Exhibit 10.1


 


EQUITY PURCHASE AGREEMENT


 


This equity purchase
agreement is entered into as of December 18, 2017 (this "Agreement"), by and between Ocean Thermal Energy Corporation,
a Nevada corporation (the "Company"), and L2 Capital, LLC, a Kansas limited liability company (the "Investor").


 


 


 


WHEREAS, the
parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase up to Fifteen Million Dollars ($15,000,000.00) of the Company’s
Common Stock (as defined below);


 


NOW, THEREFORE,
the parties hereto agree as follows:


 


ARTICLE I

CERTAIN DEFINITIONS


 


DEFINED TERMS. As used
in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):


 


“Agreement”
shall have the meaning specified in the preamble hereof.


 


“Average Daily
Trading Volume” shall mean the average trading volume of the Company’s Common Stock in the five (5) Trading Days
immediately preceding the respective Put Date.


 


“Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.


 


“Claim Notice”
shall have the meaning specified in Section 9.3(a).


 


“Clearing
Costs” shall mean all of the Investor’s broker and Transfer Agent fees.


 


“Clearing
Date” shall be the date on which the Investor receives the Put Shares as DWAC Shares in its brokerage account.


 


“Closing”
shall mean one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.3.


 


“Closing Certificate”
shall mean the closing certificate of the Company in the form of Exhibit B hereto.


 


“Closing Date”
shall mean the date of any Closing hereunder.


 


“Commitment
Period” shall mean the period commencing on the Execution Date, and ending on the earlier of (i) the date on which
the Investor shall have purchased Put Shares pursuant to this Agreement equal to the Maximum Commitment Amount, (ii) December
18, 2020, or (iii) written notice of termination by the Company to the Investor (which shall not occur at any time that the
Investor holds any of the Put Shares).


 


“Commitment
Shares” shall mean 1,714,285 shares of the Company’s common stock which were issued to the Investor on or around
the date hereof.


 


“Common Stock”
shall mean the Company’s common stock, $0.001 par value per share, and any shares of any other class of common stock whether
now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets
(upon liquidation of the Company).


 


“Common Stock
Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.


 


“Company”
shall have the meaning specified in the preamble to this Agreement.


 


“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.


 


 


 




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“Damages”
shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees
and disbursements and costs and expenses of expert witnesses and investigation).


 


“Dispute Period”
shall have the meaning specified in Section 9.3(a).


 


“DTC”
shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.


 


“DTC/FAST
Program” shall mean the DTC’s Fast Automated Securities Transfer Program.


 


“DWAC”
shall mean Deposit Withdrawal at Custodian as defined by the DTC.


 


“DWAC Eligible”
shall mean that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation)
by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the
Commitment Shares or Put Shares, as applicable, are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does
not have a policy prohibiting or limiting delivery of the Commitment Shares or Put Shares, as applicable, via DWAC.


 


“DWAC Shares”
means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without
restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified DWAC
account with DTC under the DTC/FAST Program, or any similar program hereafter adopted by DTC performing substantially the same
function.


 


“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Exchange
Cap” shall have the meaning set forth in Section 7.1(c).


 


“Execution
Date” shall mean the date of this Agreement.


 


“FINRA”
shall mean the Financial Industry Regulatory Authority, Inc.


 


“Investment
Amount” shall mean the Put Shares referenced in the Put Notice multiplied by the Purchase Price minus the Clearing Costs.


 


“Indemnified
Party” shall have the meaning specified in Section 9.2.


 


“Indemnifying
Party” shall have the meaning specified in Section 9.2.


 


“Indemnity
Notice” shall have the meaning specified in Section 9.3(e).


 


“Investor”
shall have the meaning specified in the preamble to this Agreement.


 


“Lien”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Market Price”
shall mean the one (1) lowest traded price on the Principal Market for any Trading Day during the Valuation Period, as reported
by Bloomberg Finance L.P or other reputable source.


 


“Material
Adverse Effect” shall mean any effect on the business, operations, properties, or financial condition of the Company
that is material and adverse to the Company and/or any condition, circumstance, or situation that prohibit or otherwise materially
interfere with the ability of the Company to enter into and perform its obligations under any Transaction Document.


 


 


 




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“Maximum Commitment
Amount” shall mean Fifteen Million Dollars ($15,000,000.00).


 


“Person”
shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.


 


“Principal
Market” shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), or principal quotation systems (i.e.
OTCQX, OTCQB, OTC Pink, the OTC Bulletin Board), or other principal exchange or recognized quotation system which is at the time
the principal trading platform or market for the Common Stock.


