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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