Blueprint





 







Exhibit 10.59

 



LOAN AGREEMENT

 


This Loan Agreement (the
“Loan
Agreement”) is made as of
November 6, 2017, by and between JPF Venture Group, Inc. (the
“Lender”) and Ocean Thermal Energy Corporation (the
“Borrower”).

 



W I T N E S S E T H:

 


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 the original principal amount of up to Two Million
Dollars ($2,000,000) (the “Loan”), with the specific amount to be
determined at its sole discretion of the Lender. 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.

 


3.      Interest
Rate. The Loan shall bear
interest as set forth in the Note.

 


4.      Repayment.
Repayment of the Loan shall be made as set forth in the Note, and
pre-payment shall be permitted as therein
specified.

 


5.      Use
of Proceeds. The proceeds of
the Loan shall be used to finance Sales, Marketing, Engineering,
Legal, Consulting and Administrative Expenses associated with the
Baha Mar, and/or other Projects/Activities, as well as Office &
Staffing Expenses.

 


6.      Collateral.
The Loan will be secured by a first lien security interest in all
assets of Borrower now owned or hereafter acquired as more
specifically set forth in the Security Agreement. The Loan shall be
cross-collateralized and cross- defaulted with all other
obligations due from Borrower to Lender.

 


7.      Expenses
and Fees. The Borrower agrees
to pay the Lender for all reasonable out-of-pocket expenses of
every nature related to their respective credit facilities,
including, but not limited to, attorneys' fees (not to exceed
$5,000) and out-of-pocket expenses which the Lender may incur in
connection with the execution or carrying out of this Loan
Agreement and the other Loan Documents, or its rights hereunder and
thereunder, and the Lender may pay any or all such expenses and add
the amount thereof to the indebtedness secured or assured pursuant
to the Loan Documents.

 




 

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8.      Representations
and Warranties. The Borrower,
in order to induce the Lender to make the Loan, makes the following
representations, warranties and promises:

 


a.      Good
Standing. The Borrower is a
corporation, duly organized, validly existing and in good standing
under the laws of the state of its incorporation, with powers
adequate to own its properties, and to carry on its business as
presently conducted by it.

 


b.      Authority;
Binding Agreement. The
execution, delivery and performance of the Loan Documents are
within the corporate power of the Borrower, have been duly
authorized by the Borrower and are not in contravention of law or
the terms of the Borrower’s Articles of Incorporation and
By-Laws. The execution, delivery and performance of the Loan
Documents does not and will not contravene any documents,
agreements or undertakings to which the Borrower is a party or by
which the Borrower is bound. No approval of any person,
corporation, governmental body or other entity is a prerequisite to
the execution, delivery, validity or enforceability and performance
of the Loan Documents. When executed by the Borrower, the Loan
Documents to which the Borrower is a party will constitute the
legally binding obligations of the Borrower, enforceable in
accordance with their terms except as the enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally.

 


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
the Borrower furnished the Lender with other financial data or
other representations about their financial
condition.

 


d.      Solvency.
Any borrowings to be made by Borrower under this Loan Agreement do
not and will not render Borrower insolvent. The Borrower is not
contemplating either the filing of a petition under any state or
federal bankruptcy or insolvency laws, or the liquidation of all or
a major portion of its property, and the Borrower has no knowledge
or any reason to know of any person contemplating the filing of any
such petition against it.

 




 

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9.      Covenants.
The Borrower agrees with the Lender that during the term of this
Agreement and the other Loan Documents, and any extensions,
replacements or renewals thereof (except as otherwise agreed by the
Lender in writing):

 


a.      Insurance.
The Borrower shall maintain adequate fire and extended coverage
insurance, with the Lender named as lender loss payee, as well as
general liability, business interruption and other insurance
policies as are customary. All such insurance:

 


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.

 


b.      Notice
of Default; Litigation. The
Borrower shall notify the Lender in writing immediately upon
becoming aware of any default hereunder, or of any actions, suits,
investigations, or proceedings at law, in equity or before any
governmental authority that may have a material adverse effect on
such Borrower, pending or threatened, against or affecting the
Borrower or any collateral securing the Loan or involving the
validity or enforceability of the Loan Documents or the priority of
the liens created thereunder.

