Document:

Blueprint

 

	
 

	

PROMISSORY NOTE

	
 

	
 

	
 

	
 

	

$25,000

	

Lancaster, PA

	

December 21, 2016

 

 

FOR
VALUE RECEIVED, the undersigned, TETRIDYN SOLUTIONS, INC., a Nevada
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
TWENTY FIVE THOUSAND DOLLARS AND NO CENTS ($25,000), 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 six percent (6%) per
annum.

 

1.           

Payments. All unpaid principal
and all accrued and unpaid interest shall be due and payable within
90 days after demand.

 

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.           

Conversion. Subject to and in
compliance with the provisions contained herein, Payee is entitled,
at its option, at any time prior to maturity, or in the case this
Note or some portion hereof shall have been called for prepayment
before such date, then for this Note or such portion hereof, until
and including, but not after, the close of business within 30 days
after the date of notice of prepayment, to convert this Note (or
any portion of the principal amount hereof or accrued and unpaid
interest hereon) into fully paid and nonassessable shares
(calculated as to each conversion to the nearest share) of common
stock, par value $0.001 per share, of Maker (the
“Shares”) at the rate of one share for each $0.03 of
principal amount of this Note, by surrender of this Note, duly
endorsed (if so required by Maker) or assigned to Maker or in
blank, to Maker at its offices, accompanied by written notice to
Maker, in the form attached hereto, that Payee elects to convert
this Note or, if less than the entire principal amount hereof is to
be converted, the portion thereof to be converted. On conversion,
Payee shall be entitled to payment of accrued interest on this Note
through the date of conversion. No fractions of Shares will be
issued on conversion, but instead of any fractional interest, Maker
will pay cash. Payee is entitled, at its option, to require that
the exercise price be appropriately adjusted in the event of any
stock splits, reverse-split, merger, consolidation, conversion, or
any similar change in Maker’s common stock. Payee is also
entitled, at its option, to require that the conversion price and
number of shares issuable on conversion of this Note be
appropriately adjusted in the event of any stock splits,
reverse-split, merger, consolidation, conversion, or similar change
in Maker’s common stock. For the avoidance of doubt, it is
explicitly agreed that if the Payee does not exercise these
options, the exercise price, conversion price, and number of shares
shall remain unchanged after any stock splits, reverse-split,
merger, consolidation, conversion, or any similar change in
Maker’s common stock.

 

 

5.           

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;

 

(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.

 

6.           

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.

 

7.           

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.

 

8.           

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.

 

9.           

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.

 

10.           

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.

 

11.           

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

 

12.           

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.

 

13.           

Security. This Note is
unsecured.

 

EXECUTED effective
the year and date first above written.

 

TETRIDYN SOLUTIONS,
INC.

 

 

By: /s/ Peter
Wolfson                                                                            

Peter
Wolfson, Director

 

 

 

 

 

 

TetriDyn
Solutions, Inc.

800
South Queen Street

Lancaster,
PA 17603, USA

 

Re:           

Conversion of
Note

 

Gentlemen:

 

The
undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note or the portion hereof designated, into
shares of common stock, par value $0.001 per share, of TetriDyn
Solutions, Inc., in accordance with the terms of this Note, and
directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned
unless a different name has been indicated below. If shares are to
be issued in the name of a person other than the undersigned, the
undersigned will pay any transfer taxes payable with respect
thereto.

 

 

 

 

(Signature)

Dated:                                                                       

FILL IN
FOR REGISTRATION

OF
SHARES:

 

 

JPF VENTURE GROUP,
INC                                                                           

           

47-1973424_____________________________

(Printed
Name)                                                                            

(Social Security or
Other Identifying Number)

 

 

800 South Queen
Street                                                                

Lancaster, PA
17603                                                                

(Street
Address)                                                                            

(City/State/Zip
Code)

 

 

 

Portion
to be converted (if less than all)Blueprint

	

EXECUTION COPY

 

 

NEITHER
THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF

(A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES FILED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

 

Principal
Amount:
$371,250.00                                                                                        

Issue
Date: December 14, 2018

 

 

REPLACEMENT CONVERTIBLE PROMISSORY NOTE

 

 

FOR VALUE RECEIVED, OCEAN THERMAL ENERGY CORPORATION, a
Nevada

 

corporation
(hereinafter called the “Borrower”), hereby
promises to pay to the order of L2
CAPITAL, LLC, a Kansas limited liability company, or its
registered assigns (the “Holder”) the principal
sum of

$371,250.00 (the “Principal Amount”),
together with interest at the rate of twelve percent (12%) per
annum on the aggregate unconverted and then outstanding Principal
Amount of this Note, at maturity or upon acceleration or otherwise,
as set forth herein (this “Note”) (with the
understanding that the initial six months of such interest shall be
guaranteed). This Note is being
issued by the Borrower to the Holder to evidence the assignment by
Collier Investments, LLC, a California limited liability company
(the “Seller”),
of that certain Convertible Note (the “Original
Note”) issued by the
Borrower to the Seller on May 22, 2018, in the original principal
amount of $281,250.00, pursuant to that certain Note Purchase and
Assignment Agreement (the “Note Purchase
Agreement”) entered
into on December 14, 2018 (the “Issue
Date”), which such
amount evidencing the principal amount of the Original Note was
fully funded and earned by the Seller on or before the date of
issuance of the Original Note. The Principal Amount of this Note
outstanding will initially be $371,250.00 on the Issue Date.
The maturity date of this Note shall be December 22, 2018 (the
“Maturity
Date”), and is the date upon which the Principal
Amount, as well as any accrued and unpaid interest and other fees,
shall be due and payable. This Note may not be repaid in whole or
in part except as otherwise explicitly set forth herein. Any amount
of principal or interest on this Note, which is not paid by the
applicable Maturity Date, shall bear interest at the rate of the
lesser of (i) twenty-four percent (24%) per annum or (ii) the
maximum amount allowed by law, from the due date thereof until the
same is paid (“Default Interest”).
Interest shall commence accruing on the date that this Note is
issued and shall be computed on the basis of a 365-day year and the
actual number of days elapsed. All payments due hereunder (to the
extent not converted into the Borrower’s common stock (the
“Common
Stock”) in accordance with the terms hereof) shall be
made in lawful money of the United States of America. All payments
shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the
provisions of this Note. Whenever any amount expressed to be due by
the terms of this Note is due on any day which is not a business
day, the same shall instead be due on the next succeeding day which
is a business day and, in the case of any interest payment date
which is not the date on which this Note is paid in full, the
extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such
date. As used in this Note, the term “business day”
shall mean any day other than a Saturday, Sunday or a day on which
commercial banks in the city of New York, New York are authorized
or required by law or executive order to remain
closed.

