NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
 
OCEAN THERMAL ENERGY CORPORATION
 
CONVERTIBLE NOTE
 
Issuance Date: May 22, 2018
Original Principal Amount:$281,250
Note No. CPWR-1
Consideration Paid at Close: $250,000

 
FOR VALUE RECEIVED, Ocean Thermal Energy Corporation, a Nevada corporation with
a par value of $0.001 per common share (“Par Value”) (the "Company"), hereby
promises to pay to the order of Collier Investments, LLC or registered assigns
(the "Holder") the amount set out above as the Original Principal Amount (as
reduced pursuant to the terms hereof pursuant to redemption, conversion or
otherwise, the "Principal") when due, whether upon the Maturity Date (as defined
below), acceleration, redemption or otherwise (in each case in accordance with
the terms hereof) and to pay interest ("Interest") on any outstanding Principal
at the applicable Interest Rate from the date set out above as the Issuance Date
(the "Issuance Date") until the same becomes due and payable, upon the Maturity
Date or acceleration, conversion, redemption or otherwise (in each case in
accordance with the terms hereof).
 
The Original Principal Amount is $281,250 plus accrued and unpaid interest and
any other fees. The Consideration is $250,000 payable by wire transfer (there
exists a $31,250 original issue discount (the “OID”)). The Holder shall pay
$250,000 of Consideration upon closing of this Note. For purposes hereof, the
term “Outstanding Balance” means the Original Principal Amount, as reduced or
increased, as the case may be, pursuant to the terms hereof for conversion,
breach hereof or otherwise, plus any accrued but unpaid interest, collection and
enforcements costs, and any other fees, penalties, damages or charges incurred
under this Note.
 
 
(1)
GENERAL TERMS

 
(a)       Payment of Principal. The "Maturity Date" shall be the earlier of (i)
seven (7) months after the Issuance Date or (ii) the date in which the Company
consummates a capital raising transaction in the amount of $6,000,000.00 or more
primarily from the sale of equity of the Company (the “Qualified Financing”), as
may be extended at the option of the Holder in the event that, and for so long
as, an Event of Default (as defined below) shall not have occurred and be
continuing on the Maturity Date (as may be extended pursuant to this Section 1)
or any event shall not have occurred and be continuing on the Maturity Date (as
may be extended pursuant to this Section 1) that with the passage of time and
the failure to cure would result in an Event of Default.
 
 
1

 
 
(b)       Interest. A one-time interest charge of twelve percent (12%)
(“Interest Rate”) shall be applied on the Issuance Date to the Outstanding
Balance. Interest hereunder shall be paid on the Maturity Date (or sooner as
provided herein) to the Holder or its assignee in whose name this Note is
registered on the records of the Company regarding registration and transfers of
Notes in cash or converted into Common Stock at the Conversion Price provided
the Equity Conditions are satisfied.
 
(c)       Security. This Note shall be secured by collateral and assets of the
Company, as further provided in that certain security agreement entered into on
the Issuance Date by the Company and Holder.
 
 
(2)
EVENTS OF DEFAULT.

 
(a)       An “Event of Default”, wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):
 
(i)       The Company's failure to pay to the Holder any amount of Principal,
Interest, or other amounts when and as due under this Note (including, without
limitation, the Company's failure to pay any redemption payments or amounts
hereunder);
 
(ii)       A Conversion Failure as defined in section 3(b)(ii)
 
(iii)       The Company or any subsidiary of the Company shall commence, or
there shall be commenced against the Company or any subsidiary of the Company
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Company or any subsidiary of the Company
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the
Company or any subsidiary of the Company or there is commenced against the
Company or any subsidiary of the Company any such bankruptcy, insolvency or
other proceeding which remains undismissed for a period of 61 days; or the
Company or any subsidiary of the Company is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or proceeding is
entered; or the Company or any subsidiary of the Company suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any
substantial part of its property which continues undischarged or unstayed for a
period of sixty one (61)       days; or the Company or any subsidiary of the
Company makes a general assignment for the benefit of creditors; or the Company
or any subsidiary of the Company shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally as they become
due; or the Company or any subsidiary of the Company shall call a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of
its debts; or the Company or any subsidiary of the Company shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Company
or any subsidiary of the Company for the purpose of effecting any of the
foregoing;
 
