Exhibit 10.42


 


CONVERTIBLE
PROMISSORY NOTE 


 


	November 14, 2016	U.S. $185,000.00


 


FOR VALUE RECEIVED, Omagine,
Inc., a Delaware corporation (“Borrower”), promises to pay to St.
George Investments LLC, a Utah limited liability company, or its successors or assigns (“Lender”), $185,000.00
and, if applicable, any interest, fees, charges, and late fees on the date that is six (6) months after the Purchase Price Date
(the “Maturity Date”). This Convertible Promissory Note (this “Note”) is issued and made
effective as of November 14, 2016 (the “Closing Date”). This Note is issued pursuant to that certain Note Purchase
Agreement dated November 14, 2016, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase
Agreement”). Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated
herein by this reference.


 


This Note carries an OID
of $30,000.00. In addition, Borrower agrees to pay $5,000.00 to Lender to cover Lender’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Note (the “Transaction
Expense Amount”), all of which Transaction Expense Amount is included in the initial principal balance of this Note.
The purchase price for this Note shall be $150,000.00 (the “Purchase Price”), computed as follows: $185,000.00
initial principal balance, less the OID, less the Transaction Expense Amount. The Purchase Price shall be payable by Lender by
wire transfer of immediately available funds.


 


1.            Prepayment;
Interest.


 


1.1.          Interest.
No interest shall accrue on the Outstanding Balance of this Note unless and until an Event of Default (as defined below) occurs.
Immediately following the occurrence of any Event of Default, interest shall automatically accrue on the Outstanding Balance beginning
on the date the applicable Event of Default occurred at an interest rate equal to the lesser of 22% per annum or the maximum rate
permitted under applicable law. Interest calculated hereunder shall be computed on the basis of a 360-day year comprised of twelve
(12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms of this Note.


 


1.2.         Prepayment.
Borrower may repay this Note in whole or in part at any time without penalty.


 


2.            Security.
This Note is unsecured.


 


3.            Conversion.


 


3.1.         Conversions.
Lender has the right at any time following an Event of Default, at its election, to convert (each instance of conversion is referred
to herein as a “Conversion”) all or any part of the Outstanding Balance into shares (“Conversion Shares”)
of fully paid and non-assessable common stock, $0.001 par value per share (“Common Stock”), of Borrower as per
the following conversion formula: the number of Conversion Shares in the relevant Conversion shall be equal to the amount of the
Outstanding Balance being converted in such Conversion (the “Conversion Amount”) divided by the Conversion Price
(as defined below). Conversion notices in the form attached hereto as Exhibit A (each, a “Conversion Notice”)
may be effectively delivered to Borrower by facsimile, email, mail, overnight courier, or personal delivery, and all Conversions
shall be cashless and not require further payment from Lender. Borrower shall deliver the Conversion Shares from any Conversion
to Lender in accordance with Section 8 below.


 






     

     


    

 


3.2.         Conversion
Price. Subject to the adjustments set forth herein, the conversion price (the “Conversion Price”) for each
Conversion shall be equal to 60% (the “Conversion Factor”) multiplied by the average of the three (3) lowest
daily VWAPs for the Common Stock during the twenty (20) Trading Days immediately preceding the applicable Conversion. Additionally,
if at any time after the occurrence of an Event of Default, Borrower is not DWAC Eligible, then the then-current Conversion Factor
will automatically be reduced by 5% for all future Conversions. If at any time after the occurrence of an Event of Default, the
Conversion Shares are not DTC Eligible, then the then-current Conversion Factor will automatically be reduced by an additional
5% for all future Conversions. Finally, in addition to the Default Effect, if any Major Default occurs concurrent with or after
the occurrence of an Event of Default (other than an Event of Default for failure to pay the Outstanding Balance on the Maturity
Date), the Conversion Factor shall automatically be reduced for all future Conversions by an additional 5% for each of the first
three (3) Major Defaults that occur after the occurrence of such Event of Default (for the avoidance of doubt, each occurrence
of any Major Default shall be deemed to be a separate occurrence for purposes of the foregoing reductions in Conversion Factor,
even if the same Major Default occurs three (3) separate times). For example, the first time Borrower is not DWAC Eligible, the
Conversion Factor for future Conversions thereafter will be reduced from 60% to 55% for purposes of this example. Following such
event, the first time the Conversion Shares are no longer DTC Eligible, the Conversion Factor for future Conversions thereafter
will be reduced from 55% to 50% for purposes of this example. If, thereafter, there are three (3) separate occurrences of a Major
Default pursuant to Section 4.1(a), then for purposes of this example the Conversion Factor would be reduced by 5% for the first
such occurrence, and so on for each of the second and third occurrences of such Major Default. For the avoidance of doubt and notwithstanding
anything to the contrary contained in this Note or in any of the Transaction Documents, the parties hereby agree that if any shares
of Common Stock cannot be electronically transferred via DWAC and DTC procedures solely because of the existence of a 144 Event
(as such term is defined in Attachment 1 – Definitions) with respect to such shares of Common Stock, then such Common Stock
relevant to such 144 Event shall not be deemed to be either (a) not DWAC Eligible, or (b) not DTC Eligible solely because of such
144 Event and, absent any other impediment to DWAC Eligibility or DTC Eligibility, such Common Stock shall at all times and in
all cases and respects be deemed to be DWAC Eligible and DTC Eligible.


