Document:

ex10one.htm

 

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the use in this Registration Statement on Form S-1 of our report dated January 4, 2010, relating to the consolidated financial statements of Global Condiments, Inc., appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading “Experts” in such Prospectus.

/s/  LBB & Associates Ltd., LLP

LBB & Associates Ltd., LLP

Houston, Texas

January 4, 2010ex10_1.htm

    
      

    

    Exhibit
10.1

    

    OccuLogix,
Inc. (d/b/a TearLab Corporation)

    11025
Roselle St., Suite 100

    San
Diego, CA  92121

    

    
       

       

      
        	 	January 8,
      2010

      

       

    

    

    Greybrook
Capital Inc.

    5090
Explorer Drive, Suite 203

    Mississauga,
Ontario

    L4W
4T9

    

    Ladies
and Gentlemen:

    

    
      	
               
      

            	
              Re:

            	
              Advisory
      Agreement

            

    

    

    Reference
is hereby made to the Advisory Agreement, dated November 2, 2009, between
OccuLogix, Inc. (the “Company”) and Greybrook
Capital Inc. (“Greybrook”), pursuant to
which Greybrook is rendering corporate finance advisory services to the
Company.  Such Advisory Agreement is referred to hereinafter as the
“Advisory
Agreement”.  Capitalized terms used herein, but not defined,
have the respective meanings attributed to such terms in the Advisory
Agreement.

    

    The
Company and Greybrook hereby agree that, notwithstanding Section 2(a) of the
Advisory Agreement, the Advisory Fee shall consist (in Greybrook’s sole
discretion) of (i) U.S.$100,000 in cash or (ii) shares of the Company’s common
stock in a number equal to the quotient of (A) U.S.$100,000 and (B) U.S.$1.22,
being the per share closing consolidated bid price of the Company’s common stock
on NASDAQ on the Effective Date.  For greater certainty, in the event
that Greybrook shall elect to be paid the Advisory Fee in shares of the
Company’s common stock, the Company shall issue to Greybrook 81,967 shares of
the Company’s common stock.

    

    The
Advisory Agreement remains in full force and effect, unamended, other than as
specifically amended hereby.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If the
foregoing correctly sets forth the mutual understanding of Greybrook and the
Company, please indicate so by signing below and returning an executed copy
hereof to the Company.

    

    Yours
very truly,

    

    OCCULOGIX,
INC.

    
      

      
        	/s/
      William G. Dumencu  
	
                Name:

              	
                William
      G. Dumencu

              
	
                Title:

              	
                Chief
      Financial Officer & Treasurer

              

      

       

    

    The
foregoing is in accordance with Greybrook’s understanding of the subject matter
in question is agreed to by Greybrook as of the date hereof.

    

    GREYBROOK
CAPITAL INC.

    

    
      	/s/
      Greg Marchant  
	
              Name:

            	Greg
      Marchant    
	
              Title:

            	President,
      CEO and SecretarySERIES
A AND SERIES B NOTES CONVERSION AGREEMENT

       

      THIS
SERIES A AND SERIES B NOTES CONVERSION AGREEMENT (this “Agreement”), dated as of
January 7, 2010 (the “Agreement
Date”), by and among Solar EnerTech Corp., a Delaware corporation (the
“Company”), and the
holders of Notes (as defined below) representing at least seventy-five percent
(75%) of the aggregate principal amount of the outstanding Notes (the “Required Holders”).

       

      RECITALS

       

      WHEREAS, the Company entered
into a Securities Purchase Agreement, dated March 7, 2007, pursuant to which the
Company issued to certain investors Series A Convertible Notes (each a “Series A Note,” and
collectively, the “Series A
Notes”), Series B Convertible Notes (each a “Series B Note,” and collectively, the
“Series B Notes”, and
together with the Series A Notes, the “Notes”), Series A Warrants to
Purchase Common Stock (the “Series A Warrants”) and Series
B Warrants to Purchase Common Stock (the “Series B
Warrants”).

       

      WHEREAS, pursuant to terms and
conditions of the Series A Notes, any unpaid principal and any accrued but
unpaid interest owed under the Series A Notes are convertible into shares of
Common Stock at a conversion price per share of common stock of $0.69 per share
(the “Series A Conversion
Price”).

       

      WHEREAS, pursuant to terms and
conditions of the Series B Notes, any unpaid principal and any accrued but
unpaid interest owed under the Series B Notes are convertible into shares of
Common Stock at a conversion price per share of common stock of $0.57 per share
(the “Series B Conversion
Price”).

       

      WHEREAS, the Company entered
into a Securities Purchase Agreement, dated January 11, 2008, pursuant to which
the Company issued and sold to certain investors shares of the Company’s Common
Stock and Series C Warrants to Purchase Common Stock (the “Series C Warrants,” and
together with the Series A Warrants and the Series B Warrants, collectively, the
“Warrants”).

       

      WHEREAS, the Company and
Required Holders desire to amend the Series A Notes and Series B Notes to, among
other things, reduce the Series A Conversion Price and the Series B
Conversion Price to
$0.15 per share (the “New Conversion Price”) in consideration for
the conversion of all outstanding amounts owed under the Notes into shares of
the Company’s Common Stock (the “Conversion
Stock”).

       

      WHEREAS, upon the closing of
the transactions contemplated by this Agreement, the Company will enter into an
Amendment to the Series A, Series B and Series C Warrants to, among other
things, amend the exercise price of the Warrants to $0.15.

       

      WHEREAS, Section 15 of the
Notes provides that the Notes may be amended by written consent of the Required
Holders.

       

      AGREEMENT

       

      NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained
in this
Agreement, the Company and Required Holders hereby agree as
follows:

       

      
        	
                 
      

              	
                1.

              	
                AMENDMENT
      OF SERIES A NOTES AND SERIES B NOTES.  Subject to the
      satisfaction (or waiver) of the conditions set forth in Sections 7 and 8 below, the Required
      Holders having the power to amend the Series A and Series B Notes,
      effective upon the Closing (as defined in Section 6(a)), hereby
      amend each Series A Note and Series B Note as
  follows:

              

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (a)

              	
                Section
      (3)(b) of each Series A Note and Series B Note is hereby amended in its
      entirety to read as follows:

              

      

       

      “Forced
Conversion.  In the event that the Required Holders elect to
convert all of the Notes held by the Required Holders, then (i) all of
outstanding principal of all outstanding Notes, (ii) all accrued and unpaid
interest with respect to all outstanding Notes and (iii) all accrued and unpaid
Late Charges with respect to all outstanding Notes will be automatically
converted at the Conversion Price (as defined below) on the date the Required
Holders’ provide their written election to convert (the “Forced Conversion”) such that
no Notes will be outstanding after the date thereof, no interest or Late Charges
will thereafter be payable.  Notwithstanding anything set forth in
this Note or elsewhere, the Holder is not required to take any further action to
automatically convert this Note under a Forced Conversion except that the Holder
shall physically surrender to the Company this Note by delivery of the same to
the Company’s outside counsel at DLA Piper LLP (US), 2000 University Ave, East
Palo Alto, CA  94303, Attention: Yem Mai, Esq. in order to receive a
stock certificate for the number of shares of Common Stock to which the Holder
shall be entitled to upon the Forced Conversion.