 


“Purchase
Price” shall mean 85% of the Market Price on such date on which the Purchase Price is calculated in accordance with the
terms and conditions of this Agreement.


 


“Put”
shall mean the right of the Company to require the Investor to purchase shares of Common Stock, subject to the terms and conditions
of this Agreement.


 


“Put Date”
shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).


 


“Put Notice”
shall mean a written notice, substantially in the form of Exhibit A hereto, to Investor setting forth the Put Shares which
the Company intends to require Investor to purchase pursuant to the terms of this Agreement.


 


“Put Shares”
shall mean all shares of Common Stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in
accordance with the terms and conditions of this Agreement.


 


“Registration
Statement” shall have the meaning specified in Section 6.4.


 


“Regulation
D” shall mean Regulation D promulgated under the Securities Act.


 


“Required
Minimum” shall mean, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Commitment Shares, ignoring any beneficial ownership
limitations set forth therein.


 


“Rule 144”
shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.


 


“SEC”
shall mean the United States Securities and Exchange Commission.


 


“SEC Documents”
shall have the meaning specified in Section 4.5.


 


“Securities”
means, collectively, the Put Shares and the Commitment Shares.


 


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


 


“Short Sales”
shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.


 


“Subsidiary”
means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting
stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated
under the Securities Act.


 


“Third Party
Claim” shall have the meaning specified in Section 9.3(a).


 


“Trading Day”
shall mean a day on which the Principal Market shall be open for business.


 


 


 




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“Transaction
Documents” shall mean this Agreement and all schedules and exhibits hereto and thereto.


 


“Transfer
Agent” shall mean Interwest Transfer Co., Inc., the current transfer agent of the Company, and any successor transfer
agent of the Company.


 


“Transfer
Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent
to issue the Put Shares and the Commitment Shares pursuant to the Transaction Documents, in the form of Exhibit C attached hereto.


 


“Valuation
Period” shall mean the period of five (5) Trading Days following the Clearing Date associated with the applicable Put
Notice during which the Purchase Price of the Common Stock is valued, provided, however, that the Valuation Period shall instead
begin on the Clearing Date if the respective Put Shares are received as DWAC Shares in Investor’s brokerage account prior
to 11:00 a.m. EST on the respective Clearing Date.


 


“Variable
Security Holder” means any holder of any securities of the Company in an amount in excess of $500,000 that (A) have or
may have conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued
pursuant to such conversion right varies with the market price of the Common Stock, or (B) are or may become convertible into Common
Stock (including without limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies
with the market price of the Common Stock, even if such security only becomes convertible following an event of default, the passage
of time, or another trigger event or condition.


 


ARTICLE II

PURCHASE AND SALE OF COMMON STOCK


 


Section 2.1 PUTS.
Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), the Company shall
have the right, but not the obligation, to direct the Investor, by its delivery to the Investor of a Put Notice from time to time,
to purchase Put Shares (i) in a minimum amount not less than $10,000.00 and (ii) in a maximum amount of $1,000,000.00,
provided, further, that the number of Put Shares shall not exceed 300% of the Average Daily Trading Volume.


 


Section 2.2 MECHANICS.


 


(a)       PUT
NOTICE. At any time and from time to time during the Commitment Period, except as provided in this Agreement, the Company may
deliver a Put Notice to Investor, subject to satisfaction of the conditions set forth in Section 7.2 and otherwise provided
herein. The Company shall deliver, or cause to be delivered, the Put Shares as DWAC Shares to the Investor within two (2) Trading
Days following the Put Date.


 


(b)       DATE
OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the Trading Day it is received by email by the
Investor if such notice is received on or prior to 8:30 a.m. EST or (ii) the immediately succeeding Trading Day if it is received
by email after 8:30 a.m. EST on a Trading Day or at any time on a day which is not a Trading Day. The Company shall not deliver
another Put Notice to the Investor within ten (10) Trading Days of a prior Put Notice.


 


Section 2.3 CLOSINGS.
If the value of the Put Shares delivered to the Investor causes the Company to exceed the Maximum Commitment Amount, then the
Investor shall return to the Company the surplus amount of Put Shares associated with such Put and the Purchase Price with respect
to such Put shall be reduced by any Clearing Costs related to the return of such Put Shares. The Closing of a Put shall occur
within one (1) Trading Day following the end of the respective Valuation Period, whereby the Investor shall deliver the Investment
Amount by wire transfer of immediately available funds to an account designated by the Company.