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

This
Note is free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and
will not impose personal liability upon the holder
thereof.

 

 

 

The
following additional terms shall also apply to this
Note:

 

 

ARTICLE I. CONVERSION RIGHTS

 

 

1.1 
Conversion Right. The Holder
shall have the right at any time on or after the Issue Date, to
convert all or any part of the outstanding and unpaid Principal
Amount and accrued and unpaid interest of this Note into fully paid
and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other
securities of the Borrower into which such Common Stock shall
hereafter be changed or reclassified at the Conversion Price
determined as provided herein (a “Conversion”);
provided,
however, that in no
event shall the Holder be entitled to convert any portion of this
Note in excess of that portion of this Note upon conversion of
which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of this Note or
the unexercised or unconverted portion of any other security of the
Borrower subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number
of shares of Common Stock issuable upon the conversion of the
portion of this Note with respect to which the determination of
this proviso is being made, would result in beneficial ownership by
the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock (the “Maximum Share Amount”).
The Holder, upon not less than 61 days’ prior written notice
to the Borrower, may increase the Maximum Share Amount, provided
that the Maximum Share Amount shall never exceed 9.99% of the
number of shares of Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
conversion of this Note held by the Holder and the provisions of
this Section 1.1
shall continue to apply. Any such increase will not be effective
until the 61st day after such notice is delivered to the Borrower.
The Maximum Share Amount provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1.1 to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Maximum Share Amount provisions
contained herein or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The
limitations contained in this paragraph shall apply to a successor
holder of this Note. For purposes of this Section 1.1, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso. The number of
shares of Common Stock to be issued upon each conversion of this
Note shall be determined by dividing the Conversion Amount (as
defined below) by the applicable Conversion Price then in effect on
the date specified in the notice of conversion, in the form
attached hereto as Exhibit
A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with
Section 1.3 below;
provided that the Notice of Conversion is submitted by facsimile or
e-mail (or by other means resulting in, or reasonably expected to
result in, notice) to the Borrower before 6:00 p.m., New York, New
York time on such conversion date (the “Conversion Date”). The
term “Conversion
Amount” means, with respect to any conversion of this
Note, the sum of (1) the Principal Amount of this Note to be
converted in such conversion plus (2) at the Holder’s option,
accrued and unpaid interest, if any, on such Principal Amount at
the interest rates provided in this Note to the Conversion Date,
plus (3) at the Holder’s option, Default Interest, if any, on
the amounts referred to in the immediately preceding clauses (1)
and/or (2) plus (4) at the Holder’s option, any amounts owed
to the Holder pursuant to Sections 1.2, 1.3(g),
4.11, 4.12 and/or 4.13 and/or Article III
hereof.

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

1.2

Conversion Price.

 

 

 

(a) Calculation of Conversion
Price. The “Conversion Price” per
share shall be the Variable Conversion Price (as defined herein)
(subject to adjustment as further described herein). The
“Variable Conversion
Price” shall mean 65% multiplied by the Market Price
(as defined herein) (representing a discount rate of 35%).
“Market
Price” means the lowest Trading Price (as defined
below) for the Common Stock during the twenty (20) Trading Day
period ending on the last complete Trading Day prior to the
Conversion Date. “Trading Price” or
“Trading
Prices” means, for any security as of any date, the
lowest VWAP price on the Over-the-Counter Pink Marketplace, OTCQB,
or applicable trading market (the “Trading Market”) as
reported by a reliable reporting service designated by the Holder
(i.e. www.Nasdaq.com) or, if the Trading Market is not the
principal trading market for such security, on the principal
securities exchange or trading market where such security is listed
or traded or, if the lowest intraday trading price of such security
is not available in any of the foregoing manners, the lowest
intraday price of any market makers for such security that are
quoted on the OTC Markets. If the Conversion Price on the date in
which the Holder actually receives the Conversion Shares (each a
“Share Delivery
Date”) is less than the Conversion Price in the
respective Notice of Conversion, then the Conversion Price in the
respective Notice of Conversion shall be retroactively adjusted
downward to equal the Conversion Price on the Share Delivery Date.
If the Trading Price cannot be calculated for such security on such
date in the manner provided above, the Trading Price shall be the
fair market value as mutually determined by the Borrower and the
Holder in order to determine the Conversion Price of this Note.
“Trading
Day” shall mean any day on which the Common Stock is
tradable for any period on the Trading Market, or on the principal
securities exchange or other securities market on which the Common
Stock is then being traded. Each time an Event of Default (as
defined herein) occurs while this Note is outstanding, an
additional discount of five percent (5%) shall be factored into the
Conversion Price (in addition to the base 40% discount rate). All
expenses incurred by Holder, for the issuance and clearing of the
Common Stock into which this Note is convertible into, shall
immediately and automatically be added to the balance of this Note
at such time as the expenses are incurred by Holder pursuant to
written notice regarding the same from the Holder to the
Borrower.