 


4.           Defaults
and Remedies.


 


4.1.         Defaults.
The following are events of default under this Note (each, an “Event of Default”): (a) Borrower fails to pay
any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) Borrower fails to deliver any Conversion
Shares in accordance with the terms hereof; (c) a receiver, trustee or other similar official shall be appointed over Borrower
or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or
discharged within sixty (60) days; (d) Borrower becomes insolvent or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any; (e) Borrower makes a general assignment for the benefit of creditors;
(f) Borrower files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (g) an involuntary
bankruptcy proceeding is commenced or filed against Borrower and such proceeding shall remain uncontested for twenty (20) days
or shall not be dismissed or discharged within sixty (60) days; (h) Borrower defaults or otherwise fails to observe or perform
any covenant of Borrower as specifically set forth in Section 4 of the Purchase Agreement; (i) any representation or warranty made
by Borrower to Lender herein or in any Transaction Document in connection with the issuance of this Note is false or misleading
in any material respect when made; (j) the occurrence of a Fundamental Transaction without Lender’s prior written consent;
(k) Borrower fails to maintain the Transfer Agent Reserve as required under the Purchase Agreement or to add shares to the Transfer
Agent Reserve as required under the Purchase Agreement within three (3) Trading Days of Borrower’s receipt of a written notice
from Lender requesting an increase in the Transfer Agent Reserve; (l) Borrower effectuates a reverse split of its Common Stock
without twenty (20) Trading Days prior written notice to Lender; (m) any money judgment, writ or similar process is entered or
filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more than $100,000.00, and shall
remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender; (n) Borrower
fails to be DWAC Eligible; or (o) Borrower breaches any covenant or other term or condition contained in any Other Agreements.


 






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4.2.         Remedies.
At any time and from time to time after the occurrence of any Event of Default, Lender may accelerate this Note by written notice
to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding
the foregoing, at any time following the occurrence of any Event of Default, Lender may, at its option, elect to increase the Outstanding
Balance by applying the Default Effect (subject to the limitation set forth below) via written notice to Borrower without accelerating
the Outstanding Balance, in which event the Outstanding Balance shall be increased as of the date of the occurrence of the applicable
Event of Default pursuant to the Default Effect, but the Outstanding Balance shall not be immediately due and payable unless so
declared by Lender (for the avoidance of doubt, if Lender elects to apply the Default Effect pursuant to this sentence, it shall
reserve the right to declare the Outstanding Balance immediately due and payable at any time and no such election by Lender shall
be deemed to be a waiver of its right to declare the Outstanding Balance immediately due and payable as set forth herein unless
otherwise agreed to by Lender in writing). Notwithstanding the foregoing, upon the occurrence of any Event of Default described
in clauses (c), (d), (e), (f) or (g) of Section 4.1, the Outstanding Balance as of the date of acceleration shall become immediately
and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender. For the
avoidance of doubt, Lender may continue making Conversions at any time following an Event of Default until such time as the Outstanding
Balance is paid in full. Borrower further acknowledges and agrees that Lender may continue making Conversions following the entry
of any judgment or arbitration award in favor of Lender until such time that the entire judgment amount or arbitration award is
paid in full. Borrower agrees that any judgment or arbitration award will, by its terms, be made convertible into Common Stock.
Any Conversions made following a judgment or arbitration award shall be made pursuant to the following formula: the amount of the
judgment or arbitration award being converted divided by 80% of the lowest daily VWAP in the ten (10) Trading Days immediately
preceding the date of Conversion. In such event, Borrower and Lender agree that it is their expectation that any such judgment
amount or arbitration award that is converted will tack back to the Purchase Price Date for purposes of determining the holding
period under Rule 144. Borrower and Lender agree and stipulate that any judgment or arbitration award entered against Borrower
shall be reduced by $1,000.00 and such $1,000.00 shall become the new Outstanding Balance of this Note and this Note shall expressly
survive such judgment or arbitration award. Additionally, following the occurrence of any Event of Default, Borrower may, at its
option, pay any Conversion in cash instead of Conversion Shares by paying to Lender on or before the applicable Delivery Date (as
defined below) a cash amount equal to the number of Conversion Shares set forth in the applicable Conversion Notice multiplied
by the highest daily VWAP of the Common Stock that occurs during the period beginning on the date the applicable Event of Default
occurred and ending on the date of the applicable Conversion Notice. In connection with acceleration described herein, Lender need
not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender may immediately
and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available
to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and
Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment pursuant to this
Section 4.2. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
Nothing herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver
Conversion Shares upon Conversion of the Notes as required pursuant to the terms hereof.


