ex1015form10.htm





 





OCEAN
THERMAL ENERGY CORPORATION

 

PROMISSORY
NOTE

 


	
US$290,000.00

	
December 31,
2013






 

FOR VALUE RECEIVED,
the undersigned, OCEAN THERMAL
ENERGY CORPORATION, a Delaware corporation (the
“Company”), or its
successors or assigns, hereby promises to pay to the order of
THEODORE HERMAN, an individual, or his assigns (collectively, the
“Holder”), the principal
amount of Two Hundred Ninety Thousand Dollars (US $290,000),
together with any accrued and unpaid interest thereon as described
herein. The Company and the Holder may hereinafter be referred to
individually as a “Party” and collectively
as “Parties.”

 

1.      
       Definitions. In addition to the
terms defined elsewhere in this Promissory Note (this
“Note”), the following terms have the meanings
indicated:

 

“BBNA” means Broadband
Network Affiliates, Inc., a Delaware corporation.

 

“Business Day” means any
day other than a Saturday, Sunday or other day on which banks in
New York, New York are required to be closed.

 

“Maturity Date” means
December 31, 2015.

 

“Merger Agreement” means
the Agreement and Plan of Merger among BBNA, the Company and
Theodore Herman dated December 24, 2013, as amended.

 

“Reverse Merger” means a
business combination transaction involving the Company and BBNA
after which BBNA continues and survives but less than five percent
(5%) of the combined voting power of the then-outstanding
securities of BBNA immediately after such transaction are held,
directly or indirectly, in the aggregate by the holders of
securities entitled to vote generally in the election of directors
of BBNA immediately prior to such transaction, as described in the
Merger Agreement.

 

“Warrants” means those
warrants of BBNA, the form of which is attached as Exhibit A, and that were issued
to the holders referred in Schedule 2 of the Merger Agreement to
purchase up to an aggregate of 10,000,000 shares of the
Company’s common stock with a Class A of 2,000,000 warrants
at a warrant exercise price of $0.50 per share; with a Class B of
2,000,000 warrants at a warrant exercise price of $0.50 per share;
with a Class C of 2,000,000 warrants at a warrant exercise price of
$0.75 per share; with a Class D of 2,000,000 warrants at a warrant
exercise price of $1.00 per share; with a Class E of 2,000,000
warrants at a warrant exercise price of $1.25 per
share.

 

2.      
       Principal Amount. The principal
amount represented by this Note is Two Hundred and Ninety Thousand
Dollars (US$290,000).

 

3.       
      Interest. The unpaid principal
balance from time to time outstanding hereunder shall bear interest
from the date of the Reverse Merger until paid in full at a fixed
rate of eight percent (8%) per annum. Interest will accrue on this
Note from the date of the Reverse Merger on the basis of a 360-day
year consisting of twelve 30-day months.

 

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4.       
      Payment of Principal and
Interest.

 

(a)           Payment.
Subject to reduced payment as provided for in Section 9 of this
Note, the Company shall pay to the Holder the principal amount of
this Note, and all accrued and unpaid interest thereon, upon the
earlier to occur of (i) the Maturity Date, or (ii) as set forth in
Sections 4(b)(i), (ii), (iii), (iv) or (v), considered separately.
Principal and interest due hereunder shall be paid in lawful money
of the United States of America in immediately available federal
funds or the equivalent at the address of the Holder set forth in
Section 5 below or at such other address as the Holder may
designate. All payments made hereunder shall first be applied to
interest then due and payable and any excess payment shall then be
applied to reduce the principal amount then due and payable. Upon
payment in full of all principal and interest payable hereunder,
the Holder shall surrender this Note to the Company for
cancellation.

 

(b)           Amount
and Timing of Payment. Subject to reduced payment as
provided for in Section 9 of this Note, the Company shall pay
principal under this Note on the following schedule:

 




(i)

$50,000 triggered
by receipt by the Company of cash in connection with the exercise
of Class A Warrants;





 




(ii)

$50,000 triggered
by receipt by the Company of cash in connection with the exercise
of Class B Warrants;





 




(iii)

$60,000 triggered
by receipt by the Company of cash in connection with the exercise
of Class C Warrants;





 




(iv)

$60,000 triggered
by receipt by the Company of cash in connection with the exercise
of Class D Warrants; and





 




(v)

$70,000 triggered
by receipt by the Company of cash in connection with the exercise
of Class E Warrants.





 

5.       
      Notices. All notices and other
communications required or permitted hereunder to be given to a
Party to this Note shall be in writing and shall be faxed, mailed
by registered or certified mail postage prepaid, delivered by a
national overnight delivery service, or otherwise delivered by
hand, electronically (including by email) or by messenger,
addressed to such Party’s address as set forth
below:

 


	
If to the
Company:

	
Ocean Thermal
Energy Corporation


	
 

	
Attention: Jeremy
Feakins, Chief Executive Officer


	
 

	
800 South Queen
Street


	
 

	
Lancaster, PA
17603


	
 

	
Facsimile: (717)
299-1336


	
 

	
Email:
jeremv.feakins@otecorporation.com


	
 

	
 


	
 

	
With a copy (not
constituting notice) to:


	
 

	
 


	
 

	
Procopio, Cory,
Hargreaves & Savitch, LLP


	
 

	
Attention: John P.
Cleary, Esq.


	
 

	
12544 High Bluff
Drive, Suite 300


	
 

	
San Diego, CA
92130


	
 

	
Email:
john.cleary@procopio.com






 

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If to the
Holder:

	
Theodore
Herman


	
 

	
9909 Topanga Canyon
Boulevard, Suite 122


	
 

	
Chatsworth, CA
91311






 

or such other
address with respect to a Party as such Party shall notify each
other Party in writing as above provided. Any notice sent in
accordance with this Section 5 shall be effective upon the earlier
of: (i) if mailed, seven (7) Business Days after mailing; (ii) if
sent by messenger, upon delivery; (iii) if sent by a nationally
recognized overnight delivery service, one Business Day after
having been dispatched; (iv) if sent electronically (including by
email), upon transmission and electronic confirmation of
transmission or (if transmitted and received on a non-Business Day)
on the first Business Day following transmission and electronic
confirmation of transmission; and, (v) upon the actual receipt
thereof.

 

6.     
        Default and
Remedies.

 

(a)           An
“Event of
Default” under this Note shall mean the occurrence of
any of the following events:

 




(i)

If the Company
shall fail to make any payment when required by this Note;
or





 




(ii)

The commencement by
the Company of any bankruptcy, insolvency, receivership or similar
proceedings under any federal or applicable state law; or the
commencement against the Company of any bankruptcy, insolvency,
receivership or similar proceeding under any federal or applicable
state law by creditors of the Company or other similar law of any
jurisdiction, provided, that such proceeding shall not be deemed an
Event of Default if such proceeding is dismissed within ninety (90)
days of commencement.





 

(b)           Upon
and during the continuation of an Event of Default, the Holder may
declare the outstanding principal amount, and all accrued and
unpaid interest on such principal amount, immediately due and
payable, and such amount shall be collectible immediately or at any
time after such Event of Default. The rights and remedies provided
by this Note shall be cumulative, and shall be in addition to, and
not exclusive of, any other rights and remedies available at law or
in equity.

 

7.    
         Assignability. Neither Party
may assign this Note without prior notice to the other Party. No
such assignment shall constitute a novation or release of either
Party of their obligations hereunder.

 

8.    
         Usury Laws. It is the intention
of the Company and the Holder to conform strictly to all applicable
usury laws now or hereafter in force, arid any interest payable
under this Note shall be subject to reduction to an amount that is
the maximum legal amount allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction over
such matters. The aggregate of all interest (whether designated as
interest, service charges, points or otherwise) contracted for,
chargeable, or receivable under this Note shall under no
circumstances exceed the maximum legal rate upon the principal
amount remaining unpaid from time to time. If such interest does
exceed the maximum legal rate, it shall be deemed a mistake and
such excess shall be canceled automatically and, if theretofore
paid, rebated to the Company or credited on the principal amount,
or if this Note has been repaid, then such excess shall be rebated
to the Company.

 

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9.     
        Offset. The Company shall be
entitled to deduct from any amount of principal or interest that is
or may become otherwise due under this Note any and all amounts due
and owing from Theodore Herman pursuant to the Herman Obligations
(as defined in the Merger Agreement).

 

10.            Miscellaneous.

 

(a)           Any
amendment hereto or waiver of any provision hereof must be in
writing and signed by both the Company and the Holder.

 

(b)           Wherever
in this Note reference is made to the Company or the Holder, such
reference shall be deemed to include, as applicable, a reference to
their respective successors and permitted assigns, and the
provisions of this Note shall be binding upon and shall inure to
the benefit of such successors and permitted assigns.

 

(c)           This
Note shall in all respects be governed by and construed in
accordance with the laws of the State of Delaware without regard to
conflict of laws principles of any jurisdiction to the
contrary.

 

(d)           The
captions of the Sections of this Note are inserted solely for ease
of reference and shall not be considered in the interpretation or
construction of this Note.

 

(e)           The
Holder, by acceptance of this Note, hereby represents and warrants
that (i) the Holder has been offered the opportunity to obtain
information from the Company, to verify the accuracy of the
information received by it and to evaluate the merits and risks of
its investment in the Company, and to ask questions of and receive
satisfactory answers concerning the terms and conditions of its
investment in the Company, and (ii) the Holder has acquired this
Note for investment only and not for resale or distribution. The
Holder, by acceptance of this Note, further understands, covenants
and agrees that the Company is under no obligation and has made no
commitment to provide for registration of this Note.

 

(f)           The
Company waives presentment, notice and demand, notice of protest,
notice of demand and dishonor, and notice of nonpayment of this
Note.

 

(g)           In
the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then
such provision shalt be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of this Note. THE
PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT EITHER MAY HAVE, AND
AGREE NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE
OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(h)           No
delay in the exercise of any right or remedy of any Party shall
operate as a waiver thereof, and no single or partial exercise of
any such right or remedy shall preclude other or future exercise
thereof or the exercise of any other right or remedy.

 

(i)           It
is expressly understood and agreed by the Parties hereto that if it
is necessary to enforce payment of this Note through the engagement
or efforts of an attorney or by suit, the Company shall pay
reasonable attorneys’ fees, expenses of counsel, and other
costs of collection incurred by the Holder.

 

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(j)           This
Note may be executed in counterparts, each of which shall be deemed
an original, but both of which shall constitute one and the same
Note.

 

IN WITNESS WHEREOF,
the Company has executed, acknowledged and delivered this Note as
of the day and year first above written.

 

 


	
 

	
OCEAN THERMAL
ENERGY CORPORATION

 

By: /s/ Jeremy P.
Feakins

Name: Jeremy P.
Feakins

Its: Chief
Executive Officer






 



 

 

AGREED TO AND
ACCEPTED BY:

 

By: /s/ Theodore
Herman

Name: Theodore
Herman

 


Exhibits

 

Exhibit
A  Form of Warrants