Exhibit
10.143





 


NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A
OR REGULATION S UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


	Principal
    Amount: $138,888.88	Issue
    Date: August 5, 2022	 
	Actual
    Amount of Purchase Price: $125,000.00	 	 


 


PROMISSORY
NOTE


 


FOR
VALUE RECEIVED, CLEAN ENERGY TECHNOLOGIES, INC., a Nevada corporation (hereinafter called the “Borrower” or the
“Company”) (Trading Symbol: CETY), hereby promises to pay to the order of Jefferson Street Capital, LLC, a New Jersey
limited liability company, or registered assigns (the “Holder”), in the form of lawful money of the United States of America,
the principal sum of $138,888.88 (the “Principal Amount”) (subject to adjustment herein), which amount is the $125,000.00
actual amount of the purchase price hereof plus an original issue discount in the amount of $13,888.88 (the “OID”), and to
pay interest on the unpaid Principal Amount hereof at the rate of fifteen percent (15%) (the “Interest Rate”) per annum from
the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by
prepayment or otherwise, as further provided herein. The maturity date shall be twelve (12) months from the Issue Date (the “Maturity
Date”), and is the date upon which the Principal Amount (which includes the OID) and any accrued and unpaid interest and other
fees, shall be due and payable. This Note is part of the Bridge Offering (as defined in the Purchase Agreement) (as defined below) (“Bridge
Offering”).


 


This
Note may not be prepaid or repaid in whole or in part except as otherwise explicitly set forth herein.


 


Any
Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) fifteen percent
(15%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid (“Default Interest”).
Interest and Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.


 


All
payments due hereunder (to the extent not converted into shares of common stock, $0.001 par value per share, of the Borrower (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall
be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of
this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day.


 


Each
capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase
Agreement, dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). As used
in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks
in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term “Trading
Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase
Agreement), provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.


 


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


 


The
following terms shall also apply to this Note:


 




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ARTICLE
I. CONVERSION RIGHTS


 


1.1
Conversion Right. The Holder shall have the right, on any calendar day, at any time on or following the earlier of (i) the date
that an Event of Default (as defined in this Note) occurs under this Note or (ii) the date that the Company consummates an Uplist Offering
(as defined in this Note), to convert all or any portion of the then outstanding and unpaid Principal Amount and interest (including
any Default Interest) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any
shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified,
at the Conversion Price (as defined below) determined as provided herein (a “Conversion”); provided, however, that
notwithstanding anything to the contrary contained herein, the a Holder shall not have the right to convert any portion of this Note,
pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth on the applicable
Notice of Conversion, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any other Persons (as
defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and Attribution Parties shall include the number of shares of Common
Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially owned by
the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for
purposes of this Section 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required
to be filed in accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section
1.1, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common
Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B)
a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading
Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common
Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
at the time of the respective calculation hereunder. “Person” and “Persons” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental
entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note.
The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached
hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by
the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other
means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m.,
New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means,
with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus
(2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2).


 




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		1.2	Conversion
                                            Price.



 


