Document:

ex1019form10.htm

ADDENDUM TO

SECURED CONVERTIBLE PROMISSORY NOTE (BOND)

THIS ADDENDUM TO SECURED CONVERTIBLE PROMISSORY NOTE (BOND) (this “Addendum”) is made effective as of [date], 2014 (the “Effective Date”), by and between Ocean Thermal Energy Corporation, a Delaware corporation (the “Company”), and each of the lenders signatory and identified on Schedule I hereto (“Investors”). The Company and Investors are sometimes collectively referred to herein as, the “Parties”.

RECITALS

A.           The Company and Investors entered into a series of Secured Promissory Notes (Bonds) in identical form, the form of which is attached as Exhibit A hereto (the “Original Notes”), pursuant to which upon certain occurrences, the Original Notes shall either automatically, or at the option of each Investor, convert into shares of the Company’s Common Stock (the “Conversion Shares”) in accordance with the conversion provisions of the Original Notes.

B.           The Parties desire to amend the Original Notes to provide for adjustments to the Conversion Shares (as defined in the Original Notes) upon the occurrence of certain dilutive issuances, as more particularly set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, promises and undertakings set forth herein, the Company and the Investors hereby agree as follows:

AMENDMENT AND AGREEMENT

1.           Conversion Shares. Section 1(h) of the Original Notes is hereby amended and superseded in its entirety as follows:

“(h)           “Conversion Shares” shall mean one thousand (1,000) shares of the Common Stock of the Company, as adjusted below:

(i)           Stock Dividends. In case the Company shall pay or make a dividend or other distribution on any class of capital stock of the Company payable in Common Stock, the number of Conversion Shares shall be increased by multiplying such number of shares by a fraction of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the day immediately preceding the date of such distribution and the numerator shall be the sum of such number of shares and the total number of shares of Common Stock constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following such distribution.

 

 

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(ii)           Subdivisions. In case the outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares of Common Stock, the number of Conversion Shares at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the number of Conversion Shares at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately decreased, such increase or decrease, as the case may be, to become effective immediately after the opening of business on the day following the date upon which such subdivision or combination becomes effective.

(iii)           Reclassifications. The reclassification of Common Stock into securities (other than Common Stock) and/or cash and/or other consideration shall be deemed to involve a subdivision or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number or amount of securities and/or cash and/or other consideration outstanding immediately thereafter and the effective date of such reclassification shall be deemed to be “the day upon which such subdivision becomes effective,” or “the day upon which such combination becomes effective,” as the case may be, within the meaning of clause (ii) above.

2.           Miscellaneous.

a.           No Further Amendment; Effective of Amendment. Except as expressly amended hereby, each of the Original Notes is in all respects ratified and confirmed and all the terms, conditions, and provisions thereof shall remain in full force and effect. This Addendum is limited precisely as written and shall not be deemed to be an amendment to any other term or condition of the Original Notes. This Addendum shall form a part of each Original Note for all purposes, and the parties thereto and hereto shall be bound hereby. From and after the execution of this Addendum by the Parties, any reference to an Original Note shall be deemed a reference to the Original Note as amended hereby. This Addendum shall be deemed to be in full force and effect from and after the execution of this Addendum by the Parties.

b.           Invalidity. If any provision of this Addendum is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any Party hereto under this Addendum will not be materially and adversely affected thereby: (a) such provision will be fully severable; (b) this Addendum will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; (c) the remaining provisions of this Addendum will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance here from; and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Addendum a legal, valid and enforceable provision to reflect the same economic and legal substance of, and in as similar terms to, such illegal, invalid or unenforceable provision as may be possible.

c.           Counterparts. This Addendum may be executed simultaneously in two or more counterparts, including counterparts bearing a facsimile signature copy, each of which shall be deemed an original but all of which together shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other. The Parties intend that a facsimile signature copy on this Addendum shall have the same force and effect as an original signature.

 

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IN WITNESS WHEREOF, the Company and each Investor has executed this Addendum to Secured Convertible Promissory Note on the day and year written on the first page.

ACKNOWLEDGED AND AGREED:

OCEAN THERMAL ENERGY CORPORATION

By: /s/ Jeremy P. Feakins

Name: Jeremy P. Feakins

Title: Chief Executive Officer

Address: 800 South Queen Street

Lancaster, PA 17603

INVESTOR:

(if an entity):  [name]

By: [name]

Name (print): [name]

Title (if an entity): [name]

[SIGNATURE PAGE TO ADDENDUM TO SECURED CONVERTIBLE PROMISSORY NOTE]

Exhibit A

[FORM OF] Secured Convertible Promissory Note (Bond)

[see attached]

 

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THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

OCEAN THERMAL ENERGY CORPORATION

SECURED CONVERTIBLE PROMISSORY NOTE (BOND)

	
U.S. $[number]

	
[date], 2014

FOR VALUE RECEIVED, OCEAN THERMAL ENERGY CORPORATION, a Delaware corporation (the “Company”), promises to pay to [investor name] (“Investor”), or his/her/its permitted assigns, in lawful money of the United States of America the principal sum of [dollar amount] Dollars (US$[dollar amount]), or such lesser amount as shall equal the outstanding principal amount hereof, together with interest from the date of this Secured Convertible Promissory Note (this “Note”) on the unpaid principal balance at a rate equal to [rate]% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) [maturity date], 2019 (the “Maturity Date”); (ii) immediately upon or after the occurrence of an Event of Default (as defined below); or (iii) pursuant to a Change of Control. The obligations of the Company are secured pursuant to that certain Security Agreement, the form of which is attached hereto and incorporated herein by this reference as Exhibit B (the “Security Agreement”).

The following is a statement of the rights of Investor and the conditions to which this Note is subject, and to which Investor, by the acceptance of this Note, agrees:

1.           Definitions. As used in this Note, the following capitalized terms have the following meanings:

a.           “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

b.           “Baha Mar Project” means the construction, operation and ownership by the Company of a seawater air conditioning (SWAC) system located on New Providence Island, Nassau, The Bahamas.

c.           “Bloomberg” means Bloomberg, L.P.

d.           “Business Day” means any day other than a Saturday, Sunday or any other day on which nationally chartered banks are authorized to be closed in the State of New York.

 

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e.           “Change of Control” shall mean (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Company held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such transaction or series of transactions; (ii) a sale, lease or other conveyance of all or substantially all of the assets of the Company; or (iii) the commencement of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

f.           “Closing Sale Price” means the last closing trade price for the Company’s Common Stock on an Eligible Market, as reported by Bloomberg, or, if the Eligible Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of the Company’s Common Stock prior to 4:00 p.m., New York time, as reported by Bloomberg, or, if the Eligible Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

g.           The “Company” includes the Company initially executing this Note and any Person which shall succeed to or assume the obligations of the Company under this Note.

h.           “Conversion Shares” shall mean one thousand (1,000) shares of the Common Stock of the Company.

i.           “Eligible Market” means The New York Stock Exchange, NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the OTC Bulletin Board.

j.           “Event of Default” has the meaning given in Section 5 hereof.

k.           “Investor” shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the registered holder of this Note.

l.           “Obligations” shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Company to the Investor of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), now existing or hereafter arising under or pursuant to the terms of this Note, including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by the Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after a Change of Control or the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding.

 

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m.           “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority.

n.           “Registration Statement” means a registration statement of the Company under the 1933 Act covering securities of the Company (including Common Stock) on Form S-3, if the Company is then eligible to file using such form, and if not eligible, on Form S-1 or other appropriate form.

o.           “SEC” means the Securities and Exchange Commission.

p.           “Trading Day” means any day on which the Common Stock is traded on the Eligible Market, or, if the Eligible Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that, “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Investor.

q.           The “1934 Act” shall mean the Securities and Exchange Act of 1934, as amended.

r.           The “1933 Act” shall mean the Securities Act of 1933, as amended.

2.           Payments and Prepayment. Quarterly payments of interest-only shall be made in arrears, with the first quarterly installment due on [date], 2014 (the “Initial Installment Date”). Quarterly payments of interest-only thereafter shall be made on the fifteenth (15th) day of the first month after the end of each calendar quarter (or the next Business Day thereafter) until the Maturity Date. If this Note is not earlier converted as provided herein, all unpaid principal, together with any then unpaid and accrued interest hereon, shall be due and payable on the Maturity Date. The Company will make all cash payments due under this Note in immediately available funds by 5:00 p.m. New York local time on the date such payment is due.

