Document:

Unassociated Document

    
      FORBEARANCE

      TO

      LOAN
AND SECURITY AGREEMENT

       

      This
FORBEARANCE to Loan and
Security Agreement (this “Forbearance”) is
entered into this 30th day of September, 2010 by and between Silicon Valley Bank
(“Bank”) and US DATAWORKS, INC., a Nevada corporation (“Borrower”) whose address
is One Sugar Creek Center Blvd., 5th Floor, Sugar Land,
TX 77478.

       

      Recitals

       

      1. Bank and
Borrower have entered into that certain Loan and Security Agreement dated as of
February 9, 2010, as amended by that certain First Amendment to Loan and
Security Agreement dated as of March 5, 2010 and that certain Second Amendment
to Loan and Security Agreement dated as of April 23, 2010 (as the same may from
time to time be further amended, modified, supplemented or restated, the “Loan
Agreement”).  Capitalized terms used but not otherwise defined herein
shall have the meanings set forth for such terms in the Loan
Agreement.  Bank has extended credit to Borrower for the purposes
permitted in the Loan Agreement.

       

      2. Borrower
is currently in default of the Loan Agreement for (I) failing to comply
with the covenants set forth in (i) Section 6.7(a) of the Loan Agreement for the
April, May, June, July and August 2010 measuring periods and (ii) Section 6.7(b)
of the Loan Agreement for the May, June, July and August 2010 measuring periods
and (II) making payments with respect to Subordinated Debt in violation of
Section 7.9 of the Loan Agreement and Section 3 of the Subordination Agreement
(collectively, the “Existing Defaults”).

       

      3. Borrower
had requested that Bank, and Bank had agreed, pursuant to that certain
Forbearance to Loan and Security Agreement by and between Bank and Borrower
entered into on September 20, 2010, to forbear from exercising its rights and
remedies against Borrower with respect to the Existing Defaults from the date
thereof through September 30, 2010.

       

      4. Borrower
has requested that Bank continue to forbear from exercising its rights and
remedies against Borrower from the date hereof through October 13, 2010 (the
“Forbearance Period”).  Although Bank is under no obligation to do so,
Bank is willing to forbear from exercising its rights and remedies against
Borrower through the Forbearance Period on the terms and conditions set forth in
this Forbearance, so long as Borrower complies with the terms, covenants and
conditions set forth in this Forbearance in a timely manner.

       

      Agreement

       

      Now,
Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

       

      1. Definitions.  Capitalized
terms used but not defined in this Forbearance shall have the meanings given to
them in the Loan Agreement.

       

      2. Forbearance.

       

      2.1 Forbearance
Period.  So long as no Event of Default, other than the
Existing Defaults, occurs, subject to the terms and conditions set forth herein,
Bank shall forbear from filing any legal action or instituting or enforcing any
rights and remedies it may have against Borrower through the Forbearance
Period.  Except as expressly provided herein, this Forbearance does
not constitute a waiver or release by Bank of any Obligations or of any existing
Event of Default other than the Existing Defaults or Event of Default which may
arise in the future after the date of execution of this
Forbearance.  If Borrower does not comply with the terms of this
Forbearance, Bank shall have no further obligations under this Forbearance and
shall be permitted to exercise at such time any rights and remedies against
Borrower as it deems appropriate in its sole and absolute
discretion.  Borrower understands that Bank has made no commitment and
is under no obligation whatsoever to grant any additional extensions of time at
the end of the Forbearance Period.

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      2.2 Forbearance
Terms.  Repayment and performance of all obligations of
Borrower to Bank under the Loan Agreement and this Forbearance shall be secured
by the Collateral.  Borrower shall not be permitted to request and
Bank shall not make any Credit Extensions until the Existing Defaults have been
waived in writing by Bank.

       

      2.3 Consent to Subordinated Debt
Payments.  Notwithstanding the provisions of Section 7.9 of the
Loan Agreement and Section 3 of the Subordination Agreement, Bank hereby
consents to payments by Borrowers in respect of Subordinated Debt during the
Forbearance Period in an amount not to exceed Twenty Nine Thousand Two Hundred
Dollars ($29,200) in the aggregate.

       

      3. Limitation
of Forbearance.

       

      3.1 This
Forbearance is effective for the purposes set forth herein and shall be limited
precisely as written and shall not be deemed to (a) be a consent to any
amendment, waiver or modification of any other term or condition of any Loan
Document, or (b) otherwise prejudice any right or remedy which Bank may now
have or may have in the future under or in connection with any Loan
Document.

       

      3.2 This
Forbearance shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents are hereby ratified and confirmed and
shall remain in full force and effect.

       

      4. Representations and
Warranties.  To induce Bank to enter into this Forbearance,
Borrower hereby represents and warrants to Bank as follows:

       

      4.1 Immediately
after giving effect to this Forbearance, (a) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material
respects as of the date hereof (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and correct as
of such date), and (b) no Event of Default other than the Existing Defaults has
occurred and is continuing;

       

      4.2 Borrower
has the power and authority to execute and deliver this Forbearance and to
perform its obligations under the Loan Agreement;

       

      4.3 The
organizational documents of Borrower delivered to Bank on the Effective Date as
supplemented by the additional organizational documents subsequently delivered
to Bank (which Bank acknowledges it has received) remain true, accurate and
complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect;

       

      4.4 The
execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement have been duly authorized
by all necessary action on the part of Borrower;

       

      4.5 The
execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement do not and will not
contravene (a) any law or regulation binding on or affecting Borrower,
(b) any contractual restriction with a Person binding on Borrower,
(c) any order, judgment or decree of any court or other governmental or
public body or authority, or subdivision thereof, binding on Borrower, or
(d) the organizational documents of Borrower;

       

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      4.6 The
execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement do not require any order,
consent, approval, license, authorization or validation of, or filing, recording
or registration with, or exemption by any governmental or public body or
authority, or subdivision thereof, binding on either Borrower, except as already
has been obtained or made; and

       

      4.7 This
Forbearance has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’
rights.

       

      5. Prior
Agreement.  The Loan Documents are hereby ratified and
reaffirmed and shall remain in full force and effect.  This
Forbearance is not a novation and the terms and conditions of this Forbearance
shall be in addition to and supplemental to all terms and conditions set forth
in the Loan Documents.  In the event of any conflict or inconsistency
between this Forbearance and the terms of such documents, the terms of this
Forbearance shall be controlling, but such document shall not otherwise be
affected or the rights therein impaired.

       

      6. Release by
Borrower.

       

      6.1 FOR GOOD AND VALUABLE
CONSIDERATION, Borrower hereby forever relieves, releases, and discharges
Bank and its present or former employees, officers, directors, agents,
representatives, attorneys, and each of them, from any and all claims, debts,
liabilities, demands, obligations, promises, acts, agreements, costs and
expenses, actions and causes of action, of every type, kind, nature, description
or character whatsoever, whether known or unknown, suspected or unsuspected,
absolute or contingent, arising out of or in any manner whatsoever connected
with or related to facts, circumstances, issues, controversies or claims
existing or arising from the beginning of time through and including the date of
execution of this Forbearance (collectively “Released
Claims”).  Without limiting the foregoing, the Released Claims
shall include any and all liabilities or claims arising out of or in any manner
whatsoever connected with or related to the Loan Documents, the Recitals hereto,
any instruments, agreements or documents executed in connection with any of the
foregoing or the origination, negotiation, administration, servicing and/or
enforcement of any of the foregoing.

       

      6.2 In
furtherance of this release, Borrower expressly acknowledges and waives any and
all rights under Section 1542 of the California Civil Code, which provides as
follows:

       

      “A general release does not
extend to claims which the creditor does not know or expect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” (Emphasis
added.)

       

      6.3 By
entering into this release, Borrower recognizes that no facts or representations
are ever absolutely certain and it may hereafter discover facts in addition to
or different from those which it presently knows or believes to be true, but
that it is the intention of Borrower hereby to fully, finally and forever settle
and release all matters, disputes and differences, known or unknown, suspected
or unsuspected; accordingly, if Borrower should subsequently discover that any
fact that it relied upon in entering into this release was untrue, or that any
understanding of the facts was incorrect, Borrower shall not be entitled to set
aside this release by reason thereof, regardless of any claim of mistake of fact
or law or any other circumstances whatsoever.  Borrower acknowledges
that it is not relying upon and has not relied upon any representation or
statement made by Bank with respect to the facts underlying this release or with
regard to any of such party’s rights or asserted rights.