(a) Calculation
of Conversion Price. The per share conversion price into which Principal Amount and interest (including any Default Interest)
under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal $0.025,
provided, however, that if the Company consummates an Uplist Offering (as defined in this Note) on or before the date that is one
hundred eighty (180) calendar days after the Issue Date, then the Conversion Price shall equal 75% of the offering price per share
of Common Stock (or unit, if units are offered in the Uplist Offering) at which the Uplist Offering is made (the “Uplist
Conversion Price”) (for the avoidance of doubt, if a unit includes more than one share of the Common Stock in the Uplist
Offering, the Uplist Conversion Price shall mean 75% of the unit price divided by the number of shares of Common Stock contained in
a unit), subject to adjustment as provided in this Note. For the avoidance of doubt, if an Event of Default occurs, then the
Conversion Price shall equal the lesser of (i) $0.025 per share (subject to adjustment as provided in this Note), or (ii) the
Default Conversion Price (as defined in Article III herein). “Uplist Offering” shall mean an offering of Common Stock
(or units consisting of Common Stock and warrants to purchase Common Stock) that will result in the immediate listing for trading of
the Common Stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, or any other national securities exchange (or any successors to any of the foregoing). If at any time the
Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole
discretion of the Holder, the Conversion price hereunder may equal such par value for such conversion and the Conversion Amount for
such conversion may be increased to include Additional Principal, where “Additional Principal” means such additional
amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such
conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the
Holder to the par value price. Holder shall be entitled to add to the Principal Amount of the Note $1,750.00 in each Notice of
Conversion to cover Holder’s fees associated with such conversion for up to three (3) Notices of Conversion. All such
Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, rights
offerings, reclassification or similar transaction that proportionately decreases or increases the Common Stock. If the Company, at
any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in
shares of Common Stock on shares of Common Stock or any Common Stock Equivalents, (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a
smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital
stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
the immediately preceding sentence shall become effective immediately after the record date for the determination of shareholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification. “Common Stock Equivalents” means any securities of the Company or the
Company’s subsidiaries 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.


 


1.3 Authorized
and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the
issuance of a number of Conversion Shares equal to the greater of: (a) 12,000,000 shares of Common Stock or (b) the sum of (i) the
number of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) at
the time of such calculation (taking into consideration any adjustments to the Conversion Price as provided in this Note) multiplied
by (ii) two (2) (the “Reserved Amount”). The Borrower represents that upon issuance, the Conversion Shares will be
duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it has irrevocably instructed its
transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated
by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents
who are charged with the duty of executing stock certificates or cause the Company to electronically issue shares of Common Stock to
execute and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated
by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.


 


If,
at any time, the Borrower does not maintain the Reserved Amount, it will be considered an Event of Default (as defined in this Note)
under this Note.


 




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		1.4	Method
                                            of Conversion.



 


(a) Mechanics
of Conversion. This Note may be converted by the Holder in whole or in part, on any calendar day, at any time on or following
the earlier of (i) the date that an Event of Default (as defined in this Note) occurs under this Note or (ii) the date that the
Company consummates an Uplist Offering (as defined in this Note), by submitting to the Borrower or Borrower’s transfer agent a
Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to
11:59 p.m., New York, New York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed
to have been delivered and received on the next Trading Day.


 


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


 


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


 


(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower or Borrower’s transfer agent from the Holder of a facsimile
transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the
order of the Holder certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as
contemplated by Section 1.4(f) hereof) within three (3) Trading Days after such receipt (the “Deadline”) (and, solely in
the case of conversion of the entire unpaid Principal Amount and interest (including any Default Interest) under this Note,
surrender of this Note). If the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the
Deadline a certificate for the number of Conversion Shares or to which the Holder is entitled hereunder and register such Conversion
Shares on the Company’s share register or to credit the Holder’s balance account with DTC (as defined below) for such
number of Conversion Shares to which the Holder is entitled upon the Holder’s conversion of this Note (a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (i) the Company shall pay in cash to the Holder on
each day after the Deadline and during such Conversion Failure an amount equal to 1.0% of the product of (A) the sum of the number
of Conversion Shares not issued to the Holder on or prior to the Deadline and to which the Holder is entitled and (B) the closing
sale price of the Common Stock on the Trading Day immediately preceding the last possible date which the Company could have issued
such Conversion Shares to the Holder without violating this Section 1.4(d); and (ii) the Holder, upon written notice to the Company,
may void all or any portion of such Notice of Conversion; provided that the voiding of all or any portion of a Notice of Conversion
shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice. In
addition to the foregoing, if on or prior to the Deadline the Company shall fail to issue and deliver a certificate to the Holder
and register such Conversion Shares on the Company’s share register or credit the Holder’s balance account with DTC for
the number of Conversion Shares to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading
Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to
the Holder’s total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation
to deliver such certificate (and to issue such Conversion Shares) or credit such Holder’s balance account with DTC for such
Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Conversion Shares or credit such Holder’s balance account with DTC and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the
closing sales price of the Common Stock on the date of exercise. Nothing shall limit the Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver certificates representing the Conversion Shares (or
to electronically deliver such Conversion Shares) upon the conversion of this Note as required pursuant to the terms
hereof.