3.           Prepayment. This Note may be prepaid at any time without the prior written consent of the Investor.

4.           Investor Representations.

a.           Securities Law Compliance. The Investor has been advised that this Note and the underlying securities have not been registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. The Investor is aware that the Company is under no obligation pursuant to this Note to effect any such registration with respect to this Note or the underlying securities or to file for, or comply with, any exemption from registration. The Investor has not been formed solely for the purpose of making this investment and is purchasing this Note for his/her/its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof. The investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite period of time.

 

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b.           Accredited Investor. The Investor is an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act, and the Investor acknowledges that in order to participate in the offering of the Company’s Secured Convertible Promissory Notes, the Investor must provide to the Company, and its counsel, satisfactory information to verify the Investor’s status as an accredited investor, as required by Rule 506(c) of Regulation D under the Securities Act.

c.           Access to Information. The Investor acknowledges that the Company has given the Investor access to the corporate records and accounts of the Company and to all information in its possession relating to the Company, has made its officers and representatives available for interview by the Investor, and has furnished such Investor with all documents and other information required for the Investor to make an informed decision with respect to the purchase of this Note.

d.           Transfer Restrictions. The Investor acknowledges that (i) the Common Stock issuable upon conversion of this Note has not been and will not be registered under the provisions of the 1933 Act, and may not be transferred unless (A) subsequently registered thereunder, or (B) the Investor shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the Common Stock to be sold or transferred may be sold or transferred pursuant to an exemption from registration under the 1933 Act; (ii) any sale of the Common Stock made in reliance on Rule 144 may be made only in accordance with the terms of such Rule and further, if such Rule is not applicable, any resale of such Common Stock under circumstances in which the seller, or the Person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) except as otherwise provided herein, neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

e.           Restrictive Legend. The Investor acknowledges and agrees that, until such time as the Common Stock has been registered under the 1933 Act, and may be sold in accordance with an effective Registration Statement, or until such Common Stock can otherwise be sold without restriction, whichever is earlier, the certificates and other instruments representing any of the Common Stock shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such Common Stock):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

5.           The Company Representations and Warranties.

a.           Use of Proceeds. The Company shall use the net proceeds received hereunder for working capital and general corporate purposes only; provided, however, the Company will not use such proceeds to pay fees payable to any broker or finder relating to the offer and sale of this Note.

 

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b.           Reporting Status. If the Company becomes an issuer required to file reports under the 1934 Act, so long as the Investor beneficially owns the Common Stock and for at least twenty (20) Trading Days thereafter, the Company shall file all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and shall take all reasonable action under its control to ensure that adequate current public information with respect to the Company, as required in accordance with Rule 144, is publicly available, and shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination.

6.           Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

a.           Failure to Pay. The Company shall fail to pay (i) when due any principal or interest payment on the due date hereunder or (ii) any other payment required under the terms of this Note on the date due, and such payment shall not have been made within five (5) days of the Company’s receipt of Investor’s written notice to the Company of such failure to pay.

b.           Breaches of Covenants. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note (other than those specified in Section 5(a)) and (i) such failure shall continue for thirty (30) days after the Company receives notice thereof from the Investor, or (ii) if such failure is not curable within such 30-day period, but is reasonably capable of cure and the Company shall not have commenced a cure in a manner reasonably satisfactory to the Investor within the initial 30-day period or at any time thereafter ceases to use commercially practicable efforts to effect such cure.

c.           Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property; (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature; (iii) make a general assignment for the benefit of its creditors; (iv) be dissolved or liquidated; (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or (vi) take any action for the purpose of effecting any of the foregoing.

d.           Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company, or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement.

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

 

 

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7.           Notice of Events of Default and Change of Control; Rights of Investor upon Default. The Company shall furnish to the Investor, promptly upon the occurrence thereof, written notice of the occurrence of any Event of Default hereunder and, not less than ten (10) days prior to a Change of Control, written notice of any proposed Change of Control. Immediately upon the occurrence or existence of any Event of Default and at any time thereafter during the continuance of such Event of Default, all outstanding Obligations payable by the Company hereunder shall be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. In addition to the foregoing remedy, upon the occurrence or existence of any Event of Default, the Investor may exercise any other right, power or remedy granted to it under this Note or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

8.           Conversion.

a.           Automatic Conversion. At the time the Closing Sale Price for the Company’s Common Stock is equal to or greater than $1.80 per share for a period of ten (10) consecutive days on an Eligible Market, then the outstanding principal amount of and all accrued and unpaid interest under this Note shall automatically convert into the Conversion Shares. On and after the date of conversion pursuant to this Section 8(a) or Section 8(b), the Person or Persons entitled to receive the Conversion Shares shall be treated for all purposes as the record holder of such Conversion Shares and a purchaser of such Conversion Shares.

b.           Optional Conversion. If not previously converted pursuant to Section 8(a), at any time on or following the Maturity Date that the Company’s Common Stock is listed on an Eligible Market, the outstanding principal amount of, and all accrued but unpaid interest under, this Note shall be convertible at the option of the holder into the Conversion Shares.

c.           Mechanics of Conversion. Within three (3) Business Days after the occurrence of the conditions for automatic conversion as set forth in Section 8(a), the Company will notify the Investor that this Note has been converted in accordance with Section 8(a). Within three (3) Business Days thereof, or upon the Investor’s decision to convert this Note in accordance with Section 8(b), the Investor shall deliver (whether via email, facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date (a “Conversion Date”), a copy of an executed notice of conversion substantially in the form attached hereto as Exhibit A (the “Conversion Notice”) to the Company. The Investor shall promptly thereafter surrender this Note to a reputable overnight courier for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction).

9.           Successors and Assigns. Subject to the restrictions on transfer described in Sections 11 and 12 below, the rights and obligations of the Company and the Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

10.           Waiver and Amendment. Any provision of this Note may only be waived, amended or modified upon the written consent of the Company and the Investor.

 

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11.           Registration and Replacement of this Note. Transfer of Note and Securities Issuable on Conversion Hereof.

a.           Registration and Replacement. The Company will keep, at its principal executive office, books for the registration and registration of transfer of this Note. Prior to presentation of this Note for registration of transfer, the Company shall treat the Person in whose name such Note is registered as the owner and holder of such Note for all purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to any restrictions on or conditions to transfer set forth elsewhere in this Note, including Section 11(b) below, and any other agreement to which the holder is a party, the holder of this Note, at its option, may in person or by duly authorized attorney surrender the same for exchange at the Company’s chief executive office, and promptly thereafter and at the Company’s expense, except as provided below, receive in exchange therefor one or more new Notes in the name of such holder, each in the principal (or for the number of shares, as applicable) requested by such holder, dated the date to which interest shall have been paid on the Note so surrendered or, if no interest shall have yet been so paid, dated the date of the Note so surrendered and registered in the name of such Person or Persons as shall have been designated in writing by such holder or its attorney for the same principal amount as the then unpaid principal amount of the Note so surrendered (or for the number of shares, as applicable). Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Note and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it; or (b) in the case of mutilation, upon surrender thereof, the Company, at its expense, will execute and deliver in lieu thereof a new Note executed in the same manner as the Note being replaced, in the same principal amount as the unpaid principal amount of such Note and dated the date to which interest shall have been paid on such Note or, if no interest shall have yet been so paid on such Note, dated the date of such Note.

b.           Transfer of Note and Underlying Securities. With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, the Investor will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of the Investor’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company, as promptly as practicable, shall notify the Investor that the Investor may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 11(b) that the opinion of counsel for the Investor, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify the Investor promptly after such determination has been made. Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Subject to the foregoing transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of the Company as provided in Section 11(a). Notwithstanding the above, this Section 11 shall not prohibit, and no opinion of counsel shall be required with respect to, the disposition by the Investor to an Affiliate if, prior to such transfer, the transferee agrees in writing to be subject to the terms hereof to the same extent as if he were the original Investor hereunder.

 

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12.           Assignment by the Company. Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of the Investor, such consent not to be unreasonably withheld, delayed or conditioned.