 






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5.           Unconditional
Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation
of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has
or may have hereafter against Lender, its successors and assigns, and agrees to make the payments or Conversions called for herein
in accordance with the terms of this Note.


 


6.          Waiver.
No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the
waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent
to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.


 


7.           Effect
of Certain Events.


 


7.1.         Adjustment
Due to Distribution. If Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to
holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution
to Borrower’s stockholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off))
(a “Distribution”), then Lender shall be entitled, upon any conversion of this Note after the date of record
for determining stockholders entitled to such Distribution, to receive the amount of such assets which would have been payable
to Lender with respect to the shares of Common Stock issuable upon such conversion had Lender been the holder of such shares of
Common Stock on the record date for the determination of stockholders entitled to such Distribution.


 


7.2.         Adjustments
for Stock Split. Notwithstanding anything herein to the contrary, any references to share numbers or share prices shall be
appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction.


 


8.           Method
of Conversion Share Delivery. On or before the close of business on the fifth (5th) Trading Day following the date
of delivery of a Conversion Notice (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such
time, deliver or cause its transfer agent to deliver the applicable Conversion Shares electronically via DWAC to the account designated
by Lender in the applicable Conversion Notice. If Borrower is not DWAC Eligible, it shall deliver to Lender or its broker (as designated
in the Conversion Notice), via reputable overnight courier, a certificate representing the number of shares of Common Stock equal
to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its designee. For the
avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless Lender or its
broker, as applicable, has actually received the certificate representing the applicable Conversion Shares no later than the close
of business on the relevant Delivery Date pursuant to the terms set forth above. Moreover, and notwithstanding anything to the
contrary herein or in any other Transaction Document, in the event Borrower or its transfer agent refuses to deliver any Conversion
Shares to Lender on grounds that such issuance is in violation of Rule 144 under the Securities Act of 1933, as amended (“Rule
144”), Borrower shall deliver or cause its transfer agent to deliver the applicable Conversion Shares to Lender with
a restricted securities legend, but otherwise in accordance with the provisions of this Section 8. In conjunction therewith, Borrower
will also deliver to Lender a written opinion from its counsel or its transfer agent’s counsel opining as to why the issuance
of the applicable Conversion Shares violates Rule 144.


 