 

 

Each
time, while this Note is outstanding, the Borrower enters into a
Section 3(a)(9) Transaction (as defined herein) (including but not
limited to the issuance of new promissory notes or of a replacement
promissory note), or Section 3(a)(10) Transaction (as defined
herein), in which any 3rd party has the right
to convert monies owed to that 3rd party (or receive
shares pursuant to a settlement or otherwise) at a discount to
market greater than the Variable Conversion Price in effect at that
time (prior to all other applicable adjustments in this Note), then
the Conversion Price may be adjusted at the option of the Holder to
such greater discount percentage (prior to all applicable
adjustments in this Note) until this Note is no longer outstanding.
Each time, while this Note is outstanding, the Borrower enters into
a Section 3(a)(9) Transaction (including but not limited to the
issuance of new promissory notes or of a replacement promissory
note), or Section 3(a)(10) Transaction, in which any 3rd party has a look
back/holding period greater than the look back/holding period in
effect under this Note at that time, then the Holder’s look
back/holding period may be adjusted at the option of the Holder to
such greater number of days until this Note is no longer
outstanding. The Borrower shall give written notice to the Holder,
with the adjusted Conversion Price and/or adjusted look
back/holding period (each adjustment that is applicable due to the
triggering event), within one (1) business day of an event that
requires any adjustment described in the two immediately preceding
sentences, and the Holder shall have the sole discretion in
determining whether to utilize the adjusted term pursuant to this
section. So long as this Note is outstanding, if any security of
the Borrower contains any term more favorable to the holder of such
security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then
the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall
become a part of the transaction documents with the Holder pursuant
to the amendment thereof at the Holder’s
direction.

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

If at
any time the Conversion Price as determined hereunder for any
Conversion would be less than the par value of the Common Stock,
then at the sole discretion of the Holder, the Conversion Price
hereunder may equal such par value for such conversion and the
Conversion Amount for such conversion may be increased (at the
option of the Holder) to include Additional Principal (without a
reduction in the amount owed under this Note), where
“Additional
Principal” means such additional amount to be added to
the Conversion Amount to the extent necessary to cause the number
of conversion shares issuable upon such conversion to equal the
same number of conversion shares as would have been issued had the
Conversion Price not been adjusted by the Holder to the par value
price.

 

 

 

If, at
any time when this Note is issued and outstanding, the Borrower
issues or sells, or is deemed to have issued or sold (in the sole
determination of the Holder), any shares of Common Stock for a
consideration per share less than the Conversion Price in effect on
the date of such issuance (or deemed issuance) of such shares of
Common Stock (a “Dilutive Issuance”), then
the Holder shall have the right, in Holder’s sole discretion
on each conversion after such Dilutive Issuance, to utilize the
price per share of the Dilutive Issuance as the Conversion Price
for such conversion.

 

 

(b) Authorized Shares. The Borrower
covenants that during the period the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock
a sufficient number of shares, free from preemptive rights, to
provide for the issuance of Common Stock upon the full conversion
of this Note. The Borrower is required at all times to have
authorized and reserved three times (300%) the number of shares
that is actually issuable upon full conversion of this Note (based
on the Conversion Price of this Note in effect from time to time)
(the “Reserved
Amount”). The Reserved Amount shall be increased from
time to time in accordance with the Borrower’s obligations
hereunder. The Borrower represents that upon issuance, such shares
of Common Stock will be duly and validly issued, fully paid and
non-assessable. In addition, if the Borrower shall issue any
securities or make any change to its capital structure which would
change the number of shares of Common Stock into which this Note
shall be convertible at the then current Conversion Price, the
Borrower shall at the same time make proper provision so that
thereafter there shall be a sufficient number of shares of Common
Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Note. The Borrower acknowledges that
it has irrevocably instructed its transfer agent to issue
certificates for the Common Stock issuable upon conversion of this
Note, and agrees that its issuance of this Note shall constitute
full authority to its officers and agents who are charged with the
duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note.

 

 

If, at
any time the Borrower does not maintain the Reserved Amount it will
be considered an Event of Default under Section 3.2 of this
Note.

 

 

 

1.3

Method of
Conversion.

 

 

 

(a) Mechanics of Conversion.
Subject to Section
1.1, this Note may be converted by the Holder in whole or in
part at any time on or after the Issue Date, (A) by submitting to
the Borrower a Notice of Conversion (by facsimile, e-mail or other
reasonable means of communication dispatched on the Conversion Date
prior to 6:00 p.m., New York, New York time) and (B) subject to
Section 1.3(b),
surrendering this Note at the principal office of the
Borrower.

 

 

(b) Surrender of Note Upon
Conversion. The Holder and the Borrower shall maintain
records showing the updated current unpaid and unconverted
Principal Amount of the Note in connection with each Tranche
Purchase. Notwithstanding anything to the contrary set forth
herein, upon conversion of this Note in accordance with the terms
hereof, the Holder shall not be required to physically surrender
this Note to the Borrower unless the entire unpaid Principal Amount
of this Note is so

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

converted. The
Holder and the Borrower shall maintain records showing the
Principal Amount so converted and the dates of such conversions or
shall use such other method, reasonably satisfactory to the Holder
and the Borrower, so as not to require physical surrender of this
Note upon each such conversion. In the event of any dispute or
discrepancy, such records of the Borrower shall, prima facie, be controlling and
determinative in the absence of manifest error. Notwithstanding the
foregoing, if any portion of this Note is converted as aforesaid,
the Holder may not transfer this Note unless the Holder first
physically surrenders this Note to the Borrower, whereupon the
Borrower will forthwith issue and deliver upon the order of the
Holder a new Note of like tenor, registered as the Holder (upon
payment by the Holder of any applicable transfer taxes) may
request, representing in the aggregate the remaining unpaid
Principal Amount of this Note. The Holder and any assignee, by
acceptance of this Note, acknowledge and agree that, by reason of
the provisions of this paragraph, following conversion of a portion
of this Note, the unpaid and unconverted Principal Amount of this
Note represented by this Note may be less than the amount stated on
the face hereof.