13.           Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and faxed, mailed or delivered to each party at the respective addresses of the parties as set forth on the signature page hereto, or at such other address or facsimile number as the Company shall have furnished to the Investor in writing. All such notices and communications will be deemed effectively given the earlier of (i) when received; (ii) when delivered personally; (iii) one business day after being delivered by facsimile (with receipt of appropriate confirmation); (iv) one business day after being deposited with an overnight courier service of recognized standing; or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.

14.           Payment. Payment shall be made in lawful tender of the United States, and all references to dollar amounts shall refer to United States Dollars.

15.           Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

16.           Expenses; Waivers. If any action is instituted with a court to collect this Note, the Company promises to pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred in connection with such action. The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument. Each Party shall bear its own fees and costs incurred in connection with the consummation of the transactions contemplated by this Note.

17.           Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware or of any other state.

18.           Failure or Indulgence Not Waiver. No failure or delay on the part of the Investor 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 privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

19.           Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict herewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note.

20.           Grant of Security Interest. As security for the Obligations, the Company shall execute and delivery to the Investor that certain Security Agreement in the form attached hereto, and incorporated herein by this reference, as Exhibit C.

 

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21.           Senior Security. The Company hereby represents and warrants that except with respect to the senior and junior Baha Mar project lenders in the aggregate principal amount of $106,375,000 as of the date hereof, as may be increased or extended from time to time (the “Senior Indebtedness”), there is no currently outstanding indebtedness of the Company that provides that it is, or will be, senior to this Note. The Company agrees not to incur, during the period this Note remains outstanding, any indebtedness for borrowed money, except any extension, refinancing or additional indebtedness under the Senior Indebtedness or additional Notes on the same terms herein in the aggregate principal amount of US$15,000,000, that is senior or pari passu to this Note (other than trade payables) without the prior written consent of Investor, which shall not be unreasonably withheld or delayed.

THE COMPANY has caused this Note to be issued as of the date first written above.

OCEAN THERMAL ENERGY CORPORATION

By: /s/ Jeremy P. Feakins

Name: Jeremy P. Feakins

Title: Chief Executive Officer

Address: 800 South Queen Street

Lancaster, PA 17603

INVESTOR:

(If an entity): [name]

By: [signature]

Name (print): [name]

Title (if an entity): [title]

 

	Note 	 9	 

  

  

  

EXHIBIT A

CONVERSION NOTICE

NAME OF INVESTOR:  __________________________

ADDRESS: _____________________________________

Date: ________________

Ocean Thermal Energy Corporation

Attn: Chief Executive Officer

800 South Queen Street

Lancaster, PA 17603

CONVERSION NOTICE

The above-captioned Investor hereby gives notice to Ocean Thermal Energy Corporation, a Delaware corporation (the “Company”), pursuant to that certain Secured Convertible Promissory Note held by the investor (the “Note”), that the Investor elects to convert the balance set forth below into fully-paid and nonassessable shares of Common Stock of the Company as of the date of conversion specified below. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

A.           Date of conversion: ____________________

B.           Conversion Amount: ___________________

C.           Conversion Shares:  ____________________

Sincerely,

INVESTOR:

(if an entity): [name]

By: [signature]

Name (print): [name]

Title (if an entity): [title]

 

 

	Note Exhibit A	 10	 

  

  

  

 

EXHIBIT B

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”) is made this __ day of ______________, 2014, by Ocean Thermal Energy Corporation, a Delaware corporation, with its registered offices at 800 South Queen Street Lancaster, PA 17603 (hereinafter referred to as the “Debtor”),

TO AND IN FAVOR OF: [lender name]

having an office at: [lender address] (hereinafter referred to as the “Lender”),

WITNESSETH:

WHEREAS, on or about even date herewith, Debtor has borrowed the sum of $[loan amount] ([loan amount] Dollars) from the Lender (the “Loan”), such Loan to be evidenced by, among other things, that or those certain Secured Convertible Promissory Notes dated on or about even date herewith given by the Debtor in favor of Lender (the “Note”), and certain other documents and instruments given in connection with said Loan; and

WHEREAS, to secure the payment of all sums due or which may become due under or in connection with the Note (all of such obligations secured hereby, hereinafter called the “Obligation(s)”), Lender has required that Debtor grant Lender a security interest in the Debtor’s right to proceeds from the Baha Mar Project (as defined below), and the Debtor has agreed to execute this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, and in consideration of the Loan, the Obligations, and any extensions of credit made or to be made by the Lender to the Debtor, and intending to be legally bound hereby, the Debtor hereby agrees to and with Lender as follows:

1.           Definitions. As used in this Agreement, the following words and terms shall have the following meanings respectively, unless the context hereof clearly requires otherwise:

a.           “Accounts” shall include without limitation all rights of the Debtor, whenever acquired, to payment, whether or not earned by performance, and other obligations or indebtedness owed to the Debtor, in either case relating to or arising from the Debtor’s interest in the Baha Mar Project; and all rights of the Debtor to receive any payments in money or kind relating to or arising from the Baha Mar Project.

b.           “Agreement” shall mean this Security Agreement as the same may be supplemented or amended from time to time.

c.           “Baha Mar Project” shall mean the project whereby the Debtor, through its subsidiary company OTE BM Ltd., will build, own and operate a Seawater Air Conditioning system for the Baha Mar Resort in The Bahamas.

d.           “Debtor’s Address” shall mean the address set forth in the first part of this Agreement.

e.           “Code” shall mean the applicable law now or hereafter in force in The Bahamas.

f.           “Collateral” shall mean collectively all Accounts and all Proceeds therefrom.

 

	Note Exhibit B	 11	 

  

  

  

g.           “Costs and Expenses” shall mean any and all sums, fees, costs, expenses and charges which the Lender may pay or incur (i) pursuant to any provision of this Agreement; or (ii) in connection with the preparation, execution, effectuation and administration of this Agreement or any other agreement or instrument executed in connection herewith; or (iii) in defending, protecting, preserving or enforcing its security interest or the Collateral or any other agreement or instrument executed in connection herewith; or (iv) otherwise in connection the provisions of this Agreement. “Costs and Expenses” shall include, but is not limited to, all search, filing and recording fees; taxes; attorneys’ fees and legal expenses; all fees and expenses for the service and filing of papers; premiums on insurance, bonds, and undertakings; fees of marshals, sheriffs, custodians, and others; and all court costs and collection charges.

h.           “Event of Default” shall mean any of the Events of Default described in Section 4 of this Agreement.

i.           “Proceeds” shall have the meaning given to that term in the Code and shall include without limitation whatever is received when Collateral or Proceeds is sold, exchanged, collected or otherwise disposed of, whether cash or noncash, and includes without limitation proceeds of insurance payable by reason of loss of, or damage to, Collateral.

j.           “Senior Baha Mar Project Lender” shall mean any debt financier providing capital for that certain Seawater Air Conditioning project for the Baha Mar resort complex in The Bahamas.

To the extent not defined in this Section 1, unless the context requires otherwise, all other terms contained in this Agreement shall have the meanings attributed to them by the Code, to the extent the same are used or defined therein.

2.           Grant of Security Interest. As security for payment to Lender of all the Obligations, and as security for performance of the agreements, conditions, covenants, provisions and stipulations contained herein, and in any renewal, extension, or modification hereof and in all other agreements and instruments made and given by the Debtor to Lender in connection with any of the Obligations, the Debtor agrees that the Lender shall have, and the Debtor grants to and creates in favor of the Lender, a security interest under the Code in and to such of the Collateral as is now or in the future owned or acquired by the Debtor. Upon the Debtor’s full satisfaction of the Obligations under the Note, this security interest shall terminate.

3.           Representations, Warranties and Covenants. The Debtor represents and warrants to and covenants with the Lender, and such representations, warranties and covenants shall be continuing so long as any of the Obligations remain outstanding, as follows:

a.           Except with respect to its subsidiary companies, the Debtor utilizes no trade names in the conduct of its business, except the names set forth above in the first part of this Agreement.

b.           The security interest in the Collateral granted to the Lender in this Agreement is and shall be a perfected first priority security interest in the Collateral and prior and superior to the rights of all third parties in the Collateral existing on the date of this Agreement or arising after the date of this Agreement, except for those interests which Debtor grants to other lenders under the same Note issuance as this Loan and except for those interests which Debtor grants to the Senior Baha Mar Project Lender (the “Permitted Security Interests”).