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9.           Conversion
Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section 8, Lender, at any
time prior to selling all of those Conversion Shares, may rescind in whole or in part that particular Conversion attributable to
the unsold Conversion Shares, with a corresponding increase to the Outstanding Balance (the parties’ expectation being that
any returned amount will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144). In
addition, for each Conversion, in the event that Conversion Shares are not delivered by the sixth Trading Day (inclusive of the
day of the Conversion), a late fee equal to the greater of (a) $500.00 and (b) 2% of the applicable Conversion Share Value rounded
to the nearest multiple of $100.00 (but in any event the cumulative amount of such late fees for each Conversion shall not exceed
200% of the applicable Conversion Share Value) will be assessed for each day after the fifth Trading Day (inclusive of the day
of the Conversion) until Conversion Share delivery is made; and such late fee will be added to the Outstanding Balance (such fees,
the “Conversion Delay Late Fees”). For illustration purposes only, if Lender delivers a Conversion Notice to
Borrower pursuant to which Borrower is required to deliver 100,000 Conversion Shares to Lender and on the Delivery Date such Conversion
Shares have a Conversion Share Value of $20,000.00, then in such event a Conversion Delay Late Fee in the amount of $500.00 per
day (the greater of $500.00 per day and $20,000.00 multiplied by 2%, which is $400.00) would be added to the Outstanding Balance
of the Note until such Conversion Shares are delivered to Lender. For purposes of this example, if the Conversion Shares are delivered
to Lender twenty (20) days after the applicable Delivery Date, the total Conversion Delay Late Fees that would be added to the
Outstanding Balance would be $10,000.00 (20 days multiplied by $500.00 per day). If the Conversion Shares are delivered to Lender
one hundred (100) days after the applicable Delivery Date, the total Conversion Delay Late Fees that would be added to the Outstanding
Balance would be $40,000.00 (100 days multiplied by $500.00 per day, but capped at 200% of the Conversion Share Value).


 


10.          Ownership
Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, if at any time
Lender shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would cause Lender
(together with its affiliates) to beneficially own a number of shares exceeding 4.99% of the number of shares of Common Stock outstanding
on such date (including for such purpose the shares of Common Stock issuable upon such issuance) (the “Maximum Percentage”),
then Borrower must not issue to Lender shares of Common Stock which would exceed the Maximum Percentage. For purposes of this section,
beneficial ownership of Common Stock will be determined pursuant to Section 13(d) of the 1934 Act. The shares of Common Stock issuable
to Lender that would cause the Maximum Percentage to be exceeded are referred to herein as the “Ownership Limitation Shares”.
Borrower will reserve the Ownership Limitation Shares for the exclusive benefit of Lender. From time to time, Lender may notify
Borrower in writing of the number of the Ownership Limitation Shares that may be issued to Lender without causing Lender to exceed
the Maximum Percentage. Upon receipt of such notice, Borrower shall be unconditionally obligated to immediately issue such designated
shares to Lender, with a corresponding reduction in the number of the Ownership Limitation Shares. Notwithstanding the forgoing,
the term “4.99%” above shall be replaced with “9.99%” at such time as the Market Capitalization is less
than $10,000,000.00. Notwithstanding any other provision contained herein, if the term “4.99%” is replaced with “9.99%”
pursuant to the preceding sentence, such increase to “9.99%” shall remain at 9.99% until increased, decreased or waived
by Lender as set forth below. By written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to
itself but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement
is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.


 






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11.          Payment
of Collection Costs. If this Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration
or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Lender otherwise takes action
to collect amounts due under this Note or to enforce the provisions of this Note, then Borrower shall pay the costs incurred by
Lender for such collection, enforcement or action including, without limitation, attorneys’ fees and disbursements. Borrower
also agrees to pay for any costs, fees or charges of its transfer agent that are charged to Lender pursuant to any Conversion or
issuance of shares pursuant to this Note.


 


12.          Opinion
of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to
have any such opinion provided by its counsel. Lender also has the right to have any such opinion provided by Borrower’s
counsel.


 


13.         Governing
Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement
to determine the proper venue for any disputes are incorporated herein by this reference.


 


14.          Resolution
of Disputes.


 


14.1.       Arbitration
of Disputes. By its acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in the
Purchase Agreement) set forth as an exhibit to the Purchase Agreement.


 


14.2.       Calculation
Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any Calculation (as defined in the Purchase
Agreement), such dispute will be resolved in the manner set forth in the Purchase Agreement.


 


15.         Cancellation.
After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be
deemed canceled, and shall not be reissued.


 


16.         Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Note.


 


17.         Assignments.
Borrower may not assign this Note without the prior written consent of Lender. This Note and any shares of Common Stock issued
upon conversion of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower.


 


18.         Time
is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Note and the documents
and instruments entered into in connection herewith.


 


19.         Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.”


 


20.         Liquidated
Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note,
Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’
inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly,
Lender and Borrower agree that any fees, balance adjustments, or other charges assessed under this Note are not penalties but instead
are intended by the parties to be, and shall be deemed, liquidated damages (under Lender’s and Borrower’s expectations
that any such liquidated damages will tack back to the Purchase Price Date for purposes of determining the holding period under
Rule 144).


