made in the form or at the time contained in the relevant Government DCP
Change Notice.

 
2.1.5
The Project Company Comments shall include its best estimate of the difference
between the anticipated effects upon, and financial implications for, the
Project Company of:

 
 
A)
the Government DCP Amendment being implemented in the form contained in the
relevant Government DCP Change Notice without the Government taking into account
and implementing the Project Company Comments; and

 
 
B)
the Government DCP Amendment being implemented in a form which is a modification
of that form contained in the relevant Government DCP Change Notice, in which
modified form the Government does take into account and implements the Project
Company Comments.

 
2.1.6
Upon receipt of any Project Company Comments, the Government shall take such
Project Company Comments into account before making any Government DCP Amendment
and, where such Project Company Comments would, if implemented, mitigate any
adverse effects upon the Project Company in respect of the matters referred to
in paragraph 2.1.4 (A) and 2.1.4 (B) above, the Government shall modify its
proposed Government DCP Amendment where possible to implement such Project
Company Comments and ensure that such Project Company Comments are incorporated
into any Government DCP Amendment.

 
2.1.7
The Project Company may publish the Development Control Plan from time to time
upon its websites and copies may be provided to Third Parties.

 
2.1.8
The Government shall do all things necessary, including issuing any rules,
regulations, decisions and passing any Laws in the form of Ministerial
Decisions, required to ensure that the Project Company is able to exercise its
rights with respect to the DCP and its enforcement as contemplated by the
Development Agreement.

 
2.1.9
Any DCP Change that is Approved, granted an Approval Waiver or determined to be
Approved pursuant to Clause 28.2, shall thereupon come into effect and be
enforceable under the Development Agreement. The relevant Ministerial Decision
of Amendment specified in Clause 11.6 of the Development Agreement shall be
promptly issued and published and the DCP or relevant portions thereof or
portions of the Development Agreement shall thereupon be deemed so amended and
shall thereafter be acted upon and construed by the Parties accordingly.

 
 
 
SC-4/7

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2.2           Variations
 
2.2.1
The Parties agree that they foresee the likelihood of Variations occurring as
the final detailed design of the Project unfolds.

 
2.2.2
The Parties agree therefore that:

 
 
A)
if any such Variation is a minor Variation to the overall concept envisioned by
the Final Master Plan then the Project Company shall have the absolute right to
implement such minor Variation without any Approval, but

 
 
B)
if any such Variation is a major Variation to the overall concept envisioned by
the Final Master Plan, or a Material Change to the MBO prior to the MBO
Completion Date, then such major Variation or Material Change shall require the
prior written Approval of the Government, and the Government shall not
unreasonably withhold its Approval of any major Variation, and the Government
shall not have any obligation to agree a Material Change but, subject to the
Law, shall not unreasonably withhold its Approval of any Material Change.

 
2.2.3
From time to time the Project Company may give a written notice to the
Government requesting its Approval of a Variation (a “Variation Notice”)
together with a reasonable amount of detail to substantiate such Variation (a
“Variation Proposal”).

 
2.2.4
The Government shall ensure that its written Response to such Variation Notice
(“Response”) is given within the sixty (60) day period specified in Clause 11.5
(the “Response Period”) including ensuring that all relevant Government
Authorities analyze any such Variation Proposal and provide their comments, if
any, prior to the relevant Response Date.

 
2.2.5
within the Response Period, the Government shall give a Response informing the
Project Company of its Approval or rejection of such Variation or of its
granting of an Approval Waiver with respect to such Variation, and

 
2.2.6
if a Response is not received within the Response Period, or if the Government
gives a Response which is a rejection, then such shall be a Dispute which shall
be resolved pursuant to the provisions of Clause 28.2.

 
2.2.7
any Variation that is Approved, determined to be Approved pursuant to Clause
28.2, or given an Approval Waiver, shall thereupon come into effect and be
enforceable under this Development Agreement. The relevant Ministerial Decision
of Amendment specified in Clause 11.6 of the Development Agreement shall be
promptly issued and published and the Master Plan or portions thereof or
portions of the Development Agreement shall thereupon be deemed so amended and
shall thereafter be acted upon and construed by the Parties accordingly.

 
 
 
SC-4/8

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Schedule 4A
Initial Master Plan Drawing

GRAPHIC [exsc4aa.jpg]

 
The Parties agree that this Schedule 4A represents the Initial Masterplan
concept and that the Final Master Plan will be prepared by the Project Company
and Approved by the Government pursuant to the provisions of the DCPF.
 
 
SC-4/9

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Schedule 4E
 
 
GRAPHIC [exsc4e.jpg]
 
 
 
 
 
 
 
 
 
SC-4/10

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Schedule 5

CORPORATE DOCUMENTS OF PROJECT COMPANY

Attached hereto is the Constitutive Contract of Omagine LLC, an Omani limited
liability company (the “Project Company”).
 
The Founder Shareholders of the Project Company are:
 

»   Royal Court Affairs       »   Omagine Inc., a Delaware USA corporation      
»   Journey of Light, Inc., a New York USA corporation       »   Consolidated
Contracting Company, S.A., a Panamanian company       »   Consolidated
Contractors Co. Oman LLC, an Omani company

 

 
SC-5/1

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GRAPHIC [sc5b1.jpg]
 
 
SC-5/2

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GRAPHIC [sc5b2.jpg]
 
 
 
SC-5/3

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GRAPHIC [sc5b3.jpg]
 
 
 
 
 
SC-5/4

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GRAPHIC [sc5b4.jpg]
 
 
 
SC-5/5

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Schedule 6
 
 
Minimum Build Obligation
 
 

 
 

 
Part A                                MBO Components
 
Part B                                Pearl Content Design Brief
 
Schedule 6A
MBO Components
 
The Parties hereby agree as follows:
 
1.
The seven (7) sphere shaped Buildings, each approximately twenty (20) meters in
diameter and identified as item number 1 in the drawing of the Initial Master
Plan below in this Schedule 6 are hereby defined as the “Pearls”.

 
 
The entertainment content of the Pearls is more fully described in Part B of
this Schedule 6 attached hereto.

 
2.
Two (2) hotel Buildings, one being a five star hotel and one being a four star
hotel, and identified as item number 2 in the drawing of the Initial Master Plan
below in this Schedule 6, are hereby defined as the “Hotels”.

 
3.
Notwithstanding the definition in Clause 1, the Minimum Build Obligation is
comprised of and constitutes the Substantial Completion in accordance with the
DCP and the requirements of this Development Agreement of the construction of
(a) the seven (7) Pearls, and (b) one (1) of the Hotels.

 
4.
The Project Company will keep the Government informed regarding the progress of
the design and construction of the Minimum Build Obligation via the MBO Report
to be delivered to the Government pursuant to Clause 7.1.3.

 
5.
The Parties agree that the Final Master Plan will be prepared by the Project
Company and Approved by the Government pursuant to the provisions of the DCPF.

 
 
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(All dimensions shown are indicative only)

 
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Schedule 6B
 
PRELIMINARY DESIGN BRIEF
Pearl Content

Journey of Light, Inc.
Omagine, Inc.
Confidential

February 2008
Rev. 3

Imagination. Inspiration. Illumination.
 
GRAPHIC [exsc6b.jpg]

The Omagine Journey
Bringing Oman to the world – and the world to Oman

Oman Pearl • Culture Pearl • Innovation Pearl • Energy Pearl
• Sea Pearl • Earth Pearl • Sky Pearl

Based on the true story of Oman and the World, Omagine is a high culture
entertainment destination that turns stories into physical places containing
indelible experiences designed to ignite the imagination of future generations.

Combining terrific storytelling and impeccable scholarship and research with a
variety of technologically advanced communication tools, Omagine will be a
remarkable 21st Century immersive experience that offers emotional, physical,
and intellectual interactions that amaze, entertain and educate. 

Omagine will create memories that last a lifetime.

 
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JOURNEY OF LIGHT, INC.
 
Preliminary Design Brief - Pearl Content

High Level Strategic Vision
February 2008

For use by the professional interpretive designers and content developers to be
engaged by Omagine SAOC subsequent to the Effective Date to conceive, design and
create the visitor experiences at Omagine.

Omagine‘s Pearls will be iconic architectural forms housing entertaining tourism
visitor experiences unlike anything existing elsewhere. Think of the physical
structures, architectural designs and landscaping as the “body”. Think of the
entertainment content and visitor experiences within the Pearls themselves as
the “soul”. The body will be strikingly designed and executed to a high level of
professional excellence and quality. The soul – providing the intangible
messaging essence of the visitor experiences must align with Omagine’s strategic
vision of:
 
(i)  
providing entertainment with a purpose as a part of a uniquely spectacular
tourist experience,

 
(ii)  
inspiring all visitors, especially youth to let their imaginations soar,

 
(iii)  
transferring accurate knowledge and information in a subtle and entertaining
fashion,

 
(iv)  
sparking the visitors’ imagination and confidence in their own personal
potential,

 
(v)  
aligning with the Sultanate’s objectives for promoting human capacity building
in support of ongoing Government economic and industrial planning efforts,

 
(vi)  
maintaining the Sultanate’s culture and rich bio-diversity, and

 
(vii)  
enjoying the entertainment experience.

 
This preliminary design brief is concerned with the “soul” of the Omagine Pearls
- the visitor experiences and content - which will be designed, implemented and
updated from time to time - always in alignment with the foregoing objectives.
The entertainment content and visitor experiences of the Pearls will be
specifically designed to provide “entertainment with a purpose”. The focus is on
“high culture”, science, history and the arts not just “pop culture” although
popular culture will not be held in disdain. The journey through, around and
among the Pearls tells many stories – all true stories – the stories of Oman,
Culture, Innovation, Energy, Sea, Earth and Sky. Stories of interest to all –
stories of where we have been – where we are now – and where we are going. The
stories will be told in inspiring, illuminating and exhilarating ways by means
of the Pearl entertainment content and visitor experiences. The primary focus of
the visitor experiences is entertainment but no visitor experience is to be
designed unless it is in alignment with the several secondary objectives stated
above.

 
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The following pages present for each of the Pearls, the preliminary:

1.  
Goals / Objectives

2.  
Storyline

3.  
Selected Experiences *

--------------------------------------------------------------------------------

*
Omagine will involve renowned scientific, historical and cultural experts from
universities (including Farouk El-Baz from Boston University and Omani
professors from SQU), government, international institutions, business and
specialized NGO’s to serve on the “Content Development Advisory Board” (CDAB)
for the Pearls. This is done to assure accuracy of content as well as a broad
spectrum of intellectual perspective.

The CDAB will advise on the final Design Brief for each Pearl and will
collaborate with the professional entertainment and visitor experience designers
to be hired by Omagine SAOC in order to assure an integrated, aligned and
entertaining visitor experience is achieved.

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Oman Pearl

Discover And Celebrate Oman

Goals / Objectives:

·
To discover and communicate the story of Oman’s people, history, diverse
landscape, environment, bio-diversity, cultural heritage and enlightened
leadership in a distinctive and inspirational manner.

·
To celebrate Oman’s past and present as the Sultanate looks to the future.

Storyline:

Wherever you travel in Oman you see the wisdom of preserving the past while
developing for the future. Oman is the second largest country in Arabia and
boasts a highly diverse topography and climate. It includes part of the central
Arabian Desert and the Empty Quarter in the south-west, rugged mountains to the
north and fertile plains to the south. Oman’s southern coastline is transformed
into a tropical paradise for several months each year as west monsoon rains
sweep across the Arabian Sea watering ancient Frankincense trees along Oman’s
southern shores. Fantastic archeological finds bear witness to the human
occupation Oman has nurtured since prehistoric times as the tides of early
civilization and empire lapped at its shores. The cities of Muscat and Nizwah
are a rich blend of ancient and modern architecture and the natural wonders of
Salalah, Masirah Island and Wadi Nakhr Gorge demonstrate how tourism and
conservation can co-exist in harmony.

In modern times enlightened leadership guided the flowering of the uniquely rich
Omani heritage alongside sensible modernization policies enacted for the benefit
of Oman and its people. The Sultanate of Oman keeps a watchful eye on its past
as it confidently welcomes the innovation and appropriate development of the
future. The Oman Pearl will capture and illuminate the essence of the nation’s
geography, environmental bio-diversity, history, culture and people via film and
other festive stories that entertain and inspire visitors as they discover
lasting traditions and ancient cities among modern conveniences and friendly
people.
 
Selected Experiences*:

·
A stunning motion ride experience that takes visitors on a breathtaking flight
of discovery through Oman. Using the latest high definition projection and IMAX
technologies the beauty of Oman’s coastline, mountains, seas and changing
topography is revealed. Hidden beaches, rocky cliffs, majestic forts, empty
desert, ancient cities, deep caves and colorful reefs are visited. The diverse
grandeur of the desert at night, the ancient cities and modern and ancient
wonders will ignite visitors’ imaginations inspiring and encouraging them to see
more of the country.

·
An interactive sports and activity center will provide young and old with the
opportunity to take part in “virtual” extreme sports in perfect safety as they
hang-glide in the Hajar Mountains, sand-board, or para-surf along the Salalah
coast. Excitement and discovery abound in a wide range of entertaining
competitions and events that encourage the visitor to explore Oman further.

·
An Omani heritage center providing music, dance, historical data and stories via
cinema, exhibits and interactive media from around Oman

·
A musically guided adventure journey up close and personal (possibly with
indigenous animals including the Arabian Oryx, the turtles of Ras Al-Had and the
famous Arabian Horses of Oman). The experience - whether live or digital -
invites visitors to feel at home and encourages them to explore Oman’s amazing
wadis, caves and other scenic areas.

 
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Culture Pearl

Experience The Diversity Of The World’s Cultures

Goals / Objectives:

·
To celebrate regional and world cultures though inventive, exhilarating and
entertaining displays of art, music, architecture, cuisine, fashion, language,
spirituality, architecture and vibrant forms of folk knowledge and traditions.

·
To expand and illuminate visitors’ perceptions and understanding of the
contributions and influences of different cultures throughout history.

Storyline:

Oman is close to the lands in which civilization itself originated – the region
where the first cities developed around the ‘fertile crescent’.  As these great
civilizations flowered they developed a host of cultural achievements from fine
foods and delicacies to great artistic achievements. All around the world there
are people with rich and vibrant cultural traditions, making the most of the
lands they live in, and everywhere we see the same human needs to create, to
develop and to change. Culture never stands still.

In the world’s kitchens the fruits of the surrounding fields are now
supplemented by exotic tastes from once remote parts of the world. Television
and the Internet bring entertainment and knowledge from all parts of the globe
and international art markets and museums provide access to the imagination of
artists throughout the ages. People everywhere have a need to dress
appropriately for the environment in which they live but are never content to
simply wear the same things. They look for, discover and develop new fabrics,
colors and styles - new fashions with which to adorn themselves and enrich their
lives. We live in a ferment of creation, change and enrichment but we need that
anchor of the past to help us understand and interpret the present day’s hectic
pace of cultural exchanges and interactions.

The warmth of our common humanity and experience shines through in all the
diverse ways we live, create and experience the world around us. The hospitality
of the people of Oman is legendary. They will welcome visitors to share and
enjoy the richness of their country and culture - and with the Culture Pearl
they will share entertaining - often exhilarating - stories from across the
globe’s varied cultures.

Selected Experiences*:

·
Visitors take a ride-based journey that explores the origins of civilization in
Mesopotamia, the flowering of Arabian culture and the transmission to the West
by great Arab scholars of the ancient wisdom of Greece. The journey navigates
the diverse world cultures of yesterday and today and demonstrates (often in
witty and clever ways) the flow of cultural influences between and among the
different cultures around the world.

·
Around a central stage used for international music performances, fashion shows
and other diverting entertainment, visitors relax while enjoying a variety of
foods from around the world. The Culture Pearl is also the central hub of the
Omagine Film Festival where award winning culture films will be shown and
refreshed periodically. [ possibly Omagine T.V. – depending upon regulatory
requirements and licensing issues ]

·
A multi-purpose gallery space provides changing exhibitions of works that
exemplify the commonality of human experience throughout history and provide a
thought provoking look at values and ethics of multiple cultures. These
exhibitions may be two or three dimensional art works, literature, music or
dance. The arts – in all their forms – have always been an inspirational and
illuminating feature in the quest for human development. An adjacent space
provides virtual access to the great museums and galleries of the world.

·
A media resource center provides a space for visitors (both young and old) to
explore and “play with” their own creative abilities in a relaxed and
entertaining way. They will have access to the latest technologies demonstrating
how they can even create their own media productions. If desired, they can refer
and consult with the Culture Pearl’s  “Omagineers”  -   experts in art and
technology on hand for advice.

·
A center of modern Arabian Culture provides music, dance and cinema from around
the Arabian world. This includes a digital internet based voting system through
which young visitors can review performers and performances and make
recommendations for future shows and features.

 
 
 
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Innovation Pearl

Connect With The World’s Most Remarkable Minds

Goals / Objectives:

 
·
To present experiences demonstrating the achievements of the most innovative
people, leaders, partnerships and policies which have shaped the world and
advanced economic, scientific and social development.

 
·
To use entertaining concepts and ideas that light up minds and spark
imaginations in order to motivate the new generation of entrepreneurs,
inventors, risk-takers and innovators who will create the future of the region
and the world.

 
·
To cleverly reveal how imagination is the catalyst for innovation and how past
innovations are not just history – they actually created new futures.

 
·
To contribute to the development of the “home grown” human capital in Oman and
the Arab world that is a requirement for the “Knowledge Society” of the future.

Storyline:

From the cutting edge work in biotechnology taking place on Qeshm Island, to the
technologically advanced extraction methods employed in Oman’s oilfields, to
Masdar, the zero-waste, automobile free, carbon neutral city being developed in
the United Arab Emirates, the Arab world is innovating for a better future for
mankind.  It was during the ‘Golden Age’ of Islam that Arabic science and
technology flowered. Great Arabian thinkers and scientists became familiar with
the work of Greek philosophers and scientists such as Euclid, Archimedes and
Pythagoras and continued to innovate, to create new ways of thinking and
calculating and to invent new devices to solve the problems of the day. The
development in the Muslim world of the concept of zero was the basis for all
later mathematics. The work of al-Khwarizmi made modern algebra possible. The
European Renaissance and subsequent growth of rational thought, experiment and
discovery would not have happened without these and other great Arabic
discoveries and inventions.

