Document:

Exhibit 4.2

 

	
 
    

THE ALLSTATE CORPORATION

 

to

 

U.S. BANK NATIONAL ASSOCIATION,
 as Trustee

 

TWENTIETH SUPPLEMENTAL INDENTURE TO
 INDENTURE DATED DECEMBER 16, 1997
 (SENIOR DEBT SECURITIES)

 

Dated as of December 8, 2016

 

4.200% SENIOR NOTES DUE 2046

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE I
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 1.01.
    	
Relation to   Indenture
    	
- 2 -
    
	
SECTION 1.02.
    	
Definitions
    	
- 2 -
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 2.01.
    	
Title of the   Securities
    	
- 3 -
    
	
SECTION 2.02.
    	
Limitation on   Aggregate Principal Amount
    	
- 3 -
    
	
SECTION 2.03.
    	
Principal   Payment Date
    	
- 3 -
    
	
SECTION 2.04.
    	
Interest and   Interest Rates
    	
- 3 -
    
	
SECTION 2.05.
    	
Place of Payment
    	
- 4 -
    
	
SECTION 2.06.
    	
Redemption
    	
- 4 -
    
	
SECTION 2.07.
    	
Denomination
    	
- 6 -
    
	
SECTION 2.08.
    	
Currency
    	
- 6 -
    
	
SECTION 2.09.
    	
Form of   Securities
    	
- 6 -
    
	
SECTION 2.10.
    	
Securities   Registrar and Paying Agent
    	
- 6 -
    
	
SECTION 2.11.
    	
Sinking Fund   Obligations
    	
- 6 -
    
	
SECTION 2.12.
    	
Defeasance and   Covenant Defeasance
    	
- 6 -
    
	
SECTION 2.13.
    	
Immediately   Available Funds
    	
- 6 -
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 3.01.
    	
Payment of   Expenses
    	
- 6 -
    
	
SECTION 3.02.
    	
Payment Upon   Resignation or Removal
    	
- 7 -
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 4.01.
    	
Trustee Not   Responsible for Recitals
    	
- 7 -
    
	
SECTION 4.02.
    	
Adoption,   Ratification and Confirmation
    	
- 7 -
    
	
SECTION 4.03.
    	
Counterparts
    	
- 7 -
    
	
SECTION 4.04.
    	
Governing Law
    	
- 7 -
    

 

i

 

Twentieth Supplemental Indenture, dated as of December 8, 2016, between The Allstate Corporation, a Delaware corporation (the “Company”), and U.S. Bank National Association, a national banking association, organized under the laws of the United States, as successor in interest to State Street Bank and Trust Company, a trust company organized under the laws of the Commonwealth of Massachusetts, as Trustee (the “Trustee”).

 

R E C I T A L S

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture for Senior Debt Securities, dated as of December 16, 1997, as amended by the Third Supplemental Indenture dated as of July 23, 1999 and the Sixth Supplemental Indenture dated as of June 12, 2000 (the “Indenture”), providing for the issuance from time to time of series of the Company’s Securities;

 

WHEREAS, Section 301 of the Indenture provides for various matters with respect to any series of Securities issued under the Indenture to be established in an indenture supplemental to the Indenture;

 

WHEREAS, Section 901(7) of the Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the Indenture to establish the form or terms of Securities of any series as provided by Sections 201 and 301 of the Indenture;

 

NOW, THEREFORE, THIS TWENTIETH SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the premises and the issuance of the series of Securities provided for herein, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities of such series, as follows:

 

ARTICLE I
 Relation to Indenture; Definitions

 

SECTION 1.01. Relation to Indenture

 

This Twentieth Supplemental Indenture constitutes an integral part of the Indenture.

 

SECTION 1.02. Definitions

 

For all purposes of this Twentieth Supplemental Indenture:

 

(a)                                 Capitalized terms used herein without definition shall have the meanings specified in the Indenture;

 

(b)                                 All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Twentieth Supplemental Indenture; and

 

(c)                                  The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Twentieth Supplemental Indenture.

 

- 2 -

 

ARTICLE II
 The Series of Securities

 

SECTION 2.01. Title of the Securities

 

There shall be a series of Securities designated the “4.200% Senior Notes due 2046” (the “Securities”).

 

SECTION 2.02. Limitation on Aggregate Principal Amount

 

The aggregate principal amount of the Securities shall initially be limited to $700,000,000.  The Company may, without giving notice to or seeking the consent of the holders of the Securities, issue additional Securities having the same terms (except for the issue date and, in some cases, the public offering price and the first interest payment date) as, and ranking equally and ratably with, the Securities.  Any additional Securities, together with the Securities offered by the related prospectus supplement, will constitute a single series of Securities under the Indenture.  No additional Securities may be issued if an Event of Default under the Indenture has occurred and is continuing with respect to the Securities.