       

      
        	
                 
      

              	
                (b)

              	
                Section
      3(c)(ii) of each Series A Note and Series B Note is hereby amended in its
      entirety to read as follows:

              

      

       

      ““Conversion Price” means, as of any
Conversion Date (as defined below) or other date of determination, an amount
equal to $0.15.”

       

      
        	
                 
      

              	
                (c)

              	
                Section
      3(d) of each Series A Note and Series B Note is hereby amended in its
      entirety to read as follows:

              

      

       

      “Mechanics of
Conversion.

       

      (i) Forced
Conversion.  Upon the Forced Conversion, (the “Conversion Date”), no separate
notice of conversion (“Conversion Notice”) shall be
required and the Required Holders’ election to convert all of the Notes shall be
deemed to constitute the Conversion Notice for all outstanding
Notes.  After physical surrender the Note to a common carrier for
delivery to the Company (to its counsel DLA Piper LLP (US), 2000 University
Avenue, East Palo Alto, CA  94303, Attention: Yem Mai, Esq.) as soon
as practicable on or following such date (or an indemnification undertaking with
respect to the Note in the case of its loss, theft or destruction) and an
instruction letter specifying the contact information and the address to which
the shares of Common Stock shall be delivered, on or before the second (2nd)
Trading Day following the date of the Company’s receipt of the Note and
instruction letter, the Company shall transmit by facsimile or electronic mail a
confirmation of receipt of such Note to the Holder (to the number or address
provided to the Company in the instruction letter) and to the Company's transfer
agent (the “Transfer
Agent”).  The Person or Persons entitled to receive the shares
of Common Stock issuable upon a conversion of this Note shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on the
Conversion Date.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (ii)
Delivery of
Certificates. On or before the third (3rd) Trading Day following the date
of the Company’s receipt of the Note (the “Share Delivery Date”), the
Company shall (X) provided that the Transfer Agent is participating in the
Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common
Stock to which the Holder shall be entitled to the Holder's or its designee's
balance account with DTC through its Deposit Withdrawal Agent Commission system
or (Y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver to the address as specified in
with instruction letter accompanying the Note, a certificate, registered in the
name of the Holder or its designee, for the number of shares of Common Stock to
which the Holder shall be entitled.

       

      (A) If such delivery is made after the
Share Delivery Date (a “Conversion Failure”), then the
Company will compensate the Holder at a rate of $100 per day for each of the
first ten (10) Trading Days and $200 per day thereafter for each $10,000 of
securities.

       

      (B) If the certificates have not been
delivered by the fifth (5th)
Trading Day after the Share Delivery Date and the Holder has purchased (in an
open market transaction or otherwise) Common Stock to deliver in satisfaction of
a sale by the Holder of Common Stock issuable upon such conversion that the
Holder anticipated receiving from the Company (a “Buy-In”), then the Company
shall, within three (3) Trading Days after the Holder's request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at
which point the Company's obligation to deliver such certificate (and to issue
such Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the Conversion Date.

       

      (iii)
Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation
of the names and addresses of the holders of each Note and the principal amount
of the Notes held by such holders (the “Registered Notes”). The
entries in the Register shall be conclusive and binding for all purposes absent
manifest error. The Company and the holders of the Notes shall treat each Person
whose name is recorded in the Register as the owner of a Note for all purposes,
including, without limitation, the right to receive payments of principal and
interest hereunder, notwithstanding notice to the contrary. A Registered Note
may be assigned or sold in whole or in part only by registration of such
assignment or sale on the Register. Upon its receipt of a request to assign or
sell all or part of any Registered Note by a Holder, the Company shall record
the information contained therein in the Register and issue one or more new
Registered Notes in the same aggregate principal amount as the principal amount
of the surrendered Registered Note to the designated assignee or transferee
pursuant to Section 17.

       

      (iv)
“[Intentionally Omitted.]”

       

      
        	
                 
      

              	
                (d)

              	
                Section
      3(e) of each Series A Note and Series B Note is hereby amended in its
      entirety to read as follows:

              

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “[Intentionally
Omitted.]”

       

      
        	
                 
      

              	
                (e)

              	
                Section
      8 of each Series A Note and Series B Note is hereby amended in its
      entirety to read as follows:

              

      

       

      “[Intentionally
Omitted.]”

       

      
        	
                 
      

              	
                2.

              	
                CONVERSION
      OF THE NOTES.  Subject to the satisfaction (or waiver) of
      the conditions set forth in Sections 7 and 8 below, effective upon
      the Closing, the undersigned, constituting the Required Holders, hereby
      elect and agree to convert all of amounts owed under the Notes held by the
      Required Holders into shares of the Company’s Common Stock at the New
      Conversion Price in accordance with the terms of such Notes, as amended by
      this Agreement.  Notwithstanding anything in the Notes, the
      holders of the Notes shall not be required to deliver a notice of
      conversion attached to each Note as Schedule I.  Pursuant to the
      newly amended Section 3(b) of each of the Series A Notes and Series B
      Notes, all of the outstanding principal, accrued and unpaid interest due
      under all of the Notes shall, upon the Closing, be automatically converted
      at the Conversion Price (as amended) pursuant to the Forced
      Conversion.  Notwithstanding anything set forth in the Notes and
      this Agreement, effective upon the Closing, (i) the Company shall not be
      responsible to pay and the Required Holder waive on behalf of all of the
      holders of Notes any Late Charges owed in connection with the failure by
      the Company to pay the Interest payment due on January 1, 2010 to the
      holders of the Notes for the fiscal quarter period beginning on October 1,
      2009 and ending on December 31, 2009 (the “2009 Q4 Interest Payment”), and
      (ii) the Required Holders deem that the failure to pay the 2009 Q4
      Interest Payment did not constitute a Trigger Event (as defined in the
      Notes).

              

      

      

      
        	
                 
      

              	
                3.

