Exhibit 10.1

 

 

NOTE PURCHASE AGREEMENT

 

THIS NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of May 20, 2015 (the
“Agreement Date”), by and between OMAGINE, INC., a corporation organized and
existing under the laws of the State of Delaware (the “Company”), and YA GLOBAL
MASTER SPV, LTD., a Cayman Islands exempt limited partnership (the “Investor”).

WITNESSETH

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company may issue and sell to the Investor, as provided
herein, and the Investor shall purchase a note substantially in the form
attached hereto as Exhibit A (the “Note”) in an aggregate principal amount of
$500,000;

WHEREAS, on April 22, 2014, the parties entered into a Standby Equity
Distribution Agreement (the “SEDA”); and

NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Investor hereby agree as
follows:

1.      PURCHASE AND SALE OF NOTE;

(a)                Purchase of Note. On the first business day following the
satisfaction of all of the conditions precedent set forth below (the “Closing
Date”), the Company shall sell, and the Investor shall purchase, a Note in the
principal amount of $500,000 on the terms and conditions and in reliance on the
Company’s representations and warranties, all as set forth herein. The Note
shall be in the form attached hereto as Exhibit A.

(b)               Form of Payment. Subject to the satisfaction of the terms and
conditions of this Agreement, on the Closing Date, (i) the Investor shall
deliver to the Company the principal amount of the Note to be issued and sold to
the Investor; provided, however, that the Investor shall deduct a commitment fee
in the amount of $50,000.00 from the proceeds of the Note (to be payable to YA
Global II SPV LLC as designee of the Investor) and any other deductions of
payments to be made on behalf of the Company as agreed upon between the parties
and set out on a signed closing statement (the “Closing Statement”), and (ii)
the Company shall deliver to the Investor, the Note duly executed on behalf of
the Company.

(c)                Conditions Precedent. The obligation of the Investor
hereunder to purchase the Note pursuant hereto is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for the Investor’s sole benefit and may be waived by
the Investor at any time in its sole discretion:

(i)                 There shall not have been any condition, circumstance, or
situation that has resulted in or would reasonably be expected to result in a
“Material Adverse Effect,” where “Material Adverse Effect” shall mean any
condition, circumstance, or situation that may result in, or reasonably be
expected to result in (1) a material adverse effect on the legality, validity or
enforceability of this Agreement or the transactions contemplated herein, (2) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company, taken as a whole, or (3) a
material adverse effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under this Agreement

(ii)               The Company’s common stock (“Common Stock”) shall be
authorized for quotation or trading on the NASDAQ Stock Market, the NYSE
Euronext, the New York Stock Exchange, or the OTCQX, OTCQB, or OTC Pink
marketplaces of the OTC Markets Group, whichever is at the time the principal
trading exchange or market for the Common Stock (the “Principal Market”) and
trading in the Common Stock shall not have been suspended for any reason;

 

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(iii)             The Company is not in material default nor aware of any
potential material default with any of its lenders, except as has been disclosed
in the Company’s filings with the United States Securities and Exchange
Commission (the “SEC”);

(iv)             The Company has received all necessary authorizations to sell
the Note to the Investor; and

(v)               The parties have signed a Closing Statement in an agreed upon
form.

(d)               In the event that the Closing Date has not occurred by June
15, 2015, the Investor may terminate this Agreement.

2.      INVESTOR’S REPRESENTATIONS AND WARRANTIES.

Investor hereby represents and warrants to the Company that the following are
true and correct as of the date hereof, and as of the Closing Date:

(a)                Organization and Authorization. The Investor is duly
organized, validly existing and in good standing under the laws of the Cayman
Islands and has all requisite power and authority to purchase and hold the Note.
The decision to invest and the execution and delivery of this Agreement by such
Investor, the performance by such Investor of its obligations hereunder and the
consummation by such Investor of the transactions contemplated hereby have been
duly authorized and requires no other proceedings on the part of the Investor.
The undersigned has the right, power and authority to execute and deliver this
Agreement and all other instruments on behalf of the Investor. This Agreement
has been duly executed and delivered by the Investor and, assuming the execution
and delivery hereof and acceptance thereof by the Company, will constitute the
legal, valid and binding obligations of the Investor, enforceable against the
Investor in accordance with its terms.

