Exhibit 10.1


 


THIS
NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT”)


 


US
$57,500.00 


 


OMAGINE,
INC.


12%
CONVERTIBLE REDEEMABLE NOTE


DUE
DECEMBER 29, 2018





 


FOR
VALUE RECEIVED, Omagine, Inc. (the “Company”) promises to pay to the order of ADAR BAYS, LLC and its authorized successors
and permitted assigns (“Holder”), the aggregate principal face amount of Fifty Seven Thousand Five Hundred Dollars
(U.S. $57,500.00) on December 29, 2018 (“Maturity Date”) and to pay interest on the principal amount outstanding
hereunder at the rate of 12% per annum commencing on December 29, 2017 (the “Issuance Date”). The interest will be
paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of
this Note. The principal of, and interest on, this Note are payable at 3411 Indian Creek Drive, Suite 403, Miami Beach, FL 33140,
initially, and if changed, at the address last appearing on the records of the Company as designated in writing by the Holder
hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or
on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire
transfer addressed to such Holder at the last address for such Holder appearing on the records of the Company. The forwarding
of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the
liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest may, at the
Holder’s option, be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.


 


This
Note is subject to the following additional provisions:


 


1. This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration on the Company’s records or transfer
or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith.


 






     


     


    




 


2. The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.


 


3. This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”) and
applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior
to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company’s records as the owner hereof for all other purposes, whether or not this Note be overdue,
and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing
to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being
converted (“Notice of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including
receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.


 


4.(a)The
Holder of this Note is entitled, at its option, at any time after 180 Days after the Issuance Date, to give a “Notice of
Conversion” to the Company and to convert all or any amount of the principal face amount of this Note then outstanding plus
accrued but unpaid interest thereon into shares (the “Conversion Shares”) of the Company’s common stock (the “Common
Stock”) at a price (“Conversion Price”) for each Conversion Share equal to 50% of the lowest
trading price of the Common Stock as reported on the National Quotations Bureau OTC Market Exchange which the Company’s
shares are traded or any exchange upon which the Common Stock may be traded in the future (“Exchange”), for the
twenty trading day period prior to and including the day (the “Notice Date”) upon which a Notice
of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other
electronic method of communication to the Company or its transfer agent after 4 P.M. and before 12 P.M. Eastern Standard or Daylight
Savings Time on the Notice Date if the Holder wishes to include the trading prices on such Notice Date). If the Conversion Shares
have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated
by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice
of Conversion. Accrued but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions
of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share.
To the extent the Conversion Price of the Company’s Common Stock closes below the par value per share, the Company will
take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under
law. The Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a DTC
“Chill” on its shares, the Conversion Price shall be decreased to 40% instead of 50% while that “Chill”
is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares
of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 9.9% of the outstanding shares of the
Common Stock of the Company. All the terms set forth herein, including but not limited to interest rate, prepayment terms, conversion
discount or lookback period will be adjusted downward (i.e. for the benefit of the Holder) if the Company offers a more favorable
conversion discount (whether via interest, rate OID or otherwise) or lookback period to another party or otherwise grants any
more favorable terms to any third party than those contained herein while this Note is in effect.


 






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(b) Interest
on any unpaid principal balance of this Note shall be paid at the rate of 12% per annum. Interest may, at the Holder’s option,
be paid by the Company in Common Stock (“Interest Shares”). Holder may, at any time, send in a Notice of Conversion
to the Company for Interest Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest
Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of
such notice.


 


(c) The
Note may be prepaid in cash as follows: (i) if the Note is prepaid within 90 days of the Issuance Date, then at 130% of the face
amount plus any accrued interest; (ii) if the Note is prepaid after 90 days after the Issuance Date but less than 180 days after
the Issuance Date, then at 150% of the face amount plus any accrued interest. This Note may not be prepaid after 180 days after
the Issuance Date. Such redemption must be closed and funded within 3 days of giving notice of redemption or the right to redeem
shall be null and void.


 


(d)
 Upon (i) a transfer of all or substantially all of the assets of the Company to any
person in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization or other change
or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or (iii)
any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and
(iii) being referred to as a “Sale Event”), then, in each case, the Company shall, upon request of the Holder, redeem
this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the
election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued
but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.


 


(e)
 In case of any Sale Event (not to include a sale of all or substantially all of the
Company’s assets) in connection with which this Note is not redeemed or converted, the Company shall cause effective provision
to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this
Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could
have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to
such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the
holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor
person or entity acting in good faith.


 


5. No
provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.


 






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6. The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice
of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for
hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.


 


7. The
Company agrees to pay all costs and expenses, including reasonable attorneys’ fees and expenses, which may be incurred by the
Holder in collecting any amount due under this Note.