(iv)       The Company or any subsidiary of the Company shall default in any of
its obligations under any other Note or any mortgage, credit agreement or other
facility, indenture agreement, factoring agreement or other instrument under
which there may be issued, or by which there may be secured or evidenced any
indebtedness for borrowed money or money due under any long term leasing or
factoring arrangement of the Company or any subsidiary of the Company in an
amount exceeding $100,000, whether such indebtedness now exists or shall
hereafter be created; and 
 
 
2

 
 
(v)       The Common Stock is suspended or delisted for trading on the Over the
Counter OTCQB Venture Marketplace or OTCPink Open Marketplace (the “Primary
Market”).
 
(vi)       The Company loses its ability to deliver shares via “DWAC/FAST”
electronic transfer.
 
(vii)       The Company loses its status as “DTC Eligible.”
 
(viii)       The Company shall become late or delinquent in its filing
requirements as a fully-reporting issuer registered with the Securities &
Exchange Commission.
 
(ix)       The Company shall fail to reserve and keep available out of its
authorized Common Stock a number of shares equal to at least 3 (three) times the
full number of shares of Common Stock issuable upon conversion of all
outstanding amounts under this Note.
 
(x)       The Company shall fail to meet all requirements to satisfy the
availability of Rule 144 to the Investor or its assigns including but not
limited to timely fulfillment of its filing requirements as a fully-reporting
issuer registered with the SEC, requirements for XBRL filings, and requirements
for disclosure of financial statements on its website.
 
(xi)       The Common Stock trades at less than $0.02 per share at any time
while the Note is outstanding.
 
(b)       Upon the occurrence of any Event of Default (without the need for any
party to give any notice or take any other action), the Outstanding Balance
shall immediately and automatically increase to 130% of the Outstanding Balance
immediately prior to the occurrence of the Event of Default (the “Default Sum”),
and the Conversion Price shall be redefined to equal the lesser of (a) 80%
multiplied by the price per share paid by the investors in the Qualified
Financing or (b) $0.20, subject to adjustment as provided in this Note. Upon the
occurrence of any Event of Default, the Note shall become immediately due and
payable and the Company shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the Outstanding Balance, all without
demand, presentment or notice, all of which hereby are expressly waived,
together with all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity.
 
(3) CONVERSION OF NOTE. This Note shall be convertible into shares of the
Company's Common Stock, on the terms and conditions set forth in this Section 3.
 
(a)       Conversion Right. Subject to the provisions of Section 3(c), at any
time or times on or after the Issuance Date, the Holder shall be entitled to
convert any portion of the outstanding and unpaid Conversion Amount (as defined
below) into fully paid and nonassessable shares of Common Stock in accordance
with Section 3(b), at the Conversion Price (as defined below). The number of
shares of Common Stock issuable upon conversion of any Conversion Amount
pursuant to this Section 3(a) shall be equal to the quotient of dividing the
Conversion Amount by the Conversion Price. The Company shall not issue any
fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up to the nearest whole
share. The Company shall pay any and all transfer agent fees, legal fees, costs
and any other fees or costs that may be incurred or charged in connection with
the issuance of shares of the Company’s Common Stock to the Holder arising out
of or relating to the conversion of this Note.
 
 
3

 
 
(i)       "Conversion Amount" means the portion of the Original Principal Amount
and Interest to be converted, plus any penalties, redeemed or otherwise with
respect to which this determination is being made.
 
(ii)       "Conversion Price" shall equal the lesser of (i) 80% multiplied by
the price per share paid by the investors in the Qualified Financing or (ii)
$0.20, subject to adjustment as provided in this Note, subject to adjustment as
provided in this Note.
 