 




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(e) Obligation
of Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower or
Borrower’s transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such
conversion, the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under
this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I,
all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a
Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for the Conversion
Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to
any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in
the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other
circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is sent to
the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time, on such date.


 


(f) Delivery
of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion Shares
issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder and its compliance with the
provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to
electronically transmit the Conversion Shares issuable upon conversion hereof to the Holder by crediting the account of
Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.


 


1.5 Concerning
the Shares. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless (i) such shares
are sold pursuant to an effective registration statement under the 1933 Act or (ii) the Borrower or its transfer agent shall have
been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement))
to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration
or (iii) such shares are sold or transferred pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption, or (iv)
such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise
transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase
Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until
such time as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A,
Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can
then be immediately sold, each certificate for the Conversion Shares that has not been so included in an effective registration
statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the
legend, shall bear a legend substantially in the following form, as appropriate:


 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A,
REGULATION S UNDER SAID ACT, OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 




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The
legend set forth above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares
without such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery
by crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws: (a)
such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel Opinion (as contemplated
by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public sale or transfer of such Conversion Shares
may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected.
The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees
to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance
with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided
by the Holder with respect to the transfer of Conversion Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A,
Regulation S, or other applicable exemption, at the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation
S, or other applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.


 


		1.6	Effect
                                            of Certain Events.



 


(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of
the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other Person
(as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default pursuant
to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an
amount equal to the Default Amount (as defined in this Note) or (ii) be treated pursuant to Section 1.6(b) hereof.
“Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other
entity or organization.


 


(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of
this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event,
as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of
another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then
the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms
and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such
stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in
full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case
appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not effectuate any transaction described in this
Section 1.6(b) unless (a) it first gives, to the extent practicable, at least thirty (30) days prior written notice (but in any
event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if
there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above
provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.


 


(c) Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to
holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or
distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note
after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which
would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been
the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such
Distribution.


 




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(d) Purchase
Rights. If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any convertible
securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the
record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of
shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained
herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no
such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of
such Purchase Rights.


 


(e) Dilutive
Issuance. Except with respect to an Exempt Issuance (as defined below), if the Borrower, at any time while this Note or any
amounts due hereunder are outstanding, issues, sells or grants (or has issued, sold or granted as of the Issue Date, as the case may
be) 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, any convertible notes or warrants outstanding as of or following the Issue 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 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 to the Base Conversion Price.
Except with respect to an Exempt Issuance, such adjustment shall be made whenever such Common Stock or other securities are issued.
By way of example, and for the avoidance of doubt, if the Company issues a convertible promissory note (including but not limited to
a Variable Rate Transaction [not allowed]) after the date hereof, and the holder of such convertible promissory note has the right
to convert it into Common Stock at an effective price per share that is lower than the then Conversion Price (including but not
limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common Stock), then the
Holder has the right to reduce the Conversion Price to such Base Conversion Price (including but not limited to a conversion price
with a discount that varies with the trading prices of or quotations for the Common Stock) at any time while this Note or any
amounts due hereunder are outstanding, regardless of whether the holder of such convertible promissory note ever effectuated a
conversion at the Base Conversion Price. In the event of an issuance of securities involving multiple tranches or closings, any
adjustment pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial closing.
Notwithstanding the foregoing, the Holder may only enforce its rights under this Section 1.6(e) after the date that is one hundred
eighty (180) calendar days after the Issue Date, provided, however, that at such time the Holder may enforce its rights to all
adjustments hereunder that apply even if the Dilutive Issuance occurred on or prior to the date that is one hundred eighty (180)
calendar days after the Issue Date. “Exempt Issuance” shall mean the issuance of Common Stock to Megawell USA Technology
Investment Fund I LLC (“Megawell”), pursuant to that certain credit agreement and promissory note dated December 31,
2016, so long as (i) Calvin Pang remains both the managing director of Megawell and the chief financial officer of the Company and
(ii) Megawell’s sale of the Common Stock is subject to the restrictions on affiliates provided for in Rule
144(e). 