 






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21.         Waiver
of Jury Trial. EACH OF LENDER AND BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED
BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE,
LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.


 


22.         Voluntary
Agreement. Borrower has carefully read this Note and has asked any questions needed for Borrower to understand the terms, consequences
and binding effect of this Note and fully understand them. Borrower has had the opportunity to seek the advice of an attorney of
Borrower’s choosing, or has waived the right to do so, and is executing this Note voluntarily and without any duress or undue
influence by Lender or anyone else.


 


23.         Severability.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower
and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.


 


24.         Par
Value Adjustments. If at any time Lender delivers a Conversion Notice to Borrower and as of such date the Conversion Price
would be less than the Par Value, then, as liquidated damages, Company must pay to Lender the Par Value Adjustment Amount in cash
within one (1) Trading Day of delivery of the applicable Conversion Notice (a “Par Value Adjustment”). If Borrower
does not deliver the Par Value Adjustment Amount as required, then such amount shall automatically be added to the Outstanding
Balance. The number of Conversion Shares deliverable pursuant to any relevant Conversion Notice following a Par Value Adjustment
shall be equal to (a) the Conversion Amount, divided by (b) the Par Value. In the event of a Par Value Adjustment, Lender will
use a Conversion Notice in substantially the form attached hereto as Exhibit B.


 


[Remainder of page intentionally left blank;
signature page follows]


 




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IN WITNESS WHEREOF, Borrower
has caused this Note to be duly executed as of the Closing Date.


 


	 	BORROWER:
	 	 
	 	Omagine, Inc.
	 	 	 
	 	By:	/s/ Frank J. Drohan
	 	Name:	Frank J. Drohan
	 	Title:	President - CEO


 


ACKNOWLEDGED, ACCEPTED AND AGREED:


 


LENDER:


 


St.
George Investments LLC


 


	By:	Fife Trading, Inc., Manager	 
	 	 	 	 
	 	By:	/s/ John M. Fife	 
	 	 	John M. Fife, President	 


 


[Signature Page to Convertible
Promissory Note]


  




     

     


    


 


ATTACHMENT 1


DEFINITIONS


 


For purposes of
this Note, the following terms shall have the following meanings:


 


A1.        “Bloomberg”
means Bloomberg L.P. (or if that service is not then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by Lender and reasonably satisfactory to Borrower).


 


A2.        “Conversion
Share Value” means the product of the number of Conversion Shares deliverable pursuant to any Conversion multiplied by
the daily VWAP of the Common Stock on the Delivery Date for such Conversion.


 


A3.        “Default
Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred by (a) 15%
for each occurrence of any Major Default, or (b) 5% for each occurrence of any Minor Default, and then adding the resulting product
to the Outstanding Balance as of the date the applicable Event of Default occurred, with the sum of the foregoing then becoming
the Outstanding Balance under this Note as of the date the applicable Event of Default occurred; provided that the Default Effect
may only be applied three (3) times hereunder with respect to Major Defaults and three (3) times hereunder with respect to Minor
Defaults; and provided further that the Default Effect shall not apply to any Event of Default pursuant to Section 4.1(b) hereof.


 


A4.        “DTC”
means the Depository Trust Company or any successor thereto.


 


A5.        “DTC Eligible”
means, with respect to the Common Stock, that such Common Stock is eligible to be deposited in certificate form at the DTC, cleared
and converted into electronic shares by the DTC and held in the name of the clearing firm servicing Lender’s brokerage firm
for the benefit of Lender and the parties hereby agree that if such Common Stock cannot be so deposited, cleared, converted and
held solely because of the necessity pursuant to Rule 144 under the Securities Act of 1933, as amended, for a restrictive legend
to appear on any stock certificate representing shares of the Common Stock and therefore such Common Stock must be delivered in
certificate form (a “144 Event”), then such Common Stock relevant to such 144 Event shall not be deemed to be
not DTC Eligible solely because of such 144 Event and, absent any other impediment to DTC Eligibility, such Common Stock shall
at all times and in all cases and respects be deemed to be DTC Eligible.


 


A6.        “DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer program.


 


A7.        “DWAC”
means the DTC’s Deposit/Withdrawal at Custodian system.