 

 

	Note Exhibit B	 12	 

  

  

  

 

c.           Except with respect to the Permitted Security Interests, the Debtor is the owner of the Collateral free and clear of all security interests, mortgages, liens or encumbrances, except for liens that arise by operation of law with respect to obligations of the Debtor that are not yet due and payable; and the Debtor will defend the Collateral against all claims and demands of all persons at any time claiming an interest therein.

d.           Except with respect to the Permitted Security Interests, the Debtor shall not mortgage, pledge, grant or permit to exist any new security interest in, or lien or encumbrance upon, any of the Collateral except for the security interests to which the Lender may give its prior consent.

e.           The Debtor shall permit the Lender, through its authorized employees, agents and representatives, to inspect and examine the annual financial statements of the Debtor upon reasonable notice.

f.           The Debtor authorizes the Lender to file financing statements describing the Collateral in such public offices as the Lender may require, without the Debtor’s signature. If the law of the jurisdiction in which such instruments are filed requires the Debtor’s signature, Debtor agrees to sign such financing statements, continuation statements, or other security agreements the Lender may require. In addition, the Debtor shall, at any time and from time to time upon request of the Lender, execute and deliver to the Lender, in form and substance satisfactory to the Lender, such documents as the Lender shall deem necessary or desirable to perfect or maintain perfected the security interest of the Lender in the Collateral or which may be necessary to comply with the law of the State of Delaware or in which the Debtor may then be conducting business, or in which the Debtor’s principal residence or chief executive office is located, or in which any of the Collateral may be located.

g.           The Debtor shall pay any and all Costs and Expenses within thirty (30) days after written notice from the Lender and submit to the Lender proof satisfactory to the Lender that such payment(s) have been made, or reimburse the Lender therefor.

h.           The Debtor, without first obtaining the prior written consent and approval of the Lender, will not sell, assign, lease or otherwise dispose of (whether in one transaction or in a series of transactions), any of its assets (whether now owned or hereafter acquired) except in the ordinary course of business.

i.           If and to the extent that Accounts are a part of the Collateral:

i.           The Debtor has no other places of business except at the Debtor’s Address. All records pertaining to the Accounts (including, but not limited to, computer records) are kept at Debtor’s Address; and the Debtor will notify the Lender at least thirty (30) days prior to any change in the address where records pertaining to Accounts are kept.

ii.           All books, records and documents relating to any of the Accounts (including, but not limited to, computer records) are and will be genuine and in all respects what they purport to be; and the amount of each Account shown on the books and records of the Debtor and will be the correct amount actually owing for, or to be owing at maturity of, each of the Accounts.

 

	Note Exhibit B	 13	 

  

  

  

 

iii.           Any proceeds of Accounts collected by the Debtor after an Event of Default shall not be commingled with other funds of the Debtor and shall at the Lender’s request be immediately delivered to the Lender in the form received except for necessary endorsements to permit collection. The Lender in its sole discretion may allow the Debtor to use such proceeds to such extent and for such periods, if any, as the Lender elects.

j.           The Debtor will not change its fiscal years or accounting and/or depreciation methods.

k.           The Debtor will not change its state of incorporation, formation or, organization.

l.           Debtor will not change its state organizational identification number or taxpayer identification number.

4.           Events of Default. As used in this Agreement, the term “Event of Default” shall mean any one or more of the following at the option of Lender:

a.           the occurrence of one or more of the events defined in the Note or in any other document evidencing or securing any of the Obligations as an Event of Default;

b.           the failure of the Debtor to comply fully with all of the terms, conditions, representations, or covenants of this Agreement, including the covenants set forth in Paragraph 3 hereof, and such default shall have continued for a period of thirty (30) days after notice specifying such default and demanding that the same be cured shall have been given to Debtor, or if the default cannot reasonably be remedied within such period, if Debtor fails to commence to remedy the same within thirty (30) days and diligently thereafter to carry the same to completion;

c.           the creation of any new security interest, mortgage, lien or encumbrance in favor of any person other than the Lender and the Permitted Security Interests against the Collateral, without the prior consent of the Lender; or

d.           the sale or other disposition of all or substantially all of the property or assets of the Debtor, any subsidiary of the Debtor or any accommodation party of the Debtor, other than in the ordinary course of business.

5.           Rights and Remedies. The Lender shall have, by way of example and not of limitation, the rights and remedies set forth in this Section 5 after the occurrence of any Event of Default:

a.           The Lender and any officer or agent of the Lender is hereby constituted and appointed as true and lawful attorney-in-fact of the Debtor with power:

i.           if and to the extent that Accounts are part of the Collateral, to notify or require the Debtor to notify any and all account debtors or parties against which the Debtor has a claim that such Accounts have been assigned to the Lender and/or that the Lender has a security interest therein and that all payments should be made to the Lender;

ii.           to endorse the name of the Debtor upon any instruments or payments (including but not limited to, payments made under any policy of insurance) that may come into the possession of the Lender in full or partial payment of any amount owing to the Lender;

 

	Note Exhibit B	 14	 

  

  

  

 

iii.           if and to the extent that Accounts are part of the Collateral, to send requests for verification to account debtors or other obligors; and

iv.           the Debtor grants to the Lender, as the attorney-in-fact of the Debtor, full power of substitution and full power to do any and all things necessary to be done as fully and effectually as the Debtor might or could do but for this appointment and hereby ratifying all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. Neither the Lender nor its officers and agents shall be liable for any acts or omissions or any error of judgment or mistake of fact or law in its capacity as such attorney-in-fact. This power of attorney is coupled with an interest and shall be irrevocable so long as any of the sums becoming due under this Agreement, or any of the Obligations, and/or performance under all the other provisions contained herein and therein, shall remain outstanding.

b.           Any notice required to be given by the Lender of a sale or other disposition by the Lender of any of the Collateral, made in accordance with this Agreement, which is mailed or delivered at least fifteen (15) days prior to such proposed action, shall constitute fair and reasonable notice to the Debtor of any such action.

c.           The Lender may exercise an immediate right of setoff against any accounts or deposits the Debtor may have with Lender. This subsection shall not be construed as a limitation on any rights the Lender may have against Debtor, any other parties or any other accounts or deposits.

d.           The Lender shall have, in addition to any other rights and remedies contained in this Agreement and any other agreements, instruments, and documents heretofore, now, or hereafter executed by the Debtor and delivered to the Lender, all of the rights and remedies of a secured party under the Code, all of which rights and remedies shall be cumulative and nonexclusive, to the extent permitted by law.

6.           General Provisions.

a.           No delay or failure of the Lender in exercising any right, power, or privilege under this Agreement shall affect such right, power or privilege; nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power of privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Lender are cumulative. Any waiver, permit, consent or approval of any kind or character on the part of the Lender of any breach or default under this Agreement or any such waiver of any provisions or condition of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.

b.           The Debtor hereby confirms the Lender’s right of Lender’s lien and setoff, and nothing in this Agreement shall be deemed a waiver or prohibition of the Lender’s right thereto.

c.           All notices, statements, requests and demands given to or made upon the Debtor or the Lender in accordance with the provisions of this Agreement shall be given as follows.