 


 


 




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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF INVESTOR


 


The Investor represents
and warrants to the Company that:


 


Section 3.1 INTENT.
The Investor is entering into this Agreement for its own account and the Investor has no present arrangement (whether or not legally
binding) at any time to sell the Securities to or through any Person in violation of the Securities Act or any applicable state
securities laws; provided, however, that the Investor reserves the right to dispose of the Securities at any time in accordance
with federal and state securities laws applicable to such disposition.


 


Section 3.2 NO
LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to
review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors.
The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any
of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated
by this Agreement or the securities laws of any jurisdiction.


 


Section 3.3 ACCREDITED
INVESTOR. The Investor is an accredited investor as defined in Rule 501(a)(3) of Regulation
D, and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks
of an investment in the Securities. The Investor acknowledges that an investment in the Securities is speculative and involves
a high degree of risk.


 


Section 3.4 AUTHORITY.
The Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the other
Transaction Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement
and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action and no further consent or authorization of the Investor is required. Each Transaction Document
to which it is a party has been duly executed by the Investor, and when delivered by the Investor in accordance with the terms
hereof, will constitute the valid and binding obligation of the Investor enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.


 


Section 3.5 NOT
AN AFFILIATE. The Investor is not an officer, director or “affiliate” (as that term
is defined in Rule 405 of the Securities Act) of the Company.


 


Section 3.6 ORGANIZATION
AND STANDING. The Investor is an entity duly incorporated or formed, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement
and the other Transaction Documents.


 


Section 3.7 ABSENCE
OF CONFLICTS. The execution and delivery of this Agreement and the other Transaction Documents,
and the consummation of the transactions contemplated hereby and thereby and compliance with the requirements hereof and thereof,
will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor,
(b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by
which the Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result
in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute
a breach of any fiduciary duty owed by the Investor to any third party, or (d) require the approval of any third-party (that
has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which the
Investor is subject or to which any of its assets, operations or management may be subject.


 


Section 3.8 DISCLOSURE;
ACCESS TO INFORMATION. The Investor had an opportunity to review copies of the SEC Documents
filed on behalf of the Company and has had access to all publicly available information with respect to the Company.


 









Section 3.9 MANNER
OF SALE. At no time was the Investor presented with or solicited by or through any leaflet,
public promotional meeting, television advertisement or any other form of general solicitation or advertising.


 






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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY


 


The Company represents
and warrants to the Investor that, except as disclosed in the SEC Documents or except as set forth in the disclosure schedules
hereto:


 


Section 4.1 ORGANIZATION
OF THE COMPANY. The Company is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. The Company has no Subsidiaries.
The Company is not in violation or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing
as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be,
could not have or reasonably be expected to result in a Material Adverse Effect and no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


Section 4.2 AUTHORITY.
The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and
the other Transaction Documents. The execution and delivery of this Agreement and the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate
action and no further consent or authorization of the Company or its Board of Directors or stockholders is required. Each of this
Agreement and the other Transaction Documents has been duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.


 


Section 4.3 CAPITALIZATION.
As of the date hereof, the authorized capital stock of the Company consists of (a) 200,000,000 shares of Common Stock, par
value of $0.001 per share, of which approximately 120,274,710 shares of Common Stock are issued and outstanding and (b) 5,000,000
shares of preferred stock, of which 0 are issued and outstanding. Except as set forth on Schedule 4.3, the Company has not issued
any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant
to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as set forth on Schedule 4.3 and as disclosed in the SEC Documents, and except as a result of the
purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable
for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings
or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.
The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Investor) and will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. There are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.


 


Section 4.4 LISTING
AND MAINTENANCE REQUIREMENTS. The Common Stock is registered pursuant to Section 12(b) or 12(g)
of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the
SEC is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the date hereof,
received notice from the Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company
is not in compliance with the listing or maintenance requirements of such Principal Market. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.


 


 






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Section 4.5 SEC
DOCUMENTS; DISCLOSURE. Except as set forth on Schedule 4.5 and routine Forms 8-K, the Company
has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents
prior to the expiration of any such extension. As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as applicable, and other federal laws, rules and regulations
applicable to such SEC Documents, and none of the SEC Documents when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents
comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations
of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the
financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments). Except with respect to the
material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither
it nor any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that it believes
constitutes or might constitute material, non-public information. The Company understands and confirms that the Investor will
rely on the foregoing representation in effecting transactions in securities of the Company.


 


Section 4.6 VALID
ISSUANCES. The Securities are duly authorized and, when issued and paid for in accordance with
the applicable Transaction Documents, will be duly and validly issued, fully paid, and non-assessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.