 


A8.        “DWAC Eligible”
means that (a) Borrower’s Common Stock is eligible at DTC for full services pursuant to DTC’s operational arrangements,
including without limitation transfer through DTC’s DWAC system, (b) Borrower has been approved (without revocation) by DTC’s
underwriting department, (c) Borrower’s transfer agent is approved as an agent in the DTC/FAST Program, (d) the Conversion
Shares are otherwise eligible for delivery via DWAC; (e) Borrower has previously delivered all Conversion Shares to Lender via
DWAC; and (f) Borrower’s transfer agent does not have a policy prohibiting or limiting delivery of the Conversion Shares
via DWAC (the foregoing a, b, c, d, e and f being the “DWAC Conditions”). Notwithstanding the foregoing sentence,
the parties hereby agree that if any shares of Common Stock cannot comport with or meet the DWAC Conditions solely because of a
144 Event with respect to such shares, then such Common Stock relevant to such 144 Event shall not be deemed to be not DWAC Eligible
solely because of such 144 Event and, absent any other impediment to DWAC Eligibility, such Common Stock shall at all times and
in all cases and respects be deemed to be DWAC Eligible.


 


Attachment 1 to Convertible Promissory Note, Page 1


 






     

     


    

 


A9.        “Fundamental
Transaction” means that (a) (i) Borrower or any of its subsidiaries other than Omagine LLC shall, directly or indirectly,
in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the
surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries other than Omagine LLC shall,
directly or indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose
of all or substantially all of its respective properties or assets to any other person or entity, or (iii) Borrower or any
of its subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make
a purchase, tender or exchange offer, other than a purchase, tender or exchange offer with respect to Omagine LLC, that is accepted
by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock
of Borrower held by the person or persons making or party to, or associated or affiliated with the persons or entities making or
party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly,
in one or more related transactions, consummate a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or entity whereby such
other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of
voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with the other persons
or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Borrower or
any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify
the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or (b) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations
promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.


 


A10.      “Major
Default” means any Event of Default occurring under Sections 4.1(a), 4.1(h) or 4.1(k) of this Note.


 


A11.      “Mandatory
Default Amount” means the greater of (a) the Outstanding Balance divided by the Conversion Price on the date the Mandatory
Default Amount is demanded, multiplied by the VWAP on the date the Mandatory Default Amount is demanded, or (b) the Outstanding
Balance following the application of the Default Effect.


 


A12.      “Market
Capitalization” means a number equal to (a) the average VWAP of the Common Stock for the immediately preceding fifteen
(15) Trading Days, multiplied by (b) the aggregate number of outstanding shares of Common Stock as reported on Borrower’s
most recently filed Form 10-Q or Form 10-K.


 


A13.      “Minor
Default” means any Event of Default that is not a Major Default.


 


A14.      “OID”
means an original issue discount.


 


A15.      “Other
Agreements” means, collectively, all existing and future agreements and instruments between, among or by Borrower (or
an affiliate) and Lender (or an affiliate).


 


A16.      “Outstanding
Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant
to the terms hereof for payment, Conversion, offset, or otherwise, plus the Transaction Expense Amount, accrued but unpaid interest,
collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes
and fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees) incurred
under this Note.


 


A17.      “Par Value”
means the par value of the Common Stock on any relevant date of determination. The Par Value as of the Closing Date is $0.001.


 


A18.      “Par Value
Adjustment Amount” means an amount calculated as follows: (a) the number of Conversion Shares deliverable under a particular
Conversion Notice (prior to any Par Value Adjustment) multiplied by the Par Value, less (b) the Conversion Amount (prior to any
Par Value Adjustment), plus (c) $500.00. For illustration purposes only, if for a given Conversion, the Conversion Amount was $20,000.00,
the Conversion Price was $0.0008 and the Par Value was $0.001 then the Par Value Adjustment Amount would be $5,500.00 (25,000,000
Conversion Shares ($20,000.00/$0.0008) multiplied by the Par Value of $0.001 ($25,000.00) minus the Conversion Amount of $20,000.00
plus $500.00 equals $5,500.00).


 


A19.      “Purchase
Price Date” means the date the Purchase Price is received by Borrower from Lender.


 


A20.      “Trading
Day” means any day on which the New York Stock Exchange is open for trading.