	
If to Debtor:

	
Ocean Thermal Energy Corporation

	  	
ATTN: Jeremy P. Feakins, President

	  	
800 South Queen Street

	  	
Lancaster, Pennsylvania 17603-5818

 

 

	Note Exhibit B	 15	 

  

  

  

 

	
With a copy to:

	
Gerald Koenig, General Counsel

	  	
Ocean Thermal Energy Corporation

	  	
1629 K Street NW, Suite 300

	  	
Washington DC, 20006

	  	  
	
If to Lender at:

	  
	  	  
	  	  

 

 

 

All notices hereunder shall be in writing and shall be deemed to have been duly given for all purposes when (i) delivered in person; (ii) when deposited in the mail as registered or certified, return receipt requested, postage prepaid; or (iii) when sent for delivery by any overnight delivery service which requires the signature of the party who accepts delivery. All notices shall be directed to the party to receive the same at its address stated above or at such other address as may be substituted by notice given as herein provided.

d.           The provisions of this Agreement may from time to time be amended in writing signed by the Debtor and the Lender.

e.           This Agreement shall be governed by and construed and enforced under the laws of the State of Delaware.

f.           If any provision of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement or any other agreement between the Debtor and the Lender; but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein.

g.           All paragraph headings in this Agreement are included for convenience only and are not to be construed as a part hereof or in any way as limiting or amplifying the terms hereof.

h.           This Agreement may be executed in as many counterparts as may be deemed necessary and convenient, and each of which when so executed shall be deemed an original, but all such counterparts shall constitute but one and the same writing.

i.           The provisions of this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Lender and the Debtor; provided, however, that the Debtor may not assign any of their rights or delegate any of its obligations hereunder without the prior written consent of the Lender.

j.           Each reference in this Agreement to the Lender shall be deemed to include its successors and assigns. Any pronouns used in this Agreement shall be construed in the masculine, feminine, neuter, singular, or plural as the context may require. The agreements and obligations on any part of the Debtor herein contained shall remain in force and applicable notwithstanding any changes in the individuals comprising the limited liability company or corporation and the terms “Debtor” shall include any altered or successive limited liability companies or corporations; provided, however, that the predecessor limited liability companies or corporations shall not thereby be released from any of their obligations and liabilities hereunder.

 

	Note Exhibit B	 16	 

  

  

  

IN WITNESS WHEREOF, the Debtor has caused this Agreement to be executed as of the date first above written.

DEBTOR:

Ocean Thermal Energy Corporation

By: /s/ Jeremy P. Feakins

Name: Jeremy P. Feakins

Title: President

 

	Note Exhibit B	 17	 

  

  

  

SCHEDULE OF HOLDERS

	
Bond #

	
First Name

	
Last Name

	
Bond Amount

	
Exercise Price

	
# of Shares

	
24

	
Thomas

	
Hinkle

	
$50,400.00

	
$1.20

	
42,000

	
25

	
William

	
Schultz

	
$6,000.00

	
$1.20

	
5,000

	
31

	
Richard

	
Toews

	
$25,200.00

	
$1.20

	
21,000

	
36

	
Catherine

	
Thoma Revocable Trust

	
41

	
Steven

	
O'Day

	
$7,200.00

	
$1.20

	
6,000

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	
0

	  	  	  	  	
$1.20

	  
	  	  	  	
$166,800.00

	  	
139,000

 

	Scheduleex1020form10.htm

MEMORANDUM OF UNDERSTANDING

BETWEEN

OTE CORPORATION

AND

DCNS

FOR

USVI OTEC AND/OR SWAC PROJECT

This Memorandum of Understanding (hereinafter referred to as “MoU”) is made and entered into by and between:

OCEAN THERMAL ENERGY CORPORATION, a corporation organized under the laws of Delaware (United States of America) having its registered office located at 800 South Queen Street, Lancaster, PA 17603, United States of America,

hereinafter referred to as “OTE Corp.”

on the one part,

and

DCNS, a company (“Societe Anonyme”) incorporated under the laws of France with a capital of EUR 563,000,000, incorporated with the Register of Trade and Commerce of Paris under the number B 441 133 808, whose registered office is at 40-42, rue du Docteur Finlay, 75015 Paris, France,

hereinafter referred to as “DCNS”

on the other part.

OTE Corp. and DCNS are hereinafter individually referred to as a “Party” and collectively as the “Parties.”

 

1

  

  

  

TABLE OF CONTENTS

	
ARTICLE 1

	
- PURPOSE OF THIS MOU

	  	  
	
ARTICLE 2

	
- GENERAL PRINCIPLES OF COOPERATION

	  	  
	
ARTICLE 3

	
- OFFER

	  	  
	
ARTICLE 4

	
- COMING INTO FORCE, DURATION AND VALIDITY

	  	  
	
ARTICLE 5

	
- CONFIDENTIALITY

	  	  
	
ARTICLE 6

	
- ASSIGNMENT

	  	  
	
ARTICLE 7

	
- COMMUNICATIONS - ADVERTISING

	  	  
	
ARTICLE 8

	
- GOVERNING LAW AND ARBITRATION

	  	  
	
ARTICLE 9

	
- INTELLECTUAL PROPERTY RIGHTS

	  	  
	
ARTICLE 10

	
- NOTICES

	  	  
	
ARTICLE 11

	
- ENTIRE MOU AND AMENDMENT

	  	  
	
ARTICLE 12

	
- LANGUAGE

	  	  
	
ARTICLE 13

	
- MISCELLANEOUS

	  	  
	
ANNEX 1

	
- CONFIDENTIALITY PROVISIONS

	  	  
	
ANNEX 2

	
- WORK SHARING SCHEME

	  	  
	
ANNEX 3

	
- ESTIMATED SCHEDULE

	  	  
	
ANNEX 4

	
- ESTIMATED VALUE OF THE PRELIMINARY FEASIBILITY STUDY

 

2

  

  

  

WITNESSETH

WHEREAS, OTE Corp. is a renewable energy corporation specializing in Ocean Thermal Energy Conversion (OTEC) and Seawater District Cooling (SDC) systems and technology.

WHEREAS, DCNS is a leading European player on the world market for naval defense systems (acting as prime contractor, shipbuilder and systems integrator), now expanding into services and energy, especially in renewable ocean energies including OTEC, floating wind turbines, tidal turbines and wave energy converters.

WHEREAS, DCNS targets worldwide market for plant generating electricity from OTEC and aims at supplying, as EPCI (Engineering Procurement Construction and Installation) contractor, OTEC power plants and SDC systems.

WHEREAS, OTE Corp. targets OTEC market acting as project developer with a BOO (Build Own and Operate) business model.

WHEREAS, OTE Corp. and DCNS have entered into a memorandum of understanding on January 22nd 2013, in order to start discussions to explore the possibility of collaborating together on OTEC projects.

WHEREAS, the US Virgin Islands, hereinafter referred to as “USVI,” may be interested in installing a SDC and/or an OTEC power plant in its territory of hereinafter referred to as the “Project.”

WHEREAS, the USVI intend to express their requirements with respect to the Project in a request for information and/or proposal that is expected for the beginning of 2015, hereinafter referred to as “Request.”

WHEREAS, the Parties, given their diverse and complementary capabilities, are willing to cooperate to (i) perform a preliminary feasibility study and (ii) prepare an offer under OTE Corp.’s name or dedicated OTE Affiliate in answer to the Request in order for said offer to be submitted and to be accepted by the USVI and (iii) if such offer is accepted by USVI, to negotiate in good faith a EPCI contract for DCNS to perform the EPCI work for the execution of the Project.

WHEREAS, an entity shall be treated as being an Affiliate of another if that other entity:

(i)             is directly or indirectly controlling such Party;

(ii)            is under the same direct or indirect ownership or control as such Party; or

(iii)           is directly or indirectly owned or controlled by such Party. For these purposes, an entity shall be treated as being controlled by another if that other entity has more than fifty per cent (50%) of the shares or more than fifty per cent (50%) of the votes in such entity, is able to direct its affairs and/or to control the composition of its board of directors or equivalent body.

Notwithstanding the foregoing and for the avoidance of doubt, the French State or third-party companies under direct or indirect control of the French State which are not part of the DCNS Group shall not be considered as DCNS Affiliates.

 

3

  

  

  

WHEREAS, an EPCI means Engineering, Procurement, Construction and Installation.

THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:

ARTICLE 1 – PURPOSE OF THIS MOU

The purpose of this MOU is to define the terms and conditions under which the Parties agree to cooperate under the Project in order to:

	
  

	
(a)

	
perform a preliminary feasibility study in accordance with Annexes 2 and 3; and

	
  

	
(b)

	
prepare and submit an answer to USVI requirements in accordance with article 3, hereinafter referred to as “Offer”, in order for said Offer to be accepted and the contract for the execution of any OTEC power plants and SDC systems project in USVI and/or the Project to be subsequently awarded to OTE Corp. by the USVI, hereinafter referred to as “Prime Contract”; and

	
  

	
(c)

	
negotiate and enter into an EPCI agreement between the Parties in accordance with the principles provided in articles 2.1, 2.2, 2.3 and 2.4, hereinafter referred to as “EPCI Contract”, to provide the terms and conditions of their cooperation for the negotiation and the performance of the Prime Contract (should the Offer be accepted and the Prime Contract be subsequently awarded to OTE Corp. by the USVI).