 

 

(c) Payment of Taxes. The Borrower
shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on
conversion of this Note in a name other than that of the Holder (or
in street name), and the Borrower shall not be required to issue or
deliver any such shares or other securities or property unless and
until the person or persons (other than the Holder or the custodian
in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have
paid to the Borrower the amount of any such tax or shall have
established to the satisfaction of the Borrower that such tax has
been paid.

 

 

(d) Delivery of Common Stock Upon
Conversion. Upon receipt by the Borrower from the Holder of
a facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements
for conversion as provided in this Section 1.3, the Borrower shall
issue and deliver or cause to be issued and delivered to or upon
the order of the Holder certificates for the Common Stock issuable
upon such conversion within two (2) business days after such
receipt (the “Deadline”) (and, solely
in the case of conversion of the entire unpaid Principal Amount
hereof, surrender of this Note) in accordance with the terms
hereof.

 

 

 

(e) Obligation of Borrower to Deliver
Common Stock. Upon receipt by the Borrower of a Notice of
Conversion, the Holder shall be deemed to be the holder of record
of the Common Stock issuable upon such conversion, the outstanding
Principal Amount and the amount of accrued and unpaid interest on
this Note shall be reduced to reflect such conversion, and, unless
the Borrower defaults on its obligations under this Article I, all rights with
respect to the portion of this Note being so converted shall
forthwith terminate except the right to receive the Common Stock or
other securities, cash or other assets, as herein provided, on such
conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower’s obligation to issue and
deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the
Holder to enforce the same, any waiver or consent with respect to
any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in
the enforcement of any other obligation of the Borrower to the
holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the
Conversion Date so long as the Notice of Conversion is received by
the Borrower before 6:00 p.m., New York, New York time, on such
date.

 

 

(f) Delivery of Common Stock by Electronic
Transfer. In lieu of delivering physical certificates
representing the Common Stock issuable upon conversion, provided
the Borrower is

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

participating in
the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon
request of the Holder and its compliance with the provisions
contained in Sections
1.1 and

 

1.2 and in this Section 1.3, the Borrower shall
use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by
crediting the account of Holder’s Prime Broker with DTC
through its Deposit Withdrawal Agent Commission
(“DWAC”)
system.

 

 

 

(g) Failure to Deliver Common Stock Prior
to Deadline. Without in any way limiting the Holder’s
right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of this Note is not delivered by the
Deadline the Borrower shall pay to the Holder $3,000 per day in
cash, for each day beyond the Deadline that the Borrower fails to
deliver such Common Stock (unless such failure results from war,
acts of terrorism, an epidemic, or natural disaster)
(“Conversion Default
Payments”). Such cash amount shall be paid to Holder
in cash by the fifth day of the month following the month in which
it has accrued or, at the option of the Holder (by written notice
to the Borrower by the first day of the month following the month
in which it has accrued), shall be added to the Principal Amount of
this Note on the fifth day of the month following the month in
which it has accrued, in which event interest shall accrue thereon
in accordance with the terms of this Note and such additional
Principal Amount shall be convertible into Common Stock in
accordance with the terms of this Note. The Borrower agrees that
the right to convert is a valuable right to the Holder. The damages
resulting from a failure of, attempt to frustrate or interference
with such conversion right are difficult if not impossible to
qualify. Accordingly the parties acknowledge that the liquidated
damages provision contained in this Section 1.3(g) are
justified.

 

 

 

1.4 Concerning the Shares. The
shares of Common Stock issuable upon conversion of this Note may
not be sold or transferred unless (i) such shares are sold pursuant
to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”), or (ii)
the Borrower or its transfer agent shall have been furnished with
an opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or
transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Securities Act (or a successor rule)
(“Rule
144”) or (iv) such shares are transferred to an
“affiliate” (as defined in Rule 144) of the Borrower
who agrees to sell or otherwise transfer the shares only in
accordance with this Section 1.4 and who is an
“accredited investor” (as defined in Rule 501(a) of the
Securities Act). Except as otherwise provided (and subject to the
removal provisions set forth below), until such time as the shares
of Common Stock issuable upon conversion of this Note have been
registered under the Securities Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of
securities as of a particular date that can then be immediately
sold, each certificate for shares of Common Stock issuable upon
conversion of this Note that has not been so included in an
effective registration statement or that has not been sold pursuant
to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the
following form, as appropriate:

 

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE
144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION
OF COUNSEL IN A CUSTOMARY FORM, THAT REGISTRATION IS
NOT

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS.”

 

 

 

The
legend set forth above shall be removed and the Borrower shall
issue to the Holder a new certificate therefore free of any
transfer legend if (i) the Borrower or its transfer agent shall
have received an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to
the effect that a public sale or transfer of such Common Stock may
be made without registration under the Securities Act, which
opinion shall be accepted by the Borrower so that the sale or
transfer is effected or (ii) in the case of the Common Stock
issuable upon conversion of this Note, such security is registered
for sale by the Holder under an effective registration statement
filed under the Securities Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold. In the
event that the Borrower does not accept the opinion of counsel
provided by the Holder with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or
Regulation S, at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of this
Note.