 

SECTION 2.03. Principal Payment Date

 

The principal amount of the Securities outstanding (together with any accrued and unpaid interest) shall be payable in a single installment on December 15, 2046, which date shall be the Stated Maturity of the Securities Outstanding.

 

SECTION 2.04. Interest and Interest Rates

 

The rate of interest on each Security shall be 4.200% per annum, accruing from December 8, 2016, or from the most recent interest payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly provided for, payable semi-annually in arrears on June 15 and December 15 of each year commencing June 15, 2017 until the principal thereof shall have become due and payable, and until the principal thereof is paid or duly provided for or made available for payment.  The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months.  The amount of interest payable for any partial period shall be computed on the basis of the actual number of days elapsed in a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on any Security is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay).  A “Business Day” shall mean any day, other than a Saturday or Sunday, on which banks in the City of New York are not required by law to close.  The interest installment so payable in respect of any Security, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name such Security (or one or more Predecessor Securities) is registered at the close of business on June 1 or December 1 prior to such Interest Payment Date.  Any such interest installment not punctually paid or duly provided for in respect of any Security shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the

 

- 3 -

 

payment of such Defaulted Interest, notice whereof shall be given to the Holders of this series of Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

SECTION 2.05. Place of Payment

 

The Place of Payment where the Securities may be presented or surrendered for payment, where the Securities may be surrendered for registration of transfer or exchange and where notices and demand to or upon the Company in respect of the Securities and the Indenture may be served shall be the Corporate Trust Office of the Trustee.

 

SECTION 2.06. Redemption

 

(a)                                 The Company may redeem the Securities, in whole or in part, at any time and from time to time prior to June 15, 2046 (six months prior to the Stated Maturity of the Securities) (the “Par Call Date”) at a redemption price equal to the greater of (i) 100% of the principal amount of the Securities to be redeemed and (ii) as determined by an Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal of and interest on the securities to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) from the redemption date to the Par Call Date discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 20 basis points.

 

At any time and from time to time on or after the Par Call Date, the Securities will be redeemable at the Company’s option, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed.

 

In each case, the Company will pay accrued and unpaid interest on the principal amount being redeemed to the date of redemption.

 

(b)                                 For the purposes of this Section 2.6,

 

“Adjusted Treasury Rate” means, with respect to any redemption date:

 

(i)                                     the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15” published by the Board of Governors of the Federal Reserve System (or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity) under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue.  If no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month; or

 

- 4 -

 

(ii)                                  if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

The Adjusted Treasury Rate shall be calculated on the third business day preceding the redemption date.

 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the securities to be redeemed (assuming, for this purpose, that the Securities matured on the Par Call Date) that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such securities (assuming, for this purpose, that the Securities matured on the Par Call Date) (“Remaining Life”).

 

“Comparable Treasury Price” means (i) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by us.

 

“Reference Treasury Dealer” means Barclays Capital Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC or their respective successors, as selected by the Company, or if any of the foregoing refuse to act as treasury dealer for this purpose or cease to be primary U.S. Government securities dealers in the United States (a “Primary Treasury Dealer”), any other Primary Treasury Dealers specified by the Company for these purposes.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City Time, on the third business day preceding such redemption date.

 

The Company will mail a notice of redemption at least 30 days but not more than 60 days before the redemption date to each holder of the securities to be redeemed.  If less than all of the securities are to be redeemed, the trustee will select, by such method as it will deem fair and appropriate, including pro rata or by lot, the securities to be redeemed in whole or in part.

 

Unless the Company defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the securities or portions thereof called for redemption.

 

- 5 -

 

SECTION 2.07. Denomination

 

The Securities of this series shall be issuable only in registered form without coupons and in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

SECTION 2.08. Currency

 

Principal and interest on the Securities shall be payable in such coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts.

 

SECTION 2.09. Form of Securities

 

The Securities shall be substantially in the form attached as Exhibit A hereto.

 

SECTION 2.10. Securities Registrar and Paying Agent

 

The Trustee shall serve initially as Securities Registrar and Paying Agent.

 

SECTION 2.11. Sinking Fund Obligations

 

The Company has no obligation to redeem or purchase any Securities pursuant to any sinking fund or analogous requirement or upon the happening of a specified event or at the option of a Holder thereof.

 

SECTION 2.12. Defeasance and Covenant Defeasance

 

The Company has elected to have both Section 1302 (relating to defeasance) and Section 1303 (relating to covenant defeasance) applied to the Securities.