 


Section 4.7 NO
CONFLICTS. The execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Put Shares and the Commitment Shares, do not and will not: (a) result in a violation of the Company’s
certificate or articles of incorporation, by-laws or other organizational or charter documents, (b) conflict with, or constitute
a material default (or an event that with notice or lapse of time or both would become a material default) under, result in the
creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, instrument or any “lock-up” or similar provision of any
underwriting or similar agreement to which the Company is a party, or (c) result in a violation of any federal, state or local
law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the
Company or by which any property or asset of the Company is bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse
Effect) nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of
the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible
violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required
under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under
this Agreement or the other Transaction Documents (other than any SEC, FINRA or state securities filings that may be required
to be made by the Company subsequent to any Closing or any registration statement that may be filed pursuant hereto); provided
that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of Investor herein.


 


Section 4.8 NO
MATERIAL ADVERSE CHANGE. No event has occurred that would have a Material Adverse Effect on
the Company that has not been disclosed in subsequent SEC filings.


 


 






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Section 4.9 LITIGATION
AND OTHER PROCEEDINGS. Except as disclosed in the SEC Documents or as set forth on Schedule
4.9, there are no actions, suits, investigations, inquiries or proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its properties, nor has the Company received any written or oral notice of any such
action, suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction
or decree or award has been issued by or, to the knowledge of the Company, requested of any court, arbitrator or governmental
agency which would have a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company.


 


Section 4.10 REGISTRATION
RIGHTS. Except as set forth on Schedule 4.10, no Person (other than the Investor) has any right
to cause the Company to effect the registration under the Securities Act of any securities of the Company.


 


ARTICLE V

COVENANTS OF INVESTOR


 


Section 5.1 COMPLIANCE
WITH LAW; TRADING IN SECURITIES. The Investor’s trading activities with respect to shares
of Common Stock will be in compliance with all applicable state and federal securities laws and regulations and the rules and
regulations of FINRA and the Principal Market.


 


Section 5.2 SHORT
SALES AND CONFIDENTIALITY. Neither the Investor, nor any affiliate of the Investor acting on
its behalf or pursuant to any understanding with it, will execute any Short Sales during the period from the date hereof to the
end of the Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put
Notice of such number of shares of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short
Sale. The Investor shall, until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company
in accordance with the terms of this Agreement, maintain the confidentiality of the existence and terms of this transaction and
the information included in the Transaction Documents.


 


ARTICLE VI

COVENANTS OF THE COMPANY


 


Section 6.1 RESERVATION
OF COMMON STOCK. On the date hereof, the Company will reserve 50,420,168 shares of Common Stock
from its authorized and unissued Common Stock to provide for all issuances of Common Stock under the Transaction Documents, including
any Commitment Shares (the “Share Reserve”). The Company further agrees to add additional shares of Common Stock to
the Share Reserve in increments of 5,000,000 shares as and when requested by the Investor if as of the date of any such request
the number of shares being held in the Share Reserve is less than three (3) times the number of shares of Common Stock obtained
by dividing the remaining balance on the Maximum Commitment Amount as of the date of the request by the Purchase Price. The Company
shall further require the Transfer Agent to hold the shares of Common Stock reserved pursuant to the Share Reserve exclusively
for the benefit of the Investor. 


 


Section 6.2 LISTING
OF COMMON STOCK. The Company shall promptly secure the listing of all of the Put Shares and
Commitment Shares to be issued to the Investor hereunder on the Principal Market (subject to official notice of issuance) and
shall use commercially reasonable best efforts to maintain, so long as any shares of Common Stock shall be so listed, the listing
of all such Put Shares and Commitment Shares from time to time issuable hereunder. The Company shall use its commercially reasonable
efforts to continue the listing and trading of the Common Stock on the Principal Market (including, without limitation, maintaining
sufficient net tangible assets) and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of FINRA and the Principal Market.


 


Section 6.3 OTHER
EQUITY LINES AND CONVERTIBLE NOTES. So long as this Agreement remains in effect, the Company
covenants and agrees that it will not, without the prior written consent of the Investor, enter into any other equity line of
credit agreement with any other party or have any Variable Security Holders, excluding the Investor, without the Investor’s
prior written consent, which consent may be granted or withheld in the Investor’s sole and absolute discretion. For the
avoidance of doubt, nothing contained in the Transaction Documents shall restrict, or require the Investor’s consent for,
any agreement providing for the issuance or distribution of any equity securities of the Company pursuant to any agreement or
arrangement that is not covered in this Section 6.3.