 


(f) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events
described in Section 1.6 of this Note, the Borrower shall, at its expense and within one (1) calendar day after the occurrence of
each respective adjustment or readjustment of the Conversion Price, compute such adjustment or readjustment and prepare and furnish
to the Holder a certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the
number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon
conversion of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the
documentation (including but not limited to relevant transaction documents) that evidences the adjustment or readjustment. In
addition, the Borrower shall, within one (1) calendar day after each written request from the Holder, furnish to such Holder a like
certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number of
shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation
(including but not limited to relevant transaction documents) that evidences the adjustment or readjustment. For the avoidance of
doubt, each adjustment or readjustment of the Conversion Price as a result of the events described in Section 1.6 of this Note shall
occur without any action by the Holder and regardless of whether the Borrower complied with the notification provisions in Section
1.6 of this Note.


 




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1.7 [Intentionally
Omitted].


 


1.8 Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the Conversion Shares covered thereby (other than the
Conversion Shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the
Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as
a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such
shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a
failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to
such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder
or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In
all cases, the Holder shall retain all of its rights and remedies for the Borrower’s failure to convert this Note.


 


1.9 Prepayment.
At any time prior to the date that an Event of Default occurs under this Note, the Borrower shall have the right, exercisable on
four (4) Trading Days prior written notice to the Holder of the Note, to prepay the outstanding Principal Amount and interest then
due under this Note in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to the Holder of the Note at its registered addresses or by email and shall state: (1) that the
Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be four (4) Trading Days from the
date of the Optional Prepayment Notice (the “Optional Prepayment Date”). Within two (2) Trading Days after the
Holder’s receipt of the Optional Prepayment Notice, Holder shall specify in writing payment instructions to the Borrower. On
the Optional Prepayment Date, the Borrower shall make payment of the amounts designated below to or upon the order of the Holder as
specified by the Holder in writing to the Borrower. If the Borrower exercises its right to prepay the Note in accordance with this
Section 1.9, the Borrower shall make payment to the Holder of an amount in cash equal to the sum of: (w) 115% multiplied by the
Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment
Date plus (y) $750.00 to reimburse Holder for administrative fees.


 


If
the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note as
provided in this Section 1.9 on two (2) separate occasions, then the Borrower shall forever forfeit its right to prepay any part of the
Note pursuant to this Section 1.9.


 


1.10 Repayment
from Proceeds. If, at any time prior to the full repayment or full conversion of all amounts owed under this Note, the Company
receives cash proceeds of more than $2,000,000.00 (the “Minimum Threshold”) in the aggregate (for the avoidance of
doubt, each time that the Company receives cash proceeds on or after the Issue Date (except with respect to this Note), such amount
shall be aggregated together for purposes of calculating the Minimum Threshold) from any source or series of related or unrelated
sources, including but not limited to, the issuance of equity or debt, the conversion of outstanding warrants of the Borrower in a
cash exercise, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower
shall, within four (4) Trading Days of Borrower’s receipt of such proceeds, inform the Holder of or publicly disclose such
receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to, within four (4) Trading
Days, apply up to 50% (50% shall be replaced with 100% with respect to the Uplist Offering) of such proceeds after the Minimum
Threshold to repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due
under this Note. Failure of the Borrower to comply with this provision shall constitute an Event of Default. Notwithstanding
anything to the contrary in this Section 1.10, payments from customers shall be excluded from this Section 1.10.


 




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ARTICLE
II. RANKING AND CERTAIN COVENANTS


 


2.1 Ranking
and Security. This Note shall have priority over all unsecured indebtedness of the Borrower.


 


2.2 Other
Indebtedness. So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly
through any Subsidiary or affiliate) incur or suffer to exist or guarantee any unsecured indebtedness that is senior to (in priority
of payment and performance) the Borrower’s obligations hereunder.