 

SECTION 2.13. Immediately Available Funds

 

All payments of principal and interest shall be made in immediately available funds.

 

ARTICLE III
 EXPENSES

 

SECTION 3.01. Payment of Expenses

 

In connection with the offering, sale and issuance of the Securities, the Company, in its capacity as borrower with respect to the Securities, shall pay all costs and expenses relating to the offering, sale and issuance of the Securities, including commissions to the underwriters payable pursuant to the Underwriting Agreement, dated December 1, 2016, and compensation and expenses of the Trustee under the Indenture in accordance with the provisions of Section 607 of the Indenture.

 

- 6 -

 

SECTION 3.02. Payment Upon Resignation or Removal

 

Upon termination of this Twentieth Supplemental Indenture or the Indenture or the removal or resignation of the Trustee, unless otherwise stated, the Company shall pay to the Trustee all amounts accrued to the date of such termination, removal or resignation.

 

ARTICLE IV
 MISCELLANEOUS PROVISIONS

 

SECTION 4.01. Trustee Not Responsible for Recitals

 

The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the validity or sufficiency of this Twentieth Supplemental Indenture.

 

SECTION 4.02. Adoption, Ratification and Confirmation

 

The Indenture, as supplemented and amended by this Twentieth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

 

SECTION 4.03. Counterparts

 

This Twentieth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

SECTION 4.04. Governing Law

 

THIS TWENTIETH SUPPLEMENTAL INDENTURE AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

- 7 -

 

IN WITNESS WHEREOF, the parties hereto have caused this Twentieth Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, on the date or dates indicated in the acknowledgments and as of the day and year first above written.

 

	
 
    	
 
    	
THE ALLSTATE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jesse E. Merten
    
	
 
    	
 
    	
 
    	
Name: Jesse E. Merten
    
	
 
    	
 
    	
 
    	
Title: Senior Vice President and Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Daniel G. Gordon
    	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Daniel G. Gordon
    	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
Vice President, Assistant General
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Counsel and Assistant Secretary
    	
 
    	
 
    	
 
    

 

[Signature Page to Twentieth Supplemental Indenture]

 

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carolina D. Altomare
    
	
 
    	
 
    	
Name: Carolina D. Altomare
    
	
 
    	
 
    	
Title: Vice President
    

 

[Signature Page to Twentieth Supplemental Indenture]

 

 

EXHIBIT A

 

(FORM OF FACE OF SECURITY)

 

[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

 

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

	
No.
    	
Principal Amount:   $
    
	
 
    	
 
    
	
 
    	
CUSIP No. 020002 BC4
    
	
 
    	
 
    
	
 
    	
ISIN No. US020002BC43
    

 

THE ALLSTATE CORPORATION

 

4.200% SENIOR NOTES DUE 2046

 

The Allstate Corporation, a Delaware corporation (the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO. or its registered assigns, the principal sum of $                     on December 15, 2046.  The Company further promises to pay interest on said principal sum outstanding from December 8, 2016, or from the most recent interest payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly provided for, semi-annually in arrears on June 15 and December 15 of each year commencing June 15, 2017 at the rate of 4.200% per annum, until the principal hereof shall have become due and payable and, until the principal hereof is paid or duly provided for or made available for payment.  The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months.  The amount of interest payable for any partial period shall be computed on the basis of the number of actual days elapsed in a 360-day year of twelve

 

 

30-day months.  In the event that any date on which interest is payable on this Security is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay).  A “Business Day” shall mean any day, other than a Saturday or Sunday, on which banks in the City of New York are not required by law to close.  The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on June 1 or December 1 prior to such Interest Payment Date.  Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such Defaulted Interest, notice whereof shall be given to the Holder of this Security not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

 

The principal of (and premium, if any) and the interest on this Security shall be payable at the office or agency of the Company maintained for that purpose in the United States in such coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Security Register.  Notwithstanding the foregoing, so long as the Holder of this Security is Cede & Co., the payment of the principal of (and premium, if any) and interest on this Security will be made at such place and to such account as may be designated by Cede & Co. All payments of principal and interest hereunder shall be made in immediately available funds.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

 

	
 
    	
THE ALLSTATE CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: 
    	
Jesse E. Merten
    
	
 
    	
 
    	
Title: 
    	
Senior Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name: 
    	
Daniel G. Gordon
    	
 
    
	
 
    	
Title: 
    	
Vice President, Assistant General
    	
 
    
	
 
    	
 
    	
Counsel and Assistant Secretary
    	
 
    

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.

