LOAN AGREEMENT
This Loan Agreement
(the “Loan
Agreement”) is made as of April 1, 2014, by and
between Xxxxxx X. Xxxxxxx & Associates, LLC (the
“Lender”) and
Ocean Thermal Energy Corporation (the “Borrower”).
WHEREAS, the
Borrower desires to obtain certain credit facilities, as set forth
in this Loan Agreement, and the Lender is willing to provide such
credit facilities on the terms and conditions set forth
herein;
NOW, THEREFORE, the
Lender and the Borrower, intending to be legally bound, hereby
agree as follows:
1. The
Credit Facilities. The Lender agrees, pursuant to the terms
and conditions of this Loan Agreement and the other Loan Documents
(as defined below), to make a loan to the Borrower in a principal
amount of up to Two Million Two Hundred Sixty-five Thousand Dollars
($2,265,000) (the “Loan”). The Loan shall be
evidenced by a Note (the “Note”) and shall be made in
accordance with and subject to the terms and conditions of this
Loan Agreement, the Note and the other Loan Documents.
2. The
Loan Documents. The following documents and materials
(together with this Loan Agreement and any other accessory
documents executed in connection herewith, such documents and
materials, as they may be amended, restated, renewed and extended,
are collectively referred to herein as the “Loan Documents”) have been or will
be executed in connection with the Loan:
a. Note;
b. Warrants,
of even date herewith, granting to Lender, as additional
consideration for making the Loan to the Borrower, the right to
purchase up to 12,912,500 shares of Ocean Thermal Energy Corp.
common stock at a price of $0.425 per share.
6. Expenses
and Fees. The Borrower agrees to pay the Lender a Facility
Fee of $25,000.00 payable to the Lender upon execution of this Loan
Agreement.
c. Financial
Information. Subject to any limitation stated therein or in
connection therewith, all balance sheets, earning statements,
accounts receivable lists and aging schedules and other financial
data which have been or shall be furnished to the Lender by the
Borrower to induce the Lender to enter into this Loan Agreement or
otherwise in connection herewith, do or will fairly represent the
financial condition of the Borrower in all material respects, are
accurate, complete and correct in all material respects insofar as
completeness may be necessary to give the Lender a true and
accurate knowledge of the subject matter as of the date hereof.
There are no material liabilities, direct or indirect, fixed or
contingent, of the Borrower as of the date of such financial
statements which are not reflected therein or in the notes thereto.
There has been no material adverse change in the financial
condition or operations of the Borrower since the date of said
financial statements or since the respective dates on which either
furnished the Lender with other financial data or other
representations about their financial condition.
i. Shall
be issued in such amounts and by such companies as are satisfactory
to the Lender; and
ii. Shall
contain provisions providing for thirty (30) days’ prior
written notice to the Lender of any intended change or cancellation
and providing that no such change or cancellation shall be
effective as to the Lender in the absence of such
notice.
Loan
Agreement
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a. The
Borrower’s representations and warranties as contained herein
shall be accurate and complete as of the date of
closing;
b. The
Borrower shall not be in default under any of the covenants
contained herein as of the date of closing;
c. The
Borrower shall have executed and delivered all of the Loan
Documents to which it is a party;
d. The
Borrower shall have delivered to the Lender all of the documents
(fully executed) and materials and satisfied all of the
requirements reasonably requested by Lender to evidence the
obligations of Borrower with respect to the Loan in such form and
substance as may be reasonably acceptable to the
Lender.
e. The
Borrower shall have paid all costs incurred in connection with the
closing of the Loan, including without limitation, the
attorneys’ fees of the Lender’s counsel (up to a
maximum of $5,000) and all filing fees. To the extent that such
costs are not paid at closing, the Borrower hereby authorizes the
Lender to pay the same from the proceeds of the Loan;
and
f. The
Borrower shall provide the Lender with written confirmation that
there are no known disputes or pending actions between the Borrower
and the Internal Revenue Service.
g. The
Borrower shall furnish the Lender with such other documents,
opinions, certificates, evidence and other matters as may be
reasonably requested by the Lender at or prior to
closing.
a. If
any statement, representation or warranty made by the Borrower in
the Loan Documents, in connection therewith or any financial
statement, report, schedule, or certificate furnished to the Lender
by the Borrower, any of its representatives, employees or
accountants during the term of this Agreement shall prove to have
been false or misleading when made, or subsequently becomes false
or misleading, in any material respect;
Loan
Agreement
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b. Default
by the Borrower in payment within five (5) days of the due date of
any principal or interest or other amounts called for under the
Loan Documents;
c. Default
by the Borrower in the performance or observance of any of its
obligations under the provisions, terms, conditions, warranties or
covenants of the Loan Documents and such failure shall continue for
a period of thirty (30) days or more following receipt of written
notice thereof from the Lender.
d. The
occurrence of an event of default not cured within any applicable
remedy period, under any obligations of the Borrower to the Lender
other than under the Loan Documents, whether created prior to,
concurrent with, or subsequent to obligations arising out of the
Loan Documents;
e. The
occurrence of an event of default not cured within any applicable
remedy period, under any other obligation of the Borrower in an
aggregate amount of Ten Thousand Dollars ($10,000.00) or more, for
borrowed money or under any lease;
f. The
dissolution, termination of existence, merger or consolidation of
the Borrower, or a sale of all or substantially all of the assets
of the Borrower out of the ordinary course of
business;
g. A
change in the beneficial ownership of fifty percent (50%) or more
(in the aggregate) of the issued and outstanding voting capital
stock of the Borrower from the ownership on the date of this Loan
Agreement, whether through transfer, issuance of stock or
membership interests or otherwise.
h. The
Borrowers shall (i) apply for or consent to the appointment of a
receiver, trustee or liquidator of any of their or its property,
(ii) admit in writing their or its inability to pay their or its
debts as they mature, (iii) make a general assignment for the
benefit of creditors, (iv) be adjudicated a bankrupt or insolvent,
(v) file a voluntary petition in bankruptcy, or a petition or an
answer seeking reorganization to take advantage of any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting
the material allegations of a petition filed against it or he in
any proceeding under any such law or (vi) offer or enter into any
compromise, extension or arrangement seeking relief or extension of
their or its debts;
i. In
the event that proceedings shall be commenced or an order, judgment
or decree shall be entered against the Borrower, without the
application, approval or consent of the Borrower (as the case may
be) in or by any court of competent jurisdiction, relating to the
bankruptcy, dissolution, liquidation, reorganization or the
appointment of a receiver, trustee or liquidator of the Borrower of
all or a substantial part of their or its assets, and such
proceedings, order, judgment or decree shall continue undischarged
or unstayed for a period of 90 days;
j. A
final and unappealable judgment for the payment of money in excess
of Ten Thousand Dollars ($10,000.00) shall be rendered against the
Borrower and the same shall remain undischarged for a period of 60
days, during which period execution shall not be effectively
stayed; or
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Agreement
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Upon the occurrence
of any Event of Default, automatically upon an Event of Default
under subsection (h) or (i) of this Section or otherwise at the
election of the Lender, (i) all of the obligations of the Borrower
to the Lender, either under this Loan Agreement or otherwise, will
immediately become due and payable without further demand, notice
or protest, all of which are hereby expressly waived; (ii) the
Lender may proceed to protect and enforce its rights, at law, in
equity, or otherwise, against the Borrower under the Uniform
Commercial Code, any other applicable law, any Loan Document, any
agreement between the Borrower and the Lender; and/or (iii) the
Lender’s commitment to make further loans under this
Agreement or any other agreement with the Borrower will immediately
cease and terminate.
i. The
Borrower hereby waives, to the fullest extent permitted by law,
presentment, notice, protest and all other demands and notices of
any description and assent (1) to any extension of the time of
payment or any other indulgence, and (2) to the release of any
other person primarily or secondarily liable for the obligations
evidenced hereby.
ii. No
delay or omission on the part of the Lender in exercising any
right, privilege or remedy hereunder shall operate as a waiver of
such right, privilege or remedy or of any other right, privilege or
remedy under the Loan Documents. No waiver of any right, privilege
or remedy or any amendment to the Loan Documents shall be effective
unless made in writing and signed by the Lender. A waiver on any
one occasion shall not be construed as a bar to or waiver of any
such right, privilege and/or remedy on any future occasion. No
single or partial exercise of any power hereunder shall preclude
other or future exercise thereof or the exercise of any other
right. The acceptance by the Lender of any payment after any
default under the Loan Documents shall not operate to extend the
time of payment of any amount then remaining unpaid hereunder or
constitute a waiver of any rights of the Lender hereof under the
Loan Documents.
d. Governing
Law. The Loan Documents and all rights and obligations
thereunder, including matters of construction, validity, and
performance, shall be governed by the laws of the Commonwealth of
Pennsylvania;
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Agreement
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Borrower:
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Lender:
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Ocean Thermal
Energy Corporation
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Xxxxxx X. Xxxxxxx
& Associates LLC
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000 Xxxxx Xxxxx
Xxxxxx
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000 Xxxxx Xxxxx
Xxxxxx
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Xxxxxxxxx, XX
00000
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Xxxxxxxxx, XX
00000
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With a copy
to:
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With copy
to:
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Xxxxxx
Xxxxxx
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Xxxxxx X.
Xxxxxxx
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0000 Xxxxxxxxx
Xxxxxxx Xxxxx, #0000
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0000 Xxxx Xxxx
Xxxxx Xxxx
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XxXxxx XX
00000
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Xxxxxxxxx, XX
00000
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OCEAN THERMAL
ENERGY CORPORATION
By: /s/ Xxxxxx X.
Xxxxxxx
Name: Xxxxxx X.
Xxxxxxx
Title: Group
Executive Chairman
XXXXXX X. XXXXXXX
& ASSOCIATES, LLC
By: /s/ Xxxxxx X.
Xxxx
Name: Xxxxxx X.
Xxxx
Title: Partner
& Chief Administrative Officer
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Loan
Agreement
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WARRANT
to Purchase up to
12,912,500 Shares of the
Common Stock,
$0.0001 Par Value Per Share,
of
OCEAN
THERMAL ENERGY CORPORATION
This is to certify
that, for value received, Xxxxxx X. Xxxxxxx & Associates, LLC
(“Lender”) or
any permitted transferee (Lender or such transferee being
hereinafter called the “Holder”) is entitled to purchase,
subject to the provisions of this Warrant, from Ocean Thermal
Energy Corporation, a Delaware corporation (“OTEC”), at any time on or after
the date hereof, an aggregate of up to 12,912,500 fully paid and
non-assessable shares of common stock, $0.0001 par value (the
“Common Stock”),
of OTEC at a price per share equal to $0.425, subject to adjustment
as herein provided (the “Exercise Price”).
Upon such
presentation and surrender, OTEC shall issue promptly (and within
one business day if reasonably requested by the Holder) to the
Holder or its assignee, transferee or designee the number of shares
of Common Stock to which the Holder is entitled hereunder. OTEC
covenants and warrants that such shares of Common Stock, when so
issued, will be duly authorized, validly issued, fully paid and
non-assessable, and free and clear of all liens and
encumbrances.
If this Warrant is
exercised in part only, OTEC shall, upon surrender of this Warrant
for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the shares
of Common Stock issuable hereunder. Upon receipt by OTEC of this
Warrant, in proper form for exercise, the Holder shall be deemed to
be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of
OTEC may then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the
Holder. OTEC shall pay all expenses, and any and all United States
federal, state and local taxes and other charges, that may be
payable in connection with the preparation, issuance and delivery
of stock certificates pursuant to this Paragraph 1 in the name of
the Holder or its assignee, transferee or designee.
OTEC shall at all
times while this Warrant is outstanding and unexercised, maintain
and reserve, free from preemptive rights, such number of authorized
but unissued shares of Common Stock as may be necessary so that
this Warrant may be exercised without any additional authorization
of Common Stock after giving effect to all other options, warrants,
convertible securities and other rights to acquire shares of Common
Stock at the time outstanding. OTEC further agrees that (i) it will
not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary
act or omission, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder, and (ii) it will promptly take
all action reasonably necessary to protect the rights of the Holder
against dilution as provided herein.
Warrant
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Warrant
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2
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Warrant
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(A) Without
limiting the foregoing or any remedies available to the Holder, it
is specifically acknowledged that the Holder would not have an
adequate remedy at law for any breach of the provisions of this
Warrant and shall be entitled to specific performance of
OTEC’s obligations under, and injunctive relief against any
actual or threatened violation of the obligations of any person
subject to, this Warrant.
(B) The
Holder shall not, by virtue of its status as Holder, be entitled to
any rights of a stockholder in OTEC.
9. Governing
Law. This Warrant shall be deemed to have been delivered in,
and shall be governed by and interpreted in accordance with the
substantive laws of, the Commonwealth of Pennsylvania, except to
the extent that Delaware law may govern certain aspects of this
Warrant as it relates to OTEC.
Dated: April 1,
2014
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OCEAN THERMAL
ENERGY CORPORATION
By: /s/ Xxxxxx X.
Xxxxxxx
Name: Xxxxxx X.
Xxxxxxx
Title: Group
Executive Chairman
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Warrant
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PROMISSORY
NOTE
$2,265,000
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April 1,
2014
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FOR VALUE RECEIVED,
Ocean Thermal Energy Corporation, a Delaware corporation with an
address of 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the
“Borrower”),
hereby promises to pay to the order of Xxxxxx X. Xxxxxxx &
Associates, LLC (the “Lender”), at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, or at any other place designated to
the Borrower by the Lender in writing, the principal sum of Two
Million Two Hundred Sixty-five Thousand Dollars ($2,265,000), with
interest as herein specified, and under the terms and conditions
stated herein.
All amounts payable
hereunder are payable in lawful money of the United States of
America at the address of the Lender set forth above in immediately
available funds. Prior to a Default, all payments shall be applied
first on account of other charges, second to accrued interest due
on the unpaid balance of principal and finally the remainder of
such payments shall be applied to unpaid principal. If a Default
occurs, payments and monies received may be applied in any manner
and order deemed appropriate by the Lender.
In no event shall
the rate of interest hereunder be in excess of the maximum amount
permitted by law. In the event the rate of interest hereunder is
determined to be in excess of the maximum amount permitted by law,
such interest rate shall be automatically decreased to the maximum
rate permitted by law.
In addition to all
other rights contained in this Note, if a Default (defined herein)
occurs and as long as a Default continues, all outstanding sums
hereunder shall bear interest at the interest rate otherwise
prevailing under the preceding paragraph, plus 3% (the
“Default Rate”).
The Default Rate shall also apply from acceleration until all
unpaid sums and obligations (whether matured or contingent)
hereunder and any judgments thereon are paid in full.
Promissory
Note
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1
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When a Default
occurs, the Lender, at its option, may declare the entire unpaid
balance of principal of this Note, unpaid interest thereon and all
other charges, costs and expenses provided for herein, in the Loan
Agreement and/or any of the Loan Documents, and/or pursuant to any
other agreements between Borrower and Lender, immediately due and
payable without notice to or demand upon the Borrower. Upon the
occurrence of a Default, the Lender shall have all of the rights
and remedies with respect the Loan Agreement, the Loan Documents,
this Note, and/or otherwise provided for by law, in equity, and
otherwise.
10. Governing
Law. This Note shall be construed in accordance with the
domestic internal laws of the Commonwealth of Pennsylvania, without
reference to any conflict of laws provisions, as a Note made,
delivered and to be wholly performed within the Commonwealth of
Pennsylvania.
11. Judicial
Proceedings. Any suit, action, or proceeding, whether claim
or counterclaim, brought or instituted by the Borrower or the
Lender, or any of their successors or assigns, on or with respect
to this Note or the dealings of the Borrower or the Lender with
respect hereto, shall be tried only by a court and not by a jury.
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. In connection therewith, the Borrower agrees that any
suit, action or proceeding arising hereunder or with respect hereto
will be instituted in the Court of Common Pleas of York County,
Pennsylvania, or the United States District Court for the Middle
District of Pennsylvania, and irrevocably and unconditionally
submits to the jurisdiction of each such Court for such purpose.
Further, the Borrower waives any right it may have to claim or
recover, in any such suit, action or proceeding, any special,
exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages. THE BORROWER ACKNOWLEDGES
AND AGREES THAT THIS PARAGRAPH IS A SPECIFIC AND MATERIAL ASPECT OF
THIS NOTE AND THAT THE LENDER WOULD NOT EXTEND CREDIT IF THE
WAIVERS SET FORTH IN THIS PARAGRAPH WERE NOT A PART OF THIS
NOTE.
Promissory
Note
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12. Confession
of Judgment. Upon Default, the Borrower hereby irrevocably
authorizes the Prothonotary or any attorney of any court of record
in Pennsylvania or elsewhere to appear for and confess judgment
against the Borrower for any and all amounts unpaid hereunder,
together with any other charges, costs and expenses for which
Borrower is liable under this Note, and together with fees of
counsel in the reasonable amount of five percent (5%) of all of the
foregoing (but in no event less than $5,000.00) and costs of suit,
releasing all errors and waiving all rights of appeal. If a copy of
this Note, verified by affidavit, shall have been filed in such
proceeding, it shall not be necessary to file the original as a
warrant of attorney. The Borrower hereby waives the right to any
stay of execution and the benefit of all exemption laws now or
hereafter in effect. No single exercise of this warrant and power
to confess judgment shall be deemed to exhaust this power, whether
or not any such exercise shall be held by any court to be invalid,
voidable or void, but this power shall continue undiminished and
may be exercised from time to time as often as the Lender shall
elect until all sums due hereunder shall have been paid in full.
Interest shall continue to accrue after entry of judgment
hereunder, by confession, default, or otherwise, at the higher of
the prevailing rate of interest under this Note, or the judgment
rate of interest under applicable law. All waivers granted in this
paragraph are given to the extent permitted by the Pennsylvania
Rules of Civil Procedure.
13. NOTICE:
THIS NOTE CONTAINS, AT PARAGRAPH 12, A WARRANT OF ATTORNEY TO
CONFESS JUDGMENT AGAINST THE BORROWER. IN GRANTING THIS WARRANT OF
ATTORNEY TO CONFESS JUDGMENT AGAINST THE BORROWER, THE BORROWER
HEREBY KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY, AND ON THE ADVICE
OF SEPARATE COUNSEL OF THE BORROWER, UNCONDITIONALLY WAIVES ANY AND
ALL RIGHTS THE BORROWER HAS OR MAY HAVE TO PRIOR NOTICE AND AN
OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS
OF THE UNITED STATES, THE COMMONWEALTH OF PENNSYLVANIA, OR OF ANY
OTHER STATE.
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BORROWER:
OCEAN THERMAL
ENERGY CORPORATION
By: /s/ Xxxxxx X.
Xxxxxxx
Name: Xxxxxx X.
Xxxxxxx
Title: Group
Executive Chairman
Taxpayer I.D. No.:
00-0000000
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Promissory
Note
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DISCLOSURE FOR
CONFESSION OF
JUDGMENT AND EXECUTION FOR
NON-INDIVIDUALS
DATE: April 1,
2014
1. TODAY,
THE UNDERSIGNED FIRM IS EXECUTING A PROMISSORY NOTE AND OTHER
RELATED INSTRUMENTS FOR $2,265,000, OBLIGATING THE UNDERSIGNED FIRM
TO PAY THAT AMOUNT.
2. A
REPRESENTATIVE OF THE LENDER (OR OUR INDEPENDENT LEGAL COUNSEL)
(THE “REPRESENTATIVE”) HAS EXPLAINED TO US IN OUR
CAPACITIES AS A REPRESENTATIVE OF THE UNDERSIGNED FIRM THAT THE
NOTE THE UNDERSIGNED FIRM IS SIGNING CONTAINS WORDING THAT WOULD
PERMIT THE LENDER TO OBTAIN A JUDGMENT AGAINST THE UNDERSIGNED FIRM
AT THE COURTHOUSE. THE REPRESENTATIVE HAS ALSO EXPLAINED TO US IN
OUR CAPACITIES OF PRESIDENT AND SECRETARY RESPECTIVELY OF THE
UNDERSIGNED FIRM THAT THE JUDGMENT MAY BE OBTAINED AGAINST THE
UNDERSIGNED FIRM WITHOUT NOTICE TO THE UNDERSIGNED FIRM AND WITHOUT
OFFERING THE UNDERSIGNED FIRM AN OPPORTUNITY TO DEFEND AGAINST THE
ENTRY OF THE JUDGMENT, AND THAT THE JUDGMENT MAY BE COLLECTED BY
ANY LEGAL MEANS.
3. THE
REPRESENTATIVE HAS ALSO EXPLAINED TO US IN OUR CAPACITIES AS A
REPRESENTATIVE OF THE UNDERSIGNED FIRM THAT COLLECTION OF THE
JUDGMENT MAY BE ACCOMPLISHED BY THE ISSUANCE OF A WRIT OF
EXECUTION, GARNISHMENT, LEVY AND/OR OTHER EXECUTION PROCEEDINGS
WHICH MAY BE COMMENCED AGAINST THE UNDERSIGNED FIRM BY THE LENDER
WITHOUT PRIOR NOTICE AND HEARING AND THAT EXECUTION PROCEEDINGS MAY
INVOLVE THE SEIZURE AND SALE OF THE UNDERSIGNED FIRM’S
PROPERTY BY A SHERIFF, XXXXXXXX OR OTHER AUTHORITY.
4. IN
SIGNING THE NOTE, THE UNDERSIGNED FIRM IS KNOWINGLY,
UNDERSTANDINGLY AND VOLUNTARILY CONSENTING TO THE CONFESSION OF
JUDGMENT AND THE UNDERSIGNED FIRM IS WAIVING THE UNDERSIGNED
FIRM’S RIGHTS, TO THE EXTENT PERMITTED BY LAW, TO RESIST THE
ENTRY OF JUDGMENT AGAINST THE UNDERSIGNED FIRM AT THE COURTHOUSE
INCLUDING:
(a)
THE RIGHT TO NOTICE
AND A HEARING;
(b)
THE RIGHT TO REDUCE
OR SET-OFF A CLAIM BY DEDUCTING A CLAIM THE UNDERSIGNED FIRM MAY
HAVE AGAINST THE LENDER (CALLED THE “RIGHT OF
DEFALCATION”);
(c)
RELEASE OF
ERROR;
(d)
INQUEST (THE RIGHT
TO ASCERTAIN WHETHER THE RENTS AND PROFITS OF THE UNDERSIGNED
FIRM’S REAL ESTATE WILL BE SUFFICIENT TO SATISFY THE JUDGMENT
WITHIN SEVEN YEARS);
(e)
STAY OF
EXECUTION;
(f)
EXEMPTION LAWS NOW
IN FORCE OR HEREAFTER TO BE PASSED;
(g)
THE RIGHT TO DEFEND
AGAINST THE ENTRY OF JUDGMENT AGAINST THE UNDERSIGNED
FIRM.
Promissory
Note
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5. IN
SIGNING THE NOTE, THE UNDERSIGNED FIRM IS KNOWINGLY,
UNDERSTANDINGLY AND VOLUNTARILY CONSENTING TO THE ISSUANCE AND
PURSUIT AGAINST THE UNDERSIGNED FIRM OF EXECUTION, GARNISHMENT,
LEVY AND/OR OTHER EXECUTION PROCEEDINGS AND WAIVING THE UNDERSIGNED
FIRM’S RIGHTS, TO THE EXTENT PERMITTED BY LAW, TO NOTICE AND
A HEARING PRIOR TO THE ISSUANCE AND PURSUIT OF EXECUTION,
GARNISHMENT, LEVY AND/OR OTHER EXECUTION PROCEEDINGS.
6. THE
UNDERSIGNED FIRM CERTIFIES THAT THE UNDERSIGNED FIRM HAS DISCUSSED
THIS DISCLOSURE WITH THE UNDERSIGNED FIRM’S ATTORNEY-AT-LAW
AND THE ATTORNEY-AT-LAW FULLY EXPLAINED TO THE UNDERSIGNED FIRM THE
CONTENTS AND MEANING OF THIS DISCLOSURE.
THE UNDERSIGNED
FIRM IS A CORPORATION WHICH IS INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE AND THE UNDERSIGNED INDIVIDUALS ARE THE
REPRESENTATIVES OF THE UNDERSIGNED FIRM DULY AUTHORIZED TO EXECUTE
THIS DISCLOSURE ON BEHALF OF THE UNDERSIGNED FIRM. WE CERTIFY THAT
THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN WE INITIALED AND
SIGNED IT, AND THAT THE UNDERSIGNED FIRM RECEIVED A COPY OF THE
DISCLOSURE AT THE TIME OF SIGNING.
TERMS USED HEREIN
SHALL BE CONSTRUED AS USED AND/OR DEFINED IN THE NOTE.
NAME OF
FIRM:
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OCEAN THERMAL
ENERGY CORPORATION
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By:/s/ Xxxxxx X.
Xxxxxxx
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Name: Xxxxxx X.
Xxxxxxx
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Title: Group
Executive Chairman
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The foregoing Note
and Disclosure sworn to and subscribed before me this 21st day of
April, 2015.
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/s/ Xxxxxx X.
Xxxxxx
Notary
Public
My Commission
Expires: July 11, 2015
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Commonwealth of
Pennsylvania
County of
Lancaster
[Notarial
Seal]
Promissory
Note
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FORBEARANCE
AND LOAN EXTENSION AGREEMENT
This FORBEARANCE AND LOAN
EXTENSION AGREEMENT (this “Amendment”), is entered into this
4th day of April, 2016, by and between OCEAN THERMAL ENERGY
CORPORATION (“OTE”), a Delaware corporation with an
address of 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the
“Borrower”), and
XXXXXX X. XXXXXXX & ASSOCIATES, LLC, a Delaware limited
liability company with an address of 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 (the “Lender”), on the
following:
Borrower and Lender entered
into that certain Loan Agreement as of April 1, 2014 (the
“Loan
Agreement”), providing for a loan of $2,265,000 from
Lender to Borrower (the “Loan”). The obligation to repay
the Loan is evidenced by that certain Promissory Note of even date
executed and delivered by Borrower to Lender (the
“Note”). As
additional consideration for the Loan, Borrower granted to Lender a
warrant to purchase 12,912,500 shares of Borrower’s common
stock at a price of $0.425 per share at any time on or before one
year from the date of OTE’s initial public offering on a
public exchange (the “Warrant”). The Loan Agreement, the
Note, and the Warrant are together referred to as the
“Loan
Documents.” Pursuant to the terms of the Loan
Documents, the Note was payable in full on or before January 31,
2015. The Note was not paid when due and is now in
default.
Lender desires to forbear
from seeking collection of the Note and exercising its remedies
under the Loan Documents in order to enhance its financial recovery
and obtain an extension of the Warrant.
Agreement
NOW THEREFORE, for and in
consideration of the foregoing premises, which are incorporated
herein by reference, the mutual promises and covenants set forth
herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree
as follows.
1
DATED as of the year and date first
above written by the undersigned duly authorized
signatories.
BORROWER:
OCEAN THERMAL
ENERGY CORPORATION
By: /s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Chairman
& CEO
LENDER
XXXXXX X. XXXXXXX
& ASSOCIATES LLC
By: /s/ Xxxxxx X.
Xxxx
Name: Xxxxxx X.
Xxxx
Title: Partner
& CFO
2