              	
                REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.  Except as set forth in
      the SEC Documents (as defined below) and the Disclosure Schedule attached
      hereto as Exhibit
      A (the “Disclosure
      Schedule”), which both shall be deemed a part hereof and shall
      qualify any representation made herein to the extent of the disclosure
      contained in the corresponding section of the Disclosure Schedule, the
      Company hereby represents and warrants to the Required Holders that, as of
      the date of this Agreement (unless otherwise expressly stated, as used in
      this Section 3, the term the
      “Company” includes Solar EnerTech (Shanghai) Co., Ltd. (the “Shanghai
      Subsidiary”)):

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Subsidiaries.
      The Company has no direct or indirect subsidiaries other than as specified
      or disclosed in the SEC Documents. Except as disclosed in the SEC
      Documents, the Company owns, directly or indirectly, all of the capital
      stock of each subsidiary free and clear of any and all liens other than
      liens disclosed in the SEC Documents, and all the issued and outstanding
      shares of capital stock of each subsidiary are validly issued and are
      fully paid, non-assessable and free of preemptive and similar
      rights.

              

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (b)

              	
                Organization and
      Qualification.  The Company and its subsidiaries (which
      for purposes of this Agreement means any joint venture or any entity in
      which the Company, directly or indirectly, owns any of the capital stock
      or holds an equity or similar interest) are entities validly existing and
      in good standing under the laws of the jurisdiction in which they are
      formed, and have the requisite power and authorization to own their
      properties and to carry on their business as now being
      conducted.  Each of the Company and its subsidiaries is duly
      qualified as a foreign entity to do business and, is in good standing in
      every jurisdiction in which its ownership of property or the nature of the
      business conducted by it makes such qualification necessary, except to the
      extent that the failure to be so qualified or be in good standing would
      not reasonably be expected to have a Material Adverse
      Effect.  As used in this Agreement, “Material Adverse Effect”
      means any material adverse effect on the business, properties, assets,
      operations, results of operations or condition (financial or otherwise) of
      the Company and its subsidiaries, individually or taken as a whole, or on
      the transactions contemplated hereby or in the other Transaction Documents
      (as defined below) or by the agreements and instruments to be entered into
      in connection herewith or therewith, or on the authority or ability of the
      Company to perform in any material respect its obligations under the
      Transaction Documents.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Authorization;
      Enforcement; Validity.  (i) The Company has the requisite
      corporate power and authority to enter into and perform its obligations
      under this Agreement, and each of the other agreements entered into by the
      parties hereto in connection with the transactions contemplated by this
      Agreement (collectively, the “Transaction Documents”) and to issue
      the Conversion Stock in accordance with the terms hereof and thereof; (ii)
      the execution and delivery of the Transaction Documents by the Company and
      the consummation by the Company of the transactions contemplated hereby
      and thereby, including, without limitation, the issuance of the Conversion
      Stock have been duly authorized by the Company’s Board of Directors and,
      except as set forth in Section 3(f), no further
      filing, consent, or authorization is required by the Company, its Board of
      Directors or its stockholders; and (iii) this Agreement and the other
      Transaction Documents of even date herewith or as of the Closing Date (as
      defined below) have been (or upon delivery will have been) duly executed
      and delivered by the Company and constitute the legal, valid and binding
      obligations of the Company, enforceable against the Company in accordance
      with their respective terms, except as such enforceability may be limited
      by general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally, the enforcement of applicable creditors’ rights and
      remedies.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Issuance of
      Securities.  The issuances of the Conversion Stock are
      duly authorized and are free from all taxes, liens and charges with
      respect to the issue thereof.  The issuance by the Company of
      the Conversion Stock is exempt from registration under the requirements of
      the Securities Act of 1933, as amended (the “Securities
      Act”).

              

      

       

      
        	
                 
      

              	
                (e)

              	
                No Conflicts.
      The execution, delivery and performance of the Transaction Documents by
      the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby (including, without limitation, the
      issuance of the Conversion Stock) will not (i) result in a violation of
      any certificate of incorporation, certificate of formation, any articles
      of designations or other constituent documents of the Company or any of
      its subsidiaries, any capital stock of the Company or any of its
      subsidiaries or bylaws of the Company or any of its subsidiaries; (ii)
      conflict with, or constitute a default (or an event which with notice or
      lapse of time or both would become a default) in any respect under, or
      give to others any rights of termination, amendment, acceleration or
      cancellation of, any agreement, indenture or instrument to which the
      Company or any of its subsidiaries is a party, or result in the imposition
      of any lien upon any of the material properties or assets of the Company
      or of any subsidiary pursuant to, any material agreement, credit facility,
      debt or other instrument (evidencing a Company or subsidiary debt or
      otherwise) or other understanding to which the Company or any subsidiary
      is a party or by which any property or asset of the Company or any
      subsidiary is bound or affected; or (iii) result in a violation of any
      law, rule, regulation, order, judgment or decree (including foreign,
      federal and state securities laws and regulations and the rules and
      regulations of the Financial Industry Regulatory Authority’s (FINRA)
      Over-The-Counter Bulletin Board (the “Principal Market”))
      applicable to the Company or any of its subsidiaries or by which any
      property or asset of the Company or any of its subsidiaries is bound or
      affected, except in the case of each of clauses (ii) and (iii), such as
      would not be reasonably likely to have or reasonably be expected to result
      in a Material Adverse Effect.

              

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (f)

              	
                Consents.  No
      consent, approval, order or authorization of, or registration,
      qualification, designation, declaration or filing with, any federal, state
      or local governmental authority by the Company or any subsidiary is
      required in connection with the consummation of the transactions
      contemplated by this Agreement except for any required disclosures with
      the U.S. Securities and Exchange Commission (the “SEC”) pursuant to
      applicable securities laws.  The Company is not in violation of
      the listing requirements of the Principal Market and has no knowledge of
      any facts that would reasonably lead to delisting or suspension of the
      Common Stock on the Principal Market in the foreseeable
      future.

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Application of
      Takeover Protections; Rights Agreement.  The Company and
      its board of directors (the “Board”) have taken all
      necessary action in order to render inapplicable any control share
      acquisition, business combination, poison pill (including any distribution
      under a rights agreement) or other similar anti-takeover provision under
      the Certificate of Incorporation or the laws of the state of its
      incorporation which is or could become applicable to Required Holders as a
      result of the transactions contemplated by this Agreement, including,
      without limitation, the Company’s issuance of the Conversion Stock and
      Required Holders’ ownership of the Conversion
  Stock.