 


8. If
one or more of the following described “Events of Default” shall occur:


 


(a) The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or


 


(b) Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or
the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or


 


(c) The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder; or


 


(d) The
Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an
assignment for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment
of a trustee, liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy
relief, consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under
federal or state laws as applicable; or


 


(e) A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or


 


(f) Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of the Company; or


 


(g) One
or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in
the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or


 






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(h) The
Company shall have defaulted on or breached any term of any other note of similar debt instrument into which the Company has entered
and failed to cure such default within the appropriate grace period; or


 


(i) The
Company shall have its Common Stock delisted from an exchange (including the OTC Market exchange) or, if the Common Stock trades
on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;


 


(j) If
a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the
Board;


 


(k) The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion; or


 


(l)
 The Company shall not replenish the reserve set forth in Section 12, within 3 business
days of the request of the Holder.


 


(m) The
Company shall not be “current” in its filings with the Securities and Exchange Commission; or


 


(n)
 The Company shall lose the “bid” price for its stock in a market (including
the OTC marketplace or other exchange).


 


Then,
or at any time thereafter, unless cured within 5 days, and in each and every such case, unless such Event of Default shall have
been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option
of the Holder and in the Holder’s sole discretion, the Holder may consider this Note immediately due and payable, without presentment,
demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately,
and without expiration of any period of grace, enforce any and all of the Holder’s rights and remedies provided herein or any
other rights or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per
annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In
the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th
day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10th
day. The penalty for a breach of Section 8(n) shall be an increase of the outstanding principal amounts by 20%. In case
of a breach of Section 8(i), the outstanding principal due under this Note shall increase by 50%. If this Note is not paid at
maturity, the outstanding principal due under this Note shall increase by 10%. Further, if a breach of Section 8(m) occurs or
is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price
during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency
period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per
share.


 






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If
the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging
an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 


Make-Whole
for Failure to Deliver Loss. At the Holder’s election, if the Company fails for any reason to deliver to the Holder the
Conversion Shares by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs
a Failure to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to
the Holder in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows:


 


Failure
to Deliver Loss = [(Highest VWAP price for the 30 trading days on or after the day of exercise) x (Number of conversion shares)]


 


The
Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day
from the time of the Holder’s written notice to the Company.


 


9. In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired
thereby.


 


10. Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.


 


11. The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144 opinion
to allow for salability of the Conversion Shares or (ii) accept such opinion from Holder’s counsel.


 


12. The
Company shall issue irrevocable transfer agent instructions reserving 2,967,000 shares of its Common Stock for conversions under
this Note (the “Share Reserve”). Upon full payment or conversion of this Note, the Share Reserve shall be cancelled.
The Company shall pay all costs associated with issuing and delivering the Conversion Shares. If such amounts are to be paid by
the Holder, it may deduct such amounts from the Conversion Price. The Company should at all times reserve a minimum of four times
the amount of shares required if the Note would be fully converted.  The Holder may reasonably request increases from time
to time to reserve such amounts. The Company will instruct its transfer agent to provide the outstanding share information to
the Holder in connection with its conversions.


 


13. The
Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits,
recapitalizations etc. This notice shall be given to the Holder as soon as possible under law.


  


14. If
it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest
permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim
or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal or interest
on this Note.


 


15. This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be
performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and
the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of
New York or in the Federal courts sitting in the county or city of New York. This Agreement may be executed in counterparts, and
the facsimile or electronic mail transmission of an executed counterpart to this Agreement shall be effective as an original.



 






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IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.





 


Dated:
December 29, 2017


 





	 	OMAGINE, INC.
	 	 
	 	By:	/s/  Frank J. Drohan
	 	 	Frank J. Drohan
	 	 	President & CEO




 







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EXHIBIT A


  


NOTICE OF CONVERSION


 


(To be Executed by the Registered Holder
in order to Convert the Note)


 


The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Omagine, Inc. (“Shares”)
according to the conditions set forth in such Note, as of the date written below.


 


If Shares are to be issued
in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with
respect thereto.


 


Date of Conversion:                                                                                                             


Applicable Conversion Price:                                                                                            


Signature:                                                                                                                               


[Print Name of Holder and Title of Signer]


 


Address:                                                                                                                                  


 


                                                                                                                                              


SSN or EIN:                                                                                                                             
                       


Shares are to be registered in the following name:                                                                                               


 


Name:                                                                                                                                      


Address:                                                                                                                                 


Tel:                                                                                                                                           



Fax:                                                                                                                                          


SSN or EIN:                                                                                                                        



 


Shares are to be sent or delivered to the following account:


 


Account Name:                                                                                         
                                                     



Address:                                                                                                      
                                                     






 




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