 

	
Dated: December 8,   2016
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

(FORM OF REVERSE OF SECURITY)

 

This Security is one of a duly authorized issue of securities of the Company, designated as its 4.200% Senior Notes due 2046 (herein referred to as the “Securities”), issued under and pursuant to an Indenture, dated as of December 16, 1997 between the Company and U.S. Bank National Association, successor in interest to State Street Bank and Trust Company, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), as amended by the Third Supplemental Indenture dated as of July 23, 1999 and the Sixth Supplemental Indenture dated as of June 12, 2000 and as supplemented by the Twentieth Supplemental Indenture, dated as of December 8, 2016, between the Company and the Trustee (the Indenture as so amended and supplemented, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered.

 

All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

The Company may redeem the Securities, in whole or in part, at any time and from time to time prior to June 15, 2046 (six months prior to the Stated Maturity of the Securities) (the “Par Call Date”) at a redemption price equal to the greater of (i) 100% of the principal amount of the Securities to be redeemed and (ii) as determined by an Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal of and interest on the securities to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) from the redemption date to the Par Call Date discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 20 basis points.

 

At any time and from time to time on or after the Par Call Date, the Securities will be redeemable at the Company’s option, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed.

 

In each case, the Company will pay accrued and unpaid interest on the principal amount being redeemed to the date of redemption.

 

“Adjusted Treasury Rate” means, with respect to any redemption date:

 

(i)                                     the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15” published by the Board of Governors of the Federal Reserve System (or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity) under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue.  If no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall

 

 

be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month; or

 

(ii)                                  if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

The Adjusted Treasury Rate shall be calculated on the third business day preceding the redemption date.

 

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the securities to be redeemed (assuming, for this purpose, that the Securities matured on the Par Call Date) that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such securities (assuming, for this purpose, that the Securities matured on the Par Call Date) (“Remaining Life”).

 

“Comparable Treasury Price” means (i) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by us.

 

“Reference Treasury Dealer” means Barclays Capital Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC or their respective successors, as selected by the Company, or if any of the foregoing refuse to act as treasury dealer for this purpose or cease to be primary U.S. Government securities dealers in the United States (a “Primary Treasury Dealer”), any other Primary Treasury Dealers specified by the Company for these purposes.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City Time, on the third business day preceding such redemption date.

 

The Company will mail a notice of redemption at least 30 days but not more than 60 days before the redemption date to each holder of the securities to be redeemed.  If less than all of the securities are to be redeemed, the trustee will select, by such method as it will deem fair and appropriate, including pro rata or by lot, the securities to be redeemed in whole or in part.

 

 

Unless the Company defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the securities or portions thereof called for redemption.

 

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.

 

The Indenture contains provisions for satisfaction, discharge and defeasance at any time of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities of each series at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.  No reference herein to the Indenture and no provision of this Security or of the Indenture (other than Section 1302 and Section 1303 of the Indenture) shall alter or impair the obligation of the Company to pay the principal and interest on the Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Securities Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained under Section 1002 of the Indenture duly endorsed by, or accompanied by a written instrument of transfer, in form satisfactory to the Company and the Securities Registrar, duly executed by the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.  No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.  This Global Security is exchangeable for Securities in definitive form only under certain limited circumstances set forth in the Indenture.  Securities of this series so issued are issuable only in registered form without coupons in denominations of $2,000 and any integral

 

 

multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations herein and therein set forth, Securities of this series so issued are exchangeable for a  like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same.

 

The Company and, by its acceptance of this Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that for United States federal, state and local tax purposes it is intended that this Security constitute indebtedness.

 

THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.Exhibit 10.1

 

NOTE
PURCHASE AGREEMENT

 

THIS
NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of December 7, 2016 (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 II PN, LTD, a Cayman Islands exempt limited liability company (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 $750,000;

 

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 $750,000 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 $75,000.00 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;

 

(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 December 31, 2016, 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.

 

    	 	2	 

     

    

 

(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”).

 

(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 (as defined below), 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.

 

    	 	3	 

     

    

 

(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.

 

(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 (as defined below),
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.

 

    	 	4	 

     

    

 

(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.

 

(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.

 

    	 	5	 

     

    

 

(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.