 

 

 

1.5 Status as Shareholder. Upon
submission of a Notice of Conversion by a Holder, (i) the shares
covered thereby (other than the shares, if any, which cannot be
issued because their issuance would exceed such Holder’s
allocated portion of the Reserved Amount or non-waived Maximum
Share Amount) shall be deemed converted into shares of Common Stock
and (ii) the Holder’s rights as a Holder of such converted
portion of this Note shall cease and terminate, excepting only the
right to receive certificates for such shares of Common Stock and
to any remedies provided herein or otherwise available at law or in
equity to such Holder because of a failure by the Borrower to
comply with the terms of this Note. Notwithstanding the foregoing,
if a Holder has not received certificates or transmission of such
shares pursuant to Section
1.3(f) for all shares of Common Stock prior to the tenth
(10th) business day after the expiration of the Deadline with
respect to a conversion of any portion of this Note for any reason,
then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder
shall regain the rights of a Holder of this Note with respect to
such unconverted portions of this Note and the Borrower shall, as
soon as practicable, return such unconverted Note to the Holder or,
if this Note has not been surrendered, adjust its records to
reflect that such portion of this Note has not been converted. In
all cases, the Holder shall retain all of its rights and remedies
(including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3(g) to the extent
required thereby for such conversion default and any subsequent
conversion default and (ii) the right to have the Conversion Price
with respect to subsequent conversions determined in accordance
with Section 1.2)
for the Borrower’s failure to convert this Note.

 

 

 

ARTICLE II. CERTAIN COVENANTS

 

2.1 Distributions on Capital Stock.
So long as the Borrower shall have any obligation under this Note,
the Borrower shall not without the Holder’s written consent
(a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities)
on shares of capital stock other than dividends on shares of Common
Stock solely in the form of additional shares of Common Stock or
(b) directly or indirectly or through any subsidiary make any other
payment or distribution in respect of its capital stock except for
distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested
directors.

 

 

2.2 Restriction on Stock
Repurchases. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the
Holder’s written consent redeem, repurchase or otherwise
acquire (whether for cash or in exchange for property or other
securities or otherwise) in any one transaction or series of
related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such
shares.

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

ARTICLE III. EVENTS OF DEFAULT

 

 

The
occurrence of any of the following events of default shall each be
an “Event of Default”, with no right to notice or right
to cure except as specifically stated:

 

 

 

3.1 Failure to Pay Principal or
Interest. The Borrower fails to pay the principal hereof or
interest thereon when due on this Note, whether at the Maturity
Date, upon acceleration, or otherwise.

 

 

3.2 Conversion and the Shares. The
Borrower fails to reserve a sufficient amount of shares of Common
Stock as required under the terms of this Note (including without
limitation, Sections
1.2 and

 

1.3 of this Note), fails to
issue shares of Common Stock to the Holder (or announces or
threatens in writing that it will not honor its obligation to do
so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Note, fails to transfer
or cause its transfer agent to transfer (issue) (electronically or
in certificated form) shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when
required by this Note, the Borrower directs its transfer agent not
to transfer or delays, impairs, and/or hinders its transfer agent
in transferring (or issuing) (electronically or in certificated
form) shares of Common Stock to be issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when
required by this Note, or fails to remove (or directs its transfer
agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any
stop transfer instructions in respect thereof) on any shares of
Common Stock issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note (or makes
any written announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and
any such failure shall continue uncured (or any written
announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for two (2) business days after
the Holder shall have delivered a Notice of Conversion. It is an
obligation of the Borrower to remain current in its obligations to
its transfer agent. It shall be an Event of Default of this Note,
if a conversion of this Note is delayed, hindered or frustrated due
to a balance owed by the Borrower to its transfer agent. If at the
option of the Holder, the Holder advances any funds to the
Borrower’s transfer agent in order to process a conversion,
such advanced funds shall be paid by the Borrower to the Holder
within five (5) business days, either in cash or as an addition to
the balance of this Note, and such choice of payment method is at
the discretion of the Borrower.

 

 

3.3 Breach of Covenants. The
Borrower breaches any material covenant or other material term or
condition contained in this Note or any other documents entered
into between the Holder and Borrower, and such breach continues for
a period of three (3) days after written notice thereof to the
Borrower from the Holder or after five (5) days after the Borrower
should have been aware of the breach.

 

 

3.4 Breach of Representations and
Warranties. Any representation or warranty of the Borrower
made herein or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith, shall be false
or misleading in any material respect when made and the breach of
which has (or with the passage of time will have) a material
adverse effect on the rights of the Holder with respect to this
Note.

 

 

3.5 Receiver or Trustee. The
Borrower or any subsidiary of the Borrower shall make an assignment
for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial
part of its property or business, or such a receiver or trustee
shall otherwise be appointed.

 

 

3.6 Judgments. Any money judgment,
writ or similar process shall be entered or filed against the
Borrower or any subsidiary of the Borrower or any of its property
or other assets for more than

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

$100,000, and shall
remain unvacated, unbonded or unstayed for a period of ten (10)
days unless otherwise consented to by the Holder, which consent
will not be unreasonably withheld.

 

 

 

3.7 Bankruptcy. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Borrower or any subsidiary of the
Borrower.

 

 

3.8 Delisting of Common Stock. The
Borrower shall fail to maintain the listing or quotation of the
Common Stock on the Trading Market or an equivalent replacement
exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the
New York Stock Exchange, or the NYSE American.

 

 

 

3.9 Failure to Comply with the Exchange
Act. The Borrower shall fail to comply with the reporting
requirements of the Exchange Act (including but not limited to
becoming delinquent in its filings), and/or the Borrower shall
cease to be subject to the reporting requirements of the Exchange
Act.

 

 

3.10 Liquidation.
The Borrower commences any dissolution, liquidation or winding up
of Borrower or any substantial portion of its
business.