(b)               Evaluation of Risks. The Investor has such knowledge and
experience in financial, tax and business matters as to be capable of evaluating
the merits and risks of, and bearing the economic risks entailed by, an
investment in the Company and of protecting its interests in connection with
this transaction. It recognizes that its investment in the Company involves a
high degree of risk.

(c)                Investment Purpose. The Note is purchased by the Investor for
its own account, and for investment purposes. The Investor agrees not to assign
or in any way transfer the Investor’s rights to the Note or any interest therein
and acknowledges that the Company will not recognize any purported assignment or
transfer of the Note except in accordance with applicable Federal and state
securities laws. No other person has or will have a direct or indirect
beneficial interest in the Note. The Investor agrees not to sell, hypothecate or
otherwise transfer the Note unless the Note is registered under Federal and
applicable state securities laws or unless, in the opinion of counsel
satisfactory to the Company, an exemption from such laws is available.

(d)               Accredited Investor. The Investor is an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act
of 1933 (the “Securities Act”).

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(e)                Information. The Investor and its advisors (and its counsel),
if any, have been furnished with all materials relating to the business,
finances and operations of the Company and information it deemed material to
making an informed investment decision. The Investor and its advisors, if any,
have been afforded the opportunity to ask questions of the Company and its
management. Neither such inquiries nor any other due diligence investigations
conducted by such Investor or its advisors, if any, or its representatives shall
modify, amend or affect the Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement. The Investor
understands that its investment involves a high degree of risk. The Investor has
sought such accounting, legal and tax advice, as it has considered necessary to
make an informed investment decision with respect to this transaction.

(f)                No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Note offered hereby.

(g)               Not an Affiliate. The Investor is not an officer, director or
a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with the Company or any
“Affiliate” of the Company (as that term is defined in Rule 405 of the
Securities Act).

3.      COMPANY’S REPRESENTATIONS AND WARRANTIES. Except as stated below or in
the SEC Documents, the Company hereby represents and warrants to, the Investor
that the following are true and correct as of the date hereof, and as of the
Closing Date:

(a)                Organization and Qualification. The Company is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power to own its properties and to
carry on its business as now being conducted. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole. The Company
has furnished or made available to the Investor true and correct copies of the
Company’s Re-Stated Certificate of Incorporation as in effect on the date hereof
(the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on
the date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock and the material rights of the holders
thereof in respect thereto.

(b)               Authorization, Enforcement, Compliance with Other Instruments.
(i) The Company has the requisite corporate power and authority to enter into
and perform this Agreement and any related agreements, in accordance with the
terms hereof and thereof, (ii) the execution and delivery of this Agreement and
any related agreements by the Company and the consummation by it of the
transactions contemplated hereby and thereby, have been duly authorized by the
Company’s Board of Directors and no further consent or authorization is required
by the Company, its Board of Directors or its stockholders, (iii) this
Agreement, the Note (when issued) and any related agreements have been duly
executed and delivered by the Company, (iv) this Agreement, the Note (when
issued), and any related agreements, constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.

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(c)                No Conflict. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Certificate of
Incorporation, any certificate of designations of any outstanding series of
preferred stock of the Company or By-laws or (ii) conflict with or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Principal Market on which the Common Stock is quoted) applicable to the Company
or any of its subsidiaries or by which any material property or asset of the
Company or any of its subsidiaries is bound or affected and which would cause a
Material Adverse Effect. Except as disclosed in the SEC Documents, neither the
Company nor its subsidiaries is in violation of any term of or in default under
its Articles of Incorporation or By-laws or their organizational charter or
by-laws, respectively, or any material contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company or its subsidiaries. The business
of the Company and its subsidiaries is not being conducted in violation of any
material law, ordinance, regulation of any governmental entity. Except as
specifically contemplated by this Agreement and as required under the Securities
Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by this
Agreement in accordance with the terms hereof or thereof except as such consent,
authorization or order has been obtained prior to the date hereof. The Company
and its subsidiaries are unaware of any fact or circumstance which might give
rise to any of the foregoing.