 

(k)       Foreign
Corrupt Practices. Neither the Company nor any subsidiary, nor to the knowledge of the Company or any subsidiary, any agent
or other person acting on behalf of the Company or any subsidiary, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(l)       Neither
the Company, nor any subsidiary of the Company, nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any subsidiary of the Company, is a Person that is, or is owned or controlled by a Person that
is (i) on the list of Specially Designated Nationals and Blocked Persons maintained by U.S. Department of Treasury’s Office
of Office of Foreign Asset Control (“OFAC)” from time to time, (ii) the subject of any sanctions administered
or enforced by OFAC, the U.S. State Department, the United Nations Security Council, the European Union, Her Majesty’s Treasury,
or other relevant sanctions authority (collectively, “Sanctions”), (iii) has a place of business in, or is
operating, organized, resident or doing business in a country or territory that is, or whose government is, the subject of OFAC
economic sanction program (including without limitation Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

    	 	6	 

     

    

 

(m)       Except
with respect to the material terms and conditions of the transactions contemplated by this Agreement, all of which shall be publicly
disclosed by the Company as soon as possible after the date hereof, the Company covenants and agrees that neither it, nor any
other person acting on its behalf, will provide the Investor or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto the Investor shall have entered into a written agreement with
the Company regarding the confidentiality and use of such information. The Company understands and confirms that the Investor
shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

4.       INDEMNIFICATION.
The Company will indemnify and hold the Investor and its directors, officers, shareholders, members, partners, employees and agents
(and any other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack of such title
or any other title), each person who controls the Investor, and the directors, officers, shareholders, agents, members, partners
or employees (and any other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack
of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or the Note or (b) any action instituted against the Purchaser Parties in any capacity,
or any of them or their respective affiliates, by any stockholder of the Company who is not an affiliate of such Purchaser Party,
with respect to any of the transactions contemplated by herein (unless such action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under this Agreement or any agreements or understandings such Purchaser Party may have
with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such
Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company
and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for
any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party
in this Agreement or the Note. The indemnification required by this Section 4 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.

 

    	 	7	 

     

    

 

5.       COVENANTS
OF THE COMPANY.

 

(a)       Compliance
with Laws. The Company shall comply with all applicable laws, statutes, rules, regulations, orders, executive orders, directives,
policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time,
including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping
and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls,
including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws and will not take any action which
will cause the Investor to be in violation of any such laws.

 

(b)       Use
of Proceeds. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the issuance of the
Note hereunder or any proceeds from the sale of stock under the SEDA, or lend, contribute, facilitate or otherwise make available
such proceeds to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person that
is identified on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, or in any country or territory,
that, at the time of such funding, is, or whose government is, the subject of Sanctions or Sanctions programs, or (ii) in any
other manner that will result in a violation of Sanctions. The Company shall use proceeds from this Note to repay the remaining
balances on the March 15, 2016 promissory note and the June 22, 2016 promissory note as set forth on the Closing Statement.

 

6.       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.

 

    	 	8	 

     

    

 

7.       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 electronic
mail (provided that the electronic mail transmission is returned in error or the sender is not otherwise notified of any error
in transmission); 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.
	 	136
Madison Avenue

        Suite
550

        New
        York, NY 10016

	 	Attention:  Chief
    Executive Officer
	 	Telephone:  (212)
    563-4141
	 	Email:
    Charles.Kuczynski@omagine.com 

        Email:
            Frank.Drohan@omagine.com

	 	 
	With
    a copy to: 	Sichenzia
    Ross Ference Kesner LLP
	 	61
    Broadway
	 	New
    York, New York 10006
	 	Attention:  Michael
    Ference
	 	Telephone:
    (212) 930-9700
	 	Email:
        MFerence@srff.com

 

	If
    to the Holder:	YA
    II PN, Ltd.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Attention:
    Mark     Angelo
	 	Telephone:
(201) 985-8300

        Email:
        MAngelo@yorkvilleadvisors.com

	 	 
	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 electronic mail address 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, or (ii) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of personal service, or receipt from a nationally recognized
overnight delivery service in accordance with clause (i) or (ii) above, respectively.

 

8.       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.

 

    	 	9	 

     

    

 

(b)       Assignment.
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor (other
than by merger). The Investor may assign any or all of its rights under this Agreement to any person to whom such Investor assigns
or transfers the Note, or a portion thereof, provided that such transferee agrees in writing to be bound, with respect to the
Note, by the provisions of the this Agreement that apply to the Investor.

 

(c)       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]

 

    	 	10	 

     

    

 

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
	 	Name:	Charles P. Kuczynski
	 	Title:	Vice-President & Secretary

 

	 	INVESTOR:
	 	 
	 	YA II PN, Ltd. 
	 	 	 	 
	 	By:  	Yorkville Advisors Global LP
	 	Its:  	Investment Manager
	 	 	 	 
	 	 	By:  	Yorkville Advisors Global LLC
	 	 	Its:	General Partner

 

	 	By:	/s/
    David Gonzalez
	 	Name:	David Gonzalez
	 	Title:	Managing Member & General Counsel

 

    	 	11	 

     

    

 

Exhibit A

Form of Note

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