              

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (h)

              	
                SEC Documents;
      Financial Statements.  Except as set forth in the
      Disclosure Schedule or the SEC Documents, during the two (2) years prior
      to the date hereof, the Company has timely filed (or has received a valid
      extension of such time of filing and has filed all SEC Documents prior to
      the expiration of any such extension) all reports, schedules, forms,
      statements and other documents required to be filed by it with the SEC
      pursuant to the reporting requirements of the Exchange Act of 1934, as
      amended (the “Exchange
      Act”) (all of the foregoing filed prior to the date hereof along
      with the draft of the Form 10-K for the fiscal year ended September 30,
      2009 delivered to the Required Holders and all exhibits included therein
      and financial statements, notes and schedules thereto and documents
      incorporated by reference therein being hereinafter referred to as the
      “SEC
      Documents”).  The Company has delivered to the Required
      Holder or its representative true, correct and complete copies of the SEC
      Documents not available on the EDGAR system.  As of their
      respective filing dates, the SEC Documents complied (and with respect to
      the draft Form 10-K for the fiscal year ended September 30, 2009, such
      Form 10-K will comply) in all material respects with the requirements of
      the Exchange Act and the rules and regulations of the SEC promulgated
      thereunder applicable to the SEC Documents, and none of the SEC Documents,
      at the time they were filed with the SEC, contained any untrue statement
      of a material fact or omitted to state a material fact required to be
      stated therein or necessary in order to make the statements therein, in
      the light of the circumstances under which they were made, not
      misleading.  As of their respective filing dates, the financial
      statements of the Company included in the SEC Documents complied (and with
      respect to the draft Form 10-K for the fiscal year ended September 30,
      2009, such financials included in the Form 10-K will comply) as to form in
      all material respects with applicable accounting requirements and the
      published rules and regulations of the SEC with respect
      thereto.  Such financial statements have been prepared in
      accordance with generally accepted accounting principles, consistently
      applied, during the periods involved (except (i) as may be otherwise
      indicated in such financial statements or the notes thereto, or (ii) in
      the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and fairly present in
      all material respects the financial position of the Company as of the
      dates thereof and the results of its operations and cash flows for the
      periods then ended (subject, in the case of unaudited statements, to
      normal year-end audit adjustments).  No other information
      provided by the Company directly to the Required Holders which is not
      included in the SEC Documents contains any untrue statement of a material
      fact or omits to state any material fact necessary in order to make the
      statements therein, in the light of the circumstance under which they are
      or were made not misleading.  All material contracts of the
      Company and the Shanghai Subsidiary have been filed with the SEC
      Documents.  The Company anticipates filing its Form 10-K for the
      fiscal year ended September 30, 2009 in substantially the form provided to
      the Required Holders, except that the Company expects that the Form 10-K
      as filed will not contain a going-concern audit disclaimer opinion from
      the Company’s auditors.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Absence of Certain
      Changes.  Since the date of the latest unaudited
      financial statements included in the Company’s Form 10-Q filed on August
      14, 2009 and except as specifically disclosed in a subsequent SEC
      Documents filed prior to the date hereof or as set forth the Disclosure
      Schedule, (i) there has been no event, occurrence or development that has
      had or that could reasonably be expected to result in a Material Adverse
      Effect, or be required to be disclosed by the Company under applicable
      securities laws on a registration statement filed with the SEC relating to
      an issuance and sale by the Company of its Common Stock and which has not
      been publicly announced, (ii) the Company has not incurred any liabilities
      (contingent or otherwise) other than (A) trade payables and accrued
      expenses incurred in the ordinary course of business consistent with past
      practice and (B) liabilities incurred in the ordinary course of business
      not required to be reflected in the Company’s financial statements
      pursuant to U.S. Generally Accepted Accounting Principles  or
      disclosed in filings made with the SEC, (iii) the Company has not altered
      its method of accounting, (iv) the Company has not declared or made any
      dividend or distribution of cash or other property to its stockholders or
      purchased, redeemed or made any agreements to purchase or redeem any
      shares of its capital stock and (v) the Company has not issued any equity
      securities to any officer, director or Affiliate, except pursuant to
      existing Company stock plans or pursuant to conversion of outstanding
      debt.  The Company does not have pending before the SEC any
      request for confidential treatment of information.  Except as
      set forth in the Disclosure Schedule, any event, liability or development
      with respect to the Company or its subsidiaries or their respective
      business, properties, operations or financial condition, required to be
      disclosed by the Company under applicable securities laws has been
      disclosed at least five (5) Trading Days prior to the date
      hereof.  The Company maintains and will continue to maintain a
      standard system of accounting established and administered in accordance
      with generally accepted accounting
principles.

              

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      “Affiliate” for purposes hereof
means, with respect to any Person (as defined below) or entity, another person
or entity that, directly or indirectly, (i) has a ten percent (10%) or more
equity interest in that Person or entity, (ii) has ten percent (10%) or more
common ownership with that Person or entity, (iii) controls that person or
entity, or (iv) shares common control with that Person or
entity.  “Control” or “Controls” for purposes hereof
means that a Person or entity has the power, direct or indirect, to conduct or
govern the policies of another Person or entity.

      

      “Trading Day” means any day on
which the Common Stock are traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock are
then traded; provided that “Trading Day” shall not include any day on which the
Common Stock are scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock are suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York
time).

      

      
        	
                 
      

              	
                (j)

              	
                Conduct of Business;
      Regulatory Permits.  Neither the Company nor any of its
      subsidiaries is in violation of any term of or in default under its
      respective Certificates of Incorporation or its Bylaws or their
      organizational charter or bylaws, respectively.  Neither the
      Company nor any of its Subsidiaries is in violation of any judgment,
      decree or order or any statute, ordinance, rule or regulation applicable
      to the Company or its subsidiaries, and neither the Company nor any of its
      subsidiaries will conduct its business in violation of any of the
      foregoing, except for possible violations which could not, individually or
      in the aggregate, reasonably be expected to have a Material Adverse
      Effect.  Without limiting the generality of the foregoing, the
      Company is not in violation of any of the rules, regulations or
      requirements of the Approved Market and has no knowledge of any facts or
      circumstances that would reasonably lead to delisting or suspension of the
      Common Stock by its Approved Market in the foreseeable
      future.  Since March 10, 2006, (i) the Common Stock has been
      designated for quotation on the Principal Market, (ii) trading in the
      Common Stock has not been suspended by the SEC or the Principal Market and
      (iii) the Company has received no communication, written or oral, from the
      SEC or the Principal Market regarding the suspension or delisting of the
      Common Stock from the Principal Market.  The Company and its
      subsidiaries possess all certificates, authorizations and permits issued
      by the appropriate regulatory authorities necessary to conduct their
      respective businesses, except where the failure to possess such
      certificates, authorizations or permits would not be reasonably likely to
      have, individually or in the aggregate, a Material Adverse Effect, and
      neither the Company nor any such subsidiary has received any written
      notice of proceedings relating to the revocation or modification of any
      such certificate, authorization or
permit.

              

      

      

      
        	
                 
      

              	
                (k)

              	
                Control of Shanghai
      Subsidiary.  The Company is the holder of all of the
      equity of the Shanghai Subsidiary and conducts substantially all of its
      business through the Shanghai Subsidiary.  The Company has the
      right, through the action of its board of directors, to exercise absolute
      control over the Shanghai Subsidiary and to remove and replace the
      Shanghai Subsidiary’s officers, directors, chairman and any other person
      without the consent of (or any material condition imposed by) any person
      or entity, governmental or
otherwise.