 

 

 

3.11 Cessation
of Operations. The Borrower ceases operations or Borrower
admits it is otherwise generally unable to pay its debts as such
debts become due, provided, however, that any disclosure of the
Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot
pay its debts as they become due.

 

 

3.12 Financial
Statement Restatement. The Borrower replaces its auditor, or
any restatement of any financial statements filed by the Borrower
with the SEC for any date or period from two years prior to the
Issue Date of this Note and until this Note is no longer
outstanding, if the result of such restatement would, by comparison
to the unrestated financial statements, have constituted a material
adverse effect on the Borrower or the rights of the Holder with
respect to this Note.

 

 

3.13 Reverse
Splits. The Borrower effectuates a reverse split of its
Common Stock without twenty (20) days prior written notice to the
Holder.

 

 

3.14 Replacement
of Transfer Agent. In the event that the Borrower replaces
its transfer agent, and the Borrower fails to provide prior to the
effective date of such replacement, a fully executed Irrevocable
Transfer Agent Instructions (including but not limited to the
provision to irrevocably reserve shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Borrower
and the Borrower that reserves the greater of the (i) total amount
of shares previously held in reserve for this Note with the
Borrower’s immediately preceding transfer agent and (ii)
Reserved Amount.

 

 

3.15 Cross-Default.
Notwithstanding anything to the contrary contained in this Note or
the other related or companion documents, a breach or default by
the Borrower of any covenant or other term or condition contained
in any of the other financial instruments, including but not
limited to all convertible promissory notes, currently issued, or
hereafter issued, by the Borrower, to the Holder or any
3rd party
(the “Other
Agreements”), shall, at the option of the Holder, be
considered a default under this Note, in which event the Holder
shall be entitled to apply all rights and remedies of the Holder
under the terms of this Note by reason of a default under said
Other Agreement or hereunder.

 

 

3.16 Inside
Information. Any attempt by the Borrower or its officers,
directors, and/or affiliates to transmit, convey or disclose, or
any actual transmittal, conveyance or disclosure by the Borrower or
its officers, directors, and/or affiliates of, material non-public
information concerning the

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

Borrower, to the
Holder or its successors and assigns, which is not immediately
cured by Borrower’s filing of a Form 8-K pursuant to
Regulation FD on that same date.

 

 

 

3.17 No
bid. At any time while this Note is outstanding, the lowest
Trading Price on the Trading Market or other applicable principal
trading market for the Common Stock is equal to or less
than

$0.01.

 

 

3.18 Prohibition
on Debt and Variable Securities. So long as this Note is
outstanding, the Borrower shall not, without written consent of the
Holder, issue any Variable Security (as defined herein), unless (i)
the Borrower is permitted to pay off this Note in cash at the time
of the issuance of the respective Variable Security and (ii) the
Borrower pays off this Note, pursuant to the terms of this Note, in
cash at the time of the issuance of the respective Variable
Security. A “Variable Security” shall
mean any security issued by the Borrower that (a) has or may have
conversion rights of any kind, contingent, conditional or otherwise
in which the number of shares that may be issued pursuant to such
conversion right varies with the market price of the Common Stock;
(b) is or may become convertible into Common Stock (including
without limitation convertible debt, warrants or convertible
preferred stock), with a conversion or exercise price that varies
with the market price of the Common Stock, even if such security
only becomes convertible or exercisable following an Event of
Default, the passage of time, or another trigger event or
condition; or (c) was issued or may be issued in the future in
exchange for or in connection with any contract, security, or
instrument, whether convertible or not, where the number of shares
of Common Stock issued or to be issued is based upon or related in
any way to the market price of the Common Stock, including, but not
limited to, Common Stock issued in connection with a Section
3(a)(9) exchange, a Section 3(a)(10) settlement, or any other
similar settlement or exchange.

 

3.19 Failure
to Repay Upon Qualified Offering. The Borrower fails to
repay this Note, in its entirety, pursuant to the terms of this
Note, with funds received from its next completed offering
of

$1,000,000.00 or
more (consummated on or after the Issue Date).

 

UPON
THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THIS NOTE SHALL
BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO
THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN
AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN);
MULTIPLIED

BY (Z)
TWO (2). Upon the occurrence of any Event of Default specified in
Sections 3.1,
3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, and/or this 3.19, this Note
shall

become
immediately due and payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an
amount equal to 140% (plus an additional 5% per each additional
Event of Default that occurs hereunder) multiplied by the then
outstanding entire balance of this Note (including principal and
accrued and unpaid interest) plus Default Interest, if any,
plus any amounts
owed to the Holder pursuant to Sections 1.3(g) hereof
(collectively, in the aggregate of all of the above, the
“Default
Amount”), and
all other amounts payable hereunder shall immediately become due
and payable, all without demand, presentment or notice, all of
which hereby are expressly waived, together with all costs,
including, without limitation, legal fees and expenses, of
collection, and the Holder shall be entitled to exercise all other
rights and remedies available at law or in equity. Each time an
Event of Default occurs while this Note is outstanding, an
additional discount of five percent (5%) discount shall be factored
into the Conversion Price.

 

 

The
Holder shall have the right at any time, to require the Borrower,
to immediately issue, in lieu of the Default Amount, the number of
shares of Common Stock of the Borrower equal to the Default Amount
divided by the Conversion Price then in effect, subject to issuance
in tranches due to the beneficial ownership limitations contained
in this Note.

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

ARTICLE IV. MISCELLANEOUS

 

 

4.1 Failure or Indulgence Not
Waiver. No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privileges. All
rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise
available.