(d)               SEC Documents; Financial Statements. The Common Stock is
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the
“Exchange Act”) and the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC under the
Exchange Act for the two years preceding the date hereof (or such shorter period
as the Company was required by law or regulation to file such material) (all of
the foregoing filed within the two years preceding the date hereof as amended
after the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein, being
hereinafter referred to as the “SEC Documents”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Document prior to the expiration of any such extension. The Company has
delivered to the Investor or its representatives, or made available through the
SEC’s website at http://www.sec.gov, true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Investor which is not included in the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstance under
which they are or were made, not misleading.

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(e)                No Default. Except as disclosed in the SEC Documents, the
Company is not in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other material instrument or agreement to which it is
a party or by which it or its property is bound and neither the execution, nor
the delivery by the Company, nor the performance by the Company of its
obligations under this Agreement or any of the exhibits or attachments hereto
will conflict with or result in the breach or violation of any of the terms or
provisions of, or constitute a default or result in the creation or imposition
of any lien or charge on any assets or properties of the Company under its
Certificate of Incorporation, By-Laws, any material indenture, mortgage, deed of
trust or other material agreement applicable to the Company or instrument to
which the Company is a party or by which it is bound, or any statute, or any
decree, judgment, order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or its properties, in each case
which default, lien or charge is likely to cause a Material Adverse Effect.

(f)                Internal Accounting Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

(g)               Absence of Litigation. Except as set forth in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending against or affecting the Company, the Common Stock or any of the
Company’s subsidiaries, wherein an unfavorable decision, ruling or finding would
have a Material Adverse Effect.

(h)               Subsidiaries. Except as disclosed in the SEC Documents, the
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, partnership, association or other business entity.

(i)                 Tax Status. Except as disclosed in the SEC Documents, the
Company and each of its subsidiaries has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company and each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

(j)                 Certain Transactions. Except as set forth in the SEC
Documents none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

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4.      INDEMNIFICATION. The parties agree that Article V of the SEDA shall
apply to this Agreement.

5.      GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflict of laws. Each of the parties consents to the jurisdiction
of the state courts of the State of New York and the U.S. District Court for the
District of New York sitting in Manhattan, for the adjudication of any civil
action asserted pursuant to this paragraph.

6.      NOTICES. Any notices, consents, waivers or other communications required
or permitted to be given under the terms hereof must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

If to the Company, to: Omagine, Inc.   Empire State Building  

350 Fifth Avenue, Suite 4815-17

New York, New York 10118

  Attention:  Chief Executive Officer   Telephone:  (212) 563-4141   Facsimile:
  (212) 563-3355     With a copy to: Sichenzia Ross Friedman Ference LLP   61
Broadway   New York, New York 10006   Attention:  Michael Ference   Telephone:
(212) 930-9700   Facsimile:  (212) 930-9725

 

If to the Holder: YA Global Master SPV, Ltd.   1012 Springfield Avenue  
Mountainside, NJ  07092   Attention: Mark Angelo   Telephone: (201) 985-8300    
With a copy to: David Gonzalez, Esq.   1012 Springfield Avenue   Mountainside,
NJ  07092   Telephone: (201) 985-8300   Email:  dgonzalez@yorkvilleadvisors.com
   

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three Business Days prior to the effectiveness of such change.
Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (iii)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

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7.      MISCELLANEOUS.

(a)                Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party.

(b)               Entire Agreement; Amendments. This Agreement supersedes all
other prior oral or written agreements between the Investor and the Company with
respect to the matters discussed herein, and this Agreement, and the instruments
referenced herein, contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.

 

[signature page follows]

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IN WITNESS WHEREOF, each of the Investor and the Company have caused their
respective signature page to this Note Purchase Agreement to be duly executed as
of the date first written above.

  COMPANY:           OMAGINE, INC.           By: /s/ Charles P. Kuczynski    
Charles P. Kuczynski     Vice-President & Secretary           INVESTOR:        
  YA GLOBAL MASTER SPV LTD.                 By: Yorkville Advisors Global LP    
Its: Investment Manager           By: Yorkville Advisors Global LLC     Its:
General Partner           By: /s/ Gerald Eicke     Name: Gerald Eicke     Title:
Managing Member        

 

 

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Exhibit A
Form of Note