              

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (l)

              	
                Foreign Corrupt
      Practices.  Neither the Company nor any of its
      subsidiaries nor any director, officer, agent, employee or other Person
      acting on behalf of the Company or any of its subsidiaries has, in the
      course of its actions for, or on behalf of, the Company or any of its
      subsidiaries (i) used any corporate funds for any unlawful contribution,
      gift, entertainment or other unlawful expenses relating to political
      activity; (ii) made any direct or indirect unlawful payment to any foreign
      or domestic government official or employee from corporate funds; (iii)
      violated or is in violation of any provision of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
      rebate, payoff, influence payment, kickback or other unlawful payment to
      any foreign or domestic government official or
  employee.

              

      

      

      
        	
                 
      

              	
                (m)

              	
                Neither
      the issuance of the Conversion Stock to the holder of the Notes as
      registered on the Company’s books (the “Registered Holder”), nor
      the use of the respective proceeds thereof, shall cause the Registered
      Holder to violate the U.S. Bank Secrecy Act, as amended, and any
      applicable regulations thereunder or any of the sanctions programs
      administered by the U.S. Department of the Treasury’s Office of Foreign
      Assets Control (“OFAC”) of the United
      States Department of Treasury, any regulations promulgated thereunder by
      OFAC or under any affiliated or successor governmental or
      quasi-governmental office, bureau or agency and any enabling legislation
      or executive order relating thereto.  Without limiting the
      foregoing, neither the Company nor any subsidiary (a) is a Person whose
      property or interests in property are blocked or subject to blocking
      pursuant to Section 1 of Executive Order 13224 of September 23, 200l
      Blocking Property and Prohibiting Transactions With Persons Who Commit,
      Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (b)
      engages in any dealings or transactions prohibited by Section 2 of such
      executive order, or is otherwise associated with any such Person in any
      manner violative of Section 2, or (c) is a Person on the list of Specially
      Designated Nationals and Blocked Persons or subject to the limitations or
      prohibitions under any other OFAC regulation or executive
      order.

              

      

      

      
        	
                 
      

              	
                (n)

              	
                Sarbanes-Oxley
      Act.  Except as set forth in the Disclosure Schedule or
      the SEC Documents, the Company is in compliance with any and all
      applicable requirements of the Sarbanes-Oxley Act of 2002 that are
      effective as of the date hereof, and any and all applicable rules and
      regulations promulgated by the SEC thereunder that are effective as of the
      date hereof.

              

      

      

      
        	
                 
      

              	
                (o)

              	
                Transactions With
      Affiliates.  Except (i) as set forth in the SEC Documents
      filed at least ten (10) days prior to the date hereof or the draft of the
      Form 10-K for the fiscal year ended September 30, 2009 delivered to the
      Required Holders, (ii) standard employee benefits generally made available
      to all employees, (iii) standard director and officer indemnification
      agreements approved by the Company’s Board of Directors, (iv) standard
      employment agreements, and (v) other than the grant of stock or stock
      options disclosed on the Disclosure Schedule, none of the employees of the
      Company or any of its subsidiaries is presently a party to any transaction
      with the Company or any of its subsidiaries (other than for services as
      employees, officers and directors), including any contract, agreement or
      other arrangement providing for the furnishing of services to or by,
      providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or,
      to the knowledge of the Company, any entity in which any officer,
      director, or any such employee has a substantial interest or is an
      officer, director, trustee or
partner.

              

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (p)

              	
                Equity
      Capitalization.  As of the date hereof, the
      capitalization of the Company is as set forth in the Disclosure Schedule,
      both before and after giving effect to the transactions contemplated by
      this Agreement. Except as disclosed in the Disclosure Schedule: (i) as of
      the Closing Date (as defined below), none of the Company’s capital stock
      is subject to preemptive rights or any other similar rights or any liens
      or encumbrances suffered or permitted by the Company; (ii) there are no
      outstanding options, warrants, scrip, rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities or
      rights convertible into, or exercisable or exchangeable for, any capital
      stock of the Company or any of its subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its subsidiaries is or may become bound to issue additional capital stock
      of the Company or any of its subsidiaries or options, warrants, scrip,
      rights to subscribe to, calls or commitments of any character whatsoever
      relating to, or securities or rights convertible into, or exercisable or
      exchangeable for, any capital stock of the Company or any of its
      subsidiaries; (iii) except as previously disclosed in the SEC Documents,
      there are no outstanding debt securities, notes, credit agreements, credit
      facilities or other agreements, documents or instruments evidencing
      Indebtedness (as defined below) of the Company or any of its subsidiaries
      or by which the Company or any of its subsidiaries is or may become bound;
      (iv) there are no financing statements securing obligations in any
      material amounts, either singly or in the aggregate, filed in connection
      with the Company or any of its subsidiaries; (v) there are no agreements
      or arrangements under which the Company or any of its subsidiaries is
      obligated to register the sale of any of their securities under the
      Securities Act; (vi) there are no outstanding securities or instruments of
      the Company or any of its subsidiaries which contain any redemption or
      similar provisions, and there are no contracts, commitments,
      understandings or arrangements by which the Company or any of its
      subsidiaries is or may become bound to redeem a security of the Company or
      any of its subsidiaries; (vii) there are no securities or instruments
      containing anti-dilution or similar provisions that will be triggered by
      the issuance of the Conversion Stock; (viii) the Company does not have any
      stock appreciation rights or “phantom stock” plans or agreements or any
      similar plan or agreement; and (ix) the Company and its subsidiaries have
      no liabilities or obligations required to be disclosed in the SEC
      Documents but not so disclosed in the SEC Documents, other than those
      incurred in the ordinary course of the Company’s or its subsidiaries’
      respective businesses and which, individually or in the aggregate, do not
      or would not have a Material Adverse
Effect.

              

      

      

      
        	
                 
      

              	
                (q)

              	
                Indebtedness and Other
      Contracts.  Since the date of the latest unaudited
      financial statements included in the Company’s Form 10-Q filed on August
      14, 2009 and except as disclosed in the Disclosure Schedule or the SEC
      Documents, neither the Company nor any of its Subsidiaries (i) has any
      additional outstanding Indebtedness, (ii) is a party to any contract,
      agreement or instrument, the violation of which, or default under which,
      by the other party(ies) to such contract, agreement or instrument could
      reasonably be expected to result in a Material Adverse Effect, (iii) is in
      violation of any term of or in default under any contract, agreement or
      instrument, including, without limitation, contracts, agreements or
      instruments relating to any Indebtedness, except where such violations and
      defaults would not result, individually or in the aggregate, in a Material
      Adverse Effect, or (iv) is a party to any contract, agreement or
      instrument relating to any Indebtedness, the performance of which, in the
      judgment of the Company’s officers, has or is expected to have a Material
      Adverse Effect.

              

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

      For
purposes of this Agreement:  (x) “Indebtedness” of any Person
means, without duplication, (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including (without limitation) “capital leases” in
accordance with generally accepted accounting principles (other than trade
payables entered into in the ordinary course of business), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; and (z) “Person” means an individual or
legal entity, including but not limited to a corporation, a limited liability
company, a partnership, a joint venture, a trust, an unincorporated organization
and a government or any department or agency thereof.

      

      
        	
                 
      

              	
                (r)

              	
                Absence of
      Litigation.  There is no action, suit or proceeding which
      (i) adversely affects or challenges the legality, validity or
      enforceability of any of the Transaction Documents or the Conversion Stock
      or (ii) except as specifically disclosed in the SEC Documents, could, if
      there were an unfavorable decision, individually or in the aggregate, have
      or reasonably be expected to result in a Material Adverse Effect. Neither
      the Company nor any subsidiary, nor any director or officer thereof (in
      his capacity as such), is or has been the subject of any action involving
      a claim of violation of or liability under federal or state securities
      laws or a claim of breach of fiduciary duty, except as specifically
      disclosed in the SEC Documents. There has not been, and to the knowledge
      of the Company, there is not pending any investigation by the Principal
      Market, any court, public board, government agency, self-regulatory
      organization or body, involving the Company or any current or former
      director or officer of the Company (in his or her capacity as
      such).

              

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (s)

              	
                Insurance.  The
      Company and its subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as are prudent and customary in the businesses in which the Company and it
      subsidiaries are engaged. Neither the Company nor any such subsidiary has
      been refused any insurance coverage sought or applied for and neither the
      Company nor any such subsidiary has any reason to believe that it will not
      be able to renew its existing insurance coverage as and when such coverage
      expires or to obtain similar coverage from similar insurers as may be
      necessary to continue its business on terms consistent with the market for
      the Company’s and such Subsidiaries’ respective lines of business at a
      cost that would not have a Material Adverse Effect.  The
      Disclosure Schedule sets forth a description of all claims made by the
      Company against its insurers since one month prior to the prior renewal of
      any policy under which such claim was
made.

              

      

      

      
        	
                 
      

              	
                (t)

              	
                Employee
      Relations.  Neither the Company nor any of its
      subsidiaries is a party to any collective bargaining agreement or employs
      any member of a union.  The Company and its subsidiaries believe
      that their relations with their employees are good and are not aware of
      any threatened or pending work stoppages, strikes or similar
      activities.  No executive officer of the Company or any of its
      subsidiaries (as defined in Rule 501(f) of the Securities Act) has
      notified the Company or any such subsidiary that such officer intends to
      leave the Company or any such subsidiary or otherwise terminate such
      officer’s employment with the Company or any such
      subsidiary.  To the knowledge of the Company, no executive
      officer of the Company or any of its subsidiaries, is, or is now expected
      to be, in violation of any material term of any employment contract,
      confidentiality, disclosure or proprietary information agreement,
      non-competition agreement, or any other contract or agreement or any
      restrictive covenant, and the continued employment of each such executive
      officer does not subject the Company or any of its subsidiaries to any
      liability with respect to any of the foregoing matters.  The
      Company and its subsidiaries are in compliance in all material respects
      with all federal, state, local and foreign laws and regulations respecting
      labor, employment and employment practices and benefits, terms and
      conditions of employment and wages and hours, except where failure to be
      in compliance would not, either individually or in the aggregate,
      reasonably be expected to result in a Material Adverse
    Effect.

              

      

      

      
        	
                 
      

              	
                (u)

              	
                Title. The
      Company and its subsidiaries have good and marketable title in fee simple
      to all real property and good and marketable title to all personal
      property owned by them which is material to the business of the Company
      and its subsidiaries, in each case free and clear of all liens,
      encumbrances and defects except for encumbrances that do not materially
      affect the value of such property and do not interfere with the use made
      and proposed to be made of such property by the Company and any of its
      subsidiaries.  Any real property and facilities held under lease
      by the Company and any of its subsidiaries are held by them under valid,
      subsisting and enforceable leases with such exceptions as are not material
      and do not interfere with the use made and proposed to be made of such
      property and buildings by the Company and its
  subsidiaries.

              

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                (v)

              	
                Intellectual Property
      Rights.  The Company and its subsidiaries own or possess
      adequate rights or licenses to use all trademarks, service marks and all
      applications and registrations therefor, trade names, patents, patent
      rights, copyrights, original works of authorship, inventions, trade
      secrets and other intellectual property rights (“Intellectual Property
      Rights”) necessary to conduct their respective businesses as now
      conducted.  None of the Company’s registered, or applied for,
      Intellectual Property Rights, to the extent the Company has such
      Intellectual Property Rights, have expired or terminated or have been
      abandoned, or are expected to expire or terminate or expected to be
      abandoned, within three years from the date of this
      Agreement.  The Company does not, after reasonable
      investigation, have any knowledge of any infringement by the Company or
      its Subsidiaries of Intellectual Property Rights of
      others.  There is no claim, action or proceeding being made or
      brought, or to the knowledge of the Company, being threatened, against the
      Company or its Subsidiaries regarding its Intellectual Property
      Rights.  Neither the Company nor any of its Subsidiaries is
      aware of any facts or circumstances which might give rise to any of the
      foregoing infringements or claims, actions or proceedings.  The
      Company and its Subsidiaries have taken reasonable security measures to
      protect the secrecy, confidentiality and value of all of their
      Intellectual Property Rights, except where failure to do so would not,
      individually or in the aggregate, reasonably be expected to have a
      Material Adverse Effect.  Without limiting the generality of the
      foregoing, each of the Company’s employees and consultants (with respects
      to consultants, only those who have been provided access to intellectual
      property) has executed and delivered an agreement that contains a clause
      assigning to the Company any intellectual property developed by the them
      while providing services to the Company (“IP Assignment
      Clause”).  The employees and consultants (with respects
      to consultants, only those who have been provided access to intellectual
      property) of the Company in the future will be required to execute and
      deliver to the Company an agreement that contains an IP Assignment Clause,
      with such changes as may be advisable for applicable laws and
      regulations.

              

      

      

      
        	
              	
                (w) 

              	
                Environmental
      Laws.  The Company and its subsidiaries, to their
      knowledge, after commercially reasonable investigation: (i) are in
      compliance with any and all Environmental Laws (as hereinafter defined),
      (ii) have received all permits, licenses or other approvals required of
      them under applicable Environmental Laws to conduct their respective
      businesses, (iii) are in compliance with all terms and conditions of any
      such permit, license or approval, (iv) do not own or operate, and have not
      owned or operated, any real property (including soils, groundwater,
      surface water, buildings or other structures) contaminated with any
      substance that is in violation of Environmental Laws, (v) are not subject
      to liability for any Hazardous Materials disposal or contamination on any
      third party property; (vi) have not been associated with any release or
      threat of release of any Hazardous Materials; and (vii) are not liable for
      any off-site disposal or contamination pursuant to any Environmental
      Laws.  There is no civil, criminal or administrative action,
      suit, investigation, inquiry or proceeding pending or, to the knowledge of
      the Company, threatened by or before any court or governmental authority
      against the Company or any of its subsidiaries relating to or arising from
      the Company’s nor any subsidiary’s non-compliance with any Environmental
      Laws, nor has the Company received written notice of any alleged
      violations of Environmental
Laws.