Today science and innovation is pervasive. It surrounds and touches all our
lives. Mankind always had the power – but not always the desire - to imagine a
better future and create new and innovative ways of living in this world. The
Innovation Pearl will include visitor experiences in science, health, tourism,
commerce, media and society. The list of complex and elegantly simple
innovations and discoveries - penicillin; internet search; overnight express
delivery; digital money; blood circulation; the double helix DNA structure;
post-it notes -  goes on and on.

The future of the region belongs to the present majority of the Arab world
population under 16 years of age. The Innovation Pearl seeks to empower them
with the dignified self-confidence needed for their successful future. It will
excite and entertain them. Sparks of curiosity will unleash the inner-innovators
in the Arab youth - helping to cultivate the Arab leaders of business,
government and society that the region and the world will need for sustainable
growth and a better future for all.
 
 
 
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Selected Experiences*:

·  
Visitors enter a ‘time machine’ where they witness the great inventions and
inventors that have changed our world. The time machine is a large motion
simulator with projection windows looking out on the places it visits.

·  
On leaving the time machine visitors then enter an interactive demonstration
area where “Omagineers” assist them to explore the latest innovations and access
information about scientific activity today. It’s a highly interactive area in
which visitors explore the properties of the world around them through a wide
range of hands on activities. There are demonstration areas where facilitators
can show the work of different scientists, talk to the audience and demonstrate
their findings. Animators will be available to help visitors use the exhibits.
The area will include demonstrations and exhibits relevant to school curricula.

·  
Using actors, interactive media, computer generated graphics and simulator
technology, visitors to Omagine’s Innovation Pearl have the opportunity to see,
meet and talk with a number of the great inventors, leaders and most innovative
people of the past - people who have shaped the way we live today. Great
inventors, scientists and government, military and business leaders from the
past will talk about their lives and experiences. The conversations will focus
on the character, ethics and imagination of each individual; the hurdles and
doubts they had to overcome; and the reasons they were inspired to take the
chances they took to try something new and unique. Examples
include:  Archimedes;  Jabir ibn Hayyan;  Al Jazari;  Leonardo da Vinci;
Einstein; Plato, Salaadin and the philosophers in the Bagdad Academy of
Wisdom.  Many characters - innovators from all walks of life  -  will be chosen
from the Arab world. Characters can be re-created in a number of media. Some can
be animatronics, some virtual 3D projections and some holographic projections.
Other techniques such as 3D characters on large plasma screens, “Pepper’s Ghost”
or multimedia interactions via ‘time machine’ consoles may also be used. Large
scale video projections onto glass can bring ‘real’ actors into 3D sets.  Some
characters are operated by trained animators who conduct conversations with
visitors in real time via remote control while other characters converse via
interactive screens where visitors choose from a range of questions.

 
·  
The Innovation Pearl will personalize the experiences for visitors by allowing
them to access a range of animations, simulations, games and tests via smart
cards. This entertaining activity will also assess aptitudes for a range of
innovations and inspire visitors to positively influence their societies.

 
 
 
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Energy Pearl

Energize Yourself And The World Around You

Goals / Objectives:

·  
To entertain visitors with mind-opening experiences demonstrating how our lives
are linked to and dependent upon energy  - from the food we eat; to the way we
entertain ourselves; to the way we organize and run our societies.

Storyline:
 
The story of energy is the story of the development of mankind and civilization.

Without energy humans could not live. Without energy the infrastructure for,
among other things, the world’s agriculture, transportation, civil defense,
military, waste collection and communications systems would collapse. Without
energy plants would wither, animals would die and humans would be unable to use
their bodies or brains to accomplish anything.

Energy is captured from the sun by plants which are consumed by humans and
animals.  Human life depends on the energy acquired from the plants and animals
we consume, so we - and all life - are ultimately nourished by the sun.  But our
societies and the activities of civilization also require energy.

Over millennia the energy acquired from the sun by plants was condensed under
immense pressure producing reserves of coal, oil and natural gas around the
world. Oil and natural gas from the Middle-East region have been used in a
variety of ways for more than 5,000 years. The ancient Sumerians, Assyrians and
Babylonians used crude oil from large seeps at Tuttul (modern-day Hit) on the
Euphrates River and the fire-worshiping ancient Persians probably had the
"eternal fires" of their religion fueled by natural gas seeps. These fossil fuel
resources are finite, but the nuclear fusion reactions of the sun as well as the
potential energy of wind, plants and the worlds’ oceans are vast and sustainable
energy resources yet to be fully exploited economically by mankind.

Mankind’s first cities were nurtured by the waters of the Tigris and Euphrates
rivers in Mesopotamia - the ‘land between the rivers’. Here agriculture
flourished on lands regularly flooded and fertilized by these waters. The
fabulous wealth created by this natural fertility led to the construction of
large urban concentrations such as Uruk, Ur and Babylon. Many cities developed
around the ‘fertile crescent’ and in time became the centers of a highly
developed Arabian civilization leading to Islam’s ‘Golden Age’ of achievements
in culture, science and technology. Further afield culturally distinct
civilizations had developed around rivers in Egypt, northern India, China and
South America.  

These cities and the developing cultures and lifestyles they represented were
made possible by the development of settled agriculture, the domestication of
animals and the control of energy. Only much later did urban growth and the
industrialization of agriculture, transportation, and technology lead to the
benefits of higher living standards, cultural flowering and better and longer
lives for humans. But such high living standards and levels of growth began to
consume ever more energy and produce undesirable by-products that threatened the
environment. Conscious that it must create sustainable growth and development,
mankind is responding to this looming threat with imaginative and innovative
solutions that balance the requirement for desirable and positive growth against
any adverse environmental effects. The sun’s energy can be captured directly to
create electricity or heat and nuclear power plants generate vast amounts of
clean carbon-free energy (albeit with not-yet-resolved nuclear-waste disposal
problems). Plants can be grown to produce oils and gases for use as fuels. Wind
power can be harnessed. Generators can be floated on or in the sea to capture
the energy of the tides. The diversity of energy sources yet to be discovered,
harnessed and created by mankind in the future - based on nature and on old and
new technologies - will continue to fuel humanity’s sustainable march to
greatness.
 
 
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The Energy Pearl is about the importance of energy and how it fuels our lives,
bodies, minds, cities, farms and technologies.  It tells that story while not
ignoring the necessity to further develop solutions to the adverse side effects
of certain fuels. It celebrates cutting edge solutions and calls upon the youth
of the region to “energize” themselves – to see the opportunity, not the problem
– to innovate and create the great new scientific discoveries, business
enterprises and policies of the 21st century that will carry mankind forward on
an enlightened journey of progressive, culturally sensitive and uplifting
development of the earth and its resources for the benefit of all.

Selected Experiences*:

·  
Visitors will be slowly spun in their seats as they revolve around a stage
viewing unique shows projected onto the inner shell of the Energy Pearl. The
various shows focus on energy related stories including the story of how the
earth spinning around the sun captures and stores so much of its energy in
plants and fossil fuels.

·  
In a highly interactive fun experience visitors learn the ways in which the
energy of the sun, wind and water are captured and used in their day to day
lives.

·  
Visitors may interact with the Energy Pearls’ “Omagineers” (or virtually with
cutting edge engineers and scientists) to discover ingenious and fun ways of
generating and using energy. The inspiring scientific goal of generating clean
waste-free energy from nuclear fusion (as the sun does) vs. nuclear fission will
be examined.

 
 
·  
Up to the minute science demonstrations facilitated by  “Omagineers” will amaze
and enlighten visitors about recent advances in biology, DNA mapping and
discoveries of how the human body obtains, converts and utilizes energy.

·  
An entertaining sports and health café provides a non-threatening atmosphere to
transmit the most current scientific nutrition advice and best practices – both
Eastern and Western – available today for our collective health and well being.
Virtual sports celebrities provide advice and describe various fitness
technologies. Children and adults can compete in the virtual Omagine Games.

·  
Futuristic movement based and virtual experiences will allow visitors to explore
space in search of energy sources and to interact with science fiction writers,
engineers and “Omagineers” about how to exploit the massive energy conversion
possibilities of black holes.

 
 
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Sea Pearl

Explore The Seas And Oceans

Goals / Objectives:

·  
To create imaginative and exhilarating experiences by combining live aquarium
life with film projections on water screens.

·  
To explore Oman’s navigational history and the beauty, mystery and bounty of
life in the world’s oceans and seas.

·  
To travel with the great explorers (including Omani navigators) as they risk all
crossing the oceans and seas in search of new worlds and opportunities that lay
beyond the horizon.

·  
To examine the positive and negative impacts of man’s exploitation of the
seemingly boundless riches of the oceans and seas.

Storyline:

Stories of the ancient watery highways used by explorers to discover new worlds,
by fisherman to feed ever larger populations, by businessmen to conduct
international trade and by pirates to pursue their dangerous occupation are the
subject of the Sea Pearl.

Arabian ships and explorers have sailed the world’s seas and oceans for as long
as records have been kept - probably longer.  Abul Hasan Al-Masudi journeyed to
India and China and visited Oman in 915CE. Another Arabian adventurer Suleiman
al-Mahiri sailed the Atlantic, Pacific and Indian oceans - probably visiting the
Americas in the process. Oman’s strategic position straddling the trade routes
to the Middle East, Asia and Europe made it a centuries-long center of trade and
navigation. In the early 19th century Oman became a major maritime power -
holding lands as far apart as Baluchistan and Zanzibar. Omani ships traveled
around the Cape of Good Hope and an Omani sailing ship visited New York in the
mid nineteenth century. These and other great navigators and adventurers wrote
extensively of their voyages and discoveries.

Then as now, the seas and oceans were great trading, naval and passenger routes
but they also provided livelihoods - and an abundant supply of food - for the
people who lived beside them. As the ships of many nations plied the seas and
oceans, mankind became aware of the earth’s enormity and of the immense
diversity of its sea life. Naturally occurring extinction of species continued
to occur, but as ever larger fishing vessels ventured ever further over the
horizon, the seemingly endless bounty of the seas became threatened. Whale and
Cod populations plummeted dramatically and over-harvesting threatened other fish
and sea life species. Concerted private, national and international conservation
action has resolved some of these problems and is busy working on others.
Together the seafaring nations of the world are creating policies to protect the
riches of our seas and oceans.

All visitors to the Sea Pearl will leave with the illuminating recognition of
the great “gifts of the sea” that have been bestowed upon mankind. In ancient
and modern times and certainly in the future, life on earth and man’s prosperity
will continue to be inextricably linked to the seas. The entertaining
experiences will instill a desire to protect and preserve both the seas and the
life within them while inspiring future discoveries and sustainable exploitation
for the benefit of mankind’s future generations.

 
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Selected Experiences*:

·  
In a unique experience with 4D seating fitted with aquatic tubes, visitors
revolve around and/or through a semi-darkened aquarium as barracuda, colorful
fish and sea life swim through the audience via the lighted aquatic tubes. This
unprecedented experience is accompanied by water curtains and the sounds of the
oceans while the Sea Pearl’s “Omagineers” explain various species.

·  
Visitors will partake in experiences – both live and via interactive multi-media
technology - featuring many species of unique fish; for example: photo-fores
(fish with lights) and the fish with no eyes dwelling in the caves of Oman.

·  
Seated in a motion-based dhow in the center of a 360 degree projection theatre,
visitors will explore the oceans as some of the great Arabian and other maritime
explorers narrate the journey. Visitors experience the power of the seas and the
endless horizons. They are immersed in the excitement of expeditions, trade
routes, landfall in new and strange lands  -  and narrowly escape an attack by
pirates out of Basra.

·  
An entertaining and interactive center offering fun packed water rides and
experiences (possibly swimming with the dolphins).

·  
Using simulators visitors pass through a “virtual” ocean of marine wonders,
navigate the Gulf of Oman or steer a ship to the ports of Muscat, Sohar or
Salalah.

·  
From viewing platforms visitors may explore the origin and evolution of life in
the sea and the societal and economic benefits mankind derives from the seas.
The positive and negative impacts - of mankind’s relationship with the sea and
the marine environment will be demonstrated and examined. The marine
environments of the GCC states as well as the world’s temperate, tropical and
polar areas will be explored.  

 
 
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Earth Pearl

Enjoy The Wonders Of The Earth

Goals / Objectives:

 
·  
To use entertaining stories and experiences to explain the world and its natural
and man-made wonders - and its greatest wonder - life.

 
·  
To enlighten visitors regarding earth’s most admired landmarks and healthiest
societies and mankind’s influence on life on earth.

 
·  
To inspire future generations to value, cherish and protect the earth, its
environment, its animal and plant life - and most importantly - human life.

 
Storyline:

The many wonders of the natural world include the mountains of the Himalayas,
the Great Barrier Reef with its amazing wildlife, the Victoria Falls on the
Zambezi River and the ethereal Northern Lights. All this – and much more -
astound, amaze and inspire us.

The first noted man-made wonders of the world included many of the great
architectural achievements in the Middle-East region including the Hanging
Gardens of Babylon and the Pyramids of Giza. One of several World Heritage Sites
in Oman, Bahla Fort with its 12 kilometer long walls is a source of wonder.
Modern day wonders now also include the Eiffel Tower in Paris, the Taj Mahal in
Agra and the World development in Dubai.

Just as the Earth parades its history through majestic mountains, thundering
waterfalls, and vast canyons, all over the world mankind has created beautiful
structures that bear witness to humanity’s rich and varied history. Against this
monumental backdrop is the greatest wonder of the earth - life itself.

Life of some kind exists everywhere within the fragile envelope of the earth’s
crust and atmosphere. Earth’s environment has evolved and will always change but
as humanity became aware of the need to protect and preserve what it valued, the
choices mankind made and will make are crucial for the Earth and its future
human generations.

The entertaining experiences of the Earth Pearl will enlighten visitors while
inspiring them to protect Earth and life on Earth through careful management of
its resources, sustainable exploitation and development and technological
advances and breakthroughs.

 
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Selected Experiences*:

·  
Visitors to the Earth Pearl take an awe-inspiring “journey around the world” in
a soaring motion-based theatre experience. They see and “feel” the natural and
man-made wonders of present day earth ... cool breezes ... great views. Several
different inter-changeable film versions will also show Earth’s distant and near
past as visitors feel the heat of volcanoes and lava flows as earth takes shape.

·  
Up-close encounters with some of the strangest animals and most beautiful plants
from around the world will delight visitors.  “Omagineers” and handlers will
show visitors how to touch and hold the various creatures and plants while
explaining how they live and survive in the wild and how they benefit the world
and mankind.

·  
Selecting from an interactive database visitors can choose virtual visits to any
of the world’s landmarks, or to many other listed natural wonders, or take a
journey along the ancient Silk Road. A special section will focus on and be
dedicated to the natural wonders and landmarks of the Arab and Islamic world.

·  
Amusing multi-media display presentations will invite visitors to interact with
the world’s weather systems, population shifts and topographical features while
entertaining stories reveal what really lies beneath and upon the surface of a
surprising earth.

·  
Engaging exhibitions and interactive activities demonstrate for visitors:

v  
the secrets of longevity (diet, nutrition, exercise) common to healthy
individuals and societies, and

v  
the delicate balance of Earth’s biosphere and how human activity can assist or
harm the Earth’s self-sustaining systems we all depend upon.

v  
glimpses of Earth’s future, wonders to come and cities of the future.

 
 
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Sky Pearl

Marvel At The Universe Around Us

Goals / Objectives:

·  
To exhilarate, astonish and inspire visitors with a spectacular outer space
show.

·  
To visualize and (somewhat) explain the miracles of space, solar systems,
galaxies, the universe and its billions of stars.

·  
To observe the movements of the sun, moon and stars that have always dictated
the pace of our lives and guided our navigation across the earth.

·  
To inspire a thirst for further knowledge and discovery as “the sky” continues
to reveal new and ever more marvelous secrets.

Storyline:

Early navigators, including those from the Middle-East and Oman, used the sun,
moon and especially the stars to guide them across the oceans and seas. Looking
to the stars for guidance, man created and built many great observatories most
notably in Baghdad and Damascus. New ideas about the movements of the earth,
planets and stars were put forward and new methods to measure and predict their
movements were developed. Astrolabes and various analog computer devices were
invented to predict the timing of events in the heavens. Taqi al-Din invented a
clock for astronomical use that showed hours, minutes and seconds with three
dials. The clocks used around the world today began as devices to time the
movements of the heavens.

This vast knowledge of the skies and the universe was transmitted to the West
and further advanced. Understanding more about the universe in which we live is
now a common goal of humanity. In addition to the pursuit of pure science,
mankind benefits greatly from this increased understanding. Our mobile phones,
telephone and internet communications rely on space-based orbiting satellites.

Countries and private companies are developing and testing their own space
vehicles. Nations are working together to create an International Space Station.
Adventurous tourists are excitedly booking rooms at an already planned space
hotel. Man has gone to the moon and returned – several times. Exploratory
spacecraft are orbiting, mapping, landing on and exploring far off planets while
far out into the solar system the Hubble Telescope is giving us insights into
the origin of the cosmos. We are now beginning to see into the furthest reaches
of the universe.

What we know and are yet to learn about the ever expanding universe will
exhilarate visitors to the Sky Pearl and ignite their imaginations as they see
and explore the final frontier of space.

 
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Selected Experiences*:

·  
Visitors will marvel as they peer from their planetarium seats deep into space
at the beginning of time when the dust from exploding stars gathers and
condenses into the burning spheres that become our solar system and our planet.
“Omagineers” explain that they are witnessing the birth of the universe, the
formation of galaxies and the birth and death of stars larger than our sun.

