Clenergen Corporation 1% Convertible Promissory Note
NEITHER
THIS NOTE NOR THE SHARES OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE
UPON CONVERSION OF THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THIS NOTE HAS BEEN ACQUIRED, AND ANY SHARES OF
COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE
ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR THIS NOTE AND/OR SUCH SHARES OR OTHER SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS NOTE AND SUCH
SHARES OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS.
Clenergen
Corporation
1%
Convertible Promissory Note
| Dated: August 5, 2010 | Principal Amount: $303,730.50 |
Coconut
Creek, Florida 33073
For Value Received, the undersigned,
Clenergen Corporation, a Nevada corporation (“Maker”), hereby promises
to pay to Rootchange Limited, a corporation organized under the laws of Great
Britain (“Payee”),
the principal sum of $303,730.50 together with interest as set forth
below.
1. Interest
Rate. Until an Event of Default shall have occurred,
the outstanding principal amount evidenced by this Note shall bear interest
at the rate of 1.00% per annum, computed on the basis of a 360-day year for
the actual number of days elapsed (the “Applicable Interest
Rate”). Upon the occurrence of an Event of Default, the
outstanding principal amount and any accrued but unpaid interest thereon
shall bear interest until paid at the rate of 20.00% per annum, computed on the
basis of a 360-day year for the actual number of days elapsed (the “Default Interest
Rate”).
2. Payment Date; Payment Method;
Prepayment.
(a) Payment
Dates. Payment of all accrued and unpaid interest due
under this Note shall be payable semi-annually, in arrears, commencing on
February 1, 2011 (each, an “Interest Payment Date”) for so
long as any principal amount evidenced by this Note remains
outstanding. Subject to prior payment or conversion of all of the
principal amount evidenced by this Note in accordance with the terms of this
Note, payment of any outstanding principal amount evidenced by this Note
(and any accrued but unpaid interest thereon) shall be made by, or on,
November 1, 2011 (the “Maturity
Date”). Upon payment in full of the principal evidenced
by this Note (and any accrued but unpaid interest thereon), Payee, by
Xxxxx's acceptance of this Note, agrees to mark this Note ”CANCELLED” and
return this Note as so marked to Maker within five days after such payment
in full is received.
(b) Payment
Method. Payment of the principal evidenced by this Note
(and any accrued but unpaid interest thereon) shall be made by check,
subject to collection, tendered to Payee, via postage-paid, first class
mail, at the address for the giving of notices as set forth in Section 7 of
this Note.
(c) Voluntary
Prepayment. Reference is made to that certain 1.00% Promissory
Note, dated of even date herewith, executed and delivered by Maker in favor of
Xxxxx and in the principal amount of $303,730.50 (the “Non-Convertible
Note”). Maker may pay, without penalty or premium,
the outstanding principal amount evidenced by this Note (and any accrued
but unpaid interest thereon), in whole or in part, at any time up to the
Maturity Date upon no less than ten days’ prior written notice (the “Prepayment Notice Period”) to
Payee, provided, however, that any
prepayment, whether in full or in part, of any outstanding principal under this
Note shall be applied equally to this Note and to the Non-Convertible Note, on a
pari passu and pro rata
basis. Any partial prepayment shall first be applied
against any accrued and unpaid interest due under this Note and then to the
principal amount evidenced by this Note. In the event of a
voluntary prepayment being less than the full amount outstanding under this
Note (including any accrued but unpaid interest), upon surrender of this
Note in connection with said partial prepayment, Maker shall deliver to
Payee a new note substantially in the form of this Note and evidencing as
principal any amount not so prepaid. Notwithstanding the immediately
preceding sentence, following any partial prepayment of principal evidenced
by this Note, this Note shall be deemed to evidence a debt of Maker only to
the extent of the remaining principal amount outstanding following
such partial prepayment (plus any accrued and unpaid
interest).
3. Default;
Acceleration.
(a) Any
of the following shall constitute an “Event of Default” under
this Note:
(i) the
failure by Maker to pay any amounts required to be paid under this Note on
or before the fifth day following the date on which such payment was
due;
(ii) Maker
shall -
(A) apply
for or consent to the appointment of a receiver or trustee of Maker's
assets,
(B) make
a general assignment for the benefit of creditors,
(C) file
a petition or other request no matter how denominated (“Petition”) seeking relief
under Title 11 of the United States Code or under any other federal or
state bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute (“Bankruptcy Statute”),
or
(D) file
an answer admitting the material allegations of a petition filed against
Maker in any proceeding under any Bankruptcy Statute;
(iii) there
shall have entered against Maker an order for relief under any Bankruptcy
Statute; or
(iv) a
petition seeking an order for relief under any Bankruptcy Statute is filed
by any one other than Maker and without Maker's consent or agreement which
is not dismissed or stayed within 60 days after the date of such filing, or
such petition is not dismissed upon the expiration of any stay
thereof.
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(b) Upon
the occurrence of an Event of Default, the unpaid principal amount
evidenced by this Note (and any accrued but unpaid interest thereon) shall
be immediately due and payable.
(c) Until
the occurrence of an event of Default, the principal amount evidenced by
this Note shall bear interest at the Applicable Interest Rate. Upon
the effectiveness of an Event of Default, any unpaid principal amount under this
Note and any accrued but unpaid interest through the date of effectiveness
of such event of Default shall bear interest until paid at the Default
Interest Rate.
4. Optional
Conversion Right.
(a) Conversion
Option. Payee shall have the option (the “Conversion Option”),
exercisable at any time and from time to time on or prior to the Maturity Date
to convert all or any portion of the outstanding principal amount evidenced by
this Note into such whole number of fully-paid and non-assessable
shares (each, a “Conversion
Share”) of the common stock, par value $0.001 per share (the “Common Stock”), of the
Corporation as is equal to the quotient obtained by dividing (x) the amount
of principal being so converted by (y) the Conversion Price (as hereinafter
defined), as last adjusted and then in effect. The Conversion
Price, until adjusted as provided in paragraph 4(d) hereof, shall be $0.50,
the closing market price of the Common Stock on the original date of issuance of
this Note. Accrued and unpaid interest on the principal amount to be
converted shall not accrue or bear further interest, but will be payable no
later than the earlier of the next occurring Interest Payment Date or the
Maturity Date. The exercise of the Conversion Option and issuance of
any Conversion Shares shall not be deemed a prepayment for the purposes of the
Non-Convertible Note.
(b) Method of Exercise.
Payee shall exercise the Conversion Option by delivering to Maker, during
regular business hours, this Note with the Conversion Notice attached as
Appendix A to this Note duly completed and executed. Conversion
shall be deemed to have been effected immediately prior to the close of
business on the date (the “Conversion Date”) upon which
such delivery is properly made. As promptly as practicable
following the Conversion Date, Maker shall issue and deliver to Payee (or
to such other party as designated by Payee), at the place designated by
Payee, a stock certificate to which Payee is entitled and a check or cash
in respect of any fractional interest in a share of Common Stock as
provided in paragraph 4(c) of this Note. Payee (or the party in
whose name the stock certificate(s) evidencing the Conversion Shares are to
be issued) shall be deemed to have become the holder of record of the
Conversion Shares immediately prior to the close of business on
the applicable Conversion Date unless the transfer books of the Corporation
are closed on that date, in which event Payee shall be deemed to have
become the holder of record of the Conversion Shares immediately prior to
the close of business on the next succeeding date on which the transfer
books are open, but the Conversion Price shall be that Conversion Price in
effect on the Conversion Date. Upon conversion of only a portion
of the principal and accrued and unpaid interest evidenced by this Note,
Maker shall issue and deliver to Payee, at the sole expense of Maker, a new
note, substantially in the form of this Note, evidencing the remaining
principal outstanding and due Payee which new Note shall be dated as of the
last date upon which accrued interest under this Note shall have been
paid.
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(c) Fractional
Shares. No fractional Conversion Shares shall be issued
upon conversion of indebtedness evidenced by this Note pursuant to this Section
4. Instead of any fractional Conversion Shares which would
otherwise be issuable upon conversion, Maker shall pay a cash adjustment in
respect of such fractional share in an amount equal to the product
resulting from multiplying (i) the Conversion Price as in effect on the relevant
Conversion Date by (ii) such fractional Conversion Share. A
fractional Conversion Share shall not be entitled to interest or dividends,
and Payee shall not be entitled to any rights as stockholders of Maker with
respect of such fractional interest.
(d) Adjustment to Conversion
Price.
(i) If
Maker shall, at any time, (A) pay a dividend on outstanding Common Stock in
shares of Common Stock or effect a distribution to holders of outstanding
Common Stock payable in shares of Common Stock, (B) subdivide outstanding
Common Stock, (C) combine outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (D) issue any securities of
Maker in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which
Maker is the continuing or surviving corporation), the Conversion Price in
effect immediately prior to such an event shall be adjusted so that Payee,
upon surrender of this Note for conversion, in whole or part, shall be
entitled to receive the number and kind of shares of Common Stock and other
securities which Payee would have owned or have been entitled to receive
after the happening of such event had the Note been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this subparagraph 4(d)(i) shall become effective (x)
immediately after the record date, in the case of a dividend, or (y)
immediately after the effective date in the case of a subdivision,
combination or reclassification.
(ii) If
Maker shall, at any time, merge or combine with any other entity in a
transaction in which Maker is not the continuing or surviving entity, the
Conversion Price in effect immediately prior to the consummation of
such transaction shall be adjusted so that Payee, upon surrender of this
Note for conversion, in whole or part, shall be entitled to receive the
number and kind of shares and/or other securities which Payee would have
owned or have been entitled to receive after the consummation of such
transaction had the Note been converted immediately prior to the happening
of such event.