              

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

     

    The term
“Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved
thereunder.

    

    
      	
               
      

            	
              (x)

            	
              Subsidiary
      Rights.  The Company or one of its subsidiaries has the
      unrestricted right to vote, and (subject to limitations imposed by
      applicable law) to receive dividends and distributions on, all capital
      securities of its subsidiaries as owned by the Company or such
      subsidiary.

            

    

    

    
      	
               
      

            	
              (y)

            	
              Tax
      Status.  The Company and each of its subsidiaries (i) has
      made or filed all foreign, federal and state income and all other tax
      returns, reports and declarations required by any jurisdiction to which it
      is subject, (ii) has paid all taxes and other governmental assessments and
      charges that are material in amount, shown or determined to be due on such
      returns, reports and declarations, except those being contested in good
      faith and (iii) has set aside on its books provision reasonably adequate
      for the payment of all taxes for periods subsequent to the periods to
      which such returns, reports or declarations apply.  There are no
      unpaid taxes in any material amount claimed to be due by the taxing
      authority of any jurisdiction, and the officers of the Company know of no
      basis for any such claim.

            

    

    

    
      	
               
      

            	
              (z)

            	
              Internal Accounting
      and Disclosure Controls.  The Company and each of its
      subsidiaries maintain a system of internal accounting controls sufficient
      to provide reasonable assurance that (i) transactions are executed in
      accordance with management’s general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to maintain asset and liability accountability, (iii) access to assets or
      incurrence of liabilities is permitted only in accordance with
      management’s general or specific authorization and (iv) the recorded
      accountability for assets and liabilities is compared with the existing
      assets and liabilities at reasonable intervals and appropriate action is
      taken with respect to any
difference.

            

    

    

    The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the Exchange Act) that are effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the SEC,
including, without limitation, controls and procedures designed in to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and
its principal financial officer or officers, as appropriate, to allow timely
decisions regarding required disclosure.  During the twelve months
prior to the date hereof neither the Company nor any of its subsidiaries have
received any notice or correspondence from any accountant relating to any
potential material weakness in any part of the system of internal accounting
controls of the Company or any of its subsidiaries.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (aa)

            	
              Off Balance Sheet
      Arrangements.  There is no transaction, arrangement, or
      other relationship between the Company and an unconsolidated or other off
      balance sheet entity that is required to be disclosed by the Company in
      its Exchange Act filings and is not so disclosed or that otherwise would
      be reasonably likely to have a Material Adverse
  Effect.

            

    

    

    
      	
               
      

            	
              (bb)

            	
              Investment Company
      Status.  The Company is not, and upon consummation of the
      sale of the Securities will not be, an “investment company,” a company
      controlled by an “investment company” or an “affiliated person” of, or
      “promoter” or “principal underwriter” for, an “investment company” as such
      terms are defined in the Investment Company Act of 1940, as
      amended.

            

    

    

    
      	
               
      

            	
              (cc)

            	
              Transfer
      Taxes.  On the Closing Date, all stock transfer or other
      taxes (other than income or similar taxes) which are required to be paid
      in connection with issuance of the Conversion Stock will be, or will have
      been, fully paid or provided for by the Company, and all laws imposing
      such taxes will be or will have been complied
  with.

            

    

    

    
      	
               
      

            	
              (dd)

            	
              Manipulation of
      Price.  The Company has not, and to its knowledge no one
      acting on its behalf has, (i) taken, directly or indirectly, any action
      designed to cause or to result in the stabilization or manipulation of the
      price of any security of the Company, or (ii) paid or agreed to pay to any
      person any compensation for soliciting another to purchase any other
      securities of the Company.

            

    

    

    
      	
               
      

            	
              (ee)

            	
              Disclosure.  All
      disclosures provided to the undersigned Required Holders regarding the
      Company, its Subsidiaries and their respective businesses and the
      transactions contemplated hereby, furnished by or on behalf of the Company
      (including the Company’s representations and warranties set forth in this
      Agreement) are true and correct in all material respects and do not
      contain any untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements made therein, in
      light of the circumstances under which they were made, not
      misleading.

            

    

    

    
      	
               
      

            	
              (ff)

            	
              ERISA.  Neither
      the Company nor any ERISA Affiliate maintains, contributes to, or has ever
      maintained or contributed to, any liability or contingent liability with
      respect to any employee benefit plan subject to
  ERISA.

            

    

     

    
      	
               
      

            	
              (gg)

            	
              Registration
      Requirements.  Mr. Leo
      Young, the Chief Executive Officer of the Company, is a citizen of the
      United States and is not required to register his investment activities
      relating to the Company with any foreign exchange authority or similar
      governmental entity in the People’s Republic of China (“PRC”).

            

    

     

    
      	
               
      

            	
              4.

            	
              Restrictive
      Legends.  Each stock certificate representing the
      Conversion Stock, and any other securities issued in respect of the
      Conversion Stock upon any stock split, stock dividend, recapitalization,
      merger, consolidation or similar event shall be stamped or otherwise
      imprinted with legends in substantially the following
  form:

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    “THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.”

    

    Any
legend endorsed on a certificate pursuant to this Section and the stop transfer
instructions with respect to such legended securities shall be removed, and the
Company shall issue a certificate without such legend to the holder of such
securities, if such securities are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder satisfies the requirements of Rule 144.

    

    
      	
               
      

            	
              5.