 


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


 


2.4 Restriction
on Stock Repurchases and Debt Repayments. Except in connection with the Bridge Offering or an Exempt Issuance, so long as the
Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem,
repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one
transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to
purchase or acquire any such shares, or repay any pari passu or subordinated indebtedness of Borrower.


 


2.5 Sale
of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business.
Any consent by the Holder to the disposition of any assets may be conditioned on a specified use of the proceeds of
disposition.


 


2.6 Advances
and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, lend money, give credit, make advances to any officers, directors, or employees of the
Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has informed
Holder in writing prior to the Issue Date, (b) in regard to transactions with subsidiaries, joint ventures or unaffiliated third
parties, made in the ordinary course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of
$200,000 (for the avoidance of doubt, an unaffiliated third party for purposes of this clause shall not include any entity that the
Borrower owns 49% or more of the total equity interest in). So long as the Borrower shall have any obligation under this Note, the
Borrower shall not, without the Holder’s written consent, repay any affiliate (as defined in Rule 144) of the Borrower in
connection with any indebtedness or accrued amounts owed to any such party.


 


2.7 3(a)(10)
Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured in
accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a
“3(a)(10) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related
to 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 a cash payment or added to the balance of this Note (under Holder’s and Borrower’s expectation that this
amount will tack back to the Issue Date).


 


2.8 Preservation
of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, (a) change the nature of its business; (b) sell, divest, change the structure of
any material assets other than in the ordinary course of business; (c) enter into a Variable Rate Transaction; or (d) enter into any
merchant cash advance transactions. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower
shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and
become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or
remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary.


 




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2.9 Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate or Articles of Incorporation or
Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note,
and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the
rights of the Holder.


 


2.10 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.


 


ARTICLE
III. EVENTS OF DEFAULT


 


It
shall be considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”)
shall occur:


 


3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this Note,
whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note.


 


3.2 Conversion
and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing that it
will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the
terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, (iii) fails to reserve the Reserved Amount at all times, (iv) the Borrower directs its transfer agent not to
transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form)
any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its
transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any
certificate for any Conversion Shares issued to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations
described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for three (3) Trading Days after the Holder shall have delivered a Notice
of Conversion, and/or (v) fails to remain current in its obligations to its transfer agent (including but not limited to payment
obligations to its transfer agent). It shall be an Event of Default of this Note, if a conversion of this Note is delayed, hindered
or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any
funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be added to the principal
balance of the Note.


 


3.3 Breach
of Agreements and Covenants. The Borrower breaches any covenant, agreement, or other term or condition contained in the Purchase
Agreement, this Note, Irrevocable Transfer Agent Instructions, Warrant (as defined in the Purchase Agreement) (the
“Warrant”), or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or
therewith.


 


3.4 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement, this Note,
Irrevocable Transfer Agent Instructions, Warrant, or in any agreement, statement or certificate given in writing pursuant hereto or
in connection herewith or therewith shall be false or misleading in any material respect when made.


 


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


 






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3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the
Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period
of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.


 


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


 


3.8 Failure
to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements
of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act.


 


3.9
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.


 


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


 


 


3.11 Maintenance
of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other
assets which are necessary to conduct its business (whether now or in the future).


 


3.12 Financial
Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period
from two years prior to the Issue Date of this Note and until this Note is no longer outstanding.


 


3.13 Replacement
of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior
to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.


 


3.14 Cross-Default.
Except for defaults under the Nations Interbanc, Cybernaut Zfounder Ventures, or General
Electric International, Inc. transactions as disclosed in the Company’s filings with the SEC to date, the declaration
of an event of default by any lender or other extender of credit to the Company under any notes, loans, agreements or other
instruments of the Company evidencing any indebtedness of the Company (including those filed as exhibits to or described in the
Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.


 


3.15 Variable
Rate Transactions. The Borrower consummates a Variable Rate Transaction at any time on or after the Issue Date.


 


3.16 Inside
Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any
actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.