·  
Using simulation technology visitors take an enlightening journey as they walk
on the moon with Farouk El Baz and fly to the stars with Al Adrisi.

·  
As their seats ascend through the retracting roof of the Sky Pearl, visitors are
charmed by a unique view of the Gulf of Oman and the night sky above Omagine.

·  
During the “pre-flight” show to visit a Space Hotel, visitors learn how many
discoveries of the Arabian Golden Age in areas such as algebra and astronomy
have made space exploration possible today. After the “flight” arrives an
“Omagineer” receptionist takes them on a tour of the hotel during which, through
a huge observation window in the Space Hotel’s reception area, visitors enjoy a
stunning view of earth from space. They visit high-tech luxury rooms, dining
areas, space gyms, leisure areas and shops. Each room has windows looking out
into space. Visitors might also be taken to a SpacePort where simulator pods
take them on short rides into space.

·  
In another area of the Sky Pearl, accessible either through the Space Hotel or
separately, visitors may design their own space-cities of the future. This is a
large scale group game with teams competing to create the most successful future
space-cities based on sustainable criteria.

 
·  
Nearby at the Sky Pearl’s live bird sanctuary, a variety of live performers,
multimedia experiences and “Omagineers” are available to guide visitors as they
interact with various birds and learn about the relationship between the ecology
and the sky species.

 
·  
Simulated flights, powerful interactive technologies and space telescopes allow
visitors to explore the universe’s lights, radio waves and radiations.

 
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Schedule 7
 
Project Tasks / Time Schedule
 
 

Part A. Project Tasks     Part B. Project Tasks Timetable     Part C.
Preliminary Construction Schedule     Part D. MBO Time Schedule     Part E.
Phased Construction Schedule

 
 
 
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The Parties hereby agree as follows:
 
Part A
 
Project Tasks
 
 

1. The Government hereby grants to the Project Company the right and full
authority pursuant to this Development Agreement to perform the Project Tasks
and the Project Company accepts the obligation to perform the Project Tasks.    
2. With respect to any Project Task that is a construction activity and is part
of the MBO, or the Project Company Infrastructure and Utilities, all or part of
such Project Task shall be conclusively deemed to be accomplished when a
Completion Certificate to that effect is issued by the Consultant and Approved
by the Government.     3. With respect to any Project Task that is a
construction activity and is not part of the MBO, or the Project Company
Infrastructure and Utilities, all or part of such Project Task shall be
conclusively deemed to be accomplished when a written certificate attesting to
the Substantial Completion of such Project Task, which written certificate need
not be Approved by the Government, is issued by a specialized independent
consultant appointed by the Project Company.     4. The Project Company may
perform the Project Tasks itself or may procure the performance of any or all of
the Project Tasks by any person.     5. Attached hereto as Schedule 7B is the
“Project Tasks Time Schedule” which is an indicated time schedule for the start
and completion dates (the “Milestone Dates”) for the various Project Tasks
pertaining to the Development and construction of the Project.       Attached
hereto as Schedule 7C is the “Construction Time Schedule” which is an indicated
time schedule for the Substantial Completion of all construction activities
required for the Omagine Project.       Attached hereto as Schedule 7D is the
“Minimum Build Time Schedule” which is an indicated time schedule for the
Substantial Completion of all construction activities required to complete the
MBO. The Parties hereby agree that the MBO consists of the Substantial
Completion of the construction of (a) the seven (7) Pearls, and (b) one (1) of
the hotels, as further specified in paragraph 3 of Schedule 6A.       Attached
hereto as Schedule 7E is the “Phased Construction Schedule” which is an
indicated time schedule for the various phases of all construction activities
required for the Omagine Project.       The preliminary Milestone Date for the
execution of the Principal Construction Contract is within one year from the
Effective Date. After execution of such Principal Construction Contract, the MBO
Milestone Dates shall be finalized and linked to the Project Tasks Time Schedule
and a revised Schedule 7B, C, D and E shall be issued by the Project Company.  
    Subject always to the requirements of this Development Agreement in respect
of the completion of the MBO within 5 years of the Effective Date, the Project
Company shall from time to time update the Construction Time Schedule and the
Minimum Build Time Schedule and shall submit such updates to the Government.    
  Milestone Dates are dates after the Effective Date as shown on the Project
Tasks Time Schedule and may be varied from time to time by agreement of the
Parties.

 
 
 

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Schedule 8
 
Government Infrastructure Plan
 
The Parties hereby agree as follows:
 
Those roads identified below in this Schedule 8 which are to be constructed and
maintained by the Government in accordance with the specifications set out in
this Schedule 8 are hereby defined as the “Roads”.  Each of those points on the
Inner Boundary (as that term is defined in Part C of Schedule 4) identified
below in this Schedule 8 up to which the Government is to construct the Roads is
hereby defined as a “Road Connection Point”.
 
Each of those points on the Inner Boundary as shown below, up to which (i) all
the required Works for the water utility is to be constructed, and (ii) the
water utility is to be delivered by the Government, is hereby defined as a
“Water Utility Delivery Point” and the structure, interface and related
equipment to be provided by the Government at each Water Utility Delivery Point,
necessary to connect the water utility to the PC Distribution Network  (as that
term is defined in Schedule 18) is hereby defined as a “Water Utility Tie-in”.
 
The Project Company shall not bear any costs related to the design or provision
of Government Infrastructure up to the Inner Boundary, and including (a) the
Water Utility Tie-ins for the potable water utility and (b) the Road Connection
Points, all of which the foregoing (a) and (b) are located on the Inner
Boundary, or (c) the Roads, and all such costs shall be borne by the Government.
 
The Project Company shall not bear any costs with respect to the removal of any
buildings or structures in existence in or upon the Project Area as of the
Execution Date, and all such costs shall be borne by the Government.
 
The Parties agree that this Schedule 8 constitutes the minimum requirements for
the Government Infrastructure. The locations and specifications of the Roads and
water utility are specified in this Schedule 8 and the Ministry of Tourism
(“MOT”) hereby agrees and consents to such locations and specifications,
provided that, the Project Company receives the Approval for the final locations
and specifications of such Roads and water utility from the relevant Government
Authority.
 
Subject always to this Development Agreement and the Law the Project Company
shall have no claim or right of action against the MOT in the event that such
relevant Government Authority does not approve the locations and specifications
of such Roads and water utility as contemplated by this Development Agreement.
The Final Master Plan shall include at least the following with respect to the
provision of such Government Infrastructure:
 
With respect to the Roads and water supply, the Parties hereby agree as follows:
 
1.
The Government will procure the construction of the:

 
 
a)
Roads to the Road Connection Points and the Inner Boundary, and

 
 
b)
associated pedestrian walkways, curbs and reservations, ancillary hard and soft
landscaping, signage and traffic management systems to the Inner Boundary
(collectively, the “Road Elements”)

 
which are to be procured and provided up to the Inner Boundary, plus the
procurement, provision and construction of:
 
 
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c)
the Water Utility Tie-ins, and

 
 
d)
all associated infrastructure either outside the Project Area or within the
Perimeter Landscaped Area (as defined in Part C of Schedule 4), and associated
with any of the foregoing

 
in accordance with the requirements and specifications set out in this Schedule
8 and in Schedule 17.
 
2.
The Parties shall grant each other all access and other rights as may be
reasonably required for the purposes of the Government’s construction,
installation or delivery of the Roads, the Road Elements, the connection of the
Roads at the Road Connection Points, and for the purpose of the Government’s
connection of the water utility to each appropriate Water Utility Tie-in.

 
3.
The Government will procure the supply and delivery of the potable water utility
to the relevant Water Utility Delivery Point as set forth in this Schedule 8 and
in Schedule 17.

 
4.
The Government will:

 
 
(i)
procure and provide each Water Utility Tie-in for potable water as set forth in
this Schedule 8 and in Schedule 17 that is required to connect the potable water
utility at each Water Utility Delivery Point, and

 
 
(ii)
design, build, install, test, maintain and connect each Water Utility Tie-in and
the infrastructure necessary to connect the potable water utility to the PC
Distribution Network.

 
5.
The Government shall, for the purposes of complying with its obligations with
respect to the provision of the Government Infrastructure, be granted free
access to, and use of, the PC Distribution Network and the Government will
procure that all quantities of water consumed or utilized within the Project
Area shall be delivered, collected or removed, as the case may be, by
underground route and sold and billed directly by the Government to the end user
thereof within the Project Area (an “End User”).

 
6.
The Project Company shall liaise closely with the Government with regard to the
Government’s design, schedule of work, completion and connection of each Water
Utility Tie-in at each Water Utility Delivery Point to ensure that such
construction and connection takes place in accordance with the relative
specification set out in the Final Master Plan.

 
7.
The Government or the Government company supplying potable water to the Project
Area shall procure that the quantities of potable water delivered to End Users
shall be determined on a monthly basis by a reading of the relevant End User’s
meter.

 
8.
The Government undertakes to Substantially Complete or procure the Substantial
Completion of the construction of all pipes, trenches and other related
structures up to and including each Water Utility Delivery Point and to the
Inner Boundary so that each Water Utility Tie-in has been tested and
commissioned and has the full capacity of potable water available for immediate
use by End Users not later than the dates specified therefore in Table 8.1 below
in this Schedule 8.

 
 
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9.
The Government undertakes to Substantially Complete or procure the Substantial
Completion of the construction of all:

 
 
a)
Road Elements, and

 
 
b)
Roads up to each Road Connection Point and to the Inner Boundary not later than
that date specified therefore in the table below in this Schedule 8.

 
10.
It is understood and agreed by the Parties that:

 
 
a)
except as otherwise stated herein, the Government, at its cost and expense, will
procure all property rights, easements or rights-of-way necessary to build,
install and deliver:

 
 
(i)
the Government Infrastructure and, if applicable, the Private Sector Public
Infrastructure and Utilities and any infrastructure associated therewith over,
under and/or through the Perimeter Landscaped Area (as that term is defined in
Schedule 4) to the Inner Boundary, and

 
 
(ii)
the Road Elements; and

 
 
b)
the Government shall:

 
 
(i)
connect the Roads to the Main Road at the appropriate Road Connection Point, and

 
 
(ii)
connect the potable water utility to the appropriate Water Utility Tie-ins at
the appropriate Water Utility Delivery Points, and

 
 
(iii)
deliver the potable water via the PC Distribution Network to the End Users; and

 
 
c)
all references to the location of any Road Connection Point, Water Utility
Delivery Point or Water Utility Tie-in in this Schedule 8 or in the drawings
contained herein or in this Development Agreement are, notwithstanding anything
to the contrary contained elsewhere in this Development Agreement, references to
such locations at points on the Inner Boundary. If, for the convenience of the
Parties or otherwise, any such Road Connection Point, Water Utility Delivery
Point or Water Utility Tie-in is actually located or constructed at a location
other than a point on the Inner Boundary, then the Government shall continue to
be responsible for the design, construction and completion at its cost and
expense of all Government Infrastructure and, if applicable, the Private Sector
Public Infrastructure and Utilities up to the Inner Boundary.

 
11.           Notwithstanding Clause 9.2.4, in the event that the development of
the Project Area exceeds the assumptions set out in this Schedule 8 and as
contained in the traffic impact assessment or the Final Master Plan, which extra
development creates additional demand unable to be supplied from the Government
Infrastructure constructed as required by this Schedule 8, the Government or the
Private Sector Utility Companies shall, if requested by the Project Company and
at the cost of the Project Company, carry out all works as are necessary to
expand the Government Infrastructure or Private Sector Public Infrastructure and
Utilities in so far as this is necessary to satisfy the additional demand.
 
 
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Government Infrastructure
 
Roads & Water Utility Requirements
 
The Main Road
 
The timing, capacity requirements and final design of the Government
Infrastructure will be contained in the Final Master Plan. Notwithstanding the
foregoing, the Parties agree that the Government Infrastructure as Approved
shall meet at least the following minimum requirements:
 
Roads:
 
a)
Roads to be constructed up to the Inner Boundary:
 
The Roads shall be at least two (2) lanes in either direction with the
appropriate turning lanes, roundabouts, traffic signage and signals. The Roads
are to be constructed from the Main Road to the Inner Boundary and through and
upon the Perimeter Landscaped Area at the locations indicatively shown on the
Roadways Infrastructure and Utilities drawing attached below as Figure 1 to this
Schedule 8 (the “Roadways Drawing”) and such Roads are to be connected to the
four Road Connection Points and to the Inner Boundary at the locations shown
indicatively on the Roadways Drawing and definitively in the Final Master Plan.
The ultimate disposition by the Project Company of the existing unpaved service
road within the Perimeter Landscaped Area or Project Area will be specified in
the Final Master Plan. The Roads are to be constructed in accordance with the
specifications contained in the Final Master Plan.
b)
Timing for completion:
 
The Substantial Completion of the Roads will be required within eighteen (18)
months after the Effective Date.

 
The Roadways Drawing
(All dimensions shown are indicative only)
Figure 1
GRAPHIC [sc8a1.jpg]
 
 
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Potable water:
 
a)
Infrastructure to be constructed:
 
 
Underground potable water trunk mains connected to the appropriate connection
points at the relevant Water Utility Tie-ins with a capacity sufficient to
supply not less than 8,200 cubic meters of potable water per day(a) to the
Project Area at the minimum pressure and flow rates to suit the form of
Development envisaged by the  Development Control Plan.
b)
Points up to which infrastructure for potable water is to be constructed and
points at which Water Utility Tie-ins for potable water are to be constructed
and connected:
 
All potable water infrastructure is to be constructed up to the Inner Boundary.
The Water Utility Tie-ins shall be situated and constructed at the Water Utility
Delivery Points on the Inner Boundary and such points are indicatively marked A,
B, and C on the preliminary Water, Communications, Electricity drawing below
(the “WCE Drawing”) and their precise locations will be definitively shown in
the Final Master Plan.
c)
Timing for supply of potable water:
 
The supply of potable water shall be available commensurate with the start of
construction and shall be provided progressively at the volumes requested from
time to time by the Project Company to suit the rate of Development as
determined from time to time by the Project Company. Table 8.1 below sets out
the indicative timing required for the supply of such potable water which timing
may be varied by the Project Company from time to time by reasonable notice to
the Government.

(a)
Assumes that potable water is used for both (i) human use and consumption and
(ii) for irrigation purposes.  See Schedule 17.  If treated sewage is suitable
for use as irrigation water the amount of required potable water supply may be
reduced.

 

 
Table 8.1
 
Indicative Timing after Approval of the Final Master Plan for supply of potable
water
 
Volume per day (m3)
   
Months
    902       4     1,886       16     4,674       32     5,822       44    
6,724       51     8,200       60  

 
 
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Potable Water Infrastructure & Supply
 
The WCE Drawing
(All dimensions shown are indicative only)

 
GRAPHIC [sc8a2.jpg]

 
The Main Road

 
The “Main Road” means 18th November Street and/or the Seeb Coastal Road which as
of the Execution Date runs past the Omagine Project and the Perimeter Landscaped
Area northwest to Seeb and southeast past The Wave project.
 
The Main Road is the most important road to the Project. The Main Road,
identified below in this Schedule 8 will be used by all tourists, residents and
visitors to Omagine.
 
The Government agrees that the Main Road will have adequate signage, traffic
lights and roundabouts and will be sufficient to support the flow and density of
projected vehicular traffic.
 
With respect to those parts of the Main Road running past the Perimeter
Landscaped Area, the Government agrees that:
 
a)           it will repair and maintain the Main Road as necessary or required,
and
 
b)           the Main Road will have at least two (2) lanes in either direction,
and
 
c)   the Main Road will be of at least the same capacity and quality as those
parts of the Main Road running past the nearby Wave project.
 
 
 
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The Wadi Road
 
The “Wadi Road” means the paved road which as of the Execution Date connects
18th November Street to the Seeb Coastal Road and runs through the western part
of the Existing Land bi-secting the wadi and the Perimeter Landscaped Area in
the western part of the Project Area. The Wadi Road joins to a round-about in
the northern part of the Existing Land and thereafter runs north-westerly past
Seeb and along the coast.
 
The Wadi Road identified below in this Schedule 8 was constructed by the
Government prior to the Execution Date and the Project Company hereby agrees
that it will not modify the Wadi Road in any manner without the prior written
consent of the Government.
 
The Government agrees that the Wadi Road will have adequate signage and traffic
lights as determined by the Government, that it will be sufficient to support
the flow and density of projected vehicular traffic, and that it will be
repaired and maintained by the Government as necessary or required.
 
The Main Road and the Wadi Road
 
 
GRPAHIC [sc8a3.jpg]
 
(All dimensions shown are indicative only)
 
 
 
 
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Schedule 9
 
Civil Defence Facilities

Notwithstanding anything to the contrary contained in Clause 6.12, the Parties
hereby agree as follows:
 
As soon as reasonably possible after the Effective Date, the Project Company
will liase with the concerned Government Authorities with respect to any
requirement they may have for the provision by the Project Company of Civil
Defense Facilities within the Project Area, and in the event that such relevant
Government Authorities notify the Project Company that:
 
1.  
No CivilDefense Facilities are required within the Project Area, then the
Parties hereby agree that Clause 6.12 of the Development Agreement is deleted in
its entirety and shall have no further force or effect,

or
 
2.  
Civil Defense Facilities are required within the Project Area, then the Parties
hereby agree that Clause 6.12 of the Development Agreement is not deleted and
shall remain in full force and effect and all dates and time requirements
specified in Clause 6.12 which are measured from the Effective Date will instead
be measured from the date of any such notification.

 

 
 
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Schedule 10
 
Community Development Plan
 

 

 
Part A                                Community Development Plan
 
Part B                                Community Facilities
 
 
1.           The Project Company’s commitment to Community Support
 
The Project Company understands that the Government of the Sultanate of Oman has
created, and is progressively implementing, Vision 2020.  This is an integrated
strategy for economic diversification, aimed at securing sustainable future
economic growth for the Sultanate of Oman.  This growth is to be achieved by
leveraging current revenues from finite oil and gas reserves, to drive
investment in essential infrastructure. In turn, this will support the
development of value added, service based industries in Oman. A key focus is the
development of the tourism and hospitality industry sector. Large scale
developments like the Omagine Project are being designed and implemented in
support of this government imperative.
 