(b)       Mechanics of Conversion.
 
(i)       Optional Conversion. To convert any Conversion Amount into shares of
Common Stock on any date (a "Conversion Date"), the Holder shall (A) transmit by
email, facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m.,
New York, NY Time, on such date, a copy of an executed notice of conversion in
the form attached hereto as Exhibit A (the "Conversion Notice") to the Company.
On or before the third Business Day following the date of receipt of a
Conversion Notice (the "Share Delivery Date"), the Company shall (A) if legends
are not required to be placed on certificates of Common Stock pursuant to the
then existing provisions of Rule 144 of the Securities Act of 1933 (“Rule 144”)
and provided that the Transfer Agent is participating in the Depository Trust
Company's ("DTC") Fast Automated Securities Transfer Program, credit such
aggregate number of shares of Common Stock to which the Holder shall be entitled
to the Holder's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system or (B) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, issue and
deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled which certificates shall
not bear any restrictive legends unless required pursuant the Rule 144. If this
Note is physically surrendered for conversion and the outstanding Principal of
this Note is greater than the Principal portion of the Conversion Amount being
converted, then the Company shall, upon request of the Holder, as soon as
practicable and in no event later than three (3) Business Days after receipt of
this Note and at its own expense, issue and deliver to the holder a new Note
representing the outstanding Principal not converted. The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of
this Note shall be treated for all purposes as the record holder or holders of
such shares of Common Stock upon the transmission of a Conversion Notice.
 
(ii)       Company's Failure to Timely Convert. If within two (2) Trading Days
after the Company's receipt of the facsimile or email copy of a Conversion
Notice the Company shall fail to issue and deliver to Holder via “DWAC/FAST”
electronic transfer the number of shares of Common Stock to which the Holder is
entitled upon such holder's conversion of any Conversion Amount (a "Conversion
Failure"), the Original Principal Amount of the Note shall increase by $2,000
per day until the Company issues and delivers a certificate to the Holder or
credit the Holder's balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon such holder's conversion of any
Conversion Amount (under Holder’s and Company’s expectation that any damages
will tack back to the Issuance Date). Company will not be subject to any
penalties once its transfer agent processes the shares to the DWAC system. If
the Company fails to deliver shares in accordance with the timeframe stated in
this Section, resulting in a Conversion Failure, the Holder, at any time prior
to selling all of those shares, may rescind any portion, in whole or in part, of
that particular conversion attributable to the unsold shares and have the
rescinded conversion amount returned to the Outstanding Balance with the
rescinded conversion shares returned to the Company (under Holder’s and
Company’s expectations that any returned conversion amounts will tack back to
the original date of the Note).
 
(iii)       [Intentionally Omitted].
 
 
4

 

 
In the case that conversion shares are not deliverable by DWAC/FAST electronic
transfer an additional 10% discount to the Conversion Price will apply.
 
(iv)       [Intentionally Omitted].
 
(v)       [Intentionally Omitted].
 
(vi)       Book-Entry. Notwithstanding anything to the contrary set forth
herein, upon conversion of any portion of this Note in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Note to
the Company unless (A) the full Conversion Amount represented by this Note is
being converted or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice) requesting
reissuance of this Note upon physical surrender of this Note. The Holder and the
Company shall maintain records showing the Principal and Interest converted and
the dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon conversion.
 
 
(c)
Limitations on Conversions or Trading.