 


3.17 Unavailability
of Rule 144. If, at any time on or after the date that is six (6) calendar months after the Issue Date, the Holder is unable to
(i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the
Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the
Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule
144, and/or (ii) thereupon deposit such shares into the Holder’s brokerage account.


 


3.18 Delisting,
Suspension, or Quotation of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common
Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on a
Principal Market.


 




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3.19 Market
Capitalization. The Borrower fails to maintain a market capitalization of at least $10,000,000 on any Trading Day, which
shall be calculated by multiplying (i) the closing price of the Borrower’s common stock on the Trading Day immediately
preceding the respective date of calculation by (ii) the total shares of the Borrower’s common stock issued and outstanding on
the Trading Day immediately preceding the respective date of calculation.


 


3.20 Uplist
Offering. Failure by the Borrower to effectuate the Uplist Offering six (6) months from the Issue Date.


 


3.21 Rights
and Remedies Upon an Event of Default. Upon the occurrence of any Event of Default specified in this Article III, this Note
shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the Principal Amount then outstanding plus accrued interest (including any Default Interest) through
the date of full repayment multiplied by 125% (collectively the “Default Amount”), as well as all costs, including,
without limitation, legal fees and expenses, of collection, all without demand, presentment or notice, all of which hereby are
expressly waived by the Borrower. Holder may, in its sole discretion, determine to accept payment part in Common Stock and part in
cash. For purposes of payments in Common Stock, the conversion formula set forth in Section 1.2 shall apply as well as all other
provisions of this Note. Upon an Event of Default as set forth in this Article III, the Holder shall have the right to convert the
Default Amount into Common at a Conversion Price equal to ninety percent (90%) of the lowest volume weighted average price of the
Common Stock during the preceding five (5) Trading Days prior to the date of conversion (the “Default Conversion
Price”). The Holder shall be entitled to exercise all other rights and remedies available at law or in equity.


 


ARTICLE
IV. MISCELLANEOUS


 


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


 


4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a)
upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at
the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be:


 


If
to the Borrower, to:


 


CLEAN
ENERGY TECHNOLOGIES, INC.


2990
Redhill Ave.


Costa
Mesa, CA 92626


Attention:
Kambiz Mahdi


e-mail:
kmahdi@cetyinc.com


 


If
to the Holder:


 


Jefferson
Street Capital, LLC


720
Monroe Street, Suite C401B


Hoboken,
New Jersey 07030


e-mail:
brian@jeffersonstreetcapital.com


 




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4.3
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the
Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or supplemented.


 


4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. The Borrower shall not assign this Note or any rights or obligations hereunder without
the prior written consent of the Holder. The Holder may assign its rights hereunder to any “accredited investor” (as defined
in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined
under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance
of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note represented by this Note may be less than the amount stated on the face hereof.


 


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


 


4.6 Governing
Law; Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the laws of the State of
Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Note or any other agreement, certificate, instrument or document contemplated hereby shall be
brought only in the state courts located in the State of New Jersey or federal courts located in the State of New Jersey. The
Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding in connection with this Note or any other
agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law. The prevailing party in any action or
dispute brought in connection with this the Note or any other agreement, certificate, instrument or document contemplated hereby or
thereby shall be entitled to recover from the other party its reasonable attorney’s fees and costs.


 


4.7 Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal Amount
(or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be
difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended
to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of
Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The
Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.


 


4.8 Purchase
Agreement. The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement, and the documents
entered into in connection herewith and therewith.


 


4.9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to
shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any
other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote
in connection with any change in control or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall
mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the
consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose
of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend,
distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with
the terms of this Section 4.9.


 




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


 


4.11 Construction;
Headings. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.


 


4.12 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time
hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any right or
remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided
that the total liability of the Company under this Note for payments which under the applicable law are in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the
foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums which
under the applicable law in the nature of interest that the Company may be obligated to pay under this Note exceed such Maximum
Rate. It is agreed that if the maximum contract rate of interest allowed by applicable law and applicable to this Note is increased
or decreased by statute or any official governmental action subsequent to the Issue Date, the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to this Note from the effective date thereof forward, unless such application is
precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to
the Holder with respect to indebtedness evidenced by this the Note, such excess shall be applied by the Holder to the unpaid
principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the
Holder’s election.