 


A21.      “VWAP”
means the volume weighted average price of the Common stock on the principal market for a particular Trading Day or set of Trading
Days, as the case may be, as reported by Bloomberg.


 


Attachment 1 to Convertible Promissory Note, Page 2


 




     

     


    


 


EXHIBIT A


 


St. George Investments LLC


303 East Wacker Drive, Suite 1040


Chicago, Illinois 60601


 


	Omagine, Inc.	Date: __________________


Attn: Frank J. Drohan, CEO


136 Madison Avenue, 5th Floor


New York, New York 10016


 


CONVERSION NOTICE


 


The above-captioned Lender
hereby gives notice to Omagine, Inc., a Delaware corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on November 14, 2016 (the “Note”), that Lender elects to
convert the portion of the Outstanding Balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower
as of the date of Conversion specified below. Said Conversion shall be based on the Conversion Price set forth below. In the event
of a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender
in its sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.


 


		A.	Date of Conversion: ____________



		B.	Conversion #: ____________



		C.	Conversion Amount: ____________



		D.	Conversion Price: _______________



		E.	Conversion Shares: _______________ (C divided by D)



		F.	Remaining Outstanding Balance of Note: ____________*



 


* Subject to adjustments for corrections, defaults,
interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which
shall control in the event of any dispute between the terms of this Conversion Notice and such Transaction Documents.


 


Please transfer the Conversion Shares
electronically (via DWAC) to the following account:


 


	Broker:	 	 	Address:	 
	DTC#:	 	 	 	 
	Account #:	 	 	 	 
	Account Name:	 	 	 	 


 


To the extent the Conversion
Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender
via reputable overnight courier after receipt of this Conversion Notice (by facsimile transmission or otherwise) to:


_____________________________________


_____________________________________


_____________________________________


 


Exhibit A to Convertible Promissory Note, Page
1


 




     

     


    


 


 Sincerely,


 


Lender:


 


St.
George Investments LLC


 


	By:	Fife Trading, Inc., Manager	 
	 	 	 	 
	 	By:	 	 
	 	 	John M. Fife, President	 


 


 


Exhibit A to Convertible Promissory Note, Page
2


 




     

     


    


 


EXHIBIT B


 


St. George Investments LLC


303 East Wacker Drive, Suite 1040


Chicago, Illinois 60601


 


	Omagine, Inc.	Date: __________________


Attn: Frank J. Drohan, CEO


136 Madison Avenue, 5th Floor


New York, New York 10016


 


CONVERSION NOTICE


 


The above-captioned Lender
hereby gives notice to Omagine, Inc., a Delaware corporation (the “Borrower”), pursuant to that certain Convertible
Promissory Note made by Borrower in favor of Lender on November 14, 2016 (the “Note”), that Lender elects to
convert the portion of the Outstanding Balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower
as of the date of Conversion specified below. Said Conversion shall be based on the Conversion Price set forth below. In the event
of a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender
in its sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.


 


		A.	Date of Conversion: ____________



		B.	Conversion #: ____________



		C.	Conversion Amount: ____________



		D.	Par Value Adjustment Amount: _______________



		E.	Conversion Price: _______________ (Par Value)



		F.	Conversion Shares: _______________ (C divided by E)



		G.	Remaining Outstanding Balance of Note: ____________*



 


* Subject to adjustments for corrections, defaults,
interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which
shall control in the event of any dispute between the terms of this Conversion Notice and such Transaction Documents.


 


Please transfer the Conversion Shares
electronically (via DWAC) to the following account:


 





	Broker:	 	 	Address:	 
	DTC#:	 	 	 	 
	Account #:	 	 	 	 
	Account Name:	 	 	 	 


 


To the extent the Conversion Shares are not
able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender via reputable
overnight courier after receipt of this Conversion Notice (by facsimile transmission or otherwise) to:


 


_____________________________________


_____________________________________


_____________________________________


 


The Par Value Adjustment Amount must be paid
in cash within one (1) Trading Day of your receipt of this Conversion Notice.


 


Exhibit B to Convertible Promissory Note, Page 1


 






     

     


    

 


Sincerely,


 


Lender:


 


St.
George Investments LLC


 


	By:	Fife Trading, Inc., Manager	 
	 	 	 	 
	 	By:	 	 
	 	 	John M. Fife, President	 


 


Exhibit B to Convertible
Promissory Note, Page 2