 
(i)       Beneficial Ownership. The Company shall not effect any conversions of
this Note and the Holder shall not have the right to convert any portion of this
Note or receive shares of Common Stock as payment of interest hereunder to the
extent that after giving effect to such conversion or receipt of such interest
payment, the Holder, together with any affiliate thereof, would beneficially own
(as determined in accordance with Section 13(d) of the Exchange Act and the
rules promulgated thereunder) in excess of 4.99% of the number of shares of
Common Stock outstanding immediately after giving effect to such conversion or
receipt of shares as payment of interest. Since the Holder will not be obligated
to report to the Company the number of shares of Common Stock it may hold at the
time of a conversion hereunder, unless the conversion at issue would result in
the issuance of shares of Common Stock in excess of 4.99% of the then
outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent
that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of the principal amount of this Note
is convertible shall be the responsibility and obligation of the Holder. If the
Holder has delivered a Conversion Notice for a principal amount of this Note
that, without regard to any other shares that the Holder or its affiliates may
beneficially own, would result in the issuance in excess of the permitted amount
hereunder, the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum principal amount permitted to be converted on such
Conversion Date in accordance with Section 3(a) and, any principal amount
tendered for conversion in excess of the permitted amount hereunder shall remain
outstanding under this Note. In the event that the Market Capitalization of the
Company falls below $2,500,000, the term “4.99%” above shall be permanently
replaced with “9.99%”. “Market Capitalization” shall be defined as the product
of (a) the closing price of the Common Stock of the Common stock multiplied by
(b) the number of shares of Common Stock outstanding as reported on the
Company’s most recently filed Form 10-K or Form 10-Q.
 
(ii)       Capitalization. So long as this as this Note is outstanding, upon
written request of the Holder, the Company shall furnish to the Holder the
then-current number of common shares issued and outstanding, the then-current
number of common shares authorized, and the then-current number of shares
reserved for third parties.
 
 
(d)
Other Provisions.

 

 
5

 
 
(i)       Share Reservation. The Company shall at all times reserve and keep
available out of its authorized Common Stock a number of shares equal to at
least
 
5 (five) times the full number of shares of Common Stock issuable upon
conversion of all outstanding amounts under this Note; and within 3 (three)
Business Days following the receipt by the Company of a Holder's notice that
such minimum number of shares of Common Stock is not so reserved, the Company
shall promptly reserve a sufficient number of shares of Common Stock to comply
with such requirement. The Company will at all times reserve at least 4,725,000
shares of Common Stock for conversion.
 
(ii)       Prepayment. At any time within the 90 day period immediately
following the Issuance Date, the Company shall have the option, upon 10 business
days’ notice to Holder, to pre-pay the entire remaining outstanding principal
amount of this Note in cash, provided that (i) the Company shall pay the Holder
145% of the Outstanding Balance, (ii) such amount must be paid in cash on the
next business day following such 10 business day notice period, and (iii) the
Holder may still convert this Note pursuant to the terms hereof at all times
until such prepayment amount has been received in full. Except as set forth in
this Section the Company may not prepay this Note in whole or in part.
 
(iii)       Terms of Future Financings. So long as this Note is outstanding,
upon any issuance by the Company or any of its subsidiaries of any security (or
upon any amendment to any existing security) with any term more favorable to the
holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then the Company
shall notify the Holder of such additional or more favorable term and such term,
at Holder’s option, shall become a part of the Note. The types of terms
contained in another security that may be more favorable to the holder of such
security include, but are not limited to, terms addressing conversion discounts,
conversion lookback periods, interest rates, original issue discounts, stock
sale price, private placement price per share, and warrant coverage.
 
(iv)       All calculations under this Section 3 shall be rounded up to the
nearest $0.00001 or whole share.
 
(v)       Nothing herein shall limit a Holder's right to pursue actual damages
or declare an Event of Default pursuant to Section 2 herein for the Company's
failure to deliver certificates representing shares of Common Stock upon
conversion within the period specified herein and such Holder shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief,
in each case without the need to post a bond or provide other security. The
exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.
 