 


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


 


4.14 Terms
of Future Financings. Except with respect to any Exempt Issuance, so long as this Note is outstanding, upon any issuance by the
Borrower or any of its subsidiaries of any security, or amendment to a security that was originally issued before the Issue Date,
with any term that the Holder reasonably believes is more favorable to the holder of such security or with a term in favor of the
holder of such security that the Holder reasonably believes was not similarly provided to the Holder in this Note, then (i) the
Borrower shall notify the Holder of such additional or more favorable term within one (1) business day of the issuance and/or
amendment (as applicable) of the respective security, and (ii) such term, at Holder’s option, shall become a part of the
transaction documents with the Holder (regardless of whether the Borrower complied with the notification provision of this Section
4.14). 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 price, prepayment rate, interest rates, and original issue discounts.


 






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4.15 Dispute
Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount
or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the
arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the
Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Trading Days after
receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such
dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are
unable to agree upon such determination or calculation within two (2) Trading Days of such disputed determination or arithmetic
calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) Trading
Days, submit (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the case
may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the disputed
arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, to an independent,
outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower shall cause at its expense the
investment bank or the accountant to perform the determinations or calculations and notify the Borrower and the Holder of the
results no later than two (2) Trading Days from the time it receives such disputed determinations or calculations. Such investment
bank’s or accountant’s determination or calculation shall be binding upon all parties absent demonstrable
error.


 


4.16 Right
of First Refusal. Except with respect to the Bridge Offering or Equity Line (as defined in the Purchase Agreement), if at any
time while this Note is outstanding, the Borrower has a bona fide offer of capital or financing from any 3rd party, that the
Borrower intends to act upon, then the Borrower must first offer such opportunity to the Holder to provide such capital or financing
to the Borrower on the same terms as each respective 3rd party’s terms. Should the Holder be unwilling or unable to provide
such capital or financing to the Borrower within three (3) Trading Days from Holder’s receipt of written notice of the offer
(the “Offer Notice”) from the Borrower, then the Borrower may obtain such capital or financing from that respective 3rd
party upon the exact same terms and conditions offered by the Borrower to the Holder, which transaction must be completed within 30
days after the date of the Offer Notice. If the Borrower does not receive the capital or financing from the respective 3rd party
within 30 days after the date of the respective Offer Notice, then the Borrower must again offer the capital or financing
opportunity to the Holder as described above, and the process detailed above shall be repeated. The Offer Notice must be sent via
electronic mail to brian@jeffersonstreetcapital.com.


 


[signature
page follows]


 






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IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on August 5, 2022.


 


CLEAN
ENERGY TECHNOLOGIES, INC.


 


 


	By:	 	 
	Name:	Kambiz
    Mahdi	 
	Title:	Chief
    Executive Officer

     
	 


 






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EXHIBIT
A — NOTICE OF CONVERSION


 


The
undersigned hereby elects to convert $                          
principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of
the Note (“Common Stock”) as set forth below, of CLEAN ENERGY TECHNOLOGIES, INC., a Nevada corporation (the
“Borrower”), according to the conditions of the promissory note of the Borrower dated as of August 5, 2022 (the
“Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer
taxes, if any.


 


Box
Checked as to applicable instructions:


 


	 	☐	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned
    or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	 
	 	 	Name
    of DTC Prime Broker:
	 	 	Account
    Number:


 


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



 


	 	Date
    of Conversion:	 	 
	 	Applicable
    Conversion Price:	$	 
	 	Number
of Shares of Common Stock to be Issued Pursuant to Conversion of the Note:
	 

     
	 
	 	Amount
    of Principal Balance Due remaining Under the Note after this conversion:	 

     
	 


 


	 	By:
	 	Name:
	 	Title:
	 	Date: