Document:

ex1012.htm

EXHIBIT 10.12

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made effective as of the 1st day of December 2011 (the “Effective Date”).

AMONG:

WPCS INTERNATIONAL INCORPORATED, a corporation formed pursuant to the laws of the State of Delaware and having an office for business located at One East Uwchlan Avenue, Exton, PA 19341 ("Employer");

AND

MYRON POLULAK, an individual having an address at 4323 Ashfield Place, Southport, NC 28461 (“Employee”)

WHEREAS, Employee has agreed to continue to serve as an Employee of Employer, and Employer has agreed to hire Employee as such, pursuant to the terms and conditions of this Employment Agreement (the “Agreement”).

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises and the mutual covenants, agreements, representations and warranties contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee and Employer hereby agree as follows:

ARTICLE 1

EMPLOYMENT

Employer hereby affirms, renews and extends the employment of Employee as Executive Vice President of the Employer and Employee hereby affirms, renews and accepts such employment by Employer for the “Term” (as defined in Article 3 below), upon the terms and conditions set forth herein.

ARTICLE 2

DUTIES

During the Term, Employee shall serve Employer faithfully, diligently and to the best of his ability, under the direction and supervision of Employer as defined and shall use his best efforts to promote the interests and goodwill of Employer and any affiliates, successors, assigns, subsidiaries, and/or future purchasers of Employer. Employee shall render such services during the Term at Employer’s principal place of business or at such other place of business as may be determined by Employer, as Employer may from time to time reasonably require of him, and shall devote all of his business time to the performance thereof. Employee shall have those duties and powers as generally pertain to each of the offices of which he holds, as the case may be, subject to the control of Employer.

ARTICLE 3

TERM

The “Term” of this Agreement shall commence on the Effective Date and continue thereafter for a term of three (3) years, as may be extended or earlier terminated pursuant to the terms and conditions of this Agreement. The Term of this Agreement shall automatically renew for successive one (1) year periods unless, prior to the 30th calendar day preceding the expiration of the then existing Term, either Employer or Employee provides written notice to the other that it elects not to renew the Term. Upon delivery of such notice, this Agreement shall continue until expiration of the Term, whereupon this Agreement shall terminate and neither party shall have any further obligation thereafter arising under this Agreement, except as explicitly set forth herein to the contrary.

  

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ARTICLE 4

COMPENSATION

Salary

4.1

Employer shall pay to Employee an annual salary (the “Salary”) of One Hundred, Seventy-Six Thousand Dollars ($176,000.00), payable in equal installments at the end of such regular payroll accounting periods as are established by Employer, or in such other installments upon which the parties hereto shall mutually agree, and in accordance with Employer’s usual payroll procedures, but no less frequently than monthly.

Benefits

4.2

During the Term, Employee shall be entitled to participate in all medical and other employee benefit plans, including vacation, sick leave, retirement accounts and other employee benefits provided to similarly situated employees on terms and conditions no less favorable than those offered to such employees. Such participation shall be subject to the terms of the applicable plan documents, Employer’s generally applicable policies, and the discretion of the Board of Directors or any administrative or other committee provided for in, or contemplated by, such plan.

Expense Reimbursement

4.3

Employer shall reimburse Employee for reasonable and necessary expenses incurred by him on behalf of Employer in the performance of his duties hereunder during the Term in accordance with Employer's then customary policies, provided that such expenses are adequately documented.

Automobile

4.4

Employee shall be entitled to the full-time use of an automobile owned or leased by Employer.  In addition, Employer shall reimburse Employee for all maintenance and gasoline expenses associated with the automobile, provided that such expenses are adequately documented.

Bonus

	
4.5  

	 

In addition to the Salary, Employee shall be entitled to receive an annual bonus equal to 3% (the "Bonus") of the consolidated annual operating income, before the deduction of interest and taxes of a designated subsidiary or subsidiaries as assigned by Employer.  The amount of the Bonus shall be determined based upon the operating income reported in the financial statements of the designated subsidiary or subsidiaries, as calculated based on U.S. generally accepted accounting principles and as audited by the Employer’s accounting firm at year end. Any Bonus amount will be payable within thirty (30) days from completion of the audit. Employee shall have the right to review and independently verify the conclusions of any audit by delivering notice in writing to Employer within 30 days after receipt of such audit indicating that Employee wishes to exercise his right of review and verification. Within 10 business days after receipt of any such notice, Employer shall make available to Employee and his representatives, at reasonable times during normal business hours, the books and records of Employer which are reasonably necessary to conduct such review and verification. Employee shall cause such review to be conducted and concluded as quickly as reasonably practicable and in such a manner so as not to unreasonably interfere with the business and operations of Employer. Any representatives conducting such review shall, prior to being given access to such books and records, be required to enter into confidentiality and non-disclosure agreements with Employer on terms and conditions satisfactory to Employer, acting reasonably. If Employee disputes the results of the audit, he shall, within 20 days after notice is delivered by Employee to Employer that there exists a dispute, be submitted to arbitration as set forth below. Employer can assign subsidiaries at its sole discretion.

  

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Arbitration

4.6

Any unresolved disputes in regards to the Bonus due from Employer to Employee will be subject to arbitration by an independent chartered accountant mutually chosen by Employer and Employee at an expense equally borne by both parties. The parties shall, within 20 days after appointment of the Arbitrator present their written position and related evidence with respect to the unresolved disputes.  The Arbitrator shall review evidence accordingly and submit a written decision which shall be final and binding on the parties within 20 days after submission of such evidence. The Arbitrator shall comply, and the arbitration shall be conducted in accordance with, the Commercial Arbitration Rules of American Arbitration Association then in force.

ARTICLE 5

OTHER EMPLOYMENT

During the Term of this Agreement, Employee shall devote substantially all of his business and professional time and effort, attention, knowledge, and skill to the management, supervision and direction of Employer’s business and affairs as Employee’s highest professional priority. Except as provided below, Employer shall be entitled to all benefits, profits or other issues arising from or incidental to all work, services and advice performed or provided by Employee. Provided that the activities listed below do not materially interfere with the duties and responsibilities under this Agreement, nothing in this Agreement shall preclude Employee from devoting reasonable periods required for:

	
  

	
(a)

	
Serving as a member or owner of any organization involving no conflict of interest with Employer, provided that Employee must obtain the written consent of Employer;

	
  

	
(b)

	
Serving as a consultant in his area of expertise to government, commercial and academic panels where it does not conflict with the interests of Employer; and

	
  

	
(c)

	
Managing his personal investments or engaging in any other non-competing business

 

ARTICLE 6

CONFIDENTIAL INFORMATION/INVENTIONS

Confidential Information

6.1

Employee shall not, in any manner, for any reasons, either directly or indirectly, divulge or communicate to any person, firm or corporation, any confidential information concerning any matters not generally known or otherwise made public by Employer which affects or relates to Employer’s business, finances, marketing and/or operations, research, development, inventions, products, designs, plans, procedures, or other data (collectively, “Confidential Information”) except in the ordinary course of business or as required by applicable law. Without regard to whether any item of Confidential Information is deemed or considered confidential, material, or important, the parties hereto stipulate that as between them, to the extent such item is not generally known, such item is important, material, and confidential and affects the successful conduct of Employer’s business and goodwill, and that any breach of the terms of this Section 6.1 shall be a material and incurable breach of this Agreement. Confidential Information shall not include information in the public domain at the time of the disclosure of such information by Employee or information that is disclosed by Employee with the prior consent of Employer.

 

 

  

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Documents

6.2

Employee further agrees that all documents and materials furnished to Employee by Employer and relating to the Employer’s business or prospective business are and shall remain the exclusive property of Employer. Employee shall deliver all such documents and materials, not copied, to Employer upon demand therefore and in any event upon expiration or earlier termination of this Agreement. Any payment of sums due and owing to Employee by Employer upon such expiration or earlier termination shall be conditioned upon returning all such documents and materials, and Employee expressly authorizes Employer to withhold any payments due and owing pending return of such documents and materials.

Inventions

6.3

All ideas, inventions, and other developments or improvements conceived or reduced to practice by Employee, alone or with others, during the Term of this Agreement, whether or not during working hours, that are within the scope of the business of Employer or that relate to or result from any of Employer’s work or projects or the services provided by Employee to Employer pursuant to this Agreement, shall be the exclusive property of Employer. Employee agrees to assist Employer, at Employer’s expense, to obtain patents and copyrights on any such ideas, inventions, writings, and other developments, and agrees to execute all documents necessary to obtain such patents and copyrights in the name of Employer.

Disclosure

6.4

During the Term, Employee will promptly disclose to the Board of Directors of Employer full information concerning any interest, direct or indirect, of Employee (as owner, shareholder, partner, lender or other investor, director, officer, employee, consultant or otherwise) or any member of his immediate family in any business that is reasonably known to Employee to purchase or otherwise obtain services or products from, or to sell or otherwise provide services or products to, Employer or to any of its suppliers or customers.

ARTICLE 7

COVENANT NOT TO COMPETE

Except as expressly permitted in Article 5 above, during the Term of this Agreement, (a) Employee shall not engage, directly or indirectly, in any business or activity competitive to any business or activity engaged in, or proposed to be engaged in, by Employer or (b) soliciting or taking away or interfering with any contractual relationship of any employee, agent, representative, contractor, supplier, vendor, customer, franchisee, lender or investor of Employer, or using, for the benefit of any person or entity other than Employer, any Confidential Information of Employer. The foregoing covenant prohibiting competitive activities shall survive the termination of this Agreement and shall extend, and shall remain enforceable against Employee, for the period of one (1) year following the date this Agreement is terminated. In addition, during the one-year period following such expiration or earlier termination, neither Employee nor Employer shall make or permit the making of any negative statement of any kind concerning Employer or its affiliates, or their directors, officers or agents or Employee.

  

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ARTICLE 8

SURVIVAL

Employee agrees that the provisions of Articles 6, 7 and 9 shall survive expiration or earlier termination of this Agreement for any reasons, whether voluntary or involuntary, with or without cause, and shall remain in full force and effect thereafter.  Notwithstanding the foregoing, if this Agreement is terminated upon the dissolution of Employer, the filing of a petition in bankruptcy by Employer or upon an assignment for the benefit of creditors of the assets of Employer, Articles 6, 7 and 9 shall be of no further force or effect.

ARTICLE 9

INJUNCTIVE RELIEF

Employee acknowledges and agrees that the covenants and obligations of Employee set forth in Articles 6 and 7 with respect to non-competition, non-solicitation, confidentiality and Employer’s property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Employer irreparable injury for which adequate remedies are not available at law. Therefore, Employee agrees that Employer shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Employee from committing any violation of the covenants and obligations referred to in this Article 9. These injunctive remedies are cumulative and in addition to any other rights and remedies Employer may have at law or in equity.

ARTICLE 10

TERMINATION

Termination by Employee

10.1

Employee may terminate this Agreement for Good Reason at any time upon 30 days’ written notice to Employer, provided the Good Reason has not been cured within such period of time.

Good Reason

10.2

In this Agreement, “Good Reason” means, without Employee’s prior written consent, the occurrence of any of the following events, unless Employer shall have fully cured all grounds for such termination within thirty (30) days after Employee gives notice thereof:

(i)           any reduction in his then-current Salary;

	
  

	
(ii)

	
failure to pay or provide required compensation and benefits;

	
  

	
(iii)

	
any failure to appoint, elect or reelect him to the position of Executive Vice President of the Employer or the removal of him from such position;

	
  

	
(iv)

	
any material diminution in his title or duties or the assignment to him of duties not customarily associated with Employee’s position as Executive Vice President of the Employer;

	
  

	
(v)

	
any relocation of Employee’s office as assigned to him by Employer, to a location more than 25 miles from the assigned location;

	
(vi)  

	
the failure of Employer to obtain the assumption in writing of its obligation to perform the Employment Agreement by any successor to all or substantially all of the assets of Employer or upon a merger, consolidation, sale or similar transaction of Employer or;

	
(vii)  

	
the voluntary or involuntary dissolution of Employer, the filing of a petition in bankruptcy by Employer or upon an assignment for the benefit of creditors of the assets of Employer.

The written notice given hereunder by Employee to Employer shall specify in reasonable detail the cause for termination, and such termination notice shall not be effective until thirty (30) days after Employer’s receipt of such notice, during which time Employer shall have the right to respond to Employee’s notice and cure the breach or other event giving rise to the termination.

Termination by Employer

10.3

Employer may terminate its employment of Employee under this Agreement for cause at any time by written notice to Employee. For purposes of this Agreement, the term “cause” for termination by Employer shall be (a) a conviction of or plea of guilty or nolo contendere by Employee to a felony, or any crime involving fraud or embezzlement; (b) the refusal by Employee to perform his material duties and obligations hereunder; (c) Employee’s willful and intentional misconduct in the performance of his material duties and obligations; or (d) if Employee or any member of his family makes any personal profit arising out of or in connection with a transaction to which Employer is a party or with which it is associated without making disclosure to and obtaining the prior written consent of Employer. The written notice given hereunder by Employer to Employee shall specify in reasonable detail the cause for termination. Such termination shall be effective upon receipt of the written notice.

  

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Severance

10.4

Upon a termination of this Agreement without Good Reason by Employee or with cause by Employer, Employer shall pay to Employee all accrued and unpaid compensation as of the date of such termination, subject to the provision of Section 6.2. Upon a termination of this Agreement with Good Reason by Employee or without cause by Employer, Employer shall pay to Employee all accrued and unpaid compensation and expense reimbursement as of the date of such termination and the “Severance Payment.”  The Severance Payment shall be payable in a lump sum, subject to Employer’s statutory and customary withholdings.  If the termination of Employee hereunder is by Employee with Good Reason, the Severance Payment shall be paid by Employer within five (5) business days of the expiration of any applicable cure period. If the termination of Employee hereunder is by Employer without cause, the Severance Payment shall be paid by Employer within five (5) business days of termination.  The “Severance Payment” shall equal the amount of the Salary payable to Employee under Section 4.1 of this Agreement from the date of such termination until the end of the Term of this Agreement (prorated for any partial month).

Termination Upon Death

10.5

If Employee dies during the Term of this Agreement, this Agreement shall terminate, except that Employee’s legal representatives shall be entitled to receive any earned but unpaid compensation or expense reimbursement due hereunder through the date of death.

Termination Upon Disability

10.6

If, during the Term of this Agreement, Employee suffers and continues to suffer from a “Disability” (as defined below), then Employer may terminate this Agreement by delivering to Employee thirty (30) calendar days’ prior written notice of termination based on such Disability, setting forth with specificity the nature of such Disability and the determination of Disability by Employer. For the purposes of this Agreement, “Disability” means Employee’s inability, with reasonable accommodation, to substantially perform Employee’s duties, services and obligations under this Agreement due to physical or mental illness or other disability for a continuous, uninterrupted period of sixty (60) calendar days or ninety (90) days during any twelve month period.  Upon any such termination for Disability, Employee shall be entitled to receive any earned but unpaid compensation or expense reimbursement due hereunder through the date of termination.

 

 

ARTICLE 11

PERSONNEL POLICIES, BENEFITS, BENEFICIARIES

Except as otherwise provided herein, Employee’s employment shall be subject to the personnel policies, benefit plans and vacation plans which apply generally to Employer’s employees as the same may be interpreted, adopted, revised or deleted from time to time, during the Term of this Agreement, by Employer in its sole discretion. This Agreement shall inure to the benefit of Employer and any affiliates, successors, assigns, parent corporations, subsidiaries, and/or purchasers of Employer as they now or shall exist while this Agreement is in effect.

ARTICLE 12

GENERAL PROVISIONS

No Waiver

12.1

No failure by either party to declare a default based on any breach by the other party of any obligation under this Agreement, nor failure of such party to act quickly with regard thereto, shall be considered to be a waiver of any such obligation, or of any future breach.

Modification

12.2

No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the parties to be charged therewith.

Choice of Jurisdiction

12.3

This Agreement shall be governed by and construed in accordance with the laws of the state and country where the Employee maintains a permanent address, without regard to any conflict-of-laws principles. Employer and Employee hereby consent to personal jurisdiction before all courts in such state and country, and hereby acknowledge and agree that to be the most proper forum to bring a complaint before a court of law.

Entire Agreement

12.4

This Agreement embodies the whole agreement between the parties hereto regarding the subject matter hereof and supersedes any agreement prior to the Effective Date first above written. The parties agree that there are no inducements, promises, terms, conditions, or obligations made or entered into by Employer or Employee other than contained herein.

Severability, Headings and Assignment

12.5

All agreements and covenants contained herein are severable, and in the event any of them, with the exception of those contained in Articles 1 and 4 hereof, shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein. The headings contained herein are for the convenience of reference and are not to be used in interpreting this Agreement. Employee may not assign, pledge or encumber his interest in this Agreement nor assign any of his rights or duties under this Agreement without the prior written consent of Employer.

Independent Legal Advice

12.6

Employer has obtained legal advice concerning this Agreement and has requested that Employee obtain independent legal advice.

  

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IN WITNESS WHEREOF the parties have executed this Agreement as of the Effective Date first above written.

	Employer:    	 	 	Employee:	 
	 	 	 	 	 
	 	 	 	 	 
	
By: /s/ ANDY HIDALGO   

	 	 	
By: /s/ MYRON POLULAK

	 
	
Andrew Hidalgo / CEO   

	 	 	
Myron Polulak

	 
	
WPCS International Incorporated

	 	 	
 

	 

                                                                                 

 

7Exhibit 99.1

 

CWBT

Interest free if paid in full within 60 days

 

$275,000 PROMISSORY NOTE

 

FOR VALUE RECEIVED, Clean Wind Energy Tower·, Inc., a Nevada
corporation (the "Borrower") with at least 225,000,000 common shares issued and outstanding, promises to pay to JMJ
Financial or its Assignees (the "Lender") the Principal Sum along with the Interest Rate and any other fees according
to the terms herein. This Note will become effective only upon execution by both parties and delivery of the first payment of
Consideration by the Lender (the "Effective Date").

 

The Principal Sum is $275,000 (two hundred seventy five thousand)
plus accrued and unpaid interest and any other fees. The Consideration is $250,000 (two hundred fifty thousand) payable by wire
(there exists a $25,000 original issue discount (the "OID")). The tender shall pay $50,000 of Consideration upon closing
of this Note. The tender may pay additional Consideration to the Borrower in such amounts and at such dates as Lender may choose
in its sole discretion. THE PRINCIPAL SUM DUE TO LENDER SHALL BE PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY LENDER (PLUS
AN APPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT IS PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY THE LENDER AS WELL AS ANY
OTHER INTEREST OR FEES) SUCH THAT THE BORROWER IS ONLY REQUIRED TO REPAY THE AMOUNT FUNDED AND THE BORROWER IS NOT REQUIRED TO
REPAY ANY UNFUNDED PORTION OF THIS NOTE. The Maturity Date is one year· from the Effective Date of each payment (the "Maturity
Date") and is the date upon which the Principal Sum of this Note, as well as any unpaid interest and other fees, shall be
due and payable. The Conversion Price for each portion of Consideration will be the lesser of: 1) the closing price of the Borrower's
stock on the day the portion of Consideration is paid to Borrower, or 2) 70% of the lowest trade price in the 25 trading days previous
to the conversion (In the case that conversion shares are not deliverable by DWAC an additional 5% discount will apply; and if
the shares are chilled for deposit into the DTC system and only eligible for·Xclearing deposit an additional 7.5% discount
shall apply). Unless otherwise agreed in writing by both parties, at no time will the Lender convert any amount of the Note into
common stock that would result in the Lender owning more than 4.99% of the common stock outstanding.

 

1. ZERO Percent Interest for the First Sixty Days. The Borrower
may repay this Note at any time on or before 60 days from the Effective Date, after which the Borrower may not make further payments
on this Note prior to the Maturity Date without written approval from Lender, except as set forth in Section 5. If the Borrower
repays the Note on or before 60 days from the Effective Date, the Interest Rate shall be ZERO PERCENT (0%). If Borrower does not
repay the Note on or before 60 days from the Effective Date, a one-time Interest charge of 10% shall be applied to the Principal
Sum. Any interest payable is in addition to the OlD, and that OlD (or prorated OlD, if applicable) remains payable regardless of
time and manner of payment by Borrower.

 

2. Conversion. The Lender has the right, at any time after
the Effective Date, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and
any other fees) into shares of fully paid and non-assessable shares of common stock of the Borrower as per this conversion formula:
Number· of shares receivable upon conversion equals the dollar conversion amount divided by the Conversion Price. Conversions
may be delivered to Borrower by method of Lender's choice (including but not limited to email, facsimile, mall, overnight courier,
or personal delivery), and all conversions shall be cashless and not require further payment from the Lender. If no objection is
delivered from Borrower to Lender regarding any variable or calculation of the conversion notice within 24 hours of delivery of
the conversion notice, the Borrower shall have been thereafter deemed to have irrevocably confirmed and irrevocably ratified such
notice of conversion and waived any objection thereto. The Borrower shall deliver the shares from any conversion to Lender (in
any name directed by Lender) within 3 (three) business days of conversion notice delivery.

 

3. Conversion Delays. If Borrower fails to deliver shares
in accordance with the timeframe stated in Section 2, Lender, 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 Principal Sum with the rescinded conversion shares returned to the Borrower (under Lender's and Borrower's
expectations that any returned conversion amounts will tack back to the original date of the Note). In addition, for each conversion,
in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $2,000
per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery
is made; and such penalty will be added to the Principal Sum of the Note (under Lender's and Borrower's expectations that any penalty
amounts will tack back to the original date of the Note).

 

4. Reservation of Shares. At all times during which this
Note is convertible, the Borrower will reserve from its authorized and unissued Common Stock to provide for the issuance of Common
Stock upon the full conversion of this Note. The Borrower will at all times reserve at least 25,000,000 shares of Common Stock
for conversion.

 

5. Prepayment. At any time after the Effective Date, the
Borrower shall have the option, upon 20 business days' notice to Lender, to pre-pay the entire remaining outstanding principal
amount of this Note in cash, provided that (i) the Borrower shall pay the Lender 150% of the principal amount outstanding in repayment
hereof, (ii) such amount must be paid in cash on the next business day following such 20 business day notice period, and (iii)
the Lender may still convert this Note pursuant to the terms herein during the 20 business day period until such prepayment amount
has been received in full.

 

6. Piggyback Registration Rights. The Borrower shall include
on the next registration statement the Borrower files with SBC (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 Lender·at
its election in the form of cash payment or addition to the balance of this Note.

 

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7. Terms of Future Financings. So long as this Note Is
outstanding, upon any issuance by the Borrower or any of its subsidiaries of any new 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
Lender in this Note, then the Borrower shall notify the Lender of such additional or more favorable term and such term, at
Lender's option, shall become a part of the transaction documents with the Lender. 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.

 

8. Default. The following are events of default under this
Note: (i) the Borrower shall fail to pay any principal under the Note when due and payable (or payable by conversion) thereunder;
or (ii) the Borrower· shall fail to pay any interest or any other amount under the Note when due and payable (or payable
by conversion) thereunder; or (iii) a receiver, trustee or other similar official shall be appointed over the Borrower or a material
part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within
sixty (60) days; or (iv) the Borrower shall become insolvent or generally fails to pay, or admits in writing its inability to pay
its debts as they become due, subject to applicable grace periods, if any; or (v) the Borrower shall make a general assignment
for the benefit of creditors; or (vi) the Borrower shall file a petition for relief under any bankruptcy, insolvency or similar
law (domestic or foreign); or (vii) an involuntary proceeding shall be commenced or filed against the Borrower; or (viii) the Borrower
shall lose its status as "DTC Eligible" or the borrower's shareholders shall lose the ability to deposit (either electronically
or by physical certificates, or otherwise) shares into the DTC System; or (ix) the Borrower shall become delinquent In its filing
requirements as a fully-reporting issuer registered with the SEC.

 

9. Remedies. In the event of any default, the outstanding
principal amount of this Note, plus accrued but unpaid interest, liquidated damages, fees and other amounts owing in respect thereof
through the date of acceleration, shall become, at the Lender's election, immediately due and payable in cash at the Mandatory
Default Amount. The Mandatory Default Amount means the greater of (i) the outstanding principal amount of this Note, plus all accrued
and unpaid interest, liquidated damages, fees and other amounts hereon, divided by the Conversion Price on the date the Mandatory
Default Amount Is either demanded or paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the
Mandatory Default Amount is either demanded or paid in full, whichever has a higher VWAP, or (ii) 150% of the outstanding principal
amount of this Note, plus 100% of accrued and unpaid interest, liquidated damages, fees and other amounts hereon. Commencing five
(5) days after the occurrence of any event of default that results in the eventual acceleration of this Note, the interest rate
on this Note shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable
law. In connection with such acceleration described herein, the Lender need not provide, and the Borrower hereby waives, any presentment,
demand, protest or other notice of any kind, and the Lender may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by Lender at any time prior to payment hereunder and the Lender shall have all rights as a holder
of the note until such time, if any, as the Lender receives full payment pursuant to this Section 8. No such rescission or annulment
shall affect any subsequent event of default or impair any right consequent thereon. Nothing herein shall limit Lender's right
to pursue any other remedies available to it at law or In equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Borrower's failure to timely deliver certificates representing shares of Common Stock
upon conversion of the Note as required pursuant to the terms hereof.

 

10. No Shorting. Lender agrees that so long as this Note
from Borrower to Lender remains outstanding, Lender will not enter into or effect "short sales" of the Common Stock or
hedging transaction which establishes a net short position with respect to the Common Stock of Borrower. Borrower acknowledges
and agrees that upon delivery of a conversion notice by Lender, Lender immediately owns the shares of Common Stock described in
the conversion notice and any sale of those shares issuable under such conversion notice would not be considered short sales.

 

11. Assignability. The Borrower may not assign this Note.
This Note will be binding upon the Borrower and its successors and will inure to the benefit of the Lender and its successors and
assigns and may be assigned by the Lender to anyone of its choosing without Borrower's approval.

 

12. Governing Law. This Note will be governed by, and construed
and enforced in accordance with, the laws of the State of Florida, without regard to the conflict of laws principles 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 Florida or in the federal courts located in Miami-Dade County, in the State of Florida. Both parties and
the individuals signing this Agreement agree to submit to the jurisdiction of such courts.

 

13. Delivery of Process by Lender to Borrower. In the event
of any action or proceeding by Lender against Borrower, and only by Lender against Borrower, service of copies of summons and/or
complaint and/or any other process which may be served in any such action or proceeding may be made by Lender via U.S. Mail, overnight
delivery service such as FedEx or UPS, email, fax, or process server, or by mailing or otherwise delivering a copy of such process
to the Borrower at Its last known attorney as set forth in its most recent SEC filing.

 

14. Attorney Fees. In the event any attorney is employed
by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party
for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable
attorneys' fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.

 

    	2

    	 	

    
 

 

15. Opinion of Counsel. In the event that an opinion of counsel
is needed for any matter related to this Note, Lender has the right to have any such opinion provided by Its counsel. Lender also
has the right to have any such opinion provided by Borrower's counsel.

 

16. Notices. Any notice required or permitted hereunder (including
Conversion Notices) must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight
courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight
courier the business day after such notice is deposited with the courier service for delivery.

 

	Borrower:	 	Lender:
	 	 	 
	/s/ Ronald W. Pickett	 	/s/ signature
	Ronald W. Pickett	 	JMJ Financial
	Clean Wind Energy Tower, Inc.	 	Its Principal
	Chairman and Chief Executive Officer	 	 
	 	 	7/11/12
	Date: 7/11/12	 	Date: 7/11/12

 

 

 

 

 

 

 

 

 

 

 

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DISBURSEMENT REQUEST

 

Clean Wind Energy Tower, Inc. and Vista Capital Investments, LLC
hereby request disbursement of funds in the amount and manner described below from JMJ Financial:

 

 

Disbursement Amount: $50,000

 

 

 

	Please Disburse to:	CLEAN WIND ENERGY TOWER, INC.	VISTA CAPITAL INVESTMENTS, LLC.
	In the Amount of:	$45,000	$5,000
	Recipient Address:	
        1997 Annapolis Exchange Pkwy

        Suite 300

        Annapolis, MD 21401

        (41 0) 972-4713
	
        4342 Vista Way

        La Mesa CA 91941

        (619) 543-0328

	Bank Information:	
        Suntrust Bank

        2122 Generals Highway

        Annapolis, MD 21401

        410-224-6292
	
        Chase Bank

        1415 India Street

        San Diego, CA 92101

        (800) 935-9935

	ABA/Routing Number:	055002707	322-271-627
	Account Number:	1000145330774	925191496

 

 

 

 

 

	Clean Wind Energy Tower, Inc.	 
	 	 
	 	 
	By:  /s/ Ron Pickett	Dated:  7/11/12
	        Ron Pickett	 
	        CEO	 
	 	 
	 	 
	 	 
	Vista Capital Investments, LLC	 
	 	 
	By:  /s/ David Clark	Dated:  7/11/2012
	       David Clark 

       Manager	 

 

 

 

 

 

 

 

 

    	4

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