(vi)       If the Company, at any time while this Note or any amounts due
hereunder are outstanding, issues, sells or grants any option to purchase, or
sells or grants any right to reprice, or otherwise disposes of, or issues (or
has sold or issued, as the case may be, or announces any sale, grant or any
option to purchase or other disposition), any Common Stock or other securities
convertible into, exercisable for, or otherwise entitle any person or entity the
right to acquire, shares of Common Stock (including, without limitation, upon
conversion any convertible notes or warrants outstanding as of or following the
Issuance Date), in each or any case at an effective price per share that is
lower than the then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances, collectively, a “Dilutive Issuance”) (it being agreed
that if the holder of the Common Stock or other securities so issued shall at
any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Conversion Price, such issuance shall 
 
 
6

 

 
be deemed to have occurred for less than the Conversion Price on such date of
the Dilutive Issuance), then the Conversion Price shall be reduced, at the
option of the Holder, to a price equal the Base Conversion Price.
 
(4)       SECTION 3(A)(9) OR 3(A)(10) TRANSACTION. So long as this Note is
outstanding, the Company shall not enter into any transaction or arrangement
structured in accordance with, based upon, or related or pursuant to, in whole
or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9)
Transaction”) or Section 3(a)(10) of the Securities Act (a “3(a)(10)
Transaction”). In the event that the Company does enter into, or makes any
issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10)
Transaction while this note is outstanding, a liquidated damages charge of 25%
of the outstanding principal balance of this Note, but not less than $25,000,
will be assessed and will become immediately due and payable to the Holder at
its election in the form of cash payment or addition to the balance of this
Note.
 
(5)       PIGGYBACK REGISTRATION RIGHTS. The Company shall include on the next
registration statement the Company files with SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Note. Failure to do so will result in
liquidated damages of 25% of the outstanding principal balance of this Note, but
not less than $25,000, being immediately due and payable to the Holder at its
election in the form of cash payment or addition to the balance of this Note.
 
(6)       REISSUANCE OF THIS NOTE.
 
(a)       Assignability. The Company may not assign this Note. This Note will be
binding upon the Company and its successors and will inure to the benefit of the
Holder and its successors and assigns and may be assigned by the Holder to
anyone of its choosing without Company’s approval.
 
(b)       Lost, Stolen or Mutilated Note. Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note, and, in the case of loss, theft or destruction, of
any indemnification undertaking by the Holder to the Company in customary form
and, in the case of mutilation, upon surrender and cancellation of this Note,
the Company shall execute and deliver to the Holder a new Note representing the
outstanding Principal.
 
(7)       NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms hereof must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party) (iii) upon receipt, when sent by email; or (iv) one (1) Trading
Day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be those set forth in the
communications and documents that each party has provided the other immediately
preceding the issuance of this Note or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party three (3) Business Days
prior to the effectiveness of such change. Written confirmation of receipt (i)
given by the recipient of such notice, consent, waiver or other communication,
(ii) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (iii) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
 
 

 
 
The addresses for such communications shall be:
 

If to the Company, to:
 
OCEAN THERMAL ENERGY CORPORATION
800 South Queen Street Lancaster, PA 17603
E-mail: info@otecorporation.com
 
If to the Holder:
 
COLLIER INVESTMENTS, LLC
120 Birmingham Drive, Suite 230
Cardiff, CA 92007
Attn: David Clark, Principal Email:  dclark@vci.us.com
 
 
8

 
 
(8)       APPLICABLE LAW AND VENUE. This Note shall be governed by and construed
in accordance with the laws of the State of Nevada, without giving effect to
conflicts of laws thereof. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of California or in the federal courts located in the city
and county of San Diego, in the State of California. Both parties and the
individuals signing this Agreement agree to submit to the jurisdiction of such
courts.
 
(9)       WAIVER. Any waiver by the Holder of a breach of any provision of this
Note shall not operate as or be construed to be a waiver of any other breach of
such provision or of any breach of any other provision of this Note. The failure
of the Holder to insist upon strict adherence to any term of this Note on one or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Note. Any waiver must be in writing.
 