The Project Company recognizes that an imperative of the Government’s strategy
includes having the Project Company (a) giving preference to Omani goods and
services, (b) carefully considering those persons and companies who reside in
the vicinity of the Project Area for employment and contracts for the provision
of goods and services and (c) the initiation of schemes to enhance the business
and employment opportunities for the companies and residents in the vicinity of
the Project Area. It is the Project Company’s intent and objective to fulfill
these foregoing Government objectives. The Project Company has similar aims for
its business in Oman and is totally committed to a strategy of positive and
progressive Community Support and to, among other things:
 

 ●   Ensure support from local communities,       ●   Build strategic alliances
with local Omani vendors       ●   Focus on product and service quality.

 
2.           Focus on Community Support
 
The focus of this Community Development Plan  will include core areas of the
Project Company’s business such as contracting and vendor selection for the
supply of goods and services.
 
By using its best efforts to implement a positive and pro-active Community
Development Plan, the Project Company believes that it will be possible to
progressively maximize the number of Omani contractors and vendors utilized by
the Project Company, its Affiliates and Contractors across a wide range of
functions.
 
This Community Development Plan outlines the Project Company’s initial approach
to Community Support and the provision of Community Facilities. The concepts
presented will be used later to shape the Community Development Plan  in
accordance with the requirements of the Development Agreement.
 
 
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3.           Sub-contractor Community Support
 
CCC and all sub-contractors of CCC shall be required by the Project Company to
demonstrate their commitment to positive and effective Community Support as a
qualification condition within their respective contracts with the Project
Company.
 
Wherever the Project Company and CCC employ sub-contractors, the Project
Company’s management will ensure that the sub-contractors reflect the Project
Company’s Community Development Plan in all areas of their contracted
activities.
 
4.           Preferred procurement through Omani organizations
 
Wherever practical, cost efficient, and quality driven and without compromising
established health, safety and environmental (HSE) standards, the Project
Company and its Affiliates shall give preference to the procurement of
materials, goods and services from Omani organizations, especially such
organizations in the vicinity of the Project Area. The Project Company shall
also ensure that CCC and any other of its Contractors shall have the same
obligation placed on them provided always that the obligation to make such
allocation and give such preferences and consideration is contingent upon all
commercial terms and conditions for any such commercial transaction being
materially the same for such Omani persons as for any other non-Omani person as
determined by then prevailing market forces.
 
5.           Local community contractors
 
Using these guiding principles, wherever it is relevant and practical, the
Project Company will also use its Best Efforts to subcontract with local Omani
community contractor organizations and, wherever necessary, will provide them
with the necessary guidance and support to ensure that they may also comply with
and benefit from the Project Company’s Community Development Plan and best
working and employment practices.
 
The Project Company understands that many local community contractor companies
were first established in the oil and gas industry sector to help share the
benefits of development with the local people who live in the concession areas.
 
Because many of these organizations are now involved in specialized transport
and distribution activities or plant operations, they may be used by the Project
Company to provide future support for the development of the Omagine Project.
 
The Project Company also understands that there is mutual benefit to be gained
by making subject matter expert resources available to these organizations in
order to improve their competitiveness.
 
This may be achieved by introducing and developing internationally recognized
best practices in business and contract management, operational excellence, and
HSE performance.
 
6.           Responsible corporate citizenship
 
The Project Company will also investigate opportunities to contribute to the
development of the local community within which the Omagine Project is located.
 
The Founder Shareholders and the Project Company’s senior management are
convinced that this continuous and positive focus on effective Community Support
will optimize business opportunities for Omani companies in the vicinity of the
Project Area and will contribute to the welfare of the local community while
creating a source of sustainable competitive advantage for the Omagine Project.
 
 
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7.           Community Support targets
 
Within the time period specified in Clause 7.1.2 (b), the Project Company shall
provide a report to the Government reviewing the progress relating to the
provisions of Clause 7.1.2 (b) including the number of Omani companies
contracting with the Project Company and the percentage of the Project Company’s
total such contracted expenditures they represent. The Project Company will
liaise with the Government on a regular basis. It is expected that the Community
Development Plan will be reviewed and updated annually in line with actual
performance and business development issues that will become visible as the
Omagine Project unfolds.
 
This approach will ensure that each annual Community Development Plan will be
supported by a rolling five year forward view that will help to foster a
positive focus on continuous performance.
 
Lessons learned in each plan year will be consolidated in all future plans to
ensure that best practice is continuously improved.
 
This will ensure that the Project Company will be able to optimize new contracts
and new business development opportunities for Omanis.
 
8.           Summary
 
The Project Company is committed to positive and progressive Community Support.
The Project Company will work proactively with all Government Ministries and
other Government Agencies to ensure that the Community Development Plan is
continuously optimised throughout its operations in the Sultanate of Oman.
 
The Project Company is convinced that this proactive, progressive and positive
commitment to Community Support will create a competitive advantage by enhancing
customer satisfaction and will provide a range of sustainable business
opportunities for local Omanis in the areas of contracting and supply of goods
and services.
 

 
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Schedule 10
 
Part B
 
Community Facilities
 

 
Community Facilities:
 
The Parties hereby agree that the Community Facilities shall be those areas,
buildings and open spaces identified as such below and in the Final Master Plan
and the Development Control Plan, and being for the use, enjoyment and benefit
of the public at large and which shall not generally be for the private or
exclusive use of any person except as so noted in the Final Master Plan and
Development Control Plan.
 

A)   retail outlets; stores & marketplace       B)   restaurants; kiosks      
C)   entertainment venues; amphitheatre       D)   marina       E)   Pearl
buildings & exhibitions       F)   open areas       G)   beaches       H)  
boardwalk       I)   roads and pathways within the Project Area       J)  
Perimeter Landscaped Area       K)   marine structures       L)   created
waterways       M)   parks & gardens       N)   utility services & drainage    
  O)   parking areas

 
 
 
 
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Schedule 11
 
Omanisation Plan

 
Preliminary Plan for Human Resource Development and the
 
 Community Support Program
 

 
1.           The Project Company’s commitment to Omanisation
 
The Project Company understands that the Government of the Sultanate of Oman has
created, and is progressively implementing, Vision 2020.  This is an integrated
strategy for economic diversification, aimed at securing sustainable future
economic growth for the Sultanate of Oman.  This growth is to be achieved by
leveraging current revenues from finite oil and gas reserves, to drive
investment in essential infrastructure. In turn, this will support the
development of value added, service based industries in Oman. A key focus is the
development of the tourism and hospitality industry sector.
 
Large scale developments like the Omagine Project are being designed and
implemented in support of this government imperative.
 
The Project Company recognizes that the underpinning imperative of Omani human
resource development is at the centre of the Government’s strategy in meeting
these critical employment driven challenges of His Majesty Sultan Qaboos bin
Said’s vision.
 
The Founder Shareholders of the Project Company are very experienced in Oman and
other international markets. They have already established themselves as leading
integrated project design, development, construction and operations
organizations based on strategies of:
 

v Using creativity, innovation and imagination to produce exciting, award
winning property developments and content     v Maintaining financial
flexibility, conservative financial structure and cost controls     v Ensuring
support from local communities     v Maintaining high corporate governance
standards     v Building strategic international alliances with local operators
    v Employing effective human resources development strategies     v Focusing
on product and service quality     v
Maintaining a robust approach to health, safety and environmental impacts

 
The Project Company has similar aims for its business in Oman and is totally
committed to a strategy of positive and progressive human resource development
and Omanisation.
 
2.           Focus on human resource development and Omanisation
 
The focus of this strategic Omanisation and human resource development process
will be in the core areas of the Project Company’s business such as design,
development, engineering, contracting, project management, construction,
facilities management and large scale, integrated site operations.
 
 
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By using its best efforts to implement a positive and pro-active human resources
development and Omanisation strategy, the Founder Shareholders believe that it
will be possible to progressively maximize the number of Omani citizens who are
employed within the Project Company, its Affiliates and Contractors across a
wide range of functions.
 
This positive Omanisation strategy will also help to fulfill the Project
Company’s vision - bringing Oman to the world and bringing the world to Oman.
 
This Omanisation Plan outlines the Project Company’s initial approach to human
resource development and Omanisation. The concepts presented will be used later
to shape the Omanisation Plan in accordance with the requirements of the
Development Agreement.
 
3.           International Best Practice
 
The Founder Shareholders of the Project Company will bring Best
International  Practices and proven expertise in a range of value added
activities – particularly in project design, development and facilities
management of large integrated property developments and associated services as
well as a track record of proven ability in Oman of implementing the
Government’s Omanisation objectives.
 
4.           Oman Labor Law
 
The Project Company understands that the Oman Labor Law, as promulgated in Royal
Decree Number 35 of 2003 is aimed at ensuring fair rights for all workers,
whilst giving employment priority for ”any Omani who is fit and desirous to
work.” The clear aim of the Labor Law is that employers shall employ Omani
workers to the maximum possible extent.
 
The establishment of the Project Company’s business activities in Oman provides
an opportunity for the Project Company to make a significant and positive
contribution to Omanisation.
 
It is the Project Company’s intention to progressively optimize Omanisation
throughout the Omagine Project and (without compromising the overall operational
performance and competitiveness of this important development) give preference
to employing Omani citizens who have the necessary experience, qualifications,
training, skills and motivation to work productively in a world class business
operation.
 
5.           Omanisation and personal development
 
On mobilizing in Oman, the Project Company intends to advertise locally for
suitably trained and experienced staff and will be able to immediately provide a
number of direct employment opportunities for qualifying, competent and
motivated Omanis.
 
To support this recruitment activity, a robust assessment, selection and
recruitment strategy will be implemented. All staff will be employed on merit
and given the opportunity to progress to more senior roles, provided that they
demonstrate their commitment to personal development and accept accountability
for the continuous delivery of effective performance in everything they do.
 
The criteria for the assessment, selection and recruitment strategy will be
aligned with the Omagine Project’s Final Master Plan, the Project Company’s
needs and requirements and CCC’s requirements as General Contractor for the
Omagine Project, taking into account the Project Tasks, the skills that will be
needed to achieve the tasks, and the availability of Omani citizens who have the
essential qualifications, training, skills and motivation to meet these needs.
 
 
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To ensure that there is a continuous flow of talented Omani citizens to fill job
vacancies, the Project Company will detail its plans for an integrated
recruitment, training and development program within the Omanisation Plan which
shall be delivered to the Government pursuant to the requirements of the
Development Agreement.
 
This approach will ensure that the immediate, midterm and long term staffing
requirements for the Project are effectively addressed and Omanisation
opportunities continuously maximized.
 
In searching for suitably talented Omani staff, the Project Company intends to
establish links with schools, training providers, colleges and universities. The
Project Company will also liaise directly with the Ministry of Manpower.
 
Because the Project Company will be competing for local Omani talent whilst
operating in increasingly competitive commercial markets, senior management will
ensure that these assessment, selection and recruitment processes are supported
by competence-based training and continuous career development programs,
underpinned by an objective performance management system.
 
Staff will embark upon a structured personnel training and development program.
Elements of these programs may be delivered in house, or through approved third
party training and work-based education providers. For best value and impact,
all training will be underpinned by practical work experience that is focused on
the real needs of the business.
 
These work-based training programs will be completed under the guidance of an
experienced line management mentor or coach.
 
As the Project Company is successful in transferring essential skills and in
developing and promoting people, the number of direct and indirect employment
opportunities that open up for Omanis will increase accordingly.
 
The overall aim of the Omanisation Plan will be to ensure that, wherever
practical and possible, the organization is staffed by competently trained Omani
leaders, managers, supervisors, technicians, specialist and entry level
personnel working to uncompromising standards of safety and professionalism.
 
6.           Responsible corporate citizenship
 
The Project Company will also investigate opportunities to contribute to the
development of the local community within which the Omagine Project is located.
 
The Project Company’s Omanisation Plan will set out the process by which Omani
staff will be assessed, selected, recruited, trained, developed, rewarded and
managed.
 
The Founder Shareholders and the Project Company’s senior management are
convinced that this continuous and positive focus on effective Omanisation will
optimize job creation opportunities for Omani staff, support the strategy of the
Government and create a source of sustainable competitive advantage for the
Omagine Project.
 
7.           Ministry of Manpower Omanisation targets
 
The Project Company recognizes that the Ministry of Manpower has overall
responsibility for Omanisation and has mandated sector by sector targets for
achievement by the private sector.
 
 
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The Project Company understands that these progressive targets, which were first
published in mid 2003, are now to be used for the guidance of responsible
employers.
 
The Project Company’s Omanisation Plan will take account of any targets set for
the relevant industry sectors. A progressive plan will be developed to ensure
that the Project Company meets (and, wherever possible, exceeds) the relevant
industry sector Omanisation targets that may be agreed from time to time with
the Ministry of Manpower.
 
The Project Company understands that actual performance against any targets that
may be agreed with the Ministry of Manpower will be taken into account when
considering the Project Company’s application for green card employer status.
This requirement is covered in more detail in Paragraph 11 below.
 
8.                 Human resource development and Omanisation planning process
 
The Project Company is fully committed to Omanisation and this commitment will
underpin all the Project Company’s assessment, recruitment, selection, career
development, succession planning and staff retention policies.
 
The Project Company’s policy will be to select for attitude and train for
competence. Wherever this is practical (and subject to the policies put in place
by the Ministry of Manpower and the requirements of the Oman Labor Law)
applications will be accepted from male and female Omani citizens.
 
The Project Company may also select some Omani staff who, whilst having the
right attitude and motivation, may lack some knowledge, training or skills.
These staff will be trained and developed with the goal that they succeed in
their job roles.
 
To ensure career progression and to provide for succession (and provided that it
is considered to be in the best interests of the individual and the Project
Company’s organization), selected staff may also be offered seconded training in
other projects or established developments of the Founder Shareholders inside
and outside the Sultanate of Oman.
 
In all cases, the Project Company will use best practice assessment, selection
and performance management systems and these will apply equally to all Omani and
expatriate staff.
 
Initial selection of all staff will be on merit. Career progress and promotions
will be based on performance.
 
To ensure the successful transfer of skills, expatriate staff may be required to
mentor, coach, train and develop Omani staff who may later replace them in their
job roles. All such potential replacements will be conditioned by the needs of
the Project Company’s organization and the performance of the individuals
involved. These skill transfer activities will be a feature of both expatriate
and Omani employment contracts and staff performance reviews.
 
Within the time period specified in Clause 7.1.2 (a), the Project Company shall
provide a report to the Government reviewing the progress relating to the
provisions of Clause 7.1.2 (a) including  the number of Omani persons employed
by the Project Company and the percentage of the Project Company’s total
employees such Omani persons represent. The Project Company will produce an
initial Omanisation Plan to cover the five year period from project start up to
completion of all construction activities. The Project Company will liaise with
the Government on a regular basis. It is expected that the Omanisation Plan will
be reviewed and updated annually in line with actual performance, business
development and other human resources issues that will become visible as the
Omagine Project unfolds.
 
 
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This approach will ensure that each annual Omanisation Plan will be supported by
a rolling five year forward view that will help to foster a positive focus on
performance and continuous career development for all staff.
 
Lessons learned in each plan year will be consolidated in all future plans to
ensure that best practice is continuously improved.
 
This will ensure that the Project Company will be able to optimize new
recruitment of Omani staff and make informed career development and succession
planning decisions for existing Omani staff based on proven performance and with
clear sight of pipeline contracts and new business development opportunities.
 
In setting up a new operation to develop this complex Project there will be an
immediate requirement to rely on the known technical competencies and
capabilities of personnel from the Founder Shareholders’ organizations and their
Affiliates in the United States, Europe, the Middle East and Oman.  At the same
time, the Project Company proposes to introduce Omanis who meet the relevant
selection criteria. These Omani staff will undergo training and development
within the Project Company’s organization, prior to, or in parallel with, their
employment.
 
As construction activities build to a peak there will be an increasing need to
manage the activities of design, engineering and construction contractors,
resulting in the need for the Project Company to employ specialist expertise -
wherever possible preference will be given to Omanis.
 
As these activities begin to reduce in the fourth and fifth years, it is
expected that the associated reduction in manning will be focused on
expatriates. As a result, the Omanisation percentage levels are likely to
progressively increase. This approach also provides a mechanism that will become
a core aspect of the Project Company’s human resource development program. The
aim will be to provide increasing responsibility and accountability to those
Omani employees who have demonstrated the appropriate knowledge, attitude and
competence.
 
9.           Summary
 
The Project Company is committed to positive and progressive Omanisation. The
Project Company will work proactively with all Government Ministries and other
Government Agencies to ensure that Omanisation is continuously optimised
throughout its operations in the Sultanate of Oman.
 
The Project Company is convinced that this proactive, progressive and positive
commitment to Omanisation will create a competitive advantage by enhancing
customer satisfaction and will provide a range of sustainable employment and
career development opportunities for talented Omanis in a wide range of job
roles.
 
 
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Schedule 12
 
COMPENSATION FORMULAE FOR TERMINATION
 
1.
Project Company Event of Default.

 
In the event that the Government terminates the Development Agreement for a
Project Company Event of Default under Clause 21.1, the following compensation
will be due to the Project Company and may be set off against any claims that
the Government may have in respect of the relevant Project Company Event of
Default and taxes, duties, charges and money due to the Government from the
Project Company:
 
1.1      For the Existing Land or Reclaimed Land.
 
The Government shall pay to the Project Company the same per square meter rate
for the Freehold Title to the Existing Land, or Reclaimed Land, as was paid by
the Project Company to the Government under the request for transfer of the
Freehold Title in respect of all such Existing Land or Reclaimed Land
transferred by the Project Company back to the Government, subject to a
deduction of an amount of fifteen percent (15%) to partly compensate the
Government for the missed opportunity value;
 
1.2      For the Completed Infrastructure and the Completed Units.
 
The Government shall pay to the Project Company the Fair Value for the Completed
Infrastructure and for the Completed Units.
 
1.3      For the Uncompleted Infrastructure.
 
For only those parts of the Uncompleted Infrastructure for which the Government
agrees that it will assume the applicable construction contracts or appoint
another developer or contractor to complete the construction of such Uncompleted
Infrastructure, the Government shall pay to the Project Company the Fair Value
for such parts of such Uncompleted Infrastructure. For those parts of the
Uncompleted Infrastructure which the Government will neither assume the
applicable construction contracts nor appoint another developer or contractor to
complete the construction thereof, the Project Company shall be responsible for
returning the relevant parts of the Existing Land back to its original condition
so far as is reasonably practicable and taking into account that such relevant
part of the Existing Land will not be returned to its  original topography and
shall hold harmless the Government for any costs of doing so.
 
1.4      For the Uncompleted Units.
 
For only those Uncompleted Units for which the Government agrees that it will
assume the applicable construction contracts or appoint another developer or
contractor to complete the construction of such Uncompleted Units, the
Government shall pay to the Project Company the Fair Value for such Uncompleted
Units. For those Uncompleted Units which the Government will neither assume the
applicable construction contracts nor appoint another developer or contractor to
complete the construction thereof, the Project Company shall be responsible for
returning the relevant parts of the Existing Land back to its original condition
so far as is reasonably practicable and taking into account that such relevant
part of the Existing Land will not be returned to its original topography and
shall hold harmless the Government for any costs of doing so.
 
 
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2.
Set off of Monies by the Government and Claims by the Government.

 
 
2.1
Against the assessed compensation referred to in section 1 above, the Government
shall be entitled to set off monies due and owing to it by the Project Company
in relation to the Development Agreement and also set off other monies which
shall include as a minimum the following items:

 
 
(a)
all net profits after interest and taxes made by the Project Company and
Landmark Company as indicated in Schedule 24 or any other subsidiary or
organization to whom the Project Company may transfer the Project Assets or
assign its obligations up to the date of termination of the Development
Agreement as finally determined by the Independent Expert Panel;

 
 
(b)
compensation for the loss of employment and opportunities for Omani nationals,
businesses employed or potentially employed in or by the Project and the damage
to the Omani tourism sector which compensation and damage is hereby assessed at
a liquidated damages amount of seventeen point five percent (17.5%) of the total
amount, as finally determined by the Verification Engineer, which would have
been spent by the Project Company in relation to any of the Minimum Build
Obligations which did not achieve Substantial Completion due to the termination:
and

 
 
(c)
compensation for the loss of revenue to the Government which revenue would have
resulted from the Project proceeding and which compensation is hereby assessed
at a liquidated damages amount of five (5%) of the total amount, as finally
determined by the Verification Engineer, which would have been spent by the
Project Company in relation to any of the non-Minimum Build Obligations due to
be Substantially Completed within the Minimum Build period which were not
Substantially Completed due to the termination.

 
 
2.2
If all the money allowed to be set off by the Government pursuant to any section
of this Schedule 12 is subtracted from the compensation due to the Project
Company pursuant to any section of this Schedule 12 and the result of such
subtraction is either zero or a negative number, then the compensation that
would otherwise be due to the Project Company hereunder but for such set off
shall be zero, provided that, notwithstanding the foregoing, this provision
shall not in any manner limit the Government’s right to make a claim against the
Project Company in respect of this or any other failure by the Project Company
to faithfully fulfill its obligations under the Development agreement.

 
3.
Government Event of Default/Government Risk Event/Change of Law.

 
 
3.1
In the event that the Project Company terminates the Development Agreement for:

 
i.  
a Government Event of Default under Clause 21.2; or

 
ii.  
a Government Risk Event under Clause 18.5; or

 
iii.  
a Change of Law under Clause 19.6(d);

 
 
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the following compensation will be due to the Project Company:
 
 
3.1.1
For the Existing Land or Reclaimed Land.

 
The Government shall pay to the Project Company:
 
 
(a)
the Project Land Market Value for the Freehold Title in respect of all Existing
Land or Reclaimed Land transferred by the Project Company back to the
Government,

 
 
(b)
all sums paid  by the Project Company by way of Usufruct Fees which relate to
the use of the Existing Land or the Reclaimed Land after the date of the
termination,

 
 
(c)
the sums the Project Company has paid in accordance with Clause 5.3 and Clause
6.12.1 of the Development Agreement.

 
 
3.1.2
For the Completed Infrastructure, Uncompleted Infrastructure, Completed Units
and Uncompleted Units.

 
The Government shall pay to the Project Company the Market Value of the
Completed Infrastructure, Uncompleted Infrastructure, Completed Units and
Uncompleted Units.
 
 
3.2
Against the assessed compensation referred to in Clause 3.1 above, the
Government shall be entitled to set off monies due and owing to it by the
Project Company in relation to the Development Agreement together with any
claims the Government may have in respect of taxes, duties, charges and money
due to the Government from the Project Company.

 
4.
Force Majeure.

 
 
4.1
In the event that the Development Agreement is terminated due to an Event of
Force Majeure under Clause 17, the following compensation will be due to the
Project Company:

 
 
4.1.1
For the Existing Land.

 
The Government shall pay to the Project Company:
 
 
(a)
the same per square meter rate for the Freehold Title to the Existing Land or
Reclaimed Land as was paid by the Project Company to the Government under the
request for transfer of the Freehold Title in respect of all such Existing Land
or Reclaimed Land transferred by the Project Company back to the Government;

 
 
(b)
any sum paid by the Project Company by way of Usufruct Fees which relate to the
use after the date of the termination of the Existing Land or the  Reclaimed
Land.,

 
 
(c)
the sums the Project Company has paid in accordance with Clause 5.3 and Clause
6.12.1 of the Development Agreement.

 
 
4.1.2
For the Completed Infrastructure, Uncompleted Infrastructure, Completed Units
and Uncompleted Units.

 
The Government shall pay to the Project Company the Fair Value of the Completed
Infrastructure, Uncompleted Infrastructure, Completed Units and Uncompleted
Units.
 
 
4.2
Against the assessed compensation referred to in Clause 4.1 above, the
Government shall be entitled to set off monies due and owing to it by the
Project Company in relation to the Development Agreement together with any
claims the Government may have in respect of taxes, duties, charges and money
due to the Government from the Project Company.

 
 
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5.
Freehold Title Transfers and Usufruct Rights.

 
 
5.1
For the avoidance of any doubt, if this Development Agreement is terminated for
any reason, then all transfers of Freehold Title to, and sub-usufruct or lease
agreements with respect to,  Buildings, Units or Plots (the “Properties”) to
Third Party Purchasers or with Third Party Users that have been completed as at
the date of termination and made in accordance with the terms of this
Development Agreement, shall not be reversed, voided or otherwise nullified by
the Government and the owners or lessees of such Properties will continue to
enjoy the rights of a lessee or of an owner of such Freehold Title in respect of
those Properties and the provisions of this Development Agreement relating to
such Properties, including the Project Company rights, shall continue to apply
in relation to such Properties.

 
 
5.2
If this Development Agreement is terminated for any reason, then all registered
transfers of Usufruct Rights and/or Freehold Title to any Third Party Developer,
as at the date of such Termination, with respect to Plots which comprise a
Specific MBO shall be governed by Clause 5.4 of the Development Agreement.

 
 
5.3
The Government as soon as practicable after the termination under Clause 21.1 of
the Development Agreement but no later than one hundred twenty (120) Days after
such termination, has the option to acquire the remainder of the Project Area in
respect of which Freehold Title has been transferred to the Project Company.

 
6.
Miscellaneous.

 
 
6.1
The Project Company shall use its reasonable efforts to retain all receipts,
payment and contract documentation related to the Project until the MBO
Completion Date, and thereafter to the extent they are relevant to the subject
matter of this Schedule 12. In the event of the termination of this Development
Agreement, such relevant receipts, payment and contract documentation shall be
provided to the Independent Expert Panel for its use and consideration in
whatever form of valuation is applicable.

 
 
6.2
For the purposes of this Schedule 12, if the Parties are unable to agree on what
constitutes Completed Infrastructure or Completed Units, then this issue shall
be determined by the Verification Engineer.

 
7.
Schedule 12 definitions.

 
The definitions in the Development Agreement shall apply to this Schedule 12 in
addition to the following definitions:
 
“Completed Infrastructure” means all parts of the Project Company Infrastructure
and Utilities (up to the nearest completed junction point) that have achieved
Substantial Completion as at the date of termination as certified by  the
Verification  Engineer and which is not the subject matter of a Sales Agreement.
 
“Completed Units” means all Units that have achieved Substantial Completion as
at the date of termination as certified by the Verification  Engineer and which
are not the subject matter of a Sales Agreement.
 
“Independent Expert Panel” means two (2) qualified independent valuers jointly
appointed by the Parties, and failing agreement shall be appointed by the
arbitrators, each of which valuer shall be an independent professional with the
necessary skills and qualifications, who is not a national of either Party, or a
present or previous employee of either Party and who is impartial to the
Parties. The independent valuers shall prepare separate valuations and
subsequently confer to jointly agree upon one (1) valuation, failing which the
independent valuers shall appoint a third independent valuer with the necessary
skills and qualifications, who is not a national of either Party, or a present
or previous employee of either Party and who is impartial to the Parties and who
shall perform an independent valuation and the final valuation shall be the
average of the three (3) valuations and such final valuation shall be final and
binding upon the Parties. Notwithstanding the foregoing, when making assessments
in accordance with the provisions of Clause 2.1 (a) above the Independent Expert
Panel shall comprise of qualified and experienced auditors or accountants and
such assessments shall be made in compliance with the International Financial
Reporting Standards. All other assessments and valuations shall be in accordance
with the principles set out in the Royal Institute of Chartered Surveyors
Appraisal and Valuation Manual current at the time at which such assessment or
valuation has to be made or, if such manual is not in publication at such time,
such other valuation convention of a similar nature as is then commonly adopted
for valuation purposes and generally accepted by the valuation industry as
sound.
 
 
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“Fair Value” means an assessment made by the Independent Expert Panel assessed
at the date of termination of the Development Agreement which shall take into
Account the following:
 
 
(a) in the case of Completed Units or Completed Infrastructure, all of the
Project Company’s costs of completing the Units and infrastructure (including
the contract price of the relevant construction contracts) or the Market Value
whichever is the lower;

 
 
(b) in the case of Uncompleted Units or Uncompleted Infrastructure (i) the
contract price for consultancy and construction, any amounts paid by the Project
Company under those consultancy, construction or other related contracts, the
value of the work completed at the date of termination, the cost of any remedial
work, the cost to complete the Units or infrastructure, the administration,
finance and other charges to be reasonably and properly incurred by the
Government in completing the Units and infrastructure or (ii) the  Market Value,
whichever is the lower;

 
 
(c) in the event that the Completed Units, Uncompleted Units, Completed
Infrastructure and/or Uncompleted Infrastructure are in substantial compliance
with the provisions of the Development Agreement as determined by the
Verification  Engineer, the provisions of either sub clause (a) or sub clause
(b) above will apply, as the case may be, and in the event that such Completed
Units, Uncompleted Units, Completed Infrastructure and/or Uncompleted
Infrastructure are not in such substantial compliance, then an assessment will
be made by the Verification  Engineer of the cost of achieving such compliance
(provided that if such substantial compliance cannot be achieved then the
Government shall not pay for any Completed Units, Uncompleted Units, Completed
Infrastructure or Uncompleted Infrastructure to the extent that such substantial
compliance cannot be achieved (the “Non-Compliant Construction”) and the
Government shall be entitled to compensation for the reasonable costs incurred
by it for the demolition and removal of the Non-Compliant Construction and the
return of the Project Area to its original condition so far as is reasonably
practicable and taking into account that the relevant part of the Project Area
will not be returned to its original topography). Any future revenue which the
Project Company may have derived from the sale, lease or operation of the
Completed Units will not be assessed nor form a part of the compensation to be
paid by the Government to the Project Company.

 
 
“Project Land Market Value” means the difference between Rials Omani one hundred
(RO 100) per square meter and the Market Value of the relevant Existing Land and
Reclaimed Land at the date of termination, save that the Market Value of such
Existing Land or Reclaimed Land shall not in any event exceed Rials Omani three
hundred (RO 300) per square meter and such Market Value shall be capped at a
maximum of Rials Omani three hundred (RO 300) per square meter at the date of
termination. However in the event that the Project Land Market Value is
determined to be less than Rials Omani one hundred (RO 100) per square meter
then the Project Company shall be paid the actual Land Price paid by the Project
Company to the Government for the relevant Existing Land or Reclaimed Land.

 
 
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“Market Value” means the market value of a Plot or Unit or infrastructure at the
date of termination made by an Independent Expert Panel and which shall take
into account all the costs, expenses, interest, charges or all matters
associated therewith that was, became, or is capable of becoming an expense,
cost or charge to the Project Company with respect to, but not limited to, the
design, development, construction, management, ownership, disputes or deposition
of the Project and the following:
 
 
(a)
in the case of Completed Units or Completed Infrastructure which are in
substantial compliance with the provisions of the Development Agreement as
determined by the Verification Engineer, then the valuation shall be in
accordance with the above principles;

 
 
(b)
in the case of Uncompleted Units or Uncompleted Infrastructure the valuation
shall take into account such items as the Independent Expert Panel considers
relevant, which may include the contract price for consultancy, construction,
any amounts paid by the Project Company under those consultancy, construction or
other related contracts, the value of the work completed at the date of
termination, the cost of any remedial work, the cost to complete the Uncompleted
Units or Uncompleted Infrastructure, the administration, finance and other
charges to be reasonably and properly incurred by the Government in completing
the Uncompleted Units and Uncompleted Infrastructure, and

 
 
(c)
in the event that the Completed Unit, Uncompleted Unit, Completed Infrastructure
or Uncompleted Infrastructure are in substantial compliance with the provisions
of the Development Agreement, as determined by the Verification  Engineer, the
provisions of either sub-clause (a) or sub-clause (b) above will apply, as the
case may be, and in the event that such Completed Unit, Uncompleted Unit,
Completed Infrastructure or Uncompleted Infrastructure are not in such
substantial compliance then an assessment will be made by the
Verification  Engineer of the cost of achieving such substantial compliance
(provided that if such substantial compliance cannot be achieved then the
Government shall not pay for any Completed Unit, Uncompleted Unit, Completed
Infrastructure or Uncompleted Infrastructure to the extent that such substantial
compliance cannot be achieved (the “Non-Compliant Construction”) and the
Government shall be entitled to compensation for the reasonable costs incurred
by it for the demolition and removal of the Non-Compliant Construction and the
return of the Project Area to its original condition so far as is reasonably
practicable and taking into account that the relevant part of the Project Area
will not be returned to its original topography);

 
 
“Uncompleted Infrastructure” means those parts of the Project Company
Infrastructure and Utilities (from the nearest completed junction point) that as
at the date of termination have yet to achieve Substantial Completion as
certified by the Verification Engineer.

 
 
“Uncompleted Units” means all Units that as at the date of termination have yet
to achieve Substantial Completion as certified by the Verification Engineer.

 
 
“Verification Engineer” means a qualified experienced independent professional
engineer, who shall be jointly appointed by the Parties and failing agreement
shall be appointed by the Independent Expert Panel. The costs of the
Verification Engineer shall be borne by the Party who is in default and in the
case of Force Majeure shall be borne equally by the Parties. The Verification
Engineer shall rely fully on any Completion Certificate issued as of the date of
any termination of the Development Agreement and for the purposes of this
Schedule 12, Substantial Completion shall mean Substantial Completion as
evidenced by the existence of any such Approved Completion Certificate, or as
certified by the Verification Engineer.

 
 
 
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Schedule 13
 
Development Control Plan
 
 
Pursuant to Clause 9.3.4 and Clause 11.1, the Parties agree that (a) the
Development Control Plan (the “DCP”) together with the Final Master Plan will
constitute the principles and guidelines to be observed by the Project Company
for the implementation of the Project, and (b) the DCP will be created in
accordance with the guidelines set out in the Development Control Plan Framework
(the “DCPF”).
 
The DCPF will also guide the process by which the Final Master Plan is created
by the Project Company and Approved by MOT.
 
The Parties hereby agree that the Project Company will prepare and submit its
proposed Development Control Plan for the Project to the Government on a Day
within one year from the Execution Date (the “Submission Date”).
 
Because of its importance to the Project Company’s design activities, the
Government hereby further agrees that (i) pursuant to the provisions of Clause
2.1.3, the Government shall Approve, reject in writing, or grant an Approval
Waiver with respect to the DCP within forty five (45) Days after the Submission
Date, and (ii) failing that, the issuance of the Ministerial Decision referred
to in Clause 11.2 shall be deemed to be such Approval of the DCP, and (iii) any
failure by the Government to Approve or grant an Approval Waiver with respect to
such DCP or to issue such Ministerial Decision within such forty five (45) Day
period will be a Dispute which will be resolved pursuant to Clause 28.2 of the
Development Agreement.
 
 
 
SC-13 

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Schedule 14
 
Freehold Acquisition Plan in Integrated Tourism Complexes
 
1.  
ACQUISITION OF FREEHOLD TITLE

 
At any time during the term of the Usufruct Agreement, the Project Company,
Third Party Developers, Third Party Purchasers and their respective Affiliates
shall each have the right to acquire freehold title of any Unit, Plot or
sub-Plot of the Project Area (“Freehold Title”) from the Government, subject to
the Development Agreement (in accordance with the laws and regulations in place)
and the terms and conditions as set out hereunder.
 
2.  
PROJECT COMPANY’S ACQUISITION OF FREEHOLD TITLE

 
In the event that the Project Company wishes to acquire a Freehold Title, the
Parties shall proceed as follows:
 
2.1
The Project Company shall give a ninety (90) Days written notice (as per the
attached form) to the Government Authorities, pursuant to Clause 27 of the
Development Agreement, of its intention to acquire the Freehold Title (“Notice
of Intention to Purchase”).

 
2.2
The Parties shall execute thereafter, but no later than ninety (90) Days from
the date of delivery of the Notice of Intention to Purchase to the Government, a
Freehold Sale and Purchase Agreement for the respective Unit, Plot or sub-Plot
of the Project Area (“Purchased Unit”), in the format as required by the Law.

 
2.3
The registration fee for the transfer of the Freehold Title to the Project
Company shall be based on the Land Price.

 
2.4
Upon the transfer of the Land Price for the respective Purchased Unit and within
ninety (90) Days from the Delivery date of the Request, the Government shall
transfer the Freehold Title of the Purchaser’s Plot to the Purchaser; free from
any other Third Party or Customary Rights and do all such things, registration
acts and declarations as are necessary for such transfer to become effective as
soon as practicably possible.

 
3.  
AFFILIATE’S ACQUISITION OF FREEHOLD TITLE

 
In the event that an Affiliate of the Project Company wishes to acquire a
Freehold Title by way of assignment of the right to acquire Freehold Title, the
Parties shall proceed as follows:
 
3.1
The conditions stated in Clauses 4 and 24 of the Development Agreement have been
complied with.

 
3.2
The Project Company shall give a Notice of Intention to Purchase to the
Government of its intention for an Affiliate of the Project Company to acquire
the Freehold Title.

 
3.3
The Parties shall execute hereafter, but no later that ninety (90) Days from the
date of delivery of the Notice of Intention to Purchase to the Government, a
Freehold Sale and Purchase Agreement for the Purchased Unit, in the format as
required by the Law.

 
 
 
SC-14/1

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4.  
THIRD PARTY DEVELOPER OR THIRD PARTY PURCHASER’S ACQUISITION OF FREEHOLD

 
4.1
Notwithstanding Clause 1 hereof, the Government shall be under no obligation to
transfer Freehold Title directly to Third Party Purchasers of individual
residences. In such case, the Project Company or an Affiliate shall purchase the
Freehold Title from the Government and register the same, after which time the
Freehold Title may then be sold to the Third Party Purchaser or Third Party
Developer in accordance with a commercial sales agreement entered into between
the Parties.  Such commercial sales agreement shall reflect the full commercial
value of the building apartment or structure at the time of registration of the
transfer of the Freehold Title.

 
4.2
The Project Company may, at any time, assign the right to acquire Freehold Title
to a, Plot or sub-Plot, to a Third Party Developer, a Third Party Purchaser or
any of their respective Affiliates.  However registration of a Plot or sub-Plot
may only occur after Substantial Completion or in accordance with Clause 6.7 of
the Development Agreement.

 
4.3
If the Project Company assigns the right to acquire Freehold Title to any Third
Party Developer or Third Party Purchaser, then such Third Party Developer or
Third Party Purchaser shall not be entitled to further assign such right to any
Third Party.

 
4.4
At any time after Substantial Completion, or if prior to Substantial Completion
upon satisfaction of the requirements set out in Clause 6.7 of the Development
Agreement and upon a written request by the Project Company, the Government
shall directly transfer a Freehold Title of a Unit to a Third Party Developer or
a Third Party Purchaser (each referred to hereinafter as “Purchaser”), provided
that the Project Company has:

 
(a)  
declared in writing to the Government that it has executed a valid agreement
with the Purchaser regarding the assignment of its Freehold Title acquisition
rights under the Development Agreement to the Purchaser;

 
(b)  
requested the Government to register Freehold Title in accordance with the
conditions set out in the Development Agreement (“Request”);

 
(c)  
provided the Government with all necessary details and copies of documents, as
are legally required, for the valid registration of the Purchaser’s Unit from
the Government directly to the Purchaser; and

 
(d)  
provides evidence that there is deposited into the designated Government
Account, the Land Price for the Purchaser’s Unit.

 
4.5
The Government and the Purchaser shall execute not later than thirty (30) Days
after the delivery of the Request, a Freehold Sale and Purchase Agreement for
the Purchased Unit, whereby the Government’s sole consideration shall be the
Land Price.

 
4.6
Upon the transfer of the Land Price for the respective Purchased Unit and within
ninety (90) Days from the Delivery date of the Request, the Government shall
transfer the Freehold Title of the Purchaser’s Plot to the Purchaser; free from
any other Third Party or Customary Rights and do all such things, registration
acts and declarations as are necessary for such transfer to become effective as
soon as practicably possible.

 
4.7
Subject to Clause 6.7 of the Development Agreement, it is expressly agreed that
the registration fees to be charged by the Government for the registration of
Freehold Title pursuant to an assignment of a right to acquire Freehold Title
will be based in the purchase price paid by the Third Party Developer or Third
Party Purchaser (which shall be the full commercial value of the land or
buildings) that has been paid or is payable to the Project Company, if such
assignment is duly notified to the Government.  The Freehold Title must be
registered within twelve (12) Months from the date of the completion of the
buildings to be erected on the Unit which was subject of the transfer.

 
 
For the avoidance of doubt, after Substantial Completion has occurred:

 
(a)  
the Project Company may transfer the Freehold Title to undeveloped Land directly
to any Third Party other than to Third Party Purchasers of undeveloped land to
be used for individual residential units;

 
(b)  
in case of a sale to Third Party Purchasers of undeveloped land for individual
Residence Units, Freehold Title shall only be transferred if the necessary
infrastructure and utilities have been substantially completed up to the
respective Plot (namely roads, pavements, street lighting, electricity, water
and sewage), except where infrastructure falls under the responsibility of a
Private Sector Utility Company; and

 
(c)  
the Project Company shall not enter into any new agreements to assign its right
to acquire Freehold Title to any Third Party Developers and Third Party
Purchasers and the Government shall only transfer Freehold Title directly to the
Project Company, or any of its Affiliates, save for transfers or assignments
that have been agreed prior to Substantial Completion.

 
4.8
Within ninety (90) days from the date of signature of any agreement, regarding
the assignment of the right to acquire Freehold Title, the Project Company shall
inform the Government in writing of the name and address and particulars of the
Plot, sub-Plot or Unit relating to the assignment.

 
5
All references in this SCHEDULE 14 to “commercial value” and the valuation in
accordance with Clause 4.7 shall be in the first instance proposed by the
Project Company to the Ministry of Housing and in the event that the Ministry of
Housing disagrees with the Project Company valuation, then the matter shall be
determined in accordance with the Law but must always reflect the Open Market
Value that would be assessed by an independent Third Party.

 

 
 
NOTICE OF INTENTION TO PURCHASE

The _______ (“Purchaser”) hereby notifies the Government of the Sultanate of
Oman (“Seller”) of its intention to exercise its right to purchase the following
Unit, Plot, sub-Plot of the Project Area in accordance with the form annexed to
and accepted by the Ministry of Housing.
 

 
SC-14/2

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Schedule 15
 
Form of Accession Agreement

THIS ACCESSION AGREEMENT (this "Agreement") is made this [•] day of [•]
 
BETWEEN
 
(1)
THE GOVERNMENT OF THE SULTANATE OF OMAN, as represented by the Ministry of
Tourism (the “Government”); and

 
(2)
_________________________, having its registered address at P.O. Box_____, PC
______, registered in the Sultanate of Oman with commercial registration No.
__________ (the “Project Company”); and

 
(3)
[•] a company incorporated with [_____] under the laws of [•] and whose
principal office is at [•] (the "Third Party Developer").

 
WHEREAS
 
(A)
By a Development Agreement signed between the Project Company and the Government
(the "Development Agreement"), the Parties assumed certain obligations and
liabilities towards each other;

 
(B)
Pursuant to the Development Agreement a Third Party Developer shall be granted
certain rights and assume certain obligations in relation to its specific part
of the Project;

 
(C)
The Third Party Developer has agreed with the Project Company to take over and
perform part of the Project and now wishes to become a Third Party Developer as
defined under the Development Agreement and have the corresponding rights and
obligations there under; and

 
(D)
The Development Agreement provides that a Third Party Developer taking over part
of the Project Tasks shall execute an Accession Agreement in this form.

 
NOW THIS DEED WITNESSES THAT:
 
1.
Unless the contrary is stated, words and expressions defined in clause 1 of the
Development Agreement shall, insofar as the same are applicable, bear the same
meanings in this Agreement.

 
2.
The Third Party Developer hereby accedes and to the Development Agreement with
regard to the development of [INSERT PROJECT] (“_____ Project”) and shall be
entitled to exercise – jointly with the Project Company - over all rights and
obligations related to the _____ Project. The Project Company shall continue to
serve as the Government’s single point of contact and the Third Party Developer
shall process all applications and requests for approvals via the Project
Company.

 
3.
In consideration of its becoming a Third Party Developer under the Development
Agreement the Third Party Developer hereby:

 
 
3.1
confirms that it has been supplied with a copy of the Development Agreement and
all relevant documents referred to therein;

 
 
3.2
undertakes to the Project Company and the Government that it will from the date
hereof be bound by the terms of the Development Agreement and will fulfil,
discharge, perform and comply with all the obligations there under in relation
to the _______ Project; and

 
 
3.3
undertakes to execute all necessary modifications in the Development Agreement
and any other documents related thereto.

 
4.
The address of the Third Party Developer for the purposes of clause ____ of the
Development Agreement shall be [•].

 
5.
The Third Party Developer shall only be liable under the Development Agreement
in relation to the _____ Project and shall not be liable for any acts or
omissions of the Project Company.

 
6.
This Accession Agreement shall be governed by and construed in accordance with
the laws of Oman and the provisions for arbitration set out in Clause _____ of
the Development Agreement shall be read and construed as applicable to this
Accession Agreement.

 
IN WITNESS WHEREOF this Agreement has been executed and delivered on the day and
year first above written.
 
 
SC-15 

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Schedule 16

Shareholders’ Retention Document

Attached below is a copy of the relevant section of a shareholders’ agreement
among the Founder Shareholders (a complete copy of which has been provided to
the MOT) wherein they all agree to be bound by the Change of Control provisions
of the Development Agreement.
 
The Parties agree that a Change of Control may occur if required by the Law or
by the law of the jurisdiction of any Founder Shareholder or pursuant to a
listing on the Muscat Securities Market.
 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
Excerpt from the Shareholders’ Agreement among the Founder Shareholders:

6.1.                 Sales / Transfers.
 
 
6.1.1
Transfers of Shares may be made at any time by any Shareholder subject to the
provisions of the Companies Law and the following:

 
a.  
Each Party understands and agrees that the transfer by it of Shares is
restricted by the terms and conditions of both the Development Agreement and
such Party’s Subscription Agreement and no Party shall transfer any Shares
unless such transfer is permitted under the Development Agreement, such Party’s
Subscription Agreement, this Agreement and the Law.

 

 
 
SC-16 

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Schedule 17
 

 
Part A                      Utilities Requirements
 
Part B                                Private Sector Public Infrastructure and
Utilities (“PSPIU”)
 

 
Schedule 17A
 
PROJECTED UTILITIES SERVICE REQUIREMENTS

 
The Parties hereby agree as follows:
 
Each of those points on the Inner Boundary (as that term is defined in Part C of
Schedule 4) as shown below, up to which (i) all the required Works for each
utility is to be constructed, and (ii) each utility is to be delivered by the
relevant Private Sector Utility Company (“PSUC”), is hereby defined as a
“Utility Delivery Point” and the structure, interface and related equipment to
be provided by the relevant PSUC at each Utility Delivery Point, necessary to
connect the relative utility to the PC Distribution Network  (as that term is
defined in Schedule 18) is hereby defined as a “Utility Tie-in”.
 
Potable Water Utility Requirements
 
See Schedule 8 for potable water utility requirements.
 
 
Utility Requirements other than Potable Water

The timing, capacity requirements and final design of the Private Sector Public
Infrastructure and Utilities will be agreed by the Project Company and the
relevant PSUC during the negotiation and preparation of the plan for PSPIU (the
“PSPI&U Plan”) pursuant to Clause 9.2 and will be incorporated into the Final
Master Plan. Notwithstanding the foregoing, the Parties agree that the Private
Sector Public Infrastructure and Utilities to be contained in such Final Master
Plan shall meet at least the following minimum requirements:
 
 
SC-17/1

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Treated Sewage (a):
 
a)
Infrastructure to be constructed:
 
Underground Treated Sewage trunk mains connected to the appropriate connection
points at the relevant Utility Tie-in with a capacity sufficient to convey to
the Project Area not less than 1,050 cubic meters per day of Treated Sewage
without surcharge, backup or overflow from the connection point at the relevant
Utility Tie-in to the PC Distribution Network and adequate to convey the flow.
b)
Points up to which infrastructure for Treated Sewage is to be constructed and
points at which Utility Tie-ins for Treated Sewage are to be constructed:
 
All Treated Sewage infrastructure is to be constructed up to the Inner Boundary.
The Utility Tie-ins for Treated Sewage shall be situated and constructed at the
Utility Delivery Points on the Inner Boundary and are indicatively marked S1 and
S2 on the preliminary sewage collection drawing below (the “Sewage Drawing”) and
their precise locations will be definitively shown in the Final Master Plan.
c)
Timing for supply of Treated Sewage:
 
The supply of Treated Sewage shall be available commensurate with the start of
construction, and shall be provided progressively at the volumes requested from
time to time by the Project Company to suit the rate of Development as
determined from time to time by the Project Company. Table 17.1 below sets out
the indicative timing required for the supply of such Treated Sewage which
timing may be varied by the Project Company from time to time by reasonable
notice to the relevant Private Sector Utility Company.

 
(a)
“Treated Sewage” is defined as sewage which (i) has been treated at a sewage
treatment facility not owned or operated by the Project Company, and (ii) is
conveyed via underground route to the Inner Boundary for use by the Project
Company as irrigation water. If the quality of the Treated Sewage (as defined by
the chemical parameters enumerated in the Approved PSPI&U Plan and Final Master
Plan) is suitable for irrigation water, the Project Company may accept up to
1,050 cubic meters per day of such Treated Sewage.

 

Table 17.1
 
Indicative timing after Approval of the Final Master Plan for the supply of
Treated Sewage:
 
 
Volume per day (m3)
   
Months
    430       8     750       20     1,050       32  

 

 
 
SC-17/2

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Raw Sewage(a) Collection:
 
a)
Infrastructure to be constructed:
 
Underground Raw Sewage trunk mains will be constructed and connected by the
relevant Private Sector Utility Company to the appropriate connection points at
the relevant Utility Tie-in so that the Raw Sewage generated within the Project
Area and conveyed within the Project Area via the PC Distribution Network to
such Utility Tie-in, will be discharged into the relevant Private Sector Utility
Company’s Raw Sewage collection system without surcharge, backup or overflow.
The aforementioned underground Raw Sewage trunk mains will have the capacity to
accept a minimum of 6,400 cubic meters per day of Raw Sewage from the Project
Area.
b)
Points up to which infrastructure for Raw Sewage collection and conveyance is to
be constructed and points at which Utility Tie-ins for Raw Sewage are to be
constructed and connected:
 
All Raw Sewage infrastructure is to be constructed up to the Inner Boundary. The
Utility Tie-ins for Raw Sewage shall be situated and constructed at the Utility
Delivery Points on the Inner Boundary and are indicatively marked S1 and S2 on
the Sewage Drawing and their precise locations will be definitively shown in the
Final Master Plan.
c)
Timing for the availability of capacity for receipt of discharge of Raw Sewage:
 
The capacity for discharge of the Raw Sewage generated within the Project Area
into the Private Sector Utility Company’s Raw Sewage collection system shall be
available commensurate with the start of construction, and shall be provided
progressively at the volumes requested from time to time by the Project Company
to suit the rate of Development as determined from time to time by the Project
Company. Table 17.2 below sets out the indicative timing required for the
availability of such capacity requirements, which timing may be varied by the
Project Company from time to time by reasonable notice to the relevant Private
Sector Utility Company.

 
(a)
”Raw Sewage” is defined as wastewater and/or sewage which is conveyed via the PC
Distribution Network from the Project Area to the appropriate Utility Tie-in and
then via underground route to a sewage treatment facility not owned or operated
by the Project Company.

 
 
SC-17/3

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Table 17.2
 
 
Indicative timing after Approval of the Final Master Plan for the availability
of Raw Sewage capacity requirements:
 
Volume per day (m3)
   
Months
    704       4     2,048       18     3,776       26     5,248       32    
6,400       44  

 
The Sewage
Drawing
(All dimensions shown are indicative only)

 
GRAPHIC [sc17a1.jpg]
 

 
 
 
SC-17/4

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a)
Infrastructure to be constructed:
 
Underground electrical cables connected to the appropriate Utility Tie-in with a
capacity sufficient to supply not less than 56 mega-watts demand and 537
mega-watt-hours of electricity usage per Day plus such other underground cables,
wires and/or pipes or conduits as may be required for fibre optics, telephone
and satellite communications’ lines in accordance with the specifications shown
in the Approved PSPI&U Plan and Final Master Plan and such other Utility
services as may be agreed between the Parties from time to time.
b)
Points up to which infrastructure for ET is to be constructed and points at
which Utility Tie-ins for ET are to be constructed:
 
All ET infrastructure is to be constructed up to the Inner Boundary. The two
Utility Tie-ins for ET shall be situated and constructed (i) at the Utility
Delivery Point on the Inner Boundary indicatively marked as point A on the ET
Drawing below, and (ii) at one other redundant Utility Delivery Point to be
identified in the Final Master Plan and PSPI&U Plan. The precise locations of
the foregoing two ET Utility Delivery Points and Utility Tie-ins will be
definitively shown in the Final Master Plan.
c)
Timing for supply of ET:
 
Supply of ET shall be available commensurate with the start of construction, and
shall be provided progressively at the rates requested from time to time by the
Project Company to suit the rate of Development as determined from time to time
by the Project Company. Table 17.3 below sets out the indicative timing required
for the supply of the indicated megawatt hours per Day of electrical power,
which timing may be varied by the Project Company from time to time by
reasonable notice to the relevant Private Sector Utility Company.