 


c.      Financial
Information. The Borrower shall
furnish or cause to be furnished to the Lender (i) on an annual
basis, federal income tax returns of the Borrower and annual
financial statements of the Borrower, compiled by certified public
accountants, within one hundred twenty (120) days after the end of
each fiscal year; and (ii) on a fiscal quarter basis,
internally-prepared interim financial statements of the Borrower in
a form satisfactory to Lender within thirty (30) days of the close
of each fiscal quarter.

 


d.      Expenses.
The Borrower shall pay all costs and expenses (including, but not
limited to, attorneys' fees) incidental to the Loan, to the
preservation and priority of the Lender's liens and security
interests under the Loan Documents and to the collection of all
obligations pursuant to the Loan Documents.

 


e.      Deposit
Relationship. The Borrower
shall establish and maintain their primary deposit relationship
with a bank reasonably acceptable to the
Lender.

 


f.      Further
Assurances. The Borrower shall
execute such documents as the Lender may reasonably request
relating to the Loan.

 


g.      Nature
of Business. The Borrower shall
not enter into any type of business other than that in which it is
presently engaged, or otherwise significantly change the scope or
nature of its business.

 




 

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h.      Mergers,
Etc. The Borrower shall not
wind up, liquidate or dissolve, reorganize, merge or consolidate
with or into, or convey, sell, assign, transfer, lease, or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any person, or acquire all or
substantially all of the assets or the business of any person,
except as may occur in connection with the currently contemplated
Memphis investment group.

 


i.      Sale
of Assets, Etc. The Borrower
shall not sell, lease, assign, transfer, or otherwise dispose of
any of its now owned or hereafter acquired assets, except: (1)
inventory disposed of in the ordinary course of business; and (2)
the sale or other disposition of assets no longer used or useful in
the conduct of its business, except as may occur in connection with
the currently contemplated Memphis investment
group.

 


j.      Additional
Borrowings. Borrower shall not
create, incur, assume, or suffer to exist, any indebtedness,
except: (i) borrowings pursuant to this Agreement; (ii) unsecured
trade credit incurred in the ordinary course of business which are
paid in a timely manner; (iii) other obligations to the Lender; and
(iv) borrowings used to prepay in full the Borrower’s
obligations under the Loan Documents.

 


k.      Guaranties,
Etc. The Borrower shall not
assume, guaranty, endorse, or otherwise be or become directly or
contingently responsible or liable (including, but not limited to,
an agreement to purchase any obligation, stock, assets, goods, or
services, or to supply or advance any funds, assets, goods, or
services, or an agreement to maintain or cause such person to
maintain a minimum working capital or net worth, or otherwise to
assure the creditors of any person against loss) for obligations of
any person, except (i) guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in
the ordinary course of business and (ii) guaranties in favor of the
Lender.

 


l.      Liens,
Etc. Borrower shall not create,
incur, assume or suffer to exist, any mortgage, security interest,
pledge, lien, charge or other encumbrance of any nature whatsoever
on any of their respective assets, now or hereafter owned, other
than (i) liens in favor of the Lender; (ii) liens under workmen's
compensation, unemployment insurance and social security or similar
laws; and (iii) liens imposed by law, such as carriers,
warehousemen's or mechanic's liens, incurred in good faith in the
ordinary course of business which are not past due for more than
thirty (30) days (other than to the extent a longer period is
permitted by their creditors in the ordinary course of business) or
which are being contested in good faith by appropriate proceedings,
a stay of execution having been served.

 


m.           Loan
and Advances. The Borrower
shall not make any additional loans or advances to any individual,
firm or corporation.

 




 

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10.           Conditions
Precedent. The obligation of
the Lender to make the Loan is subject to the satisfaction by the
Borrower of the following conditions precedent:

 


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 they are parties;

 


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 such
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
requested by the Lender at or prior to closing.

 


11.           Events
of Default; Acceleration; Remedies. The occurrence of any one or more of the
following events shall constitute a default (an
“Event
of Default”) under this
Agreement:

 


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;

 


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
respective 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.

