UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 2)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SOLAR ENERTECH CORP.
(NAME OF ISSUER)
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
834156101
(CUSIP NUMBER)
Joseph P. Bartlett
The Law Offices of Joseph P. Bartlett, A Professional Corporation
1900 Avenue of the Stars, 19th Fl.
Los Angeles, CA 90067
(310) 201-7553
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
June 19, 2009
(Date of Event which Requires Filing of this Statement)
If the reporting person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box / /.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 834156101
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
David Gelbaum, Trustee, The Quercus Trust
--------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
PF
--------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
U.S.
--------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF -0-
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY 44,070,232
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON -0-
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
44,070,232
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
44,070,232
--------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
32.4%(1)
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
--------------------------------------------------------------------------------
_______________
(1) Based on 136,009,492 shares of Common Stock, par value $0.001 per share
("Common Stock") outstanding, calculated in accordance with Rule 13d.
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CUSIP No. 834156101
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1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Monica Chavez Gelbaum, Trustee, The Quercus Trust
--------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
PF
--------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
U.S.
--------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF -0-
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY 44,070,232
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON -0-
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
44,070,232
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
44,070,232
--------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
32.4%(1)
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
--------------------------------------------------------------------------------
_______________
(1) Based on 136,009,492 shares of Common Stock, par value $0.001 per share
("Common Stock") outstanding, calculated in accordance with Rule 13d.
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CUSIP No. 834156101
--------------------------------------------------------------------------------
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
The Quercus Trust
--------------------------------------------------------------------------------
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
PF
--------------------------------------------------------------------------------
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
U.S.
--------------------------------------------------------------------------------
7. Sole Voting Power
NUMBER OF -0-
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY 44,070,232
EACH -----------------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON -0-
WITH -----------------------------------------------------------------
10. Shared Dispositive Power
44,070,232
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
44,070,232
--------------------------------------------------------------------------------
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
32.4%(1)
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
OO
--------------------------------------------------------------------------------
_______________
(1) Based on 136,009,492 shares of Common Stock, par value $0.001 per share
("Common Stock") outstanding, calculated in accordance with Rule 13d.
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CUSIP No. 834156101
Item 1.
This Amendment No. 2 to Schedule 13D (this "Amendment No. 2") amends
and restates, where indicated, the statement on Schedule 13D relating to the
Common Stock of the Issuer filed by The Quercus Trust, David Gelbaum and Monica
Chavez Gelbaum (the "Reporting Persons") with the Securities and Exchange
Commission on January 28, 2008 (the "Initial Schedule 13D"). Capitalized terms
used in this Amendment No. 2 but not otherwise defined herein have the meanings
given to them in the Initial Schedule 13D.
This Amendment No. 2 is being made to disclose the acquisition of
additional securities of the Issuer. Except as otherwise set forth herein, this
Amendment No. 2 does not modify any of the information previously reported by
the reporting persons in the Initial Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) As of the date of this Amendment No. 2, the Reporting Persons
beneficially own 44,070,232 shares of Common Stock, which are held of record by
the Trust and does not include certain derivative securities reported and
described in Item 5(c) below.
(b) The Reporting Persons have shared voting and dispositive power with
respect to 44,070,232 shares of Common Stock. Each of David Gelbaum and Monica
Chavez Gelbaum, acting alone, has the power to exercise voting and investment
control over the shares of Common Stock owned by the Trust.
(c) During the past sixty (60) days, the Reporting Persons has
purchased shares of Common Stock in a brokered private transaction as follows:
DATE NUMBER OF SHARES PRICE PER SHARE
---- ---------------- ---------------
6/16/2009 7,313,195 $ 0.2750
The Reporting Persons purchased the above reported 7,313,195
shares of Common Stock for a total purchase price of $1,011,129 in a brokered
transaction from a group of private sellers. In addition, the Reporting Persons
entered into with the same group of private sellers that certain Convertible
Securities Purchase Agreement dated as of June 19, 2009, pursuant to which the
Reporting Persons acquired (i) Series B Notes with a total principal amount of
$6,538,154 for a total purchase price of $3,633,258 (the "Series B Notes"),
which have a conversion price of $0.57 per share and matures on March 7, 2010;
(ii) Series B Warrant to purchase up to 11,470,446 shares of Common Stock for a
purchase price of $114,704 (the "Series B Warrant"), which has an exercise price
of $0.90 per share and expires on March 20, 2012; and (iii) Series C Warrant to
purchase up to 9,090,909 shares of Common Stock for a purchase price of $90,909
(the "Series C Warrant"), which has an exercise price of $1.00 per share and
expires on January 14, 2013.
As of the date of filing of this Amendment No. 2, none of
Series B Notes, Series B Warrant or Series C Warrant (collectively, the
"Convertible Securities") can be converted or exercised into shares of Common
Stock because the Reporting Persons are prohibited from converting or exercising
the Convertible Securities into shares of Common Stock to the extent that after
giving effect to such conversion or exercise, the Reporting Persons would
beneficially own in excess of 4.99% of the shares of Common Stock, with respect
to Series B Notes and Series B Warrant, and 9.99% of the shares of Common Stock,
with respect to Series C Warrant, outstanding immediately after giving effect to
such conversion or exercise. The beneficial ownership being reported in this
Amendment No. 2 does not take into effect the conversion or exercise of the
Convertible Securities into shares of Common Stock.
(d) Not applicable.
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(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
(a) Pursuant to the Power of Attorney filed as Exhibit "B" to Amendment
No. 1 to Schedule 13D filed on August 24, 2007 with respect to the issuer Emcore
Corp., David Gelbaum has been appointed as Monica Chavez Gelbaum's
Attorney-In-Fact.
(b) Convertible Securities Purchase Agreement dated as of June 19, 2009
Item 7. Material to Be Filed as Exhibits
Exhibit A: Agreement Regarding Joint Filing of Amendment No. 2 to
Schedule 13D.
Exhibit B: Convertible Securities Purchase Agreement dated as of June
19, 2009
6
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct and agrees that this statement may be filed jointly
with the other undersigned parties.
Dated: June 22, 2009 /S/ DAVID GELBAUM
----------------------------------------------
David Gelbaum, Co-Trustee of The Quercus Trust
/S/ DAVID GELBAUM, AS ATTORNEY-IN-FACT FOR
MONICA CHAVEZ GELBAUM
----------------------------------------------
Monica Chavez Gelbaum, Co-Trustee of The
Quercus Trust
/S/ DAVID GELBAUM
----------------------------------------------
The Quercus Trust, David Gelbaum, Co-Trustee
of The Quercus Trust
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7
EXHIBIT A
AGREEMENT REGARDING JOINT FILING OF AMENDMENT NO. 2 TO SCHEDULE 13D
The undersigned agree that the Amendment No. 2 to Schedule 13D with
respect to the Common Stock of Solar EnerTech Corp. is a joint filing being made
on their behalf.
Dated: June 22, 2009 /S/ DAVID GELBAUM
----------------------------------------------
David Gelbaum, Co-Trustee of The Quercus Trust
/S/ DAVID GELBAUM, AS ATTORNEY-IN-FACT FOR
MONICA CHAVEZ GELBAUM
----------------------------------------------
Monica Chavez Gelbaum, Co-Trustee of The
Quercus Trust
/S/ DAVID GELBAUM
----------------------------------------------
The Quercus Trust, David Gelbaum, Co-Trustee
of The Quercus Trust
|
A-1
EXHIBIT B
CONVERTIBLE SECURITIES PURCHASE AGREEMENT
This Convertible Securities Purchase Agreement (the "AGREEMENT"), dated
as of June 19, 2009 is made by and between Luxor Capital Partners, LP, Luxor
Capital Partners Offshore, Ltd., LCG Select, LLC, LCG Select Offshore, Ltd, and
Atlas Master Fund, Ltd. (collectively, the "SELLER") and Quercus Trust (the
"PURCHASER").
W I T N E S S E T H:
WHEREAS, the Seller holds the following Convertible Securities of Solar
Enertech Corp., a Nevada corporation, with principal executive offices located
at 1600 Adams Drive, Menlo Park, CA 94025 (the "COMPANY"): (a) 7,313,195 shares
of common stock (the "Common Stock") of (b) a Series B Warrant for 11,470,446
shares of Common Stock exercisable for $0.90 per share, expiring March 20, 2012,
represented by Warrant No. B-12-D, B-12-E, B-13-B, B-13-C, (c) a Series C
Warrant for 9,090,909 shares of Common Stock exercisable for $1.00 per share
expiring January 14, 2013, represented by Warrant No. C-002, C-003, C-004 and
(d) a Series B Convertible Note in the principal amount of $6,538,154 dated
March 20, 2007.
WHEREAS, the Seller desires to convey to the Purchaser all of the
Convertible Securities;
WHEREAS, the Seller will convey to the Purchaser the Common Stock by
DWAC transfer and will convey to Purchaser the other Securities (the
"Convertible Securities") pursuant to the terms of this Agreement;
WHEREAS, the parties hereto desire that the Seller sell, transfer,
convey and assign to the Purchaser, and that the Purchaser purchases and
acquires from the Seller, the Convertible Securities and any and all rights and
benefits incident to the ownership thereof (including, without limitation, all
registration rights pursuant to the Registration Rights Agreement (as defined
herein) pertaining to the Convertible Securities and the shares of the Common
Stock underlying such Convertible Securities); and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE CONVERTIBLE SECURITIES
Section 1.1 PURCHASE AND SALE OF THE CONVERTIBLE SECURITIES. Upon the
terms and subject to the conditions of this Agreement and on the basis of the
representations, warranties and agreements contained herein, the Seller hereby
sells, assigns, transfers and conveys to the Purchaser the Convertible
Securities and the Purchaser hereby purchases the Convertible Securities from
the Seller for an aggregate cash purchase price of $3,838,871 ($114,704 for the
warrants expiring March 20, 2012, $90,909 for the warrants expiring January 4,
2013 and $3,633,258 for the Convertible Debt) (the "PURCHASE PRICE"). Upon the
execution of this Agreement, the Purchaser shall pay such Purchase Price by one
or more wire transfers of immediately available funds to Joseph P. Bartlett, a
Professional Corporation, Client Trust Account, for the benefit of the Seller
pursuant to the following wiring instructions:
B-1
First Republic Bank, A Division of Merrill Lynch Bank & Trust Co FSB
ABA: xxxxxxxxx
1888 Century Park East
Los Angeles, CA 90067
Beneficiary: The Law Offices of Joseph P. Bartlett, P.C., Client Trust Account
Account No. xxxxxxxxxxxxx
RE: THE QUERCUS TRUST
Section 1.2 TIME AND PLACE OF CLOSING. The closing (the "CLOSING")
shall take place at the offices of Joseph P. Bartlett, P.C. ("ESCROW AGENT"),
1900 Avenue of the Stars, 19th Floor, Los Angeles, CA 90067, as soon as possible
following the date hereof.
Section 1.3 CLOSING DELIVERIES. At the Closing, subject to the terms
and conditions hereof, Seller shall deliver or cause to be delivered to Escrow
Agent certificates (the "NEW CERTIFICATES") representing the Convertible
Securities being sold hereunder registered in the name of the Purchaser. Within
two business days of receipt of the New Certificates, Escrow Agent shall deliver
the New Certificates to the Purchaser at the address set forth herein, and shall
concurrently wire the Purchase Price to the Seller pursuant to the instructions
set forth on Appendix A on the date the New Certificates are delivered to
Purchaser.
Section 1.4 TERMINATION. This Agreement and the transactions
contemplated hereunder may be terminated by any Seller or the Purchaser, by
written notice to the other party, if the Closing of the purchase and sale of
the Convertible Securities has not been consummated on or before June 30, 2009;
provided, however, that no such termination will affect the right of any party
to sue for any breach by the other party. In the event of termination of this
Agreement due to the failure of the Seller to perform, the Purchaser shall have
the right to rescind the purchase of the Common Stock referred to in the
Recitals hereof.
Section 1.5 OTHER COVENANTS. Each of the Purchaser and the Seller agree
to take promptly such steps, and execute and deliver such instruments, corporate
resolutions and other documents as may be reasonably requested by the Company,
to cause the Company to issue the New Certificates in the name of the Purchaser,
including, the execution by the Purchaser of a customary representation letter,
and delivery of a legal opinion to the Company, if required to effect the
transfer hereunder. Upon execution of this Agreement and confirmation that the
Purchase Price has been received by Escrow Agent, the Seller agrees to deliver
the Convertible Securities (and executed assignments) to the Company or the
Company's counsel via overnight courier. The Purchaser and the Seller each
represent and warrant that they have reviewed the Convertible Securities and the
securities purchase agreements among the Company and the purchasers named
therein relating to each of the Convertible Securities (the "SECURITIES PURCHASE
AGREEMENTS") and the Registration Rights Agreement by and among the Company and
the purchasers named therein (the "REGISTRATION RIGHTS AGREEMENT" and together
with the Convertible Securities Purchase Agreement and the Original Warrants
(the "TRANSACTION DOCUMENTS"). The Purchaser and the Seller each acknowledge
that the sale and purchase made hereunder is expressly subject to the terms and
B-2
conditions of the Transaction Documents. In addition, the Purchaser and the
Seller hereby expressly agree to be bound by the terms and conditions thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER
Seller hereby represents and warrants to the Purchaser as follows:
Section 2.1 AUTHORIZATION. The Convertible Securities were originally
acquired by Seller from the Company, and fully paid for with respect to the
Series B Warrant and Series B Convertible Note on March 20, 2007 and with
respect to the Series C Warrant and Common Stock on January 14, 2008. Seller
acquired the Convertible Securities for its own account and not with a view to,
or for sale in connection with, any distribution, resale or public offering of
such Convertible Securities or any part thereof in violation of the 1933 Act (as
defined below). Seller did not offer or sell the Convertible Securities by any
form of general solicitation or general advertising. Seller is not and has never
been an "affiliate" of the Company, as defined in Rule 405 and Rule 144 under
the Convertible Securities Act of 1933, as amended (the "1933 ACT"). It has the
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder, all of which have been duly authorized by all requisite
action. This Agreement has been duly authorized, executed and delivered by it
and constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
Section 2.2 NO CONSENTS/ADVICE. No notice to, filing with, or
authorization, registration, consent or approval of any governmental authority
or other individual, partnership, corporation, joint stock company,
unincorporated organization or association, trust or joint venture, or a
governmental agency or political subdivision thereof (each, a "PERSON") is
necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by it. Seller has consulted
such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its sale of the Convertible
Securities.
Section 2.3 OWNERSHIP OF THE CONVERTIBLE SECURITIES. Seller owns the
Convertible Securities beneficially and of record, free and clear of any liens,
claims or encumbrances (collectively, "ENCUMBRANCES"). It has NOT entered into
any agreement, arrangement or other understanding (i) granting any option,
warrant or right of first refusal with respect to the Convertible Securities to
any Person, (ii) restricting its right to sell the Convertible Securities to the
Purchaser, or (iii) restricting any other of its rights with respect to the
Convertible Securities. It has the absolute and unrestricted right, power and
capacity to sell, assign and transfer the Convertible Securities to the
Purchaser free and clear of any Encumbrances. Upon payment in full of the
Purchase Price, the Purchaser will acquire good, valid and marketable title to
the Convertible Securities, free and clear of any Encumbrances created by the
Seller.
Section 2.4 BROKERS. No Person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from it in
connection with this Agreement or any of the transactions contemplated hereby,
B-3
other than Ardour Capital, which fee shall be the sole responsibility of the
Purchaser.
Section 2.5 NO LITIGATION. There is no action, suit, proceeding,
judgment, claim or investigation pending, or to the knowledge of the Seller,
threatened against the Seller which could reasonably be expected in any manner
to challenge or seek to prevent, enjoin, alter or materially delay any of the
transactions contemplated hereby.
Section 2.6 BANKRUPTCY. Seller is not under the jurisdiction of a court
in a Title 11 or similar case (within the meaning of Bankruptcy Code Section
368(a)(3)(A) (or related provisions)) or involved in any insolvency proceeding
or reorganization.
Section 2.7 NON-PUBLIC INFORMATION. Seller is not selling the
Convertible Securities "on the basis of" (as defined in Rule 10b5-1 of the
Convertible Securities Exchange Act of 1934, as amended) any material,
non-public information about the Convertible Securities or the Company.
Section 2.8 ACKNOWLEDGMENT REGARDING NON-DISCLOSURE AGREEMENT. The
Seller acknowledges that the Purchaser is a party to a non-disclosure agreement
with the Company, and may be in possession of information regarding the Company
that has not been disclosed to the Seller (such information, the "CONFIDENTIAL
INFORMATION") and that such information is readily available to the Seller. The
Seller acknowledges that Seller does not want the Purchaser or the Company to
disclose the Confidential Information to them. Notwithstanding this, the Seller
desires to consummate the transactions contemplated hereby in accordance with
the terms hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE PURCHASER
The Purchaser hereby represents and warrants to the Seller as follows:
Section 3.1 AUTHORIZATION. It has the power and authority to execute
and deliver this Agreement and to perform its obligations hereunder, all of
which have been duly authorized by all requisite action. This Agreement has been
duly authorized, executed and delivered by it and constitutes its valid and
binding agreement, enforceable against it in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 3.2 BROKERS. No person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from it in
connection with this Agreement or any of the transactions contemplated hereby,
other than Ardour Capital, which fee shall be paid by the Purchaser. The Seller
shall have no obligation with respect to any such fees or with respect to any
claims made by or on behalf of Ardour Capital that may be due in connection with
the transactions contemplated hereby.
Section 3.3 FINANCIAL RESOURCES. It has presently available to it
sufficient cash resources to enable it to pay the Purchase Price.
B-4
Section 3.4 ACCREDITED INVESTOR. At the time the Purchaser was offered
the Convertible Securities, it was, at the date hereof it is, and on the Closing
it will be, a "Qualified Institutional Buyer" as that term is defined in Rule
144A under the 1933 Act.
Section 3.5 INVESTMENT INTENT. The Purchaser is acquiring the
Convertible Securities for its own account, and not with a view to, or for sale
in connection with, any distribution, resale or public offering of such
Convertible Securities or any part thereof in violation of the 1933 Act.
Section 3.6 INVESTMENT EXPERIENCE; ACCESS TO INFORMATION. The Purchaser
(a) either alone or together with its representatives, has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of this investment and make an informed decision to so invest,
and has so evaluated the risks and merits of such investment, (b) has the
ability to bear the economic risks of this investment and can afford a complete
loss of such investment, (c) understands the terms of and risks associated with
the acquisition of the Convertible Securities, including, without limitation, a
lack of liquidity, price transparency or pricing availability and risks
associated with the industry in which the Company operates, (d) has had the
opportunity to review such disclosure regarding the Company, its business, its
financial condition and its prospects as the Purchaser has determined to be
necessary in connection with the purchase of the Convertible Securities,
including, without limitation, the Company's Annual Report on Form 10-K (or
substantially equivalent form) for its most recently completed fiscal year, the
Company's Quarterly Reports on Form 10-Q (or substantially equivalent form) for
the fiscal quarters since the end of such completed fiscal year, and the
Company's Current Reports on Form 8-K (or substantially equivalent form) since
the end of such completed fiscal year, each as amended, and (e) has had an
opportunity to ask such questions and make such inquiries concerning the
Company, its business, its financial condition and its prospects as the
Purchaser has deemed appropriate in connection with such purchase and to receive
satisfactory answers to such questions and inquiries.
Section 3.7 RESTRICTIONS ON TRANSFER. The Purchaser understands that
(a) the Convertible Securities (including the shares of Common Stock underlying
such Convertible Securities) have not been registered under the Convertible
Securities Act or the Convertible Securities laws of any state, (b) the shares
of Common Stock underlying the Warrants will be "restricted Convertible
Securities" as said term is defined in Rule 144 of the Rules and Regulations
promulgated under the Convertible Securities Act ("RULE 144"), (c) the Common
Stock underlying the Warrants may not be sold, pledged or otherwise transferred
unless a registration statement for such transaction is effective under the
Convertible Securities Act and any applicable state Convertible Securities laws,
or unless an exemption from such registration provisions is available with
respect to such transaction, and if required by the Company in accordance with
the agreements described in Section 1.5, accompanied by an opinion of legal
counsel that the Purchaser is justified in relying upon such exemption from
registration, and (d) the New Certificates will bear a legend substantially the
same as the legend on the certificates evidencing the original Convertible
Securities, copies of which the Purchaser has reviewed.
Section 3.8 GENERAL SOLICITATION. The Purchaser is not purchasing the
Convertible Securities as a result of any advertisement, article, notice or
other communication regarding the Convertible Securities published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
B-5
Section 3.9 NO CONFLICTS; ADVICE. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
does or will violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency, or court to which the Purchaser is subject or any provision
of its organizational documents or other similar governing instruments, or,
conflict with, violate or constitute a default under any agreement, credit
facility, debt or other instrument or understanding to which the Purchaser is a
party. The Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Convertible Securities. Except for the information
included in this Agreement that has been provided by Seller, Purchaser has
solely relied on its own due diligence review and investigation of the Company
and has not relied on any information from Seller in making its investment
decision to purchase the Convertible Securities.
Section 3.10 NO LITIGATION. There is no action, suit, proceeding,
judgment, claim or investigation pending, or to the knowledge of the Purchaser,
threatened against the Purchaser which could reasonably be expected in any
manner to challenge or seek to prevent, enjoin, alter or materially delay any of
the transactions contemplated by this Agreement.
Section 3.11 CONSENTS. No authorization, consent, approval or other
order of, or declaration to or filing with, any governmental agency or body or
other Person is required for the valid authorization, execution, delivery and
performance by the Purchaser of this Agreement and the consummation of the
transactions contemplated hereby.
ARTICLE IV
SURVIVAL, AMENDMENT AND WAIVER
Section 4.1 SURVIVAL. The representations and warranties contained in
this Agreement or any certificate delivered in connection herewith shall survive
the sale of the Convertible Securities as contemplated hereby.
Section 4.2 AMENDMENTS. This Agreement (including the provisions of
this Section 4.2) may not be amended or modified except by an instrument in
writing signed on behalf of all of the parties affected by such amendment or
modification.
Section 4.3 EXTENSION; WAIVER. The parties hereto may (i) extend the
time for performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the agreements
of the other parties hereto or satisfaction of any of the conditions to such
party's obligations contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of a party
hereto to assert any of its rights hereunder shall not constitute a waiver of
such rights.
ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, when delivered by courier, three
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days after being deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested), or when received by facsimile transmission
upon receipt of a confirmed transmission report, as follows:
If to the Purchaser: Quercus Trust
1835 Newport Blvd.
A109 - PMB 467
Costa Mesa, CA 92627
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With a copy to:
The Law Offices of Joseph P. Bartlett, P.C.
1900 Avenue of the Stars
19tht Floor
Los Angeles, CA 90067
If to the Seller:
Any party hereto, by notice given to the other parties hereto in accordance with
this Section 5.1 may change the address or facsimile transmission number to
which such notice or other communications are to be sent to such party.
Section 5.2 EXPENSES. Each of the parties hereto shall pay its own
expenses incident to this Agreement and the transactions contemplated herein.
Section 5.3 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York, without reference to the choice of
law principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
Section 5.4 ASSIGNMENT; SUCCESSORS AND ASSIGNS; NO THIRD PARTY RIGHTS.
This Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors, permitted assigns and legal representatives. This Agreement shall be
for the sole benefit of the parties to this Agreement and their respective
heirs, successors, permitted assigns and legal representatives and is not
intended, nor shall be construed, to give any Person, other than the parties
hereto and their respective heirs, successors, assigns and legal
representatives, any legal or equitable right, remedy or claim hereunder.
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Section 5.5 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
Section 5.6 TITLES AND HEADINGS. The titles and headings in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
Section 5.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the matters covered hereby and
thereby and supersedes all previous written, oral or implied understandings
among them with respect to such matters.
Section 5.8 SEVERABILITY. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 5.9 INTERPRETATION. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, "herein," "hereto,"
"hereof" and words of similar import refer to this Agreement as a whole and not
to any particular Section or paragraph hereof; (ii) words importing the
masculine gender shall also include the feminine and neutral genders, and vice
versa; and (iii) words importing the singular shall also include the plural, and
vice versa.
Section 5.10 NO STRICT CONSTRUCTION. Each of the parties hereto
acknowledge that this Agreement has been prepared jointly by the parties hereto,
and shall not be strictly construed against either party.
Section 5.11 ESCROW AGENT. Escrow Agent may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed by it
to be genuine and to have been signed or presented by the proper party or
parties. Escrow Agent shall not be personally liable for any act it may do or
omit to do hereunder while acting in good faith, and any act done or omitted by
it pursuant to the advice of its attorneys-at-law shall be conclusive evidence
of such good faith. Seller and the Purchaser agree jointly and severally to
indemnify and hold harmless Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in any
way arising from or relating to the duties hereunder or the transactions
contemplated hereby other than any such claim, liability, cost or expense to the
extent the same shall have been determined by final, unappealable judgment of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of Escrow Agent. ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR
THE SELLER HEREUNDER, AND MAY CONTINUE TO ACT AS LEGAL COUNSEL TO THE SELLER.
THE SELLER AND PURCHASER CONSENT TO ESCROW AGENT ACTING IN SUCH CAPACITY AS
LEGAL COUNSEL FOR THE SELLER AND WAIVE ANY CLAIM THAT SUCH REPRESENTATION
REPRESENTS A CONFLICT OF INTEREST ON THE PART OF ESCROW AGENT. THE PURCHASER
UNDERSTANDS THAT THE SELLER AND ESCROW AGENT ARE RELYING EXPLICITLY ON THE
FOREGOING PROVISION IN ENTERING INTO THIS AGREEMENT.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above-written.
LUXOR CAPITAL GROUP, LP (SELLER)
ON BEHALF OF:
LUXOR CAPITAL PARTNERS, LP
LUXOR CAPITAL PARTNERS OFFSHORE, LTD.
LCG SELECT, LLC
LCG SELECT OFFSHORE, LTD.
ATLAS MASTER FUND, LTD.
By: /s/ Norris Nissim
------------------------------
Name: Norris Nissim
Title: General Counsel
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QUERCUS TRUST (BUYER)
By:/s/ David Gelbaum
---------------------------------
Name: David Gelbaum
Title: Trustee
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APPENDIX A
SELLER'S WIRING INSTRUCTIONS
The sum of $xxxxxxxxxxxx, representing the net purchase price, to the
account of xxxxxxxxxxxxxxxxxxxxxxxxxx, specified immediately below.
Bank: xxxxxxxx
Address: xxxxxxxx
ABA #: xxxxxxxx
For credit to. xxxxxxxx
A/C #: xxxxxxxx
F/F/C: xxxxxxxx
F/F/C A/C# xxxxxxxx
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The sum of $xxxxxxxx, representing the net purchase price, to the
account of xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, specified immediately below.
Bank: xxxxxxxx
Address: xxxxxxxx
ABA #: xxxxxxxx
For credit to. xxxxxxxx
A/C #: xxxxxxxx
F/F/C: xxxxxxxx
F/F/C A/C# xxxxxxxx
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The sum of $xxxxxxxx, representing the net purchase price, to the
account of xxxxxxxxxxxxxxx specified immediately below.
Bank: xxxxxxxx
Address: xxxxxxxx
ABA #: xxxxxxxx
For credit to. xxxxxxxx
A/C #: xxxxxxxx
F/F/C: xxxxxxxx
F/F/C A/C# xxxxxxxx
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The sum of $xxxxxxxx, representing the net purchase price, to the
account of xxxxxxxxxxxxxxxxxxxxxxxx., specified immediately below.
Bank: xxxxxxxx
Address: xxxxxxxx
ABA #: xxxxxxxx
For credit to. xxxxxxxx
A/C #: xxxxxxxx
F/F/C: xxxxxxxx
F/F/C A/C# xxxxxxxx
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The sum of $xxxxxxxx, representing the net purchase price, to the
account of xxxxxxxxxxxxxxxxxxxxxxx, specified immediately below.
Bank: xxxxxxxx
Address: xxxxxxxx
ABA #: xxxxxxxx
For credit to. xxxxxxxx
A/C #: xxxxxxxx
F/F/C: xxxxxxxx
F/F/C A/C# xxxxxxxx
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x Redacted Information
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