 


 






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Section 6.4 FILING
OF CURRENT REPORT AND REGISTRATION STATEMENT. The Company agrees that it shall file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the SEC within the time required by the Exchange
Act, relating to the transactions contemplated by, and describing the material terms and conditions of, the Transaction Documents
(the “Current Report”). The Company shall permit the Investor to review and comment upon the final pre-filing draft
version of the Current Report at least two (2) Trading Days prior to its filing with the SEC, and the Company shall give reasonable
consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon the final pre-filing draft
version of the Current Report within one (1) Trading Day from the date the Investor receives it from the Company. The Company
shall also file with the SEC, on or before January 15, 2018, a new registration statement (the “Registration Statement”)
covering only the resale of the Commitment Shares (first) and the Put Shares (second).


 


ARTICLE VII

CONDITIONS TO DELIVERY OF

PUT NOTICES AND CONDITIONS TO CLOSING


 


Section 7.1 CONDITIONS
PRECEDENT TO THE RIGHT OF THE COMPANY TO ISSUE AND SELL PUT SHARES. The right of the Company
to issue and sell the Put Shares to the Investor is subject to the satisfaction of each of the conditions set forth below:


 


(a)       ACCURACY
OF INVESTOR’S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Investor shall be true and correct
in all material respects as of the date of this Agreement and as of the date of each Closing as though made at each such time.


 


(b)       PERFORMANCE
BY INVESTOR. Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Investor at or prior to such Closing.


 


(c)       PRINCIPAL
MARKET REGULATION. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any Put
Shares, if the issuance of such Put Shares would exceed the aggregate number of shares of Common Stock which the Company may issue
without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange
Cap”).


 


Section 7.2 CONDITIONS
PRECEDENT TO THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The obligation of the Investor
hereunder to purchase Put Shares is subject to the satisfaction of each of the following conditions:


 


(a)       EFFECTIVE
REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the
resale by the Investor of the Put Shares and the Commitment Shares and (i) neither the Company nor the Investor shall have received
notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise
has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has
threatened to do so and (ii) no other suspension of the use of, or withdrawal of the effectiveness of, such Registration Statement
or related prospectus shall exist.


 


(b)       ACCURACY
OF THE COMPANY’S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and
correct in all material respects as of the date of this Agreement and as of the date of each Closing (except for representations
and warranties specifically made as of a particular date).


 


(c)       PERFORMANCE
BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied with by the Company.


 


(d)       NO
INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely
affects any of the transactions contemplated by the Transaction Documents, and no proceeding shall have been commenced that may
have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Transaction Documents.


 


(e)       ADVERSE
CHANGES. Since the date of filing of the Company’s most recent SEC Document, no event that had or is reasonably likely
to have a Material Adverse Effect has occurred.


 


 


 






    	 	9	 



     


    

 


(f)       NO
SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the
SEC, the Principal Market or FINRA, or otherwise halted for any reason, and the Common Stock shall have been approved for listing
or quotation on and shall not have been delisted from the Principal Market. In the event of a suspension, delisting, or halting
for any reason, of the trading of the Common Stock, as contemplated by this Section 7.2(f), the Investor shall have the
right to return to the Company any remaining amount of Put Shares associated with such Put, and the Purchase Price with respect
to such Put shall be reduced accordingly.


 


(g)       BENEFICIAL
OWNERSHIP LIMITATION. The number of Put Shares then to be purchased by the Investor shall not exceed the number of such shares
that, when aggregated with all other shares of Common Stock then owned by the Investor beneficially or deemed beneficially owned
by the Investor, would result in the Investor owning more than the Beneficial Ownership Limitation (as defined below), as determined
in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder. For purposes of this Section
7.2(g), in the event that the amount of Common Stock outstanding, as determined in accordance with Section 16 of the Exchange
Act and the regulations promulgated thereunder, is greater on a Closing Date than on the date upon which the Put Notice associated
with such Closing Date is given, the amount of Common Stock outstanding on such Closing Date shall govern for purposes of determining
whether the Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would own more than the
Beneficial Ownership Limitation following such Closing Date. The “Beneficial Ownership Limitation” shall be
4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable pursuant to a Put Notice.


 


(h)       PRINCIPAL
MARKET REGULATION. The issuance of the Put Shares shall not exceed the Exchange Cap.


 


(i)       NO
KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing the Registration
Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading
Days following the Trading Day on which such Put Notice is deemed delivered).


 


(j)       NO
VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT. The issuance of the Put Shares shall not violate the shareholder approval requirements
of the Principal Market.


 


(k)       OFFICER’S
CERTIFICATE. On the date of delivery of each Put Notice, the Investor shall have received the Closing Certificate executed
by an executive officer of the Company and to the effect that all the conditions to such Closing shall have been satisfied as of
the date of each such certificate.


 


(l)       DWAC
ELIGIBLE. The Common Stock must be DWAC Eligible and not subject to a “DTC chill.”


 


(m)       SEC
DOCUMENTS. All reports, schedules, registrations, forms, statements, information and other documents required to have been
filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act (other than Forms 8-K) shall have
been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange Act.


 


(n)       TRANSFER
AGENT INSTRUCTION LETTER. The Transfer Agent Instruction Letter shall have been executed and delivered by the Company to the
Transfer Agent and acknowledged and agreed to in writing by the Transfer Agent.


 


(o)       RESERVE.
The Company shall have reserved sufficient shares of its Common Stock for the Investor, pursuant to the terms of this Agreement
and all other contracts between the Company and Investor.


 


(p)       MINIMUM
PRICING. The lowest traded price of the Common Stock in the five (5) Trading Days immediately preceding the respective Put
Date must exceed $0.01 per share (the “Minimum Pricing”).


 


ARTICLE VIII

LEGENDS


 


Section 8.1 NO
RESTRICTIVE STOCK LEGEND. No restrictive stock legend shall be placed on the share certificates
representing the Put Shares.


 


Section 8.2 INVESTOR’S
COMPLIANCE. Nothing in this Article VIII shall affect in any way the Investor’s obligations
hereunder to comply with all applicable securities laws upon the sale of the Common Stock.


 


 


 


 




    	 	10	 



     


    


 





ARTICLE IX

NOTICES; INDEMNIFICATION


 


Section 9.1 NOTICES.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (a) personally served, (b) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (c) delivered by reputable air courier service with charges prepaid, or (d) transmitted by
hand delivery, telegram, or email as a PDF, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (i) upon hand delivery or delivery by email at the address designated below (if delivered
on a business day during normal business hours where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii)
on the second business day following the date of mailing by express courier service or on the fifth business day after deposited
in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur.


 


The addresses for such
communications shall be:


 


If to the Company:


 


Ocean Thermal Energy Corporation

800 South Queen Street

Lancaster, PA 17603

Email: info@otecorporation.com

Attention: Jeremy Feakins, CEO


 


If to the Investor:
L2 Capital, LLC


 


8900 State Line Rd., Suite 410

Leawood, KS 66206

Email: investments@ltwocapital.com

Attention: Adam Long, Managing Partner


 


Either party hereto may from time to time
change its address or email for notices under this Section 9.1 by giving at least ten (10) days’ prior written notice of
such changed address to the other party hereto.


 


Section 9.2 INDEMNIFICATION.
Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers,
directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages,
joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising
out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or
agreement on the part of the Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the
omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus
or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein,
in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages
result primarily from the Indemnified Party’s failure to perform any covenant or agreement contained in this Agreement or
the Indemnified Party’s negligence, recklessness or bad faith in performing its obligations under this Agreement; provided,
however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made
by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the
Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto,
or any preliminary prospectus or final prospectus (as amended or supplemented).


 


 


 






    	 	11	 



     


    

 


Section 9.3 METHOD
OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party
under Section 9.2 shall be asserted and resolved as follows:


 


(a)       In
the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against
or sought to be collected from such Indemnified Party by a Person other than a party hereto or an affiliate thereof (a “Third
Party Claim”), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if
any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim for indemnification
that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then
reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a “Claim Notice”)
with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable
promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated
to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party’s ability
to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party
as soon as practicable within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either
a Claim Notice or an Indemnity Notice (as defined below) (the “Dispute Period”) whether the Indemnifying Party
disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party
desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.


 


(i)       If
the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have
the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying
Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by
the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the
consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary
damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full
pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise
or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified
Party, at any time prior to the Indemnifying Party’s delivery of the notice referred to in the first sentence of this clause
(i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary
or appropriate to protect its interests; and provided, further, that if requested by the Indemnifying Party, the
Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying
Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate
in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause
(i), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect
to such participation. Notwithstanding the foregoing, the Indemnified Party may takeover the control of the defense or settlement
of a Third Party Claim at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third
Party Claim.


 


(ii)       If
the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend
the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously
and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute
Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the
Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable
manner and in good faith or will be settled at the discretion of the Indemnified Party(with the consent of the Indemnifying Party,
which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and
its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions
of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying
Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this clause (ii)
or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party
shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection
with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified
Party pursuant to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.


