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 Payee'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.
 

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(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 Payee 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, Payee 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:

If to Maker, to:
Tim J.E. Bowen, Chief Executive Officer

Clenergen Corporation
5379 Lyons Road, Suite 301
Coconut Creek, Florida 33073

with a copy to:
Dennis C. O’Rourke, Esq.

Moritt Hock Hamroff & Horowitz LLP
400 Garden City Plaza
Garden City, New York 11530

If to Payee, to:
Rootchange Limited

Bath House
8 Chapel Place
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.
 

  Clenergen Corporation                
 
By:
/s/ Tim J.E. Bowen       Tim J.E. Bowen      
Chief Executive Officer
         

 
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Appendix A
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:

 
⁪
All of the principal amount outstanding under this Note

 
⁪
The following amount of principal outstanding under this Note:

 
$____________
 

II.           Conversion shares to be issued and registered in the following
name(s):

 
⁪
In the name of the undersigned at the address of the undersigned set forth in
Maker’s records, with respect to:

 
⁪
All conversion shares

 
⁪
____% of the conversion shares

 
⁪
In the name of the following new registered owner, with respect to:

 
⁪
All conversion shares

 
⁪
____% of the conversion shares

 
Name of registered owner:
     
Address of registered owner:
                 
Social Security or Taxpayer
 
Identification Number:
 

 

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III.
Conversion Share Certificate(s) to be delivered as follows:

 
⁪
To the undersigned at the address of the undersigned set forth in Maker’s
records

 
⁪
To the following:

 
Name:
     
Address:
                 

 
IV. 
Execution Section:

 
Signature of the registered owner of
 
the Note:
 
Name of registered owner of the
 
Note:
     
Title of signatory, if applicable:
     
Date of execution:
 

 

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