ARTICLE 2 – GENERAL PRINCIPLES OF COOPERATION

Both Parties agree that their cooperation under the Project, in particular with respect to the Offer and the EPCI Contract, shall be governed by the following principles:

	
2.1

	
The anticipated work share of each Party under the Project (including the preliminary feasibility study) shall be defined on the basis of the Work Sharing Scheme as attached in Annex 2, hereinafter referred to as “Work Share”, and to be further discussed and finalised later in the EPCI Contract, subject to the changes which might be subsequently agreed upon between the Parties in relation with the requirements of the USVI, as expressed in the Request or otherwise.

	
2.2

	
The Prime Contract and the EPCI Contract shall, in particular, define the detailed terms and conditions with respect to the performance of the Parties’ respective responsibilities, it being expressly agreed that:

	
  

	
(a)

	
Both Parties will work on an open book basis concerning the costs and contingencies of the Offer and related EPCI costs in order to ensure reasonable commercial profitability for both Parties.

 

4

  

  

  

	
  

	
(b)

	
The EPCI Contract must be signed on the basis of the specific terms and conditions of the Prime Contract and therefore cannot be entered into between the Parties before the Prime Contract has been awarded by the USVI.

	
  

	
(c)

	
The Parties will expeditiously and in good faith negotiate the EPCI Contract simultaneously to the Prime Contract to be executed by OTE Corp. and USVI and that the role of DCNS shall include all usual and customary responsibilities of an EPCI contractor with reasonable and equitable payment for such responsibilities.

	
  

	
(d)

	
Should the Parties be unable to negotiate a mutually acceptable EPCI Contract within hundred and twenty (120) days after the Prime Contract is executed by OTE Corp. and USVI, and provided that both Parties have exercised good faith in such negotiations, OTE Corp. shall be permitted to proceed with the its obligations under the Prime Contract independently of DCNS. In such case and only when Prime Contract has been awarded by the USVI to OTE Corp, OTE Corp. will pay upon invoicing by DCNS of:

	
  

	
1.

	
the cost of the feasibility study as per Annex 4, plus,

	
  

	
2.

	
the associated travel and accommodation expenses related to the performance of the Project plus,

	
  

	
3.

	
a lump sum fee of 1.5% of the amount of OTE Corp. offer to USVI; and

	
  

	
(e)

	
The EPCI Contract must comply with article 9.6 of this MoU.

	
2.3

	
The EPCI Contract shall be negotiated in good faith between the Parties in accordance with the general principles provided in this MoU, provided however that nothing in this MoU may be construed as binding or otherwise compelling either Party to enter into the EPCI Contract.

	
2.4

	
This MoU constitutes a cooperation for the aforementioned purposes and no relationship other than that created by virtue hereof shall be established by any reference to the Parties. Nothing in this MoU establishes or creates, nor should in any way be interpreted as establishing or creating a joint venture, corporation, partnership of formal business or legal entity of any kind whatsoever, the “affectio societatis” being expressly excluded herein.

	
2.5

	
Throughout the term of this MoU, each Party undertakes that it shall not, directly or indirectly, participate in any OTEC power plants and SDC systems project in USVI and/or the Project in any manner other than in accordance with the provisions of this MoU.

	
2.6

	
It is mutually agreed that each Party shall bear its own expenses incurred for the performance of its obligations under this MoU without being entitled to claim any reimbursement of such expenses or part thereof from the other Party. The estimated costs for the performance of the preliminary feasibility study are indicated in Annex 4.

 

5

  

  

  

	
2.7

	
For the purpose of the Project and before the Prime Contract is awarded to OTE Corp., DCNS will conduct with OTE Corp., in accordance with Annexes 2 and 3, a preliminary feasibility study of the USVI site(s) where the Project could be performed, without prejudice of a possible more detailed feasibility study to be agreed between the Parties.

ARTICLE 3 – OFFER

	
3.1

	
The Parties shall closely cooperate in order to prepare a competitive Offer which OTE Corp. will submit to the USVI. Nonetheless, each Party is specifically responsible of the part of the Offer pertaining to its part in the Work Sharing.

	
3.2

	
During the Offer phase, the Parties will give reasonable assistance to each other with respect to the preparation and the submission of the Offer in order for said Offer to be accepted and OTE Corp. to be awarded the Prime Contract by the USVI. A Party shall not take any commitment which may affect the other Party and/or the other Party’s Work Share without the previous written consent of said Party.

ARTICLE 4  – COMING INTO FORCE, DURATION AND VALIDITY

	
4.1

	
This MoU shall come into force on the date it is executed by both Parties.

	
4.2

	
This MoU shall remain in force and effect until the occurrence of any of the following, whichever occurs first:

	
  

	
4.2.1

	
after a twenty four (24) month period starting from its coming into force as per article 4.1 unless said period be terminated earlier or extended by mutual written consent of the Parties;

	
  

	
4.2.2

	
in accordance with article 4.3;

	
  

	
4.2.3

	
the definitive withdrawal or cancellation of the Request by the USVI;

	
  

	
4.2.4

	
the Offer has been rejected by the USVI;

	
  

	
4.2.5

	
the USVI has selected the offer of a third party for the Project;

	
  

	
4.2.6

	
hundred and twenty (120) days after the Prime Contract is executed by OTE Corp. and USVI and the Parties have not entered into the EPCI Contract (as provided in article 2.2(c));

	
  

	
4.2.7

	
the entering into force of the EPCI Contract by the Parties, which shall expressly provide for the superseding of this MoU.

In the above events and with the exception of § 4.2.6 above, none of the Parties shall have the right to claim damages as consequence thereof, except if such termination is a consequence of gross negligence or willful misconduct.

 

6

  

  

  

	
4.3

	
Either Party hereto shall have the right to terminate this MoU by giving thirty (30) days prior written notice to the other Party in the event of a material breach or material default by the other Party of its obligations under this MoU and where such defaulting Party does not remedy or undertake reasonable steps to remedy within thirty (30) days after receipt of written notice to that effect from the initiating Party.

	
4.4

	
The termination of this MoU shall not relieve the Parties of any of their respective obligations under article 5 (Confidentiality), article 7 (Communication - Advertising) and article 8 (Governing Law and Arbitration) of this MoU.

ARTICLE 5 – CONFIDENTIALITY

The confidential information exchanged between the Parties in the framework of this MoU shall be protected and disclosed exclusively in accordance with the provisions of Annex 1 hereto.

ARTICLE 6 – ASSIGNMENT

Neither Party has the right to assign or transfer any or all of its rights and obligations under this MoU to any third party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. For the purposes of this Article, assignment by a Party to a wholly-owned subsidiary of that Party established for the sole purpose of performing this Project shall be permitted.

ARTICLE 7 – COMMUNICATIONS – ADVERTISING

Neither Party shall issue a news release, public announcement, advertisement, or other form of publicity concerning its activities in connection with this MoU unless agreed in writing by the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. However, nothing in this MoU, shall be interpreted to prevent either Party from complying applicable law with regard to the issuance of statements related to the subject matter hereof, subject to prior notice to the other Party.

ARTICLE 8 – GOVERNING LAW AND ARBITRATION

This MoU shall be binding upon the Parties, their successors and assigns, and shall be governed and construed by the laws of Switzerland without giving effect to such law’s provisions regarding conflict of laws. All disputes between the Parties in connection with or arising out of the existence, validity, construction, performance and termination of this MoU (or any terms thereof), which the Parties are unable to resolve between themselves shall be settled in Geneva (Switzerland) under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. Proceedings shall be held in the English language.

Notwithstanding the foregoing, either Party may immediately seek injunctive relief in any court of competent jurisdiction.

 

7

  

  

  

ARTICLE 9 – INTELLECTUAL PROPERTY RIGHTS

	
9.1

	
All intellectual property rights, including without limitation any invention, know-how, data, whether patented or not, patent, processes, commercial or technical information of whatever nature, software (including source code), trademark or design, hereinafter referred to as “Intellectual Property”, of either Party prior the coming into force of this MoU or developed or acquired independently of this MoU (including with respect to the preparation of the Offer) by said Party shall remain vested or vest in such Party, subject to any rights of third parties, hereinafter referred to as “Background Intellectual Property”.

	
9.2

	
All Intellectual Property developed or acquired by either Party under this MoU without the benefit of any access to the Background Intellectual Property of the other Party shall vest in said Party, subject to any rights of third parties, and shall also be deemed to be Background Intellectual Property.

	
9.3

	
Should studies and/or work be conducted jointly during the performance of the Contract, without any particular Party being in a position to reasonably claim ownership, the relevant results shall be jointly owned by the Parties, subject to the rights of third party, and each Party shall have a non-exclusive, free of charge and nontransferable right to use said results. The Parties shall meet in order to determine the conditions of protection of said results and shall establish a joint ownership settlement of said results.

	
9.4

	
Each Party grants to the other Party a royalty-free, non-exclusive and nontransferable licence to use its Intellectual Property, including the Background Intellectual Property set out in article 9.1 and the Intellectual Property set out in article 9.2, strictly for the purpose of performing its obligations under this MoU. It is expressly understood that any such license shall be automatically revoked upon the end of the validity of this MoU as set forth in article 4.2. Nothing in this MoU shall be construed or interpreted as obliging either Party to furnish any Intellectual Property to the other Party.

	
9.5

	
Each Party hereby declares and warrants that the licenses it grants pursuant to article 9.4 above will not infringe the Intellectual Property of any third party and (ii) that it shall indemnify and hold the other Party harmless of any and all claims of third parties in this respect.

	
9.6

	
Unless agreed otherwise by the Parties, this entire clause shall apply also to and be stipulated in any agreement and contract subsequently entered into pursuant the MoU.

ARTICLE 10 – NOTICES

	
10.1

	
All notices, requests, consents, approvals, waivers and other communications hereunder shall be deemed to have been duly given and made when received, and shall be effective upon receipt, if (i) in writing (in the English language) and (ii) it is (a) delivered by registered or certified mail, return receipt requested, (b) delivered by a national courier service, or (c) sent by electronic transmission thereof, in each case, to the person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such person.

 

8

  

  

  

	
10.2

	
Notices to OTE CORP. shall be addressed to the attention of Jeremy P. FEAKINS at the following:

	
by mail:

	
800 South Queen Street

	  	
Lancaster, Pennsylvania 17603

	  	
United States of America

	  	  
	
electronic:

	
Jeremy.feakins@OTEcorporation.com

	  	  
	
telephone:

	
+1 717 299 1344

	
10.3

	
Notices to DCNS shall be addressed to the attention of Frederic LE LIDEC at the following:

	
by mail:

	
143, bis avenue de Verdun

	  	
F 92442 Issy les Moulineaux Cedex

	  	
France

	  	  
	
electronic:

	
frederic.lelidec@dcnsgroup.com

	  	  
	
telephone:

	
+33 1 78 46 71 27

ARTICLE 11 – ENTIRE MOU AND AMENDMENT

	
11.1

	
This MoU (including its 13 articles and its four (4) annexes attached hereto) constitutes the full and complete understanding and agreement between the Parties in relation to the Project and supersedes all prior agreements and understandings between the Parties in relation to the Project. In case of discrepancy between the annexes and the articles, the latter shall prevail.

	
11.2

	
No change, alteration, modification, or addition to this MoU shall be valid unless made in writing and properly executed as an amendment by the Parties hereto.

ARTICLE 12 – LANGUAGE

The Parties agree to use the English language for exchange between them of information, and more generally, the English language shall be used between the Parties for the purpose of their cooperation under the Project.

ARTICLE 13 – MISCELLANEOUS

	
13.1

	
Each Party shall act in its own name and on its own behalf and neither Party has the right to act on behalf of the other Party without said other Party’s prior written approval.

	
13.2

	
The failure of either Party at any time to enforce any of the provisions of this MoU shall not be construed as a waiver by such Party of any such provisions nor in any way affect the validity of this MoU, in whole or in part.

 

9

  

  

  

	
13.3

	
If any term, provision, covenant or condition of this MoU is held invalid or unenforceable for any reason, the remaining provisions of this MOU shall continue in full force and effect as if this MoU had been executed with the invalid or unenforceable portion eliminated, provided the effectiveness of the remaining portions of this MOU will not defeat the overall intent of the Parties. In such a situation, the Parties agree, to the extent legal and possible, to incorporate a replacement provision to accomplish the originally intended effect.

IN WITNESS WHEREOF the Parties have caused this Memorandum of Understanding to be executed in duplicate by their respective duly authorized representatives.

	
For OTE CORP.

	
For DCNS

	  	  
	
Name: Jeremy P. Feakins

	
Name: Frederic Le Lidec

	  	  
	
Title: CEO

	
Title: VP Ocean Energy Director

	  	  
	
Signature: /s/ Jeremy P. Feakins

	
Signature: /s/ Frederic Le Lidec

	  	  
	
Date: July 10, 2014

	
Date: 10th July 2014

10

  

  

  

ANNEX 1

CONFIDENTIALITY PROVISIONS

	
1.

	
“Information” shall mean all and any commercial, financial, technical, operational or other information appertaining in any way to the subject matter of this MoU (including, but not limited to, all data, know-how, calculations, designs, drawings, methods, processes, systems, explanations, demonstrations and the existence of the MoU) as have been or may be disclosed or granted access otherwise made available (any such disclosure, availability or granting of access being referred to in this Annex as “disclosure”) by one Party (“Discloser”) to the other (“Recipient”), but shall exclude any such information which:

	
  

	
a)

	
prior to disclosure was in the possession of the Recipient, as properly evidenced by the written records of the Recipient, and which the Recipient was entitled to use; or

	
  

	
b)

	
at the time of disclosure is in the public domain other than by reason of a breach of duty of the MoU; or

	
  

	
c)

	
after disclosure becomes generally available to third parties by publication or otherwise, other than by reason of a breach of duty or of the MoU,

	
  

	
d)

	
has been approved for release and by written authorisation of the Discloser.

	
2.

	
Any disclosure of Information shall be solely for the purposes detailed in the MoU and the Recipient shall not use nor permit nor cause others to use Information for any other purpose without the prior written consent of the Discloser.

	
3.

	
The Recipient undertakes:

	
  

	
a)

	
to treat all Information as strictly confidential and not to disclose any part of it to any third party (save as necessary to the Recipient’s employees, officers for the purposes detailed in the MoU) unless the prior written consent of the Discloser has been obtained in relation to such disclosure.

	
  

	
b)

	
not to disclose such Information to any other persons within the Recipient’s organisation other than those having a need-to-know;

	
  

	
c)

	
neither to disclose nor cause to be disclosed such Information whether directly or indirectly to any third party or persons other than those mentioned in subparagraphs (a) and (b) above;

	
  

	
d)

	
not to use such Information in whole or in part for any purpose other than the MoU without the prior written consent of the Discloser;

	
  

	
e)

	
subject to clause 5 of this Annex, not to copy or reduce Information to writing except as may be strictly necessary for the purposes of the MoU.

 

11

  

  

  

	
4.

	
Save only to the extent that the Recipient or any third party has pre-existing rights in any Information, it shall remain the absolute property of the Discloser and all documents, tapes, discs, films, photographs, models and other media embodying Information shall be returned to the Discloser by the Recipient on demand together with all copies of it, and at the latest thirty (30) days after the termination of this MoU.

	
5.

	
The Recipient shall not make any copies of or duplicate in any way in whole or in part any Information without the prior written agreement of the Discloser and where such copies or reproductions are permitted in accordance with this clause the Recipient shall treat them strictly in accordance with the provisions of this Annex and comply with the instructions of the Discloser with regard to the protection and disposal of them. The Recipient shall return the originals and all copies to the Discloser promptly upon the request of the Discloser, and at the latest thirty (30) days after the termination of this MoU.

	
6.

	
The Recipient shall provide proper and secure storage for all documents, materials and things comprising or embodying Information whilst in its custody or under its control and shall ensure that all necessary and proper security precautions are taken to safeguard Information and to restrict access to it.

	
7.

	
The Recipient shall ensure that any employee, officer to whom Information has been disclosed by, or otherwise as a result of disclosure to, the Recipient shall maintain the confidential nature of the Information as if such employee and/or officer had entered into an agreement with the Discloser in respect of it on the same terms mutatis mutandis as the terms contained in this Annex.

	
8.

	
Nothing in this Annex shall be construed or interpreted as obliging either party to furnish any Information to the other or to furnish Information in any form nor as granting to the Recipient any right or licence under or in relation to any Information.

	
9.

	
Any Information disclosed by the Parties under this MoU which is Classified Information shall be identified by the Discloser as Classified Information at the time of disclosure and the disclosure, protection, use and handling of such information shall be in accordance with the security procedures prescribed by the appropriate Government.

	
10.

	
The obligations contained in this Annex shall continue in full force and effect for the duration of this MoU and for five (5) years from the time of termination of the MoU notwithstanding that all or part of the documents, materials or other things embodying Information shall have been returned to the Discloser or that the purpose for which Information was disclosed has been abandoned, completed or has otherwise lapsed or ceased to apply.

 

12

  

  

  

ANNEX 2

WORK SHARING SCHEME

Workshare to be discussed and finalised later in accordance with article 2.1

1.           General Work Sharing scheme

	
USVI Project Tasks:

	
Workshare Comments:

	
A-USVI Feasibility Study Tasks:

	  
	
Statement of Work

	
Joint

	
Establishment of Design Bases

	
OTE Corp lead, DCNS assistance

	
Selection of the site

	
Joint

	
Design of Land-Based OTEC Plant

	
Both parties with separate OTE Corp and DONS designs

	
Design of Floating OTEC Plant

	
Both parties with separate OTE Corp and DCNS designs

	
Design of Fresh Water Production

	
OTE Corp

	
Performance/Economic Analysis

	
Joint

	  	  
	
B-USVI Design Study Tasks:

	  
	
Environment Assessments

	
OTE Corp lead, DCNS assistance

	
Project Detail & Completion Design

	
DCNS

	
Environmental Impact (Permitting & Compliance to regulations)

	
OTE

	
Risk Management Register

	
DCNS

	  	  
	
C-USVI Construction Tasks:

	  
	
Final Project Installation

	
DCNS

	
Final hand over of project producible to USVI clients

	
OTE

	  	  
	
D-Management of Operation & Maintenance:

	  
	
Operation and Maintenance

	
DCNS

2.           Preliminary Feasibility Study Work Sharing scheme

	
USVI Project Tasks:

	
Workshare Comments:

	
Kick-Off Meeting

	  
	
Establish plan of actions/responsibilities/schedule

	
Both parties

	
Establish POC’s for OTE and DCNS

	
Both parties

	
Statement of Work

	  
	
Elaboration SoW

	
Both parties

	
MOU Teaming/Partnership Agreement

	  
	
MOU drafting agreement

	
DCNS lead

	
MOU submittal

	
DCNS

	
MOU Teaming/Partnership Between OTE and DCNS

	
Both parties

	
Establishment of Design Bases

	  
	
Land-based plant on St. Croix

	
OTE Corp lead, DCNS assistance

	
Floating plant off the coast of St. Thomas

	
OTE Corp lead, DCNS assistance

	
Production of fresh water

	
OTE Corp

	
Design Bases for Land-Based and Floating Plants

	
Both parties

	
USVI Visit & Working Group Session #1

	  
	
OTE-DCNS meeting: SOW, Design Bases, Schedule

	
OTE Corp lead, DCNS assistance

	
Meeting with WAPA and USVI Office of Energy

	
OTE Corp lead, DCNS assistance

	
OTEC Site Visit on St. Croix

	
OTE Corp lead, DCNS assistance

	
Meeting with University of Virgin Island (UVI)

	
OTE Corp lead, DCNS assistance

	
Design of Land-Based OTEC Plant

	  
	
Selection of the site

	
Both parties

	
System design & optimization

	
Both parties with separate OTE Corp and DCNS designs

	
Power interfacing with WAPA substation

	
Both parties with separate OTE Corp and DCNS designs

	
PFD, equipment list, instrumentation/control, safety

	
Both parties with separate OTE Corp and DCNS designs

	
General plant and seawater pipe layout

	
Both parties with separate OTE Corp and DCNS designs

	
Concept Designs of Land-Based OTEC Plant - OTE and DCNS

	
Both parties

	
Working Group Session # 2 at DCNS (Paris or Nantes)

	  
	
Review of concept designs - land-based and floating plants

	
Both parties

13

  

  

  

 

 

	
USVI Project Tasks:

	
Workshare Comments:

	
Criteria for selecting common design based on techno-economic merits

	
Both parties

	
Methodology for joint economic analysis-CAPEX, OPEX, economic parameters

	
Both parties

	
Design of Floating OTEC Plant

	  
	
System design & optimization

	
Both parties with separate OTE Corp and DCNS designs

	
Platform design concepts and CWP interfacing

	
Both parties with separate OTE Corp and DCNS designs

	
Submarine cable - interfacing with platform and WAPA substation

	
Both parties with separate OTE Corp and DCNS designs

	
Anchoring studies

	
Both parties with separate OTE Corp and DCNS designs

	
PFD, equipment list, instrumentation/control, safety

	
Both parties with separate OTE Corp and DCNS designs

	
General layout of the power system on platform

	
Both parties with separate OTE Corp and DCNS designs

	
Concept Designs of Floating OTEC Plant - OTE and DCNS

	
Both parties with separate OTE Corp and DCNS designs

	
Design of Fresh Water Production

	  
	
Production of Fresh Water Studies

	
OTE Corp

	
Performance/Economic Analysis

	  
	
Performance analysis: levelized power generation

	
Joint analysis

	
WBS and cost estimates: land-based and floating plants

	
Joint analysis

	
Economic analysis and COE

	
Joint analysis

	
Business case development

	
OTE Corp lead, DCNS assistance

	
Working Group Session # 3 at OTE (Manassas)

	  
	
Review of initial economic analysis

	
Both parties

	
Selection of common design of land-based and floating plants

	
Both parties

	
Outline of the design report including economic analysis

	
Both parties

	
Assignment of preparing final report

	
Both parties

	
Common Design of Land-Based and Floating Plants

	
Both parties

	
Environment Assessments

	  
	
Identify permit requirements and agencies

	
OTE Corp lead, DCNS assistance

	
Identify environmental regulations for the proposed land-based and floating plants

	
OTE Corp lead, DCNS assistance

	
Preliminary assessment of environmental impacts

	
OTE Corp lead, DCNS assistance

	
Perform risk mitigation and impact on costs & operation

	
OTE Corp lead, DCNS assistance

	
Environment Impact Assessment Report

	
OTE Corp lead, DCNS assistance

	
Implementation/Final Report

	  
	
Preparation of final report

	
OTE Corp lead, DCNS assistance

	
Review by Office of Energy and WAPA

	
OTE Corp

	
Presentation to USVI stakeholders

	
OTE Corp lead, DCNS assistance

	
Implementation plan

	
OTE Corp lead, DCNS assistance

 

14

  

  

  

ANNEX 3

ESTIMATED SCHEDULE

 

15

  

  

  

ANNEX 4

ESTIMATED VALUE OF THE PRELIMINARY FEASIBILITY STUDY

	
 

USVI Feasibility Study Tasks:

	
 

Comments:

	
DCNS value:

(assigned to this task)

	
 Kick-off meeting

	
 Both parties

	
2,000€  

	
 Statement of Work

	
 Both parties

	
3,000€  

	
 MOU Teaming/Partnership Agreement

	
 DCNS lead

	
5,000€  

	
 Establishment of Design Bases

	
 OTE Corp lead

	
5,000€  

	
 USVI Visit & Working Group Session #1

	
 Both parties

	
10,000€  

	
 Design of Land-Based OTEC Plant

	
 Separate OTE and DCNS designs

	
21,000€  

	
 Working Group Session #2 at DCNS (Pans or Nantes)

	
 Both parties

	
5,000€  

	
 Design of Floating OTEC Plant

	
 Separate OTE and DCNS designs

	
25,000€  

	
 Design of Fresh Water Production

	
 OTE Corp (not included in DCNS studies)

	
0€  

	
 Performance/Economic Analysis

	
 Both parties

	
15,000€  

	
 Working Group Session #3 at OTE (Manassas)

	
  Both parties

	
12,000€  

	
 Environment Assessments

	
 OTE Corp lead, DCNS assistance

	
5,000€  

	
 Implementation/Final Report

	
 OTE Corp lead, DCNS assistance

	
10,000€  

16

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