 

 

4.2 Notices. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be

(i)
personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, telegram, facsimile, or
electronic mail addressed as set forth below or to such other
address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand
delivery, upon electronic mail delivery or upon delivery by
facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:

 

 

If to
the Borrower, to:

 

 

Ocean
Thermal Energy Corporation 800 South Queen Street

Lancaster, PA
17603

Attention: Jeremy
Feakins, CEO

 

e-mail:
jeremy.feakins@otecorporation.com If to the Holder:

L2
CAPITAL, LLC

208
Ponce de Leon Ave. Ste. 1600

San
Juan, PR 00918

Attention: Adam
Long, Managing Partner e-mail:
investments@ltwocapital.com

 

 

with a
copy to that shall not constitute notice:

 

K&L
Gates LLP

 

200 S.
Biscayne Blvd., Ste. 3900

Miami,
FL 33131

Attention: John D.
Owens, III, Esq. e-mail: john.owens@klgates.com

 

4.3 Amendments. This Note and any
provision hereof may only be amended by an instrument in writing
signed by the Borrower and the Holder. The term “Note”
and all reference thereto,

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

as used
throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as
so amended or supplemented.

 

 

 

4.4 Assignability. This Note shall
be binding upon the Borrower and its successors and assigns, and
shall inure to be the benefit of the Holder and its successors and
assigns. Notwithstanding anything to the contrary herein, the
rights, interests or obligations of the Borrower hereunder may not
be assigned, by operation of law or otherwise, in whole or in part,
by the Borrower without the prior signed written consent of the
Holder, which consent may be withheld at the sole discretion of the
Holder (any such assignment or transfer shall be null and void if
the Borrower does not obtain the prior signed written consent of
the Holder). This Note or any of the severable rights and
obligations inuring to the benefit of or to be performed by Holder
hereunder may be assigned by Holder to a third party, in whole or
in part, without the need to obtain the Borrower’s consent
thereto. Each transferee of this Note must be an “accredited
investor” (as defined in Rule 501(a) of the Securities Act).
Notwithstanding anything in this Note to the contrary, this Note
may be pledged as collateral in connection with a bona fide margin
account or other lending arrangement.

 

 

4.5 Cost of Collection. If default
is made in the payment of this Note, the Borrower shall pay the
Holder hereof costs of collection, including reasonable
attorneys’ fees.

 

 

4.6 Governing Law. This Note shall
be governed by and interpreted in accordance with the laws of the
State of Kansas without regard to the principles of conflicts of
law (whether of the State of Kansas or any other
jurisdiction).

 

 

4.7 Arbitration. Any disputes,
claims or controversies arising out of or relating to this Note, or
the transactions contemplated hereby, or the breach, termination,
enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this Note to
arbitrate, shall be referred to and resolved solely and exclusively
by binding arbitration to be conducted before the Judicial
Arbitration and Mediation Service (“JAMS” ), or its successor
pursuant the expedited procedures set forth in the JAMS
Comprehensive Arbitration Rules and Procedures (the
“Rules”
), including Rules 16.1 and

16.2 of
those Rules. The arbitration shall be held in New York, New York,
before a tribunal consisting of three (3) arbitrators each of whom
will be selected in accordance “strike and rank”
methodology set forth in Rule 15. Either party to this Note may,
without waiving any remedy under this Note, seek from any court
sitting in the County of Johnson, State of Kansas any interim or
provisional relief that is necessary to protect the rights or
property of that party, pending the establishment of the arbitral
tribunal. The costs and expenses of such arbitration shall be paid
by and be the sole responsibility of the Borrower, including but
not limited to the Holder’s attorneys’ fees and each
arbitrator’s fees. The arbitrators’ decision must set
forth a reasoned basis for any award of damages or finding of
liability. The arbitrators’ decision and award will be made
and delivered as soon as reasonably possible and in any case within
sixty (60) days following the conclusion of the arbitration hearing
and shall be final and binding on the parties and may be entered by
any court having jurisdiction thereof.

 

 

4.8 JURY
TRIAL WAIVER. THE BORROWER AND THE HOLDER HEREBY WAIVE A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS NOTE.

 

 

4.9 Certain Amounts. Whenever
pursuant to this Note the Borrower is required to pay an amount in
excess of the outstanding Principal Amount (or the portion thereof
required to be paid at that time) plus accrued and unpaid interest
plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of
cash payment on this Note may be difficult to determine and the
amount to be so paid by the Borrower represents stipulated damages
and not

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

a
penalty and is intended to compensate the Holder in part for loss
of the opportunity to convert this Note and to earn a return from
the sale of shares of Common Stock acquired upon conversion of this
Note at a price in excess of the price paid for such shares
pursuant to this Note. The Borrower and the Holder hereby agree
that such amount of stipulated damages is not plainly
disproportionate to the possible loss to the Holder from the
receipt of a cash payment without the opportunity to convert this
Note into shares of Common Stock.

 

 

4.10 Remedies.
The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby.
Accordingly, the Borrower acknowledges that the remedy at law for a
breach of its obligations under this Note will be inadequate and
agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be
entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any
breach of this Note and to enforce specifically the terms and
provisions thereof, without the necessity of showing economic loss
and without any bond or other security being required.

 

 

4.11 Section
3(a)(10) Transactions. If at any time while this Note is
outstanding, the Borrower enters into a transaction structured in
accordance with, based upon, or related or pursuant to, in whole or
in part, Section 3(a)(10) of the Securities Act (a
“3(a)(10)
Transaction”), then a liquidated damages charge of
100% of the outstanding principal balance of this Note at that
time, will be assessed and will become immediately due and payable
to the Holder, either in the form of cash payment, an addition to
the balance of this Note, or a combination of both forms of
payment, as determined by the Holder. The liquidated damages charge
in this Section 4.11 shall be in addition to, and not in
substitution of, any of the other rights of the Holder under this
Note.