 


 


 






    	 	12	 



     


    

 


(iii)       If
the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to
the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with
respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability
of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying
Party shall be entitled to institute such legal action as it deems appropriate.


 


(b)       In
the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the
nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined
in good faith, of such claim (an “Indemnity Notice”) with reasonable promptness to the Indemnifying Party. The
failure by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the
extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies
the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails
to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the
claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall
be entitled to institute such legal action as it deems appropriate.


 


(c)       The
Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.


 


(d)       The
indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party
against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.


 


ARTICLE X

MISCELLANEOUS


 


Section 10.1 GOVERNING
LAW; JURISDICTION. This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Nevada without regard to the principles of conflicts of law. Each of the Company and the Investor hereby
submits to the exclusive jurisdiction of the United States federal and state courts located in Kansas, County of Johnson, with
respect to any dispute arising under the Transaction Documents or the transactions contemplated thereby.


 


Section 10.2 JURY
TRIAL WAIVER. The Company and the Investor hereby waive a trial by jury in any action, proceeding
or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection
with the Transaction Documents.


 


Section 10.3 ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the Company and the Investor and their respective successors.
Neither this Agreement nor any rights of the Investor or the Company hereunder may be assigned by either party to any other Person.


 


Section 10.4 NO
THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and the
Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as set forth in Section 9.3.


 


Section 10.5 TERMINATION.
The Company may terminate this Agreement at any time by written notice to the Investor, except while the Investor holds any of
the Put Shares. In addition, this Agreement shall automatically terminate on the earlier of (i) the end of the Commitment Period;
(ii) the date that the Company sells and the Investor purchases the Maximum Commitment Amount; or (iii) the date in which the
Registration Statement is no longer effective, or (iv) the date that, pursuant to or within the meaning of any Bankruptcy Law,
the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for
the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors;
provided, however, that the provisions of Articles III, IV, V, VI, IX and the agreements and covenants of the Company and the
Investor set forth in Article X shall survive the termination of this Agreement.


 


 


 






    	 	13	 



     


    

 


Section 10.6 ENTIRE
AGREEMENT. The Transaction Documents, together with the exhibits and schedules thereto, contain
the entire understanding of the Company and the Investor with respect to the matters covered herein and therein and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.


 


Section 10.7 FEES
AND EXPENSES. Except as expressly set forth in the Transaction Documents or any other writing
to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this
Agreement; provided that the Investor may withhold 8% of the Investment Amount associated with each applicable Put Notice for
the payment of the Company’s fees to Craft Capital Management, LLC, a registered broker-dealer. The Company shall pay all
Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investor.
Upon execution of this Agreement, the Company shall issue the Commitment Shares to Investor for its commitment to enter into this
Agreement. The Commitment Shares shall be earned in full upon the execution of this Agreement, and the Commitment Shares are not
contingent upon any other event or condition, including but not limited to the effectiveness of the Registration Statement or
the Company’s submission of a Put Notice to the Investor. In addition, the Investor shall withhold $15,000.00 from the Investment
Amount with respect to the first Put under this Agreement for reimbursement of Investor’s legal fees relating to the preparation
of this Agreement.


 


Section 10.8 COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall
be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and
all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto
by email of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.


 


Section 10.9 SEVERABILITY.
In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall
be ineffective if it materially changes the economic benefit of this Agreement to any party.


 


Section 10.10 FURTHER
ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.


 


Section 10.11 NO
STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.


 


Section 10.12 EQUITABLE
RELIEF. The Company recognizes that in the event that it fails to perform, observe, or discharge
any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Investor. The Company
therefore agrees that the Investor shall be entitled to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.


 


Section 10.13 TITLE
AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience
of reference and are not to be considered in construing or interpreting this Agreement.


 


Section 10.14 AMENDMENTS;
WAIVERS. No provision of this Agreement may be amended or waived by the parties from and after
the date that is one (1) Trading Day immediately preceding the initial filing of the Registration Statement with the SEC. Subject
to the immediately preceding sentence, (i) no provision of this Agreement may be amended other than by a written instrument signed
by both parties hereto and (ii) no provision of this Agreement may be waived other than in a written instrument signed by the
party against whom enforcement of such waiver is sought. No failure or delay 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.


 


 


 




    	 	14	 



     


    


 





Section 10.15 PUBLICITY.
The Company and the Investor shall consult with each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such
public statement, other than as required by law, without the prior written consent of the other parties, which consent shall not
be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in
which such case the disclosing party shall provide the other party with prior notice of such public statement. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of the Investor without the prior written consent of the Investor,
except to the extent required by law. The Investor acknowledges that this Agreement and all or part of the Transaction Documents
may be deemed to be “material contracts,” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the
Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities
Act or the Exchange Act. The Investor further agrees that the status of such documents and materials as material contracts shall
be determined solely by the Company, in consultation with its counsel.