 




 

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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, except as
may occur in connection with the currently contemplated Memphis
investment group;

 


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
Borrower 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 such 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 such 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

 


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 and
may proceed to liquidate and realize upon any of its collateral in
accordance with the rights of a mortgagee or a secured party under
the Uniform Commercial Code, any other applicable law, any Loan
Document, any agreement between the Borrowers and the Lender;
and/or (iii) the Lender's commitment to make further loans under
this Agreement or any other agreement with either of the Borrowers
will immediately cease and terminate.

 




 

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12.           General
Provisions. The Lender and the
Borrowers agree as follows with respect to the Loan
Documents:

 


a.      Waivers.

 


i.           The
Borrowers hereby waive, 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, (2) to any substitution, exchange
or release of collateral, and (3) 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.

 


b.      Binding
Agreement. The Loan Documents
shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives,
successors, and assigns;

 


c.      Entire
Agreement and Amendment. The
Loan Documents constitute the entire agreement between the Lender
and the Borrowers with respect to the Loan and shall not be changed
in any respect except by written instrument signed by the parties
thereto;

 


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;

 


e.      Severability.
If any term, condition, or provision of the Loan Documents or the
application thereof to any person or circumstance shall, to any
extent, be held invalid or unenforceable according to law, then the
remaining terms, conditions, and provisions of the Loan Documents,
or the application of any such invalid or unenforceable term,
condition or provision to persons or circumstances other than those
to which it is held invalid or unenforceable, shall not be affected
thereby, and each term, condition, and provision of the Loan
Documents shall be valid and enforced to the fullest extent
permitted by law;

 




 

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f.      Notice.
Any demand or notice required or permitted under the Loan Documents
shall be effective if either: (i) hand-delivered to the addressee,
or (ii) deposited in the mail, registered or certified, return
receipt requested and postage prepaid, or delivered to a private
express company addressed to the addressee: (A) at the address
shown below, or (B) if such party has provided the other in writing
with a change of address, at the last address so provided. Any
notice or demand mailed as provided in this paragraph shall be
deemed given and received on the earlier of: (i) the date received;
(ii) or the date of delivery, refusal or non-delivery as indicated
on the return receipt, if sent by mail or private express as
provided above.

 


	


Borrowers:

	


Lender:


	


Ocean Thermal Energy Corporation



OCEES International, Inc.



800 South Queen Street



Lancaster, PA 17603


 



With a copy to:



Gerald Koenig



8220 Crestwood Heights Drive, #1105



McLean VA 22102 


	


JPF Venture Group, Inc.



800 South Queen Street



Lancaster, PA 17603


 



With copy to:



Jeremy P. Feakins



1200 West Penn Grant Road



Lancaster, PA 17603


 







 


g.      Conflict
Among Loan Documents. In the
event of any conflict between the terms, covenants, conditions and
restrictions contained in the Loan Documents, the term, covenant
and condition or restriction which grants the greater benefit upon
the Lender shall control. The determination as to which term,
covenant, condition or restriction is the more beneficial shall be
made by the Lender in its sole discretion.

 


h.      Costs
of Collection. The Borrowers
agree to pay on demand all reasonable out-of-pocket costs of
collection under the Loan Documents, including reasonable
attorneys' fees, whether or not any foreclosure or other action is
instituted by the Lender in its discretion.

 


i.      Set-Off,
Etc. As additional collateral,
the Borrowers grant (1) a security interest in, or pledges, assigns
and delivers, to the Lender, as appropriate, all deposits, credits
and other property now or hereafter due from the Lender to the
Borrowers and (2) the right to set-off and apply (and a security
interest in said right), from time to time hereafter and without
demand or notice of any nature, all, or any portion, of such
deposits, credits and other property, against the indebtedness
evidenced by any of the Notes, whether the other collateral, if
any, is deemed adequate or not.

 


j.      Rights
Cumulative. All rights and
remedies of the Lender, whether granted herein or otherwise, shall
be cumulative and may be exercised singularly or concurrently, and
the Lender shall have, in addition to all other rights and
remedies, the rights and remedies of a secured party under the
Uniform Commercial Code of Pennsylvania. Except as otherwise
provided by law, the Lender shall have no duty as to the collection
or protection of the collateral or of any income thereon, or as to
the preservation of any rights pertaining thereto beyond the safe
custody thereof.