 

 

4.12 Reverse
Split Penalty. If at any time while this Note is
outstanding, the Borrower effectuates a reverse split with respect
to the Common Stock, then a liquidated damages charge of 30% of the
outstanding principal balance of this Note at that time, will be
assessed and will become immediately due and payable to the Holder,
either in the form of cash payment, an addition to the balance of
this Note, or a combination of both forms of payment, as determined
by the Holder. The liquidated damages charge in this Section 4.12 shall be in
addition to, and not in substitution of, any of the other rights of
the Holder under this Note.

 

 

 

4.13 Restriction
on Section 3(a)(9) Transactions. So long as this Note is
outstanding, the Borrower shall not enter into any 3(a)(9)
Transaction with any party other than the Holder, without prior
written consent of the Holder. In the event that the Borrower does
enter into, or makes any issuance of Common Stock related to, a
3(a)(9) Transaction while this Note is outstanding, a liquidated
damages charge of 25% of the outstanding principal balance of this
Note, but not less than $15,000, will be assessed and will become
immediately due and payable to the Holder at its election in the
form of cash payment, an addition to the balance of this Note or a
combination of both forms of payment, as determined by the Holder.
“3(a)(9)
Transaction” means a transaction structured in
accordance with, based upon, or related or pursuant to, in whole or
in part, Section 3(a)(9) of the Securities Act. The liquidated
damages charge in this Section 4.13 shall be in
addition to, and not in substitution of, any of the other rights of
the Holder under this Note.

 

 

4.14 Terms
of Future Financings. So long as this Note is outstanding,
upon any issuance by the Borrower or any of its subsidiaries of any
security with any term more favorable to the holder of such
security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then
the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall
become a part of the transaction documents with the Holder.
The

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

types
of terms contained in another security that may be more favorable
to the holder of such security include, but are not limited to,
terms addressing conversion discounts, prepayment rate, conversion
look back/holding periods, interest rates, original issue
discounts, stock sale price, private placement price per share, and
warrant coverage.

 

 

4.15 Usury.
If it shall be found that any interest or other amount deemed
interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically
be lowered to equal the maximum rate of interest permitted under
applicable law. The Borrower covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would
prohibit or forgive the Borrower from paying all or any portion of
the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which
may affect the covenants or the performance of this Note, and the
Borrower (to the extent it may lawfully do so) hereby expressly
waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no
such law has been enacted.

 

 

4.16 Right
of First Refusal. If at any time after the Issue Date and
until this Note is satisfied in full, the Borrower has a bona fide
offer of capital or financing from any 3rd party, that the
Borrower intends to act upon, then the Borrower must first offer
such opportunity to the Holder to provide such capital or financing
to the Borrower on the same or similar terms as each respective
3rd
party’s terms, and the Holder may in its sole discretion
determine whether the Holder will provide all or a portion of such
capital or financing. Except as otherwise provided in this Note,
should the Holder be unwilling or unable to provide such capital or
financing to the Borrower within 10 trading days from
Holder’s receipt of written notice of the offer (the
“Offer
Notice”) from the Borrower, then the Borrower may
obtain such capital or financing from that respective 3rd party upon the
exact same terms and conditions offered by the Borrower to the
Holder, which transaction must be completed within 15 days after
the date of the Offer Notice. Borrower shall, within two (2)
business days of the respective closing, utilize 50% of all
proceeds received by Borrower by each respective 3rd party that provides
capital or financing to the Borrower, to repay this Note. If the
Borrower does not receive the capital or financing from the
respective 3rd party within 15
days after the date of the respective Offer Notice, then the
Borrower must again offer the capital or financing opportunity to
the Holder as described above, and the process detailed above shall
be repeated. The Offer Notice must be sent via electronic mail to
investments@ltwocapital.com.

 

 

** signature page to follow **

 

	

302826908
v4

 

	

EXECUTION COPY

 

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by its duly authorized officer on the Issue Date.

 

 

 

Ocean
Thermal Energy Corporation

 

 

 

By:/s/ Jeremy Feakins

Name:
Jeremy Feakins

Title:
Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

302826908
v4

 

 

SIGNATURE PAGE TO REPLACEMENT CONVERTIBLE PROMISSORY NOTE

 

	

EXECUTION COPY

 

 

EXHIBIT
A NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert
$                                                                                     principal
amount of the Note (defined below) into that number of shares of
Common Stock to be issued pursuant to the conversion of the Note
(“Common Stock”) as set forth below, of Ocean Thermal
Energy Corporation, a Nevada corporation (the
“Borrower”), according to the conditions of the
replacement convertible promissory note of the Borrower dated as of
December 14, 2018 (the “Note”), as of the date written
below. No fee will be charged to the Holder for any conversion,
except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

 

[ ] The
Borrower shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the
undersigned or its nominee with DTC through its Deposit Withdrawal
Agent Commission system (“DWAC Transfer”).

 

 

Name of
DTC Prime Broker: Account Number:

 

 

[ ] The
undersigned hereby requests that the Borrower issue a certificate
or certificates for the number of shares of Common Stock set forth
below (which numbers are based on the Holder’s calculation
attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment
hereto:

 

 

L2
CAPITAL, LLC

208
Ponce de Leon Ave. Ste. 1600

San
Juan, PR 00918

e-mail:
investments@ltwocapital.com

 

 

	

Date of
Conversion:

	
 

	

Applicable
Conversion Price:

	

$            

	

Number
of Shares of Common Stock to be Issued Pursuant to Conversion of
this

Note:

	
 

	

Amount
of Principal Balance Due remaining Under this Note after
this

conversion:

	
 

 

 

L2
CAPITAL, LLC

 

By:_                                                            

Name: Title:
Date:

 

 

 

 

302826908
v4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}]]