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CLEAN ENERGY TECHNOLOGIES, INC.

CREDIT AGREEMENT AND PROMISSORY NOTE

This CREDIT AGREEMENT AND PROMISSORY NOTE (this “Agreement”) dated as of December

31, 2016 is made by and between Clean Energy Technologies, Inc., a Nevada corporation (the

“Company”) and Megawell USA Technology Investment Fund I LLC, a Wyoming limited liability

company in formation (“Lender”).

RECITALS

WHEREAS on or about March 15, 2016 the Company and Peak One Opportunity Fund, L.P., a

Delaware limited partnership (“Peak One”) entered into a Securities Purchase Agreement dated March

11, 2016 (the “SPA”).

WHEREAS pursuant to the SPA, on March 15, 2016 Peak One subscribed for and purchased

from the Company and the Company issued to Peak One a Convertible Debenture dated March 15,

2016 in the original stated principal amount of $75,000.00 (the “Peak One Debenture”).

WHEREAS the Company issued a notice of redemption of the Peak One Debenture and, pursuant

to an Escrow Funding Agreement, the Company assigned its rights under such redemption to Red Dot

Investment, Inc., a California corporation (“Red Dot”), Red Dot acquired the Peak One Debenture, and

the Company and Red Dot or an associate of Red Dot amended the Peak One debenture as held by Red

Dot (or such associate) (the Peak One Debenture, as so amended, the “Master Debenture”).

WHEREAS Lender has acquired the Master Debenture from Red Dot.

WHEREAS on or about June 6, 2016, July 6, 2016, and August 15, 2016, respectively, the

Company issued the following securities (collectively the “Notes”): (1) a 12% Convertible Note in the

original principal amount of $87,500.00 to EMA Financial, LLC, a Delaware limited liability company

(“EMA”), (2) a Convertible Promissory Note in the original principal amount of $77,750.00 to Auctus

Fund LLC, a Delaware limited liability company (“Auctus”), and (3) a 12% Convertible Promissory

Note in the original principal amount of $57,000.00 to JSJ Investments, Inc., a Texas corporation

(“JSJ” and, together with Auctus and EMA, the “Additional Noteholders”) .

WHEREAS the Company intends to redeem all of the Notes or to repay all or substantially all of

the amounts owed to the Additional Noteholders under the Notes, pursuant to which the Company will

pay amounts of $89,401.98, $97,506.38 and $86,079.37, respectively (the “Note Payment Amounts”).

WHEREAS the Company does not presently have the funds to pay the Note Payment Amounts.

WHEREAS the Company would like to borrow additional amounts from the Lender for the

Company’s operating capital needs (“Additional Advance Amounts”), which advances would be at the

sole and absolute discretion of Lender.

WHEREAS Lender has deposited in escrow with Richardson & Maloney LLP (the “Escrow

Holder”) certain funds that may be advanced to or for the benefit of the Company as Note Payment

Amounts or as Additional Advance Amounts (the “Escrow”).

WHEREAS, as a condition to the advance of any amount from Escrow relating to Note Payment

Amounts, the Company agrees to assign to Lender all of the Company’s rights to redeem, repurchase,

reacquire, repay or otherwise satisfy any associated Note and agrees that Lender shall otherwise be

subrogated to all of the rights of the lender under any Note repaid with funds advanced by Lender.

WHEREAS, pursuant to the instructions of Lender and the Company contained herein, Lender

and the Company are instructing the Escrow Holder to disburse funds from the Escrow to fund the

entirety of the Note Payment Amounts and all costs, expenses, fees or other charges arising in

connection with or relating to the Notes or payment of the Note Payment Amounts, the assignment of

the Company’s rights relating thereto, the amendment thereof once acquired by Lender, this

Agreement, the transactions contemplated herein, including the Financing Fee (as defined below) and

any costs, expenses, or other fees relating to the Notes, payment of the Note Payment Amounts, or the

enforcement or collection of any amounts advanced hereunder, and any other expense for or on account

of the Company for which an agent of the Company may request an advance, provided such advance

is approved by Lender, Red Dot, the Executive Chairman of the Company, or the Escrow Holder

(collectively, the “Ancillary Note Expenses”).

WHEREAS, pursuant to additional instructions of Lender or Red Dot, as Lender’s agent hereby

expressly authorized for such purpose, Lender may further instruct the Escrow Holder to disburse funds

from the Escrow to fund Additional Advance Amounts and any and all costs, expenses, fees or other

charges arising in connection with or relating to such Additional Advance Amounts or repayment of

the Additional Advance Amounts, this Agreement, the transactions contemplated herein, including the

Financing Fee and any costs, expenses, or other fees relating to the Additional Advance Amounts,

repayment of the Additional Advance Amounts, or the enforcement or collection of any amounts

advanced hereunder, and any other expense for or on account of the Company for which an agent of

the Company may request an advance, provided such advance is approved by Lender or Red Dot, as

Lender’s agent hereby expressly authorized for such purpose (collectively, the “Ancillary Advance

Expenses” and, together with the Ancillary Note Expenses, the “Ancillary Expenses”).

WHEREAS Lender and the Company have agreed that Lender will, where possible, acquire the

rights of the Company with respect to any Note and acquire any acquired Note through Escrow or will

otherwise be subrogated to the rights of any Note holder and that Lender will not purchase such Note

from the Company; provided, however, that where such an assignment of rights and acquisition of an

outstanding Note is not possible, then Lender shall be so subrogated and the amount and rights of such

Note Payment Amounts and Ancillary Note Expenses shall be deemed an additional advance under the

Master Debenture and such Note Payment Amounts shall be added to the outstanding principal of the

Master Debenture.

WHEREAS Lender and the Company have agreed that Lender is acquiring any Note acquired as

a good faith purchaser for value and a holder in due course, but Lender does not acquire any Note with

any representation or warranty from an Additional Noteholder other than as implied by the Additional

Noteholder to the Company, as assignor, with respect to its ownership of the Note.

WHEREAS Lender and the Company have agreed to amend any acquired Note or the subrogated

rights of Lender in respect thereof, once acquired by Lender or once Lender is subrogated thereto, (a)

to have a fixed conversion price of $.005 per share, subject to the provisions for adjustment provided

for in the Master Debenture, as amended, (b) to have a fixed interest rate of ten percent (10%) per

annum with respect to both the Note Payment Amount and any Ancillary Note Expenses (in each case

with a minimum 10% yield in the event of payoff or conversion within the first year), as provided

herein, all such expenses to be for the account of and the responsibility of the Company,

notwithstanding that Lender may advance sums to pay for them, the amount of such Ancillary Note

Expenses to constitute additional principal under the a Note so acquired, as amended, and (c) as

otherwise provided herein.

WHEREAS Lender and the Company have agreed that, with respect to any Note Advance

Amount or Ancillary Note Expense that relates to a Note that is not acquired by Lender, such amounts

shall be added to the principal amount of the Master Debenture.

WHEREAS Lender and the Company have agreed that, with any Additional Advance Amount

or Ancillary Advance Expense shall be added to the principal amount of the Master Debenture.

WHEREAS Lender and the Company have further agreed that, in the event Lender is not the

holder of the Master Debenture, this Agreement shall constitute a Promissory Note with terms and

conditions identical to the Master Debenture, mutatis mutandis. In such event, any references herein

to the Master Debenture shall be to this Agreement, mutatis mutandis.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to agree as

follows:

Recitals; Terms. The foregoign Recitals are incorproated herin by refernce as if set

forth fully herein and, in accodance with Section 622 of the California Evidence Code, the facts recited

in the Recitals are conclusively presumed to be true as between the parties hereto, or their successors

in interest. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed

thereto in the Master Debenture (including any terms incorproated by reference therein).

Escrow Deposit; Note Assignment; Promise to Pay.

(a)

Lender has designated and hereby reaffirms such designation, from funds on

deposit in Escrow with the Escrow Holder, sufficient funds to pay the Note Payment Amounts

and pay any Ancillary Note Expenses. The total of such amounts (the “Additional Owed

Principal Amount”) shall be as set forth in a schedule (the “Loan Schedule”) prepared and

updated by Lender or Red Dot, as Lender’s agent hereby expressly authorized for such purpose,

from time to time and that may be appended or re-appended by Lender or Red Dot, as Lender’s

agent hereby expressly authorized for such purpose, to the Master Debenture (or a copy thereof

if Lender does not receive the original of the Master Debenture). The parties agree that the

Loan Schedule, as prepared by Lender or Red Dot, as Lender’s agent hereby expressly

authorized for such purpose, from time to time and whether or not appended to the Master

Debenture (or a copy thereof), shall conclusive evidence of the Additional Owed Principal

Amount.

(b)

The Company represents and warrants to Lender that the Company has or will

reach consensual terms with the Additional Noteholders for redemption or repayment of the

Notes.

(c)

To the maximum extent possible, the Company hereby assign to Lender all of

the Company’s rights to repurchase the Notes and otherwise agrees that Lender shall be

subrogated to the rights of any Note prepaid with funds advanced by Lender.

(d)

To induce Lender to acquire or repay the Notes, the Company agrees to pay to

Lender a fee of $10,000.00 (the “Financing Fee”) with respect to the Note Payment Amount

of each Note and each Additional Advance Amount, with the amount of the Financing Fee to

be included as an Ancillary Expenses.

(e)

In consideration of the foregoing, the Company hereby agrees to repay to

Lender, in accordance with the terms and conditions of the Master Debenture, the Additional

Owed Principal Amount, together with interest accrued thereon and other amounts owing in

connection therewith, as any such amounts be due and owing and whether or not reflected in

the Loan Schedule.

Escrow Deposit; Additional Advance Amounts; Promise to Pay.

(a)

Lender, directly or through its agent hereby expressly authorized therefor, Red

Dot, may designate, from funds on deposit in Escrow with the Escrow Holder, funds to pay

Additional Payment Amounts and Ancillary Additional Expenses. The total of such amounts

(the “Second Additional Owed Principal Amount”) shall be as set forth in the Loan Schedule

prepared and updated by Lender or Red Dot from time to time and that may be appended or

re-appended to the Master Debenture (or a copy thereof, including if Lender does not receive

the original of the Master Debenture). The parties agree that the Loan Schedule, as prepared

by Lender or Red Dot, as Lender’s agent hereby expressly authorized for such purpose, from

time to time and whether or not appended to the Master Debenture (or a copy thereof), shall

conclusive evidence of the Second Additional Owed Principal Amount.

(b)

In consideration of the foregoing, the Company hereby agrees to repay to

Lender, in accordance with the terms and conditions of the Master Debenture, the Second

Additional Owed Principal Amount, together with interest accrued thereon and other amounts

owing in connection therewith, as any such amounts be due and owing and whether or not

reflected in the Loan Schedule.

Note Escrow Instruction. Lender and the Company hereby jointly instruct the Escrow

Holder to disburse funds from the Escrow to fund the entirety of the Note Payment Amounts and to

pay from the Escrow Account any and all Ancillary Note Expenses, inculding the legal expenses

incurred in connection with the preparation of this Agreement and the expenses of the Escrow Holder.

At the request of the Escrow Holder, Lender or Red Dot, as Lender’s agent hereby expressly authorized

for such purpose, shall confirm in writing the Escrow Holder’s payment of Ancillary Note Expenses

and Escrow Holder’s authortiy threfor, though no such confirmation shall be required, it being agreed

between the parties that the Escrow Holder shall have the authority to pay such expenses as they are

invoiced.

Additional Advance Escrow Instructions. Lender, directly or through its agent

hereby expressly authorized therefor, Red Dot, may in the future instruct the Escrow Holder to disburse

funds from the Escrow to fund Additional Advance Amounts and to pay from the Escrow Account

Ancillary Additional Expenses, inculding the legal expenses and the expenses of the Escrow Holder.

Events of Default. In addition to the Events of Default listed in the Master Debenture,

the occurrence of any of the following shall also constitute an “Event of Default” under the Master

Debenture and this Agreement:

(a)

Failure to Pay. The Company shall fail to pay when due any outstanding

amount owed under the Master Debenture;

(b)

Cross Default. A default shall occur in any other obligation of the Company

to pay money or to perform an obligation when due;

(c)

Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i)

apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all

or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts

generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors,

(iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or interpreted under

any applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation,

reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or

other similar law now or hereafter in effect or consent to any such relief or to the appointment of or

taking possession of its property by any official in an involuntary case or other proceeding commenced

against it, or (vii) take any action for the purpose of effecting any of the foregoing; or

(d)

Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the

appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part

of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization

or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or

other similar law now or hereafter in effect shall be commenced and an order for relief entered or such

proceeding shall not be dismissed or discharged within thirty (30) days of commencement.

Rights of Lender upon Default. In addition to any remedies listed in the Master

Debenture or available at law or in equity, upon the occurrence and during the continuance of any

Event of Default (and giving effect to any applicable cure periods) and at any time thereafter during

the continuance of such Event of Default, Lender may declare all amounts payable under the Master

Debenture to be and become immediately due and payable, whereupon such amounts shall be

immediately due and payable in full. In addition to the foregoing remedies, upon the occurrence or

existence of any Event of Default, Lender may exercise any other right power or remedy otherwise

permitted to it by law, either by suit in equity or by action at law, or both.

No Assignment by the Company. Neither this Agreement nor the Master Debenture

nor any of the rights, interests, or obligations of the Company hereunder or thereunder may be assigned,

in whole or in part, by the Company, including by operaiton of law, without the prior written consent

of Lender.

Waiver and Amendment. Any provision of this Agreement may be amended,

waived, or modified upon the written consent of Company and the Lender, directly or through its agent

hereby expressly authorized therefor, Red Dot.

10.

Notices.

All notices, requests, demands, consents, instructions, or other

communications required or permitted hereunder shall be in writing and faxed, emailed, mailed, or

delivered to each party at the respective addresses of the parties provided for such purpose. All such

notices and communications will be deemed given when sent to an address of the reciptient. Any party

hereto may by notice so given change its address for future notice hereunder.

11.

Payment. Payment shall be made in lawful tender of the United States.

12.

Expenses. If action is instituted to collect on the Master Debenture or to enforce any

right under this Agreement, the prevailing party shall pay all costs and expenses, including, without

limitation, attorneys’ fees and costs, incurred in connection with such action.

13.

Governing Law. All questions concerning the construction, validity, enforcement and

interpretation of this Agreement shall be governed by and construed and enforced in accordance with

the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof.

14.

Arbitration; Waiver of Right to Trial by Jury. Any dispute, controversy or claim

arising from or connected with this Agreement, including one regarding the existence, validity or

performance of this Agreement or the Master Debenture (a “Dispute”) shall be referred to and finally

resolved by arbitration under the expedited commercial arbitration rules of Pan Pacific Arbitration.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO

HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY

LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE

MASTER DEBENTURE, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR

THEREBY.

15.

Usury Limitations. It is the intention of the Company and Lender to conform strictly

to applicable usury laws. Accordingly, notwithstanding anything to the contrary in this Agreement or

the Master Debenture, amounts deemed to constitute interest under applicable law and contracted for,

chargeable, or receivable under this Agreement or under the Master Debenture shall under no

circumstances, together with any other interest, late charges, or other amounts which may be

interpreted to be interest contracted for, chargeable, or receivable hereunder or thereunder, exceed the

maximum amount of interest permitted by law, and in the event any amounts were to exceed the

maximum amount of interest permitted by law, such excess amounts shall be deemed a mistake and

shall either be reduced immediately and automatically to the maximum amount permitted by law or, if

required to comply with applicable law, be canceled automatically and, if theretofore paid, at the option

of Lender, be refunded to the Company or credited on the principal amount of the Master Debenture

then outstanding.

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IN WITNESS WHEREOF, the Company and Lender have each caused this Credit Agreement and

Promissory Note to signed by their duly appointed and authorized officers as the act and deed of such

company as of the date first written above.

CLEAN ENERGY TECHNOGIES, INC.,

a Nevada corporation

By:

Kambiz Mahdi

Chief Executive Officer

MEGAWELL USA TECHNOLOGY

INVESTMENT FUND I LLC,

a Wyoming limited liability company in formation

By:

Morris Lu

Managing Director