Exhibit 10.4

 

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Sultanate of Oman

Ministry of Tourism

Muscat

 

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
        2015, 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 :  
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

 

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.

 

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  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.

  

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.

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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: /s/ H.E. Ahmed bin Nasser bin Hamed Al Mahrizi     His Excellency
Ahmed bin Nasser bin Hamed Al Mahrizi
Minister of Tourism Stamp: (Ministry of Tourism Stamp Affixed)

 

SIGNED for and on behalf of Omagine LLC:

 

Signature: /s/ Frank J. Drohan     Frank J. Drohan
Managing Director Stamp: (Omagine LLC Stamp Affixed)

 

SIGNED for and on behalf of THE MINISTRY OF

HOUSING OF THE SULTANATE OF OMAN:

 

Signature: /s/ Mohmood Khamis Al Khuzairi     Mohmood Khamis Al Khuzairi
Authorized Person, Ministry of Housing Stamp: (Ministry of Housing Stamp
Affixed)

 

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