 



[SIGNATURE PAGE FOLLOWS]


 







 

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IN
WITNESS WHEREOF, the Borrowers and the Lender have executed this
Loan Agreement as of the date indicated above.


 





OCEAN
THERMAL ENERGY CORPORATION


 


 


By:/s/ Gerald
Koenig


Name:
Gerald Koenig


Title:
General Counsel


 




 


JPF
VENTURE GROUP, INC.


 


 


By:/s/ Edward
Baer


Name:
Edward Baer


Title:
Partner & CFO


 


 

 


 




 

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PROMISSORY
NOTE

 


	
$2,000,000

	
Lancaster,
PA

	
November
6, 2017






 


FOR
VALUE RECEIVED, the undersigned, OCEAN THERMAL ENERGY CORPORATION.,
a Delaware corporation (“Maker”), whose mailing address
and principal office is 800 South Queen Street, Lancaster, PA
17603, USA, hereby promises to pay to JPF VENTURE GROUP, INC., a
Delaware corporation (“Payee”), whose mailing address
is 800 South Queen Street, Lancaster, PA 17603, up to the principal
sum of TWO MILLION DOLLARS AND NO CENTS ($2,000,000), as
represented by advances from time to time, in lawful money of the
United States of America for payment of private debts, together
with interest (calculated on the basis of the actual number of days
elapsed but computed as if each year consisted of 360 days) on the
unpaid principal balance from time to time outstanding at a rate,
except as otherwise provided in this Note, of Ten percent (10%) per
annum.

 





1.           Payments.
All unpaid principal and all accrued and unpaid interest shall be
due and payable at the earliest of A) resolution of the Memphis
litigation; B) June 30, 2018; or, C) when Maker is otherwise able
to pay.

   



2.           Time
and Place of Payment. If any payment falls due on a day that
is considered a legal holiday in the state of Delaware, Maker shall
be entitled to delay such payment until the next succeeding regular
business day, but interest shall continue to accrue until the
payment is in fact made. Each payment or prepayment hereon must be
paid at the office of Payee set forth above or at such other place
as the Payee or other holder hereof may, from time to time,
designate in writing.

 





3.           Prepayment.
Maker reserves the right and privilege of prepaying this Note in
whole or in part, at any time or from time to time, upon 30
days’ written notice, without premium, charge, or penalty.
Prepayments on this Note shall be applied first to accrued and
unpaid interest to the date of such prepayment, next to expenses
for which Payee is due to be reimbursed under the terms of this
Note, and then to the unpaid principal balance hereof

 






4. 

Default.





 





(a)           Without
notice or demand (which are hereby waived), the entire unpaid
principal balance of, and all accrued interest on, this Note shall
immediately become due and payable at Payee’s option upon the
occurrence of one or more of the following events of default
(“Events of Default”):

 





(i)           the
failure or refusal of Maker to pay principal or interest on this
Note within 10 days of when the same becomes due in accordance with
the terms hereof;


 




 

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(ii)           the
failure or refusal of Maker punctually and properly to perform,
observe, and comply with any covenant or agreement contained
herein, and such failure or refusal continues for a period of 30
days after Maker has (or, with the exercise of reasonable
investigation, should have) notice hereof;

   



(iii)           Maker
shall: (1) voluntarily seek, consent to, or acquiesce in the
benefit or benefits of any Debtor Relief Law (defined hereinafter);
or (2) become a party to (or be made the subject of) any proceeding
provided for by any Debtor Relief Law, other than as a creditor or
claimant, that could suspend or otherwise adversely affect the
Rights (defined hereinafter) of Payee granted herein (unless, in
the event such proceeding is involuntary, the petition instituting
same is dismissed within 60 days of the filing of same).
“Debtor Relief Law” means the Bankruptcy Code of the
United States of America and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments,
or similar Laws from time to time in effect affecting the Rights of
creditors generally. “Rights” means rights, remedies,
powers, and privileges. “Laws” means all applicable
statutes, laws, ordinances, regulations, orders, writs,
injunctions, or decrees of any state, commonwealth, nation,
territory, possession, county, parish, municipality, or Tribunal.
“Tribunal” means any court or governmental department,
commission, board, bureau, agency, or instrumentality of the United
States or of any state, commonwealth, nation, territory,
possession, county, parish, or municipality, whether now or
hereafter constituted and/or existing;