            	
              COVENANTS.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Best
      Efforts.  Each party shall use its reasonable best
      efforts to timely satisfy each of the conditions to be satisfied by it as
      provided in Sections 7
      and 8 of this Agreement.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Pledge of
      Securities.  The Company acknowledges and agrees that the
      Conversion Stock may be pledged by the Registered Holder in connection
      with a bona fide margin agreement or other loan or financing arrangement
      that is secured by the Conversion Stock, including the existing pledge of
      The Quercus Trust’s Series A Notes and Series B Note (and, after the
      effectuation of the conversion contemplated hereunder, The Quercus Trust’s
      Conversion Stock) to Goldman Sachs Bank USA or any of its Affiliates,
      successors or assigns (hereinafter collectively referred to as “Goldman Sachs”) pursuant
      to the Revolving Loans (Committed Loan) Loan Agreement dated December 15,
      2009 between Goldman Sachs and Kaziikini, LLC (the “Credit Agreement”) and
      the Guaranty, Security and Pledge Agreement dated December 15, 2009 made
      by The Quercus Trust in favor of Goldman Sachs Bank USA (the “Guaranty and Security
      Agreement”) or any of the other Loan Documents (as that term is
      defined in the Credit Agreement).  The pledge of Conversion
      Stock and the effectuation by Goldman Sachs of its rights and remedies
      under any of the Loan Documents shall not be deemed to be a transfer, sale
      or assignment of the Conversion Stock  hereunder, and the
      Registered Holder shall not be required to provide the Company with any
      further notice thereof, obtain the consent of the Company or otherwise
      make any delivery to the Company pursuant to this Agreement or any other
      Transaction Document.  The Company hereby agrees to execute and
      deliver such documentation as a pledgee of the Conversion Stock (including
      Goldman Sachs) may reasonably request in connection with a pledge of the
      Conversion Stock to such pledgee by the Registered Holder or the
      effectuation of the rights and remedies of any pledgee under the documents
      governing such pledge.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Conduct of
      Business.  The business of the Company and its
      subsidiaries shall not be conducted in violation of any law, ordinance or
      regulation of any governmental entity, except where such violations would
      not result, either individually or in the aggregate, in a Material Adverse
      Effect.

            

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)

            	
              Delivery of
      Certificates.  Upon any request for removal of
      restrictive legends on the Conversion Stock, certificates for shares of
      Common Stock will be delivered to the Registered Holder within three (3)
      Trading Days.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Existing Management
      Agreements and Equity Compensation.  The Required Holders
      agree not to take any action which would not honor in any material
      respect: (i) all existing Management Agreements and Executive Incentive
      Agreements entered into by the Company, all of which have been previously
      filed with the SEC; and (ii) all outstanding stock options and restricted
      stock grants issued by the Company under the Company’s current outstanding
      equity incentive and restricted stock plans, all of which have been
      previously filed with the SEC.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Equity Incentive
      Plans.  The Required Holders agree to take all necessary
      actions required to approve the number of shares authorized under the
      Company’s equity incentive plans to increase the number of shares of
      common stock authorized to be issued under such equity incentive plans to
      equal twenty percent (20%) of the Company’s fully-diluted outstanding
      stock (including the conversion of all of the Notes and
      Warrants).  The Required Holders further agree to take all
      necessary actions required to provide for the grants of additional stock
      options equal to approximately thirty (30%) of the current option holding
      of each employee in good standing with the Company, which options shall
      have an exercise price of $0.15 per share.  Shares of the
      Company’s restricted stock forfeited by departed or departing directors or
      employees shall be reserved for use as equity compensation and
      re-designated by Mr. Leo Young as the Company’s Chief Executive
      Officer.  The Company shall comply with all applicable tax
      withholding requirements with respect to any future Company equity
      incentive grants.

            

    

    

    
      	
               
      

            	
              (g)

            	
              Compensation Committee
      Approval.  The Company agrees that all new options and
      restricted stock grants pursuant to Section 5(f), other than restricted
      stock grants to be redesignated by Mr. Young as provided for in Section
      5(f) above, shall be approved by the Company’s Compensation Committee of
      the Board of Directors (the “Compensation
      Committee”).

            

    

    

    
      	
               
      

            	
              (h)

            	
              New Employment
      Agreements.  Upon the Closing, the Company shall enter
      into new employment contracts with its key management members, as
      designated by the Company’s Chief Executive Officer in the form provided
      to the Required Holders.

            

    

    

    
      	
               
      

            	
              (i)

            	
              Future Employment
      Agreements.  The Company
      agrees that all future employment agreements with its employees (whether
      employed directly by the Company or through the Shanghai Subsidiary) shall
      include, in accordance with and to the extent enforceable under applicable
      law, (i) appropriate intellectual
      property assignment clauses pursuant
      to which the Company shall own all relevant intellectual property
      rights generated by its
      employees and (ii) appropriate
      confidentiality and non-compete
  covenants.

            

    

    
      	
               
      

            	
              (j)

            	
              Termination of
      Securities Purchase Agreement.  With respect to the
      Securities Purchase Agreement dated March 7, 2007 pursuant to which the
      Company issued to certain investors the Notes, the Series A Warrants and
      the Series B Warrants, the Company and the Required Holders (as the
      holders of at least 60% of the aggregate number of shares issuable
      collectively under the Notes, the Series A Warrants and the Series B
      Warrants) hereby agree to terminate such agreement, effective upon the
      Closing.

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (k)

            	
              Stockholders’
      Meeting.  The Company shall hold a stockholders’ meeting
      within 45 days of the Closing.  In the event that it fails to
      perform, observe, or discharge its obligation to hold such meeting within
      the 45 day period after Closing, the Required Holder shall be entitled to
      seek temporary and permanent injunctive relief in any such case without
      the necessity of proving actual damages and without posting a bond or
      other security.  Following the transactions contemplated by
      Sections 8(f) and (g) hereof through the date of the stockholders’ meeting
      and any adjournments thereof, the Company shall maintain the number of
      members on its Board of Directors at five
  members.

            

    

    

    
      	
               
      

            	
              (l)

            	
              Stock/Option Plan
      Approvals.  The Company
      shall use its best efforts to cause all PRC citizens employed by the
      Shanghai Subsidiary who have or will participate in the Company’s stock or
      option plan to obtain, through the Shanghai Subsidiary, the approval of
      the relevant foreign exchange authority or similar governmental entity
      to the extent required under applicable PRC laws.

            

    

    

    
      	
               
      

            	
              (m)

            	
              Amendment to Articles
      of Association of Shanghai Subsidiary.  As soon as practicable after the Closing,
      the Company shall cause the Articles
      of Association of the Shanghai Subsidiary to be amended to comply with
      current PRC law, including, without limitation, providing that the
      shareholder of the Shanghai Subsidiary shall be its highest authority and make all important
      decisions relating to its business
  operations.

            

    

    

    
      	
               
      

            	
              (n)

            	
              Registered
      Capital.  The
      Company’s registered capital required under the Shanghai
      Subsidiary’s governing documents is
      USD$47,500,000.  As of the
      date hereof, the Company’s paid-in registered capital is
      USD$31,960,028.87.  In accordance with the Company’s discussions
      with local authorities, the Company believes it will be able to amend its
      registered capital to lower the amount required such that
      additional paid-in capital is not
      required to be contributed or otherwise extend the date by which the
      registered capital is required to be contributed such that, in any event,
      the failure to have currently paid-in registered capital at the registered
      amount will not have a Material Adverse
  Effect.

            

    

    

    
      	
               
      

            	
              (o)

            	
              Registration
      Rights.  Upon the request
      of holders of a majority of the shares of Conversion Stock originally
      issued upon the conversion of the Notes, the Company shall use its