(e) Notice of Adjustment
Events. In the event Maker shall take any action of the types
described in paragraph 4(d), Maker shall give notice thereof to Payee,
which notice shall specify the record date, if any, with respect to such
action and the date on which such action took place. Such notice
shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action (to the extent such effect
may be at the date of such notice) on the Conversion Price and the number,
kind or class of shares or other securities or property which shall
be deliverable or purchasable upon the occurrence of such action or
deliverable upon conversion of the principal and accrued interest evidenced
by this Note. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such
action.
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(f) Liability for Taxes on
Conversion Shares. Maker shall pay all documentary, stamp
and other transactional taxes attributable to the issuance of Conversion
Shares or other securities issuable upon exercise of the Conversion Option
pursuant to and in accordance with paragraph 4(a) of any portion of the
principal and accrued interest evidenced by this Note if issued in the
name of Payee. In all other cases, such taxes shall be paid by
Payee.
(g) Reservation of Conversion
Shares. Maker shall reserve, free from preemptive rights,
out of its authorized but unissued shares of Common Stock a sufficient
number of shares of Common Stock for issuance as Conversion Shares.
(h) Status of Conversion
Shares. All Conversion Shares which may be issued in
connection with the conversion provisions set forth in this Section 4
will, upon delivery by Maker, be duly and validly issued, fully paid
and non-assessable, with no personal liability attaching to the ownership
of such Conversion Shares, and free from all taxes, liens or charges with
respect thereto and not subject to any preemptive rights.
5. Assignment. This
Note is not assignable by Maker or Payee, and any purported assignment of
this Note shall be null and void and of no effect.
6. Governing Law;
Jurisdiction. This Note and all rights and obligations
hereunder shall be governed by and construed in accordance with the laws of
the State of Nevada applicable to agreements made and be performed wholly within
such State, without regard to such State's conflicts of laws
principles. By accepting this Note, Xxxxx shall be deemed to agree
that the state or federal courts having jurisdiction for Nassau and Suffolk
County, New York shall have exclusive jurisdiction in connection with any
dispute arising under this Note.
7. Notices. All
requests, demands, notices and other communications required or otherwise
given under this Agreement shall be sufficiently given if (a) delivered by
hand, against written receipt therefor, (b) forwarded by overnight courier
requiring acknowledgment of receipt or (c) mailed by postage prepaid,
registered or certified mail, return receipt requested, addressed, in the
case of clauses (b) or (c) of this Section 7, as follows:
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If
to Maker, to:
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Xxx
X.X. Xxxxx, Chief Executive Officer
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Clenergen Corporation
0000 Xxxxx Xxxx, Xxxxx
000
Coconut Creek, Florida
33073
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with
a copy to:
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Xxxxxx
X. X’Xxxxxx, Xxx.
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Xxxxxx Xxxx Xxxxxxx & Xxxxxxxx
LLP
000 Xxxxxx Xxxx Xxxxx
Garden City, New York
11530
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If
to Payee, to:
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Rootchange
Limited
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Bath House
0 Xxxxxx Xxxxx
London EC2A 3DQ, England
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or, in
the case of any of the parties hereto, at such other address as such party
shall have furnished in writing, in accordance with this Section 7, to the
other parties hereto. Each such request, demand, notice or
other communication shall be deemed given (x) on the date of delivery by
hand, (y) on the first business day following the date of delivery to an
overnight courier or (z) three business days following mailing by
registered or certified mail.
IN WITNESS WHEREOF, this Note
has been duly executed and delivered as of the date first above
written.
CONVERSION
NOTICE
To
Clenergen Corporation:
The
undersigned registered owner of this Note hereby irrevocably exercises the
option to convert the outstanding principal amount evidenced by this Note, or
portion hereof below designated, into shares of the common stock, par value
$0.001 per share, of Clenergen Corporation, or securities or other property
or cash in accordance with the terms of this Note, and directs that
the shares, other securities, other property or cash deliverable upon
the conversion, together with any check in payment for fractional shares
and a new note evidencing any remaining principal amount, be issued and
delivered to the registered holder of this Note unless a different name has
been indicated below. If the shares or other securities are to be
registered in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect
thereto.
I. Amount
to be converted:
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All
of the principal amount outstanding under this
Note
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The
following amount of principal outstanding under this
Note:
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$____________
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II. Conversion
shares to be issued and registered in the following name(s):
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In
the name of the undersigned at the address of the undersigned set forth in
Maker’s records, with respect to:
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All
conversion shares
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____%
of the conversion shares
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In
the name of the following new registered owner, with respect
to:
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All
conversion shares
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____%
of the conversion shares
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Name
of registered owner:
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Address
of registered owner:
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Social Security or
Taxpayer
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Identification
Number:
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III.
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Conversion
Share Certificate(s) to be delivered as
follows:
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To
the undersigned at the address of the undersigned set forth in Maker’s
records
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To
the following:
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Name:
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Address:
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IV.
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Execution
Section:
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Signature
of the registered owner of
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the
Note:
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Name
of registered owner of the
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Note:
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Title
of signatory, if applicable:
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Date
of execution:
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