       

      6.4 This
release may be pleaded as a full and complete defense and/or as a
cross-complaint or counterclaim against any action, suit, or other proceeding
that may be instituted, prosecuted or attempted in breach of this
release.  Borrower acknowledges that the release contained herein
constitutes a material inducement to Bank to enter into this Forbearance, and
that Bank would not have done so but for Bank’s expectation that such release is
valid and enforceable in all events.

       

       

      
        
           

        

        
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      6.5 Borrower
hereby represents and warrants to Bank, and Bank is relying thereon, as
follows:

       

      (a) Except as
expressly stated in this Forbearance, neither Bank nor any agent, employee or
representative of Bank has made any statement or representation to Borrower
regarding any fact relied upon by Borrower in entering into this
Forbearance.

       

      (b) Borrower
has made such investigation of the facts pertaining to this Forbearance and all
of the matters appertaining thereto, as it deems necessary.

       

      (c) The terms
of this Forbearance are contractual and not a mere recital.

       

      (d) This
Forbearance has been carefully read by Borrower, the contents hereof are known
and understood by Borrower, and this Forbearance is signed freely, and without
duress, by Borrower.

       

      (e) Borrower
represents and warrants that it is the sole and lawful owner of all right, title
and interest in and to every claim and every other matter which it releases
herein, and that it has not heretofore assigned or transferred, or purported to
assign or transfer, to any person, firm or entity any claims or other matters
herein released.  Borrower shall indemnify Bank, defend and hold it
harmless from and against all claims based upon or arising in connection with
prior assignments or purported assignments or transfers of any claims or matters
released herein.

       

      7. Counterparts.  This
Forbearance may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

       

      8. Effectiveness.  This
Forbearance shall be deemed effective upon (a) the due execution and delivery to
Bank of this Forbearance by each party hereto and (b) the due execution and
delivery to Bank of completed Borrowing Resolutions for Borrower.

       

      9. Governing Law.  This
Forbearance and the rights and obligations of the parties hereto shall be
governed by and construed in accordance with the laws of the State of
California.

       

      [Signature
page follows.]

       

       

       

      
        
           

        

        
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      In Witness
Whereof, the parties hereto have caused this Forbearance to be duly
executed and delivered as of the date first written above.

       

      
        
          	
                  BANK

                   

                  SILICON
      VALLEY BANK

                   

                   

                  By:
      /s/ Phillip A.
      Wright

                  Name:   Phillip A.
      Wright

                  Title:
      Relationship
      Manager

                	
                  BORROWER

                   

                  US
      DATAWORKS, INC.

                   

                   

                  By:
      /s/ Randall J.
      Frapart

                  Name:  Randall J.
      Frapart

                  Title:
      Chief Financial
      Officer

                
	 
      	 
      

        

      

      

      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
           

        

        
          5EXHIBIT
A

    

    COLOMBIA
CLEAN POWER & FUELS, INC.

    

    10%
SECURED CONVERTIBLE NOTE DUE JUNE 30, 2012

    

    
      	
              No.
      _______

            	 
      
	
              $__________

            	
              _________________,
      2010

            

    

    

    FOR VALUE RECEIVED, COLOMBIA CLEAN
POWER & FUELS, INC., a Nevada corporation (herein called the “Company”),
hereby promises to pay on June 30, 2012 to ___________________________, with an
address at _________________________________
_____________________________________________________ (herein called the
“Holder”), the principal sum of ______________________________________ Dollars
($________), together with interest upon the principal hereof at the rate of 10%
per annum.  Interest on this Note shall accrue on the outstanding
principal amount on this Note from the date of issuance until the date of
repayment of the principal and payment of accrued interest in
full.  Interest shall be calculated on the basis of a 365 day year and
shall be payable in cash at maturity, unless all or a part of the principal
amount of the Note is converted as provided below in which event interest will
be payable in cash upon conversion as provided below.  Furthermore,
upon the occurrence of an event of default (as described below), then to the
extent permitted by law, the Company will pay interest in cash to the Holder,
payable on demand, on the outstanding principal balance of this Note from the
date of the event of default until such event of default is cured at the rate of
the lesser of 15% and the maximum applicable legal rate per
annum.  Payments hereunder shall be made at such place as the holder
hereof shall designate to the undersigned, in writing, in lawful money of the
United States of America.  Any payment which becomes due on a
Saturday, Sunday or legal holiday shall be payable on the next business
day.

    

    This Note shall, (i) upon declaration
by the Holder or (ii) automatically upon acceleration pursuant to clause (c)
below, become immediately due and payable upon the occurrence of any of the
following specified events of default:

    

    (a)           If
the Company shall default in the due and punctual payment of the principal
amount of this Note when and as the same shall become due and payable, whether
at maturity or by acceleration; or

    

    (b)           If
the Company shall default in the due and punctual payment of interest on this
Note when the same shall become due and payable; or

    

    (c)           The
Company shall fail to observe and perform any material term, condition or
agreement in this Note, which term, condition or agreement is required on its
part to be observed or performed, and such failure shall continue unremedied for
a period of ten (10) days after written notice specifying such failure shall
have been given to the Company by the Holder of this Note; or

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    (d)           If
the Company shall 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 seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking of possession by
any such official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or shall
take any corporate action to authorize any of the foregoing; or an involuntary
case or other proceeding shall be commenced against the Company seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed or unstayed for a
period of sixty (60) consecutive days.

    

    (e)           Any  material
representation or warranty made by the Company herein or in the Subscription
Agreement shall prove to have been false or incorrect or breached in a material
respect on the date as of which made and the Holder delivers written notice to
the Company of the occurrence thereof; or

    

    (f)           The
Company shall (i) default in any payment of any amount or amounts of principal
of or interest on any indebtedness, the aggregate principal amount of which
indebtedness is in excess of $50,000 or (ii) default in the
observance or performance of any other agreement or condition relating to any
indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders or beneficiary or beneficiaries of such indebtedness to cause
with the giving of notice if required, such indebtedness to become due prior to
its stated maturity.

    

    Declaration
of this Note being immediately due and payable by the Holder may only be made by
written notice to the Company declaring the unpaid balance of the principal
amount of this Note and accrued interest thereon to be due.  Such
declaration shall be deemed given upon the occurrence of any event specified in
clause (d) above.  In the event of a default, all costs of collection,
including reasonable attorneys’ fees, shall be paid by the Company.

    

    With the consent of the Holder, this
Note may be prepaid by the Company in whole or in part at any time or from time
to time without penalty or premium, together, in each case, with interest
accrued on such principal amount to the date of such
prepayment.  Without the consent of, but upon at least thirty (30)
days prior written notice to, the Holder, the outstanding principal amount of
this Note may be prepaid by the Company in whole or in part at any time or from
time to time, together, in each case, with interest accrued on such principal
amount to the date of such prepayment.

    
      
         

      

      
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    The
obligations of the Company and the Holder set forth herein shall be binding upon
the successors and assigns of each such party, whether or not such successors or
assigns are permitted by the terms hereof.

    

    The obligations of the Company under
this Note are secured by, and the Holder of this Note is entitled to the
benefits of, the (i) the Pledge and Collateral Agency Agreement, dated August
26, 2010, among the Company, Colombia CPF LLC (“CPF”) and Law Debenture Trust
Company, as collateral agent (“Collateral Agent”), and (ii) the Deed of Pledge,
dated as of August 26, 2010, among the Company, CPF, Energia Andina Santander
Resources Coὅperatieve U.A. and Collateral Agent, each as amended and
supplemented from time to time.

    

    Subject to and upon compliance with the
provisions of this paragraph, the Holder shall have the right, at any time and
during usual business hours, to convert the outstanding principal balance of
this Note (but not the accrued interest thereon) into fully paid and
non-assessable shares of Common Stock, par value $.001 per share (the “Common
Stock”), of the Issuer at a rate equal to $2.50 of principal for each share of
Common Stock (the “Conversion Price”), subject to adjustment as provided in
paragraph (c) below.

    

    (a)           In
order to exercise the conversion right, the Holder of this Note shall surrender
this Note at the principal corporate office of the Issuer, accompanied by
written notice to the Issuer stating (i) that the Holder elects to convert the
outstanding principal amount of this Note, or, if less than the entire principal
amount of this Note is to be converted, the portion thereof (a multiple of
$1,000) to be converted, and (ii) the name or names (with addresses) in which
the certificate or certificates for shares of Common Stock issuable on such
conversion shall be issued.  Notes surrendered for conversion shall be
accompanied by proper assignment thereof to the Issuer or in blank for transfer
if the shares are to be issued in a name other than that of the
Holder.  In the event this Note is converted in part only, upon such
conversion the Issuer shall execute and deliver to the Holder, at the expense of
the Issuer, a new Note of authorized denominations in principal amount equal to
the unconverted portion of this Note.  Such conversion shall be deemed
to have been effected immediately prior to the close of business on the date
(“Conversion Date”) on which the Issuer shall have received both such notice and
the surrendered Note as aforesaid, and at such time the rights of the Holder of
this Note in respect to the principal to be so converted shall cease and the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or the Holder of record of the shares represented
thereby.