(10)       LIQUIDATED DAMAGES. Holder and Company agree that in the event
Company fails to comply with any of the terms or provisions of this Note,
Holder's damages would be uncertain and difficult (if not impossible) to
accurately estimate because of the parties' inability to predict future interest
rates, future share prices, future trading volumes and other relevant factors.
Accordingly, Holder and Company agree that any fees, balance adjustments,
default interest or other charges assessed under this Note are not penalties but
instead are intended by the parties to be, and shall be deemed, liquidated
damages (under Holder's and Company's expectations that any such liquidated
damages will tack back to the Closing Date for purposes of determining the
holding period under Rule 144).
 
(11)       ADJUSTMENTS. Notwithstanding anything to the contrary, any references
herein to share numbers or share prices shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction
during such period.
 
(12)       QUALIFIED FINANCING. If the Company fails to consummate a Qualified
Financing on or before September 1, 2018, then a liquidated damages charge of
$56,250.00 shall be immediately added to the balance of this Note.
 
[Signature Page Follows]
 
 
9

 
 

 
IN WITNESS WHEREOF, the Company has caused this Convertible Note to be duly
executed by a duly authorized officer as of the date set forth above.
 
 
 
OCEAN THERMAL ENERGY CORPORATION

 
 
 
 
 
 
By:  
/s/ Jeremy P. Feakins

 
 
 
Name: Jeremy P. Feakins

 
 
 
Title: Chief Executive Officer

 

 
 
 
 COLLIER INVESTMENTS, LLC.

 
 
 
 
 
 
By:  
/s/ David Clark

 
 
 
Name: David Clark 
 
 
 
Title: Principal

 

 

[Signature Page to Convertible Note No. CPWR-1]
 
 
10

 
EXHIBIT A
CONVERSION NOTICE
[Company Contact, Position]

Ocean Thermal Energy Corporation
[Company Address]
[Contact Email Address}

 
The undersigned hereby elects to convert a portion of the $                 
Convertible Note                     issued to Collier Investments, LLC on 
                 into Shares of Common Stock of                       according
to the conditions set forth in such Note as of the date written below.
 
By accepting this notice of conversion, you are acknowledging that the number of
shares to be delivered represents less than 10% (ten percent) of the common
stock outstanding. If the number of shares to be delivered represents more than
9.99% of the common stock outstanding, this conversion notice shall immediately
automatically extinguish and debenture Holder must be immediately notified.
 
Date of Conversion:
_______________________________
Conversion Amount:
_______________________________
Conversion Price:
_______________________________
Shares to be Delivered:
Shares delivered in name of:
 
COLLIER INVESTMENTS, LLC

 
 
Signature:                                                                                  
_______________________________

By:
Title:
Collier Investments, LLC

 
11

 
EXHIBIT B
TRUE-UP NOTICE
[Company Contact, Position]

Ocean Thermal Energy Corporation
[Company Address]
[Contact Email Address}

 
The undersigned hereby gives notice to Ocean Thermal Energy Corporation,
a corporation (the “Company”), pursuant to that certain Note dated , 20 by and
between the Company and the Holder (the “Note”), that the Holder elects to:
 
__
Receive fully paid and non-assessable True-Up Shares pursuant to Section 3(b)(v)
of the Note (such Additional Origination Shares shall be calculated as set forth
below), or
 
__
Add to the Outstanding Balance a dollar amount equal to the True-Up Amount (such
True-Up Amount shall be calculated as set forth below).
 
The number of True-Up Shares Holder is entitled to receive is calculated as
follows:
 
Conversion Amount ($__) / __% of the lowest trade occurring during
the                  (__) consecutive Trading Days immediately preceding the
applicable Conversion Date ($__.__ ) - Conversion Amount ($__ ) divided by the
Par Value ($__.__) =
 
               ____________ True-Up Shares
 
The amount of True-Up Balance to be added to the Outstanding Balance is
calculated as follows:
 
Number of True-Up Shares ( ) * high trade price on the Conversion Date ($_. )=
 
               ____________ True-Up Shares
 
Shares delivered in name of:
 
COLLIER INVESTMENTS, LLC

 
                                                                                            Signature:   
________________________

By:
Title:
Collier Investments, LLC

 
 
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