 
Electricity, Telephone etc. (collectively “ET”):
 

 
Table 17.3
 
Indicative Timing after Approval of the Final Master Plan for the supply of ET:
 
Megawatt-hours per day
   
Months
    107       5     322       15     429       36     510       44     537      
50  

 
SC-17/5

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The ET Drawing
(All dimensions shown are indicative only)

GRAPHIC [sc8a2.jpg]

 
SC-17/6

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Schedule 17B
 
 
 
Private Sector Public Infrastructure and Utilities (“PSPIU”)
 
This Schedule 17A and Schedule 17B constitutes the preliminary plan for the
PSPIU. Pursuant to the requirements of Clause 9.2, the Project Company and each
relevant Private Sector Utility Company (“PSUC”) shall meet and agree on the
final plan for PSPIU (the “PSPI&U Plan”).
 
The Project Company shall not bear any costs related to the design or provision
of the PSPIU up to Inner Boundary and including the Utility Delivery Points and
Utility Tie-ins located on the Inner Boundary, and all such costs shall be borne
by the relevant PSUC.
 
The Parties agree that the PSPI&U Plan shall include the terms and conditions
contained in this Schedule 17A and Schedule 17B including but not limited to the
following:
 
 
The Parties agree:

 
1.
The relevant PSUC will procure the construction of the:

 
 
a)
power supply, and

 
 
b)
discharge of storm water and waste water services,

 
which are to be procured and provided up to the Inner Boundary, plus the
procurement, provision and construction of
 
 
c)
all Utility Tie-ins, and

 
 
d)
all associated infrastructure either outside the Project Area or within the
Perimeter Landscaped Area (as defined in Part C of Schedule 4), and associated
with any of the foregoing,

 
in accordance with the requirements and specifications set out in this Schedule
17A and Schedule 17B.
 
2.
The Parties shall each grant to the other and to the relevant PSUC all access
and other rights as may be reasonably required for the purposes of the relevant
PSUC’s construction, installation or delivery of the PSPIU and for the purpose
of its connection of the utilities to each appropriate Utility Tie-in.

 
3.
Except for the potable water utility which will be supplied by the Government,
the relevant PSUC will procure the delivery of each utility to the relevant
Utility Delivery Point as set forth in this Schedule 17A and Schedule 17B.

 
4.
The relevant PSUC will comply with the requirements of Part C of Schedule 4 with
respect to the removal of (a) transmission lines to an Underground Location, and
(b) Utility Poles (as those terms are defined in Part C of Schedule 4.

 
5.
The relevant PSUC will:

 
 
(i)
procure and provide each Utility Tie-in as set forth in this Schedule 17A and
Schedule 17B that is required to connect to each of the utility services
supplied at each relevant Utility Delivery Point, and

 
 
(ii)
design, build, install, test, maintain and connect each such Utility Tie-in and
the infrastructure necessary to connect each such utility to the PC Distribution
Network.

 
 
SC-17/7

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6.
The relevant PSUC shall, for the purposes of complying with its obligations with
respect to the provision of the PSPIU, be granted free access to and use of the
PC Distribution Network and will procure that all quantities of any utility
consumed or utilized within the Project Area shall be delivered, collected or
removed, as the case may be, by underground route and sold and billed directly
by such PSUC to the end user thereof within the Project Area (an “End User”).

 
 7.
The Project Company shall liaise closely with the relevant PSUC with regard to
such PSUC’s design, schedule of work, completion and connection of each Utility
Tie-in at each Utility Delivery Point to ensure that such construction and
connection takes place in accordance with the relative specification set out in
the PSPI&U Plan and Final Master Plan.

 
8.
The relevant PSUC supplying any utility to the Project Area shall procure that
the quantities of such utility delivered to End Users shall be determined on a
monthly basis by a reading of the relevant End User’s meter.

 
9.
The relevant PSUC undertakes to Substantially Complete or procure the
Substantial Completion of the construction of all pipes, cables and trenches and
other related structures up to and including each Utility Delivery Point and to
the Inner Boundary so that each Utility Tie-in has been tested and commissioned
and has the full capacity of the relative utility available for immediate use by
End Users not later than the dates specified above therefore in, as the case may
be, Table 17.1, Table 17.2, or Table 17.3 in Schedule 17A.

 
10.
It is understood and agreed by the Parties that:

 
 
a)
the Project Company shall not own the Private Sector Public Infrastructure and
Utilities and that all Private Sector Public Infrastructure and Utilities shall
remain the property of the relevant Private Sector Utility Company; and

 
 
b)
the Project Company shall never have any liability to any person resulting from
or connected with the existence, use, maintenance or operation of the Private
Sector Public Infrastructure and Utilities; and

 
 
c)
except as otherwise stated herein, the relevant PSUC, at its cost and expense,
will procure all property rights, easements or rights-of-way necessary to build,
install and deliver the Private Sector Public Infrastructure and Utilities and
any infrastructure associated therewith over, under and/or through the Perimeter
Landscaped Area (as that term is defined in Schedule 4) to the Inner Boundary;
and

 
 
d)
the relevant PSUC shall:

 
 
(i)
connect the Private Sector Public Infrastructure and Utilities at the
appropriate Utility Delivery Point to the appropriate Utility Tie-in, and

 
 
(ii)
deliver the utilities via the PC Distribution Network to the End Users; and

 
 
e)
all references to the location of any Utility Delivery Point or Utility Tie-in
in this Schedule 17A or Schedule 17B or in the drawings contained herein or in
this Development Agreement are, notwithstanding anything to the contrary
contained elsewhere in this Development Agreement, references to such locations
at points on the Inner Boundary. If for the convenience of the Parties or
otherwise, any such Utility Delivery Point or Utility Tie-in is actually located
or constructed at a location other than a point on the Inner Boundary, then the
relevant PSUC shall continue to be responsible for the design, construction and
completion, at its cost and expense, of all Private Sector Public Infrastructure
and Utilities up to the Inner Boundary.

 
 
f)
Notwithstanding Clause 9.2.4, in the event that the development of the Project
Area exceeds the assumptions set out in Schedule 17A and as contained in the
traffic impact assessment or the Final Master Plan, which extra development
creates additional demand unable to be supplied from the Private Sector Public
Infrastructure and Utilities constructed as required by Clause 9.2 and this
Schedule 17A and 17B, the Private Sector Utility Companies shall, at the request
of the Project Company and at the cost of the Project Company, carry out all
works as are necessary to expand the Private Sector Public Infrastructure and
Utilities in so far as this is necessary to satisfy the additional demand.

 
 
SC-17/8

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Schedule 18
 
Project Company Infrastructure and Utilities
 
 

The Parties hereby agree as follows:
 
1.  
The Project Company Infrastructure and Utilities and any other infrastructure
within the Project Area that is not Government Infrastructure or Private Sector
Public Infrastructure and Utilities will be procured by the Project Company at
its sole cost and expense.

 
2.  
This Schedule 18 constitutes the preliminary plan for the Project Company
Infrastructure and Utilities. The Project Company shall include the final plan
for Project Company Infrastructure and Utilities (the “PCI&U Plan”) in the Final
Master Plan as Approved by the Government.

 
3.
The Parties agree that the PCI&U Plan shall comprise only infrastructure within
the Project Area and infrastructure for utilities distribution within the
Project Area and shall include the terms and conditions contained in this
Schedule 18, including the following:

 
 
a)
roads and associated pedestrian walkways, curbs, central reservations, hard and
soft landscaping, signage and traffic management systems within the Project Area
(collectively “Traffic Elements”);

 
 
b)
the underground utility distribution network within and throughout the Project
Area sufficient to efficiently service the Project Area’s requirements for the
distribution of such utilities supplied by others (the “PC Distribution
Network”) for:

 
 
(i)
power distribution within the Project Area, and

 
 
(ii)
potable water distribution within the Project Area, and

 
 
(iii)
treated and untreated sewage distribution within the Project Area, and

 
(iv)           wastewater distribution within the Project Area, and
 
 
(v)
telecommunications, data transmission and data networking distribution within
the Project Area, and

 
(vi)           foul and surface water drainage within the Project Area;
 
 
c)
such other utilities distribution apparatus or infrastructure in respect of the
Project and within the Project Area as the Project Company may from time to time
determine to be useful or convenient.

 
4.
Notwithstanding the definition contained in Clause 1.2 or the right granted in
Clause 5.1.14, the Project Company does not have any obligation to develop,
build or operate a landfill site or any plant for sewage treatment, waste water
treatment, water clarification, purification, desalination or demineralization,
electric power generation, or any plant for the production of any utility.

 
 
 

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Schedule 18
 
Project Company utilities distribution
preliminary plan
Within Project Area Only
(All dimensions shown are indicative only)

 
GRAPHIC [sc8a2.jpg]
 

 

 
 
SC-18/1

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Schedule 18

Project Company roads
preliminary plan
Within Project Area Only
(All dimensions shown are indicative only)

GRAPHIC [sc8a1.jpg]

 

 
SC-18/2

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Schedule 18

Project Company sewage collection
preliminary plan
Within Project Area Only
(All dimensions shown are indicative only)

GRAPHIC [sc17a1.jpg]
 
 
 
 
SC-18/3

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Schedule 19
 
Initial Business Plan
 
 
Financial Model
 

 
The Parties hereby agree as follows:
 
Pursuant to the requirements of Clause 6.13.1 the Project Company has delivered
its preliminary financial model to the Government prior to the Execution Date.
 
Since no Governmental company or entity is a shareholder of the Project Company,
and since the Ministry of Tourism (”MOT”) is a substantial investor in other
ITC’s and projects competing with the Project Company, all future revisions of
the Project Company’s Business Plans, including updates to the PFM and related
documents, will be shared with the Office of Royal Court Affairs (“RCA”) but
will not be shared with the MOT or other Governmental Authorities, and all such
future revisions shall remain confidential and proprietary to the Project
Company.
 
Notwithstanding the foregoing paragraph, the Project Company will keep MOT
updated regarding matters relating to the project financing efforts undertaken
by the Project Company and its financial advisers and will, on a regular basis,
advise MOT of the results of such project financing efforts.
 
Pursuant to the Shareholder Agreement among the Founder Shareholders, the
Project Company will be capitalized at 26,988,125 Omani Rials (equivalent to
approximately 70 million USD) and the Project Company intends to engage BNP
Paribas, SA and BankMuscat S.A.O.G. as its financial advisers to arrange any
necessary debt financing.
 
The Percentage ownership of the Project Company is as follows:
 
Shareholder
Number of Shares
% of total
 issued Shares
Omagine, Inc. 3,000,000 60 % Royal Court Affairs 1,250,000 25 % Consolidated
Contracting Company, S.A. 500,000 10 % Consolidated Contractors Co. Oman LLC
250,000 5 %
TOTAL
5,000,000
100.0%

 
SC-19 

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Schedule 20

 
PRINCIPLES OF THE DIRECT AGREEMENT

 
The Government agrees that it will acknowledge the rights of the Lenders as
requested by the Project Company in the form and substance in accordance with
the following principles:
 
1)  
At the request of the Project Company, the Government shall grant Lenders direct
Usufruct Rights as specified in the Development Agreement, the Usufruct
Agreement and the Amendment (as defined in Clause 9.6.4) entered into between
the Government of the Sultanate of Oman represented by the Ministry of Tourism
and Omagine LLC (the “Usufruct Agreement”).

 
2)  
At the request of the Project Company, the Government shall enter into Direct
Agreements with Lenders acknowledging their rights by way of Security Interests
over certain assets of the Project Company including an assignment to the
Lenders of the Development Agreement, the Usufruct Agreement, other related
agreements, and the Project Assets which, inter alia, may entitle the Lenders to
assume control of such assets, assume certain rights under those agreements,
including a Step-In Right under the Development Agreement and/or the right to
appoint appropriate personnel, contractors or the Project Company to assume, at
all times subject to the relevant agreements, control of such assets.

 
3)  
By providing reasonable assurance and co-operation or by entering into one or
more Direct Agreements pursuant to Clause 22.3 of the Development Agreement and
this Schedule 20, the Government shall not be required or be deemed to assume
any additional obligations under such Direct Agreements other than the specific
obligations the Government assumes pursuant to such Direct Agreement nor to lose
any rights which it may have under the Development Agreement.

 
4)  
Any assignment by the Project Company by way of Security Interests as provided
above shall not relieve or in any way discharge it from the performance of its
duties and obligations under the Development Agreement.

 
5)  
Pursuant to Clause 21.1.4, the Government undertakes that if the Lenders
exercise their Step-In Rights then for a period of ninety (90) Days after the
date of exercising their Step-In Rights (“Suspension Period”) the Lenders shall
be entitled to a suspension of the Government Termination Notice.

 
6)  
The Government undertakes to withdraw its Government Termination Notice and to
continue the Development Agreement and the Usufruct Agreement in full force and
effect and not to take any action with regard to a Government Termination Notice
in relation to any Project Company Event of Default at the end of the Suspension
Period relating thereto:

 
(a)  
if the Government is satisfied, acting reasonably, that such Project Company
Event of Default no longer subsists; or

 
(b)  
if in respect of any Project Company Event of Default the Government is
satisfied, acting reasonably, that Project Company Event of Default has been
remedied; or

 
(c)  
if the Project Company Event of Default is not capable of remedy, the Lenders
have undertaken to pay compensation for the Project Event of Default;

 
in each case any compensation due and payable by the Project Company to the
Government resulting from the Project Company Event of Default having been paid
by the Lenders or a bank guarantee or other assurance of payment satisfactory to
the Government, acting reasonably, having been provided by the Lenders in
respect of any such compensation.
 
7)  
The Project Company shall, in accordance with the terms and conditions of the
Development Agreement and this Schedule 20, have the right to assign to third
party Lenders all rights granted to it pursuant to the Development Agreement and
the Usufruct Agreement.

 
 
 

 
SC-20 

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Schedule 21
 
CODE OF PRACTICE
 

 
Section 1
 
The General Principles as are stipulated by the Government to apply to all Codes
of Practice.
 
GENERAL PRINCIPLES OF THE CODE OF PRACTICE
 
1. Adoption and implementation of Best International Practices.
 
2. Transparency in the way services and costs are managed and administered.
 
3. Costs and services contracts to be kept under regular review.
 
4. Project Company’s service fee to be not more than fifteen percent (15%)  of
the fees, charges, costs, service charges, levies, licence fees, rates, rental
fees and the like as the Project Company deems appropriate to compensate it for
the cost of the Civil Defence Services and the landscaping activities in the
Project Area and in the Perimeter Landscaped Area, or the administration,
maintenance, operation, servicing and management of all or part of the Project
Area, Community Facilities or Project Company Infrastructure and
Utilities  [including connection or consumption charges] (collectively
“Charges”), and subject to and in accordance with the Code of Practice, the
Project Company shall have the exclusive right to levy Charges on Third Parties
and to administer and secure payment of such Charges from any person. ).
 
5. Service quality to be appropriate to location, use and character of asset.
 
6. Service standards to reasonably ensure value for money.
 
7. Standard of services to be reasonably monitored by the Project Company.
 
8. Apportionment of costs to be on a fair and reasonable basis, applied fairly
and consistently throughout the Project Area, to the extent that is reasonably
possible and subject to the approved Final Master Plan.
 
9. Reasonable provision of estimates of likely Charges prior to each year and
clarification and audit of accounts following year’s end.
 
10. Sinking fund monies, if any, to be held on trust in a bank.
 
11. Audited annual accounts, by external independent international firm of
auditors licensed to practice in the Sultanate of Oman.
 
12. Contractual commitments to the Code of Practice to be included in all Sales
Agreements and rental contracts. Standard form of Sales Agreement in use from
time to time to be provided to the Government upon request, for its information.
 
13. The above principles are to be elaborated and together with the General
Powers in Relation to Administration set out in Section 2 below, shall become
the detailed Code of Practice. A draft of the Code of Practice shall be provided
to the Government within three (3) months of the Effective Date for review and
comments prior to issue. In the event the Government believes the Code of
Practice is not in accordance with the above principles, the Project Company
shall, by consent or by arbitral order, amend the Code of Practice to comply
with such principles. The Code of Practice shall be incorporated by reference
into the Final Master Plan as part of the Standards.
 
 
SC-21/1

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Section 2
 
1.           GENERAL POWERS IN RELATION TO ADMINISTRATION
 
1.1           Administrative Function
 
The Project Company shall in general take all actions necessary to control,
manage and administer the Project for the benefit of itself and Third Parties.
In particular, but without prejudice to the generality of the foregoing, the
Project Company shall:
 
1.1.1           take such action as may be reasonably necessary to enforce
payment of monies due to it, including Charges, or compliance with obligations
owed to it in whatsoever capacity by Third Parties and each of them;
 
1.1.2           make such rules and regulations not inconsistent with this Code
of Practice:
 
(a)
for the furtherance and promotion of any of the purposes of this Code of
Practice;

 
(b)
as to what constitutes appropriate use of any part of the Project Area,
Community Facilities, Plots, Units or Buildings;

 
(c)
as to the resolution of disputes;

 
(d)
as to the levy and collection of Allocated Service Charges (as that term is
hereinafter defined);

 
(e)
for the better management of the Community Facilities and the administration and
governance of the Project Area generally.

 
1.2           Managing Agent
 
The Project Company shall always have the power from time to time to appoint
pursuant, to a written contract, a manager or managing agent (“Manager”) to
control, manage, maintain and administer the Project and Community Facilities or
any aspect of the Project Area and exercise such powers and duties as may be
entrusted to such Manager, including the power to collect Allocated Service
Charges.
 
2.           BUDGET AND SERVICE CHARGES
 
2.1           The budget and determination of service charges
 
2.1.1           The Project Company shall, at least two (2) Months prior to the
end of each calendar year, prepare a budget of its forecasted income and
expenditures for the next financial year in relation to the performance of its
obligations in respect of the Community Facilities and together with all
administrative and other expenses relating thereto for which the Project Company
is responsible and any amount proposed to be held in reserve in respect of
future maintenance, repairs, Charges or capital expenditures. Provision shall be
made for Charges including, but not limited to, the following:
 
a.  
cleaning, maintaining and repairing the Community Facilities (including all
media for the supply of heat, air cooling, electricity, gas, water, sewerage,
energy, telecommunications, data and other services and utilities forming part
of the Community Facilities);

 
b.  
lighting the Community Facilities and cleaning, maintaining, repairing and
replacing lighting machinery and equipment in and on the Community Facilities;

 
 
SC-21/2

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c.  
cleaning, maintaining, repairing and replacing refuse bins in or on the
Community Facilities;

 
d.  
cleaning, maintaining, repairing and replacing signage in and on the Community
Facilities;

 
e.  
expenses in respect of security for the Project, including cleaning,
maintaining, repairing, operating and replacing security machinery and equipment
(including closed circuit television) in or on the Community Facilities;

 
f.  
cleaning, maintaining, repairing, operating and replacing fire prevention,
detection and fighting machinery and equipment and fire alarms in or on the
Community Facilities;

 
g.  
maintaining the landscaped and grassed areas of the Community Facilities;

 
h.  
any other service, utility or amenity that the Project Company may in its
discretion  provide for the benefit of residents, visitors or other Third
Parties with respect to the Project Area;

 
i.  
maintenance expenses;

 
j.  
insurance premiums;

 
k.  
expenses and costs in respect of services;

 
l.  
municipality charges and/or other taxes and/or costs;

 
m.  
administrative and professional expenses;

 
n.  
management fees and Manager fees; and

 
o.  
provision for future maintenance and repairs or capital expenditures.

 
2.1.2           The costs are the total of:
 
(a)
the whole of the costs of:

 
 
(i)
providing the above items and services in accordance with the requirements of
this Code of Practice and the Development Agreement;

 
 
(ii)
the supply and/or removal of electricity, gas, water, sewerage and other
utilities to and from the Community Facilities;

 
 
(iii)
complying with the recommendations and requirements of the insurers of the
Project Company (insofar as those recommendations and requirements relate to the
Community Facilities);

 
 
(iv)
complying with all laws relating to the Community Facilities or their use, or
any Works carried out at them, and relating to the use of all service media,
machinery and equipment at or serving the Community Facilities and to any
materials kept at or disposed of from the Community Facilities;

 
 
(v)
complying with any Third Party rights insofar as they relate to the Community
Facilities;

 
 
(vi)
taking any steps (including legal proceedings) that the Project Company
considers necessary or proper to prevent or remove any encroachment over the
Community Facilities or to prevent (other than as contemplated by this
Development Agreement or the Finance Agreements) the acquisition of any right
over the Community Facilities or over all or any part of the Project Area or to
remove any obstruction to the flow of light or air to the Community Facilities
or to all or any part of the Project Area; and

 
 
SC-21/3

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(vii)
any other costs that arise due to an event of material unforeseen expense (such
as, but not limited to, remedy of unsafe conditions or to comply with the Law),
and

 
(b)  
the costs, fees and disbursements (on a full indemnity basis) of:

 
(i)  
any Manager employed by the Project Company for the carrying out and provision
of the above services or, where a Manager is not employed, a management fee for
the same; and

 
(ii)  
accountants employed by the Project Company to prepare and audit the cost and
Charges accounts; and

 
(iii)  
all municipality or Governmental charges, taxes, fees and impositions payable in
respect of the Community Facilities, their use or any Works carried out in or
upon them.

 
2.1.3           In compiling the budget as required in paragraph 2.1.1 the
Project Company shall ensure that:
 
(a)
the Charges shall be allocated to the relevant Third Parties according to a fair
proportion;

 
(b)
any Plot, Unit or Building or portion thereof dedicated to the exclusive use of
the Government or any Private Sector Utility Company (each, an “Excluded Party”)
and accepted by such Excluded Party may be included in the calculation of
overall Charges but such Excluded Party shall be excluded from any obligation to
pay any Charges;

 
 (c)
liability for payment to the Project Company of a pro-rata portion of the above
Charges shall vest in each relevant Third Party at the time such pro-rata
portion of the above Charges becomes due. The authority and right to collect
Charges from Third Parties may be delegated by the Project Company to the
Manager;

 
(d)
cost overruns or savings from prior years shall be brought forward for debit or
credit as the case may be; and

 
(e)
in the event of a material unforeseen expense (such as to remedy unsafe
conditions or to comply with the Law) the Project Company may, pursuant to
paragraph 2.2.5, amend the budget during the course of a fiscal year and, in
such an event, shall provide appropriate written notice thereof and the reasons
therefore to the relevant Third Parties.

 
2.2           Collection of Service Charges
 
2.2.1           Promptly after finalising a budget for any calendar year, the
Project Company shall, in accordance with the provisions of Paragraph 2.1.3 (a)
above, allocate a portion of the total amount of the Charges for such calendar
year to each individual relevant Third Party (each such allocation being an
“Allocated Service Charge”) and upon the delivery of a written notice (either by
hand delivery to the address of the relevant Third Party or by deposit in the
mail addressed to such Third Party) of such Allocated Service Charge to each
such respective Third Party, each such Allocated Service Charge shall become due
and payable by the respective Third Party to the Project Company. All Allocated
Service Charges shall be paid in quarterly instalments in advance on the first
Day of each calendar quarter of the calendar year to which such Allocated
Service Charge relates.
 
 
SC-21/4

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2.2.2           Each Third Party who accepts transfer of freehold title or right
of usufruct or sub-usufruct or grant of lease in the Project Area, shall, as
part of the relevant Sales Agreement, lease agreement or other agreement with
the Project Company, (or if such transaction is with another Third Party, then
as a part of the agreement with such other Third Party) covenant and agree with
the Project Company, and as the case may be, with such other Third Party, to pay
the Allocated Service Charge(s) allocated to it in accordance with this Code of
Practice.
 
2.2.3           No Third Party shall enjoy the privilege of using any of the
Community Facilities unless and until all Allocated Service Charges or other
sums (if any) which may be due and payable to the Project Company from such
Third Party pursuant to the terms of this Code of Practice shall have been paid
in full.
 
2.2.4           Each Third Party who consummates a transaction directly with the
Project Company and accepts transfer of freehold title or right of usufruct or
sub-usufruct or grant of lease with respect to a Plot, Building or Unit in the
Project Area shall, upon the relevant agreement date, become liable for payment
of that portion of the Allocated Service Charge(s) allocable to the period from
the date such transaction closes through the end of the calendar year in which
such transaction closes. In respect of any subsequent transfer directly from a
Third Party transferor to another Third Party transferee of the ownership of, or
the transfer or granting of a usufruct, sub-usufruct or lease agreement with
respect to, a Plot, Building or Unit, then, in such an event, such Third Party
transferee shall become liable for payment of all Allocated Service Charges due
in respect of such Plot, Building or Unit including arrears.
 
2.2.5           In case of a material unforeseen expense, the Project Company
may from time to time, when necessary, make specific Allocated Service Charge
levies upon the relevant Third Parties in respect of any such unforeseen expense
which has not been included in the budget referred to in paragraph 2.1 and such
Allocated Service Charge levies may be made payable in one sum or in such
instalments as the Project Company may determine in its own discretion.
 
2.2.6           If a Third Party fails to pay its Allocated Service Charges in
full to the Project Company by the due date therefor, the Project Company may
place a charge on or lien against such  Third Party’s (i) title, or (ii)
usufruct, sub-usufruct or lease agreement or other agreement with the Project
Company or any Third Party transferor, and enforce payment of  such Allocated
Service Charge(s) as a secured debt, or otherwise institute an action for the
recovery thereof in any court of competent jurisdiction.
 
2.2.7           Whenever any Plot, Building or Unit is owned jointly by two or
more persons, or whenever a usufruct, sub-usufruct or lease agreement is
executed jointly by two or more persons as lessee, then, in such events, all
such persons shall be jointly and severally liable for the payment of the
relevant Allocated Service Charges and the due performance of all other
obligations to the Project Company.
 
2.2.8           A Third Party shall be liable for all legal costs, including
lawyers’ fees, collection commissions, and other costs and expenses incurred by
the Project Company in (i) obtaining the recovery of any Allocated Service
Charge arrears or any other amount in arrears due to the Project Company from
such Third Party or (ii) enforcing compliance of such Third Party with this Code
of Practice.
 
2.2.9           The Project Company shall be entitled to charge administrative
costs, interest or other costs it incurs (“Late Payment Costs”) as a result of
the late payment by a Third Party of any Allocated Service Charge or portion
thereof or of any amount in arrears or portion thereof. Such Late Payment Costs
are recoverable and payable inclusively from the date on which any Allocated
Service Charge or portion thereof or on any arrears amount or portion thereof
became due and payable to the date of payment in full of the same by such Third
Party.
 
 
SC-21/5

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2.2.10           The Project Company may, in its sole discretion, direct in
writing that all or part of the Allocated Service Charge payable by a Third
Party be paid to another person rather than to the Project Company.
 
2.2.11           In the event that:
 
(a)
a Third Party fails to pay its Allocated Service Charge in full to the Project
Company on the due date (a “Default”); or

 
(b)
this Code of Practice is incorporated into the relevant Sales Agreement, lease
agreement or other agreement with the Project Company, and a Third Party is in
breach of the terms of this Code of Practice (a “Breach”) and, the Project
Company has given such Third Party sixty (60) Days notice in writing (a “Default
Notice”) calling upon such Third Party to remedy such Default or Breach and such
Third Party fails to cure such Breach or Default within sixty (60) Days after
the date of delivery to it of such Default Notice (either by hand delivery to
the address of the relevant Third Party or by deposit in the mail addressed to
such Third Party),

 
then pursuant to the terms and conditions of the relevant Sales Agreement, lease
agreement or other agreement with the Project Company, such Third Party will
have granted the Project Company the option (“Option”) to either:
 
 
(i)
purchase the relevant Plot, Building or Unit and any structures thereon from
such Third Party at the lesser of (x) the Open Market Value of such Plot,
Building or Unit (as determined by an independent expert appointed by the
Project Company), or (y) the purchase price (as defined in the relevant Sales
Agreement, minus any fees and expenses incurred by the Project Company in
exercising its Option, or

 
 
(ii)
immediately cancel and terminate any lease agreement, usufruct or sub-usufruct
agreement or other agreement between the Project Company and such Third Party in
accordance with its terms.

 
 
 
SC-21/6

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Schedule 22
 
Undertaking Letter Dated July 10 2014
 
The Director General of Planning, Follow up and
Information                                                                                                                                                                                                                                                                                                         
July 1, 2014
Ministry of Tourism
 

 
After Compliments:
 
UNDERTAKING
 
Omagine Co. LLC being the owner of Omagine Project (Integrated Tourism Complex)
acknowledge and undertake to Ministry of Tourism that within one year from the
date of approving the Development Agreement of the project which will be
prepared by the Ministry the Company will be committed to submit the following:
 
1.  
Submit the preliminary masterplan of project as per specification mentioned in
the Development Control Plan Framework for Tourism Development Projects of
Ministry of the year 2010 (DCPF).

 
2.  
Plan of work of the Project.

 
3.  
Study of social effects of the project on the local community and put suitable
solutions concern benefit of local community.

 
4.  
Preliminary environmental approval for the project from Ministry of Environment
as per the (DCPF).

 
5.  
Agree to build on the basis of the contractual minimum requirements for tourist
facilities.

 
6.  
Stage of project and schedule time for executing.

 
7.  
Plan of financing the project.

 
8.  
The company commitment to fulfill its obligation and build on the basis of the
contractual minimum requirements for tourism facilities.

 
Omagine Co. LLC further acknowledges and undertakes to Ministry of Tourism that
the Company will be committed to submit the following as per the schedule and
specification mentioned in the DCPF:
 
1.  
the final masterplan, and

 
2.  
the final Ministry of Environment approval for the project.

 
Based on the above the company acknowledge and undertake in case of failing to
fulfill with the terms declared above within the specified period and after
Ministry’s approval. Ministry have the right to cancel this agreement and the
consequent effects like cancel the agreement of right of benefit for the plot
with no right to the company any compensation due to result of cancellation of
the agreement from the Government of the Sultanate of Oman, provided that the
Ministry of Tourism only having the right to extend the agreement from her side
and request in writing.
 
Omagine LLC
 
By: /s/ Frank J. Drohan
 
Frank Drohan
Managing Director
 
 
SC-22 

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Schedule 23

PRINCIPLES OF ESCROW AGREEMENT

The Parties hereby agree as follows:

PRINCIPLES OF ESCROW AGREEMENTS
 

1.
As of the Execution Date there is no law in existence in Oman with respect to
the requirement for any person to establish an Escrow Account.

2.
If, subsequent to the Execution Date, a Law is enacted requiring the Project
Company to establish an Escrow Account for the protection of Third Parties in
connection with the purchase of Units, the Project Company shall then and only
then be obligated to comply with the obligations contained in Clause 6.10 and
shall also comply with the regulations issued by the Government with regard to
such Escrow Account and its relevant Escrow Agreement (“Regulations”). In such
an event the payments made to the Project Company by Third Parties pursuant to
Sales Agreements for the purchase of Units may be required to be deposited in
such Escrow Account and released to the Project Company in accordance with the
Escrow Agreement.

3.
Notwithstanding paragraph 2 of this Schedule 23 and Clause 6.10, the Parties
hereby agree that the Project Company shall at all times for the purposes of
financing the Works, Buildings and the Development of the Project be entitled to
the release of and payment to it, and the use of, any funds held in any
such  Escrow Account.

 
SC-23 

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 Schedule 24
 
Landmark Company; Commercial Terms
 
The Parties hereby agree as follows:
 
1.  
The Landmark Company

 
On a date subsequent to the Effective Date and no later than two years from the
Execution Date (the “LC Formation Date”), the Project Company shall organize the
Landmark Company as a wholly owned subsidiary of the Project Company (the
“Landmark Company”).
 
2.  
Landmark Assets

 
2.1  
Subsequent to the LC Formation Date and subject to paragraph 2.2 below and upon
the prior written consent of the Government, the Project Company shall transfer
to the Landmark Company the following assets (the Landmark Assets”) which are
identified in the Initial Master Plan and shown in Drawing 24A attached
herewith, and which consist of:

 
 
2.1.1
the MBO,

 
2.1.2  
the entire Boardwalk identified as item number 10 in Drawing 24A,

 
2.1.3  
the exhibition areas between and among the Pearls,

 
2.2  
No Freehold Title to Landmark Assets shall be transferred to the Landmark
Company. The rights transferred to the Landmark Company over the Landmark Assets
shall be transferred by way of usufruct only and upon the prior written consent
of the Government.

 
3.  
Obligations of the Landmark Company:

 
3.1  
At a date no later than two years from the Effective Date, the Landmark
Company  or the Project Company shall provide the Government for its consent the
following in writing:

 
3.1.1  
A Master Plan which will be delivered and Approved pursuant to the DCPF and
Clause 11 and Schedule 4 of this Development Agreement, for the development of
the Landmark Assets including the designs thereof, prepared to a level of detail
for each of the Landmark Assets satisfactory to the Government.

 
3.1.2  
A time schedule, which time schedule will be incorporated within the Time
Schedule for the entire Project provided in Schedule 7 and which shall be
delivered and Approved pursuant to the provisions of the DCPF and this
Development Agreement, for the development of each of the Landmark Assets
provided that such development shall progress concurrently with the development
of the MBO.

 
 
SC-24/1

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3.1.3  
Preliminary details of the facilities that each of the Pearls will include and
the final details of which shall be provided on a date no later than three years
from the Effective Date.

 
3.1.4  
Its representations on how the Landmark Assets will be operated, and

 
3.1.5  
The name(s) and corporate details of any proposed specialist tourism or
recreational operator for any of the Landmark Assets, and

 
3.1.6  
The Landmark Company’s estimated budget showing the projected sources of its
income and its projected expenses, and

 
3.1.7  
The service charges and fees that the users of the Landmark Assets will be
charged, and

 
3.1.8  
A confirmation of the Landmark Company’s continuing financial capacity.

 
3.2  
The Landmark Company shall:

 
3.2.1  
Maintain its Books and Records in accordance with the International Financial
Reporting Standards (“IFRS”), and

 
3.2.2  
Have its financial statements audited annually by an independent public
accounting firm licensed to practice in Oman (“Auditors”), and

 
3.2.3  
Until a date subsequent to the attainment by the Landmark Company of net
positive cash flow as determined in accordance with the IFRS for a twelve month
calendar period commencing on January 1:

 
a)  
Not pay any dividends to its shareholders, provided that such dividends are
payable after deducting the expenses, and

 
b)  
Retain ownership of the Landmark Assets and all other assets recorded in its
Books and Records, provided that disposing the ownership of the Landmark Assets
shall also be conditional upon the prior written consent of the Government which
shall not be unreasonably withheld.

 
 
SC-24/2

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4.  
The Project Company hereby undertakes that in case the income generated and
derived from the operation of the Landmark Assets was not sufficient then the
Project Company shall cover such ongoing operation expenses in a manner that
assures the continuous vibrancy of the Project.

 
5.  
For the avoidance of doubt, the Parties hereby agree that (i) each serviced
chalet associated with a hotel, and (ii) each serviced apartment, and (iii) each
hotel room, in the Project Area is hereby defined as a “hotel unit” as such term
is used in Ministerial Decision No. 98/2009.

 
6.  
Notwithstanding anything contained in Schedule 24, the Project Company shall
continue to be liable in respect of all its obligations and responsibilities
under the various provisions of the Development Agreement (including Schedules).

 

 
Drawing 24A
 
GRAPHIC [sc6a.jpg]

 
 
SC-24/3