    
      
         

      

      
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    (b)           As
promptly as practicable after the receipt of such notice and the surrender of
this Note as aforesaid, the Issuer shall issue, at its expense, and shall
deliver to the Holder, or on his written order, (i) a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of this Note (or specified portion thereof), (ii) a certificate or
certificates for any fractional shares of Common Stock issuable upon conversion
of this Note (or specified portion thereof) or, at the Issuer’s option, cash in
lieu of script for any fraction of a share to which the Holder is entitled upon
conversion as provided in this paragraph, and (iii) a payment by
check  or wire transfer in a amount equal to the accrued interest on
the principal amount of this Note converted.

    

    (c)           The
Conversion Price shall be adjusted as set forth in this section.

    

    (1)           In
the event that the Issuer shall make any distribution of its assets upon or with
respect to its shares of Common Stock, as a liquidating or partial liquidating
dividend, or other than as a dividend payable out of earnings or any surplus
legally available for dividends under the laws of the state of incorporation of
the Issuer, the Holder of this Note, upon the exercise of his right to convert
after the record date for such distribution or, in the absence of a record date,
after the date of such distribution, receive, in addition to the shares
subscribed for, the amount of such assets (or, at the option of the Issuer, a
sum equal to the value thereof at the time of distribution as determined by the
Board of Directors in its sole discretion) which would have been distributed to
the Holder if he had exercised his right to convert immediately prior to the
record date for such distribution or, in the absence of a record date,
immediately prior to the date of such distribution.

    

    (2)           In
case at any time the Issuer shall subdivide its outstanding shares of Common
Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision shall be proportionately reduced and
conversely, in case the outstanding shares of Common Stock of the Issuer shall
be combined into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall be proportionately
increased.

    
      
         

      

      
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    (3)           If
any capital reorganization or reclassification of the capital stock of the
Issuer, or consolidation or merger of the Issuer with another corporation, or
the sale, transfer or lease of all or substantially all of its assets to another
corporation, shall be effected in such a way that the holder of shares of Common
Stock shall be entitled to receive shares, securities or assets with respect to
or in exchange for shares of Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, the Issuer and
the Issuer or such successor or purchasing corporation, as the case may be,
shall execute an amendment to this Note providing that the Holder of this Note
shall have the right thereafter and until the expiration of the period of
convertibility to convert this Note into the kind and amount of shares,
securities or assets receivable upon such reorganization, reclassification,
consolidation, merger or sale by a holder of the number of shares of Common
Stock into which this Note might have been converted immediately prior to such
reorganization, reclassification, consolidation, merger or sale, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this subparagraph.

    

    Upon any such adjustment of the
Conversion Price pursuant to the provisions of this subparagraph, the number of
shares issuable upon conversion of this Note shall be adjusted to the nearest
full amount by multiplying a number equal to the Conversion Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Note immediately prior to such adjustment and
dividing the product so obtained by the adjusted Conversion Price.

    

    (d)           The
Issuer covenants that it will at all times reserve and keep available out of its
authorized shares of Common Stock, such number of shares of Common Stock as
shall then be deliverable upon the conversion of this Note.  All
shares of Common Stock which shall be deliverable shall be duly and validly
issued and fully paid and non-assessable.

    