 


[Signature Page Follows]


 


 


 


 


 


 






    	 	15	 



     


    

 





IN WITNESS WHEREOF,
the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day
and year first above written.


 


	 	OCEAN THERMAL ENERGY CORPORATION
	 	 
	 	 
	 	By:  /s/ Jeremy Feakins
	 	Name: Jeremy Feakins
	 	Title: Chief Executive Officer
	 	 
	 	 
	 	 
	 	 
	 	L2 CAPITAL, LLC
	 	 
	 	By: /s/ Adam Long
	 	Name: Adam Long
	 	Title: Managing Partner


 


 


[Signature Page to equity purchase agreement]


 






    	 	16	 



     


    

 





EXHIBIT A


 


FORM OF PUT NOTICE


TO: L2 CAPITAL, LLC

DATE: ______________________


 


We refer to the equity
purchase agreement, dated December 18, 2017 (the “Agreement”), entered into by and between Ocean Thermal Energy
Corporation and you. Capitalized terms defined in the Agreement shall, unless otherwise defined herein, have the same meaning when
used herein.


 


We hereby:


 


1)       Give
you notice that we require you to purchase ___________ Put Shares; and


 


2)       The
purchase price per share, pursuant to the terms of the Agreement, is ____________; and


 


3)       Certify
that, as of the date hereof, the conditions set forth in Section 7.2 of the Agreement are satisfied.


 


	 	OCEAN THERMAL ENERGY CORPORATION
	 	 
	 	 
	 	By: ____________________________
	 	Name: Jeremy Feakins
	 	Title: Chief Executive Officer


 




 


 






    	 	17	 



     


    






 





EXHIBIT B


 


FORM
OF OFFICER’S CERTIFICATE

OF OCEAN THERMAL ENERGY CORPORATION


 


Pursuant
to Section 7.2(k) of that certain equity purchase agreement, dated December 18, 2017 (the “Agreement”), by and
between Ocean Thermal Energy Corporation (the “Company”) and L2 Capital, LLC (the “Investor”),
the undersigned, in his capacity as Chief Executive Officer of the Company, and not in his individual capacity, hereby certifies,
as of the date hereof (such date, the “Condition Satisfaction Date”), the following:


 


1.       The
representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date
as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular
date) with respect to all periods, and as to all events and circumstances occurring or existing to and including the Condition
Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set
forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or the Investor;
and


 


2.       All
of the conditions precedent to the obligation of the Investor to purchase Put Shares set forth in the Agreement, including but
not limited to Section 7.2 of the Agreement, have been satisfied as of the Condition Satisfaction Date.


 


Capitalized terms used
herein shall have the meanings set forth in the Agreement unless otherwise defined herein.


 


IN WITNESS WHEREOF,
the undersigned has hereunto affixed his hand as of the ____________, 2017.


 


 


	 	By: _______________________
	     	Name: Jeremy Feakins
	 	Title: Chief Executive Officer


 




 


 


 






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EXHIBIT C


 


FORM OF TRANSFER AGENT

INSTRUCTION LETTER


 


 


 


 


 


 


 


 


 






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SCHEDULE 4.3


 


Capitalization


 


The Company currently is
raising funds of up to $500,000 pursuant to an offering of Unsecured Promissory Notes, where investors will receive warrants to
purchase 10,000 shares of the Company’s common stock (for each $50,000 in notes purchased) exercisable for 3 years at an
exercise price equal to 85% of the closing market price of the Company’s common stock the day before exercise. The notes
are not convertible.


 


On November 21, 2017, the
Company entered into that certain Consulting Agreement with EquiNet, LLC, pursuant to which the Company issued to EquiNet 250,000
shares of the Company’s common stock.


 


On November 15, 2017, the
Company entered into that certain Consulting Agreement with StockWatchIndex LLC, pursuant to which the Company issued to StockWatchIndex
LLC 200,000 shares of the Company’s common stock.




 


 


 


 


 


 


 


 


 


 


 






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SCHEDULE 4.9


 


Litigation


 


The Company has filed a complaint
in Memphis, Tennessee against an investment firm and its principals relating to the failure to fund the Company as required pursuant
to the terms of an agreement. The dispute currently is in mediation. No counterclaims have been filed against the Company.




 


 


 


 


 


 


 


 


 


 






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