 





(iv)           the
failure to have discharged within a period of 30 days after the
commencement thereof any attachment, sequestration, or similar
proceeding against any of the assets of Maker, or the loss, theft,
or destruction of, or occurrence of substantial damage to, a
material part of the assets of Maker, except to the extent
adequately covered by insurance; and

 





(v)           Maker
fails to pay any money judgment against it at least 10 days prior
to the date on which any of Maker’s assets may be lawfully
sold to satisfy such judgment.

 





(b)           If
any one or more of the Events of Default specified above shall have
happened, Payee may, at its option: (i) declare the entire unpaid
balance of principal and accrued interest on this Note to be
immediately due and payable without notice or demand; (ii) offset
against this Note any sum or sums owed by Payee to Maker; (iii)
reduce any claim to judgment; (iv) foreclose all liens and security
interests securing payment thereof or any part thereof; and (v)
proceed to protect and enforce its rights by suit in equity, action
of law, or other appropriate proceedings, whether for the specific
performance of any covenant or agreement contained in this Note, in
aid of the exercise granted by this Note of any right, or to
enforce any other legal or equitable right or remedy of
Payee.

 





5.           Cumulative
Rights. No delay on Payee’s part in the exercise of
any power or right, or single partial exercise of any such power or
right, under this Note or under any other instrument executed
pursuant hereto shall operate as a waiver thereof. Enforcement by
Payee of any security for the payment hereof shall not constitute
any election by it of remedies, so as to preclude the exercise of
any other remedy available to it.


 




 

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6.           Collection
Costs. If this Note is placed in the hands of an attorney
for collection, or if it is collected through any legal proceeding
at law or in equity or in bankruptcy, receivership, or other court
proceedings, Maker agrees to pay all costs of collection, including
Payee’s court costs and reasonable attorney’s
fees.

 





7.           Waiver.
Maker, and each surety, endorser, guarantor, and other party liable
for the payment of any sums of money payable on this Note, jointly
and severally waive presentment and demand for payment, protest,
and notice of protest and nonpayment, or other notice of default,
except as specified herein, and agree that their liability on this
Note shall not be affected by any renewal or extension in the time
of payment hereof, indulgences, partial payment, release, or change
in any security for the payment of this Note, before or after
maturity, regardless of the number of such renewals, extensions,
indulgences, releases, or changes.

 


8.           Notices.
Any notice, demand, request, or other communication permitted or
required under this Note shall be in writing and shall be deemed to
have been given as of the date so delivered, if personally served;
as of the date so sent, if sent by electronic mail and receipt is
acknowledged by the recipient; one day after the date so sent, if
delivered by overnight courier service; or three days after the
date so mailed, if mailed by certified mail, return receipt
requested, addressed to Maker at its address on the first
page.

 





9.           Successor
and Assigns. All of the covenants, stipulations, promises,
and agreements in this Note contained by or on behalf of Maker
shall bind its successors and assigns, whether so expressed or not;
provided, however, that neither Maker nor Payee
may, without the prior written consent of the other, assign any
rights, powers, duties, or obligations under this
Note.

 





10.           Headings.
The headings of the sections of this Note are inserted for
convenience only and shall not be deemed to constitute a part
hereof.

 





11.           Applicable
Law. This Note is being executed and delivered, and is
intended to be performed, in the state of Delaware, and the
substantive laws of such state shall govern the validity,
construction, enforcement, and interpretation of this Note, except
insofar as federal laws shall have application. 


 


12. 
        Security. This Note is
unsecured.

 




 


EXECUTED effective
the year and date first above written.


 




 


OCEAN
THERMAL ENERGY CORPORATION.

 



 


By:
/s/ Gerald S.
Koenig

 

 


  Gerald
S. Koenig, General Counsel

 


 

 




 

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