    (e)           Whenever
the Conversion Price is adjusted, as herein provided, the Issuer shall promptly
send to the Holder a certificate of a firm of independent public accountants
(who may be the accountants regularly employed by the Issuer) selected by its
Board of Directors setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment.  Such certificate shall be conclusive evidence of the
correctness of such adjustment.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    In the event the Issuer proposes to
consummate an offering of its equity securities, including an offering of its
convertible debt, in which the Issuer seeks to raise gross proceeds of at least
$6 million at any time while this Note is outstanding (a “Qualified Equity
Offering”),  the Issuer shall furnish to the Holder at least fifteen
(15) days prior written notice of the terms of such Qualified Equity Offering
(accompanied by the offering documents, if any, for such offering) and the
proposed date of closing of such offering and the Holder shall have the right,
at any time prior to the second (2nd) business day proceeding the actual closing
date of such offering to convert all or a portion of the principal of this Note
into such securities as are being offered by the Issuer in such offering on the
same terms as are offered to all other investors in such offering. In order to
exercise the conversion right, the Holder of this Note shall surrender this Note
at the principal corporate office of the Issuer, accompanied by written notice
to the Issuer stating (i) that the Holder elects to convert the outstanding
principal amount of this Note, or, if less than the entire principal amount of
this Note is to be converted, the portion thereof (a multiple of $1,000) to be
converted, and (ii) the name or names (with addresses) in which the certificate
or certificates for Securities issuable on such conversion shall be
issued.  Notes surrendered for conversion shall be accompanied by
proper assignment thereof to the Issuer or in blank for transfer if the
Securities are to be issued in a name other than that of the
Holder.  In the event this Note is converted in part only, upon such
conversion the Issuer shall execute and deliver to the Holder, at the expense of
the Issuer, a new Note in a principal amount equal to the unconverted portion of
this Note.  In addition, as promptly as practicable after the receipt
of such notice and the surrender of this Note as aforesaid, the Company shall
make a payment to the Holder by check or wire transfer in an amount equal to the
accrued interest on the principal amount of the Note converted.

    

    In case
the Company consummates an issuance or sale of any shares of Common Stock or any
securities exercisable for or convertible into Common Stock (an “Equity Linked
Security”) in a Qualified Equity Offering, as provided above, whether or not the
rights to exercise or convert thereunder are immediately exercisable, and the
price per share for such Common Stock or, in the case of Equity Linked
Securities, for which Common Stock is issuable upon conversion or exercise
(determined by dividing (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Common Stock or Equity
Linked Securities, as the case may be, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion
Equity Linked Securities, by (y) the total maximum number of shares of Common
Stock issued or in the case of Equity Linked Securities, issuable upon the
conversion or exercise of all such Equity Linked Securities), shall be less than
the Conversion Price in effect immediately prior to the time of such issuance or
sale, then the total maximum number of shares of Common Stock issued or issuable
upon conversion or exercise of all such Equity Linked Securities shall (as of
the date of the issue or sale of such securities) be deemed to be outstanding
and to have been issued and sold by the Company for such lower price per share
(the “Lower Price”) and the Conversion Price then in effect shall be
automatically reduced as of the date of such transaction to a price equal to the
Lower Price.

    

    The Company for itself and its
successors and assigns hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance or endorsement of this Note, and agrees that this Note shall be
deemed to have been made under, and shall be interpreted and governed by
reference to, the laws of the State of New York.

    

    Except as
expressly agreed in writing by the Holder, no extension of time for payment of
this Note, or any installment hereof, and no alteration, amendment or waiver of
any provision of this Note shall release, discharge, modify, change or affect
the liability of the Company under this Note.

    

    All of the covenants, stipulations,
promises and agreements made by or contained in this Note on behalf of the
undersigned shall bind its successors, whether so expressed or
not.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    No failure on the part of the Holder to
exercise, and no delay in exercising, any right under this Note shall operate as
a waiver thereof, nor shall any single or partial exercise of such rights
preclude any other or further exercise thereof or the exercise of any other
right.

    

    THE
COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A
COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

    

    It is the intention of the Company and
the Holder that all payments due hereunder will be treated for accounting and
tax purposes as indebtedness of the Company to the Holder.  Each of
the Company and the Holder agrees to report such payments due hereunder for the
purposes of all taxes in a manner consistent with such intended
characterization.

    

    If any term or provision of this Note
shall be held invalid, illegal or unenforceable, the validity of all other terms
and provisions herein shall in no way be affected thereby.

    

    This Note
shall be governed by and construed in accordance with the laws of the State of
New York.

    

    [Remainder
of page intentionally left blank; signature page follows]

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    IN WITNESS WHEREOF, the Company has
caused this Note to be signed in its name by its Chief Executive Officer or
Chief Financial Officer as of the date hereinabove set forth.

    

    
      
        	 
      	
                Colombia
      Clean Power & Fuels, Inc.

              
	 
      	 
      	 
      
	 
      	
                By: 

              	
                  

              
	 
      	 
      	
                Name:  Edward
      P. Mooney

              
	 
      	 
      	
                Title:
      Chief Executive Officer

              

      

    

     

    
      
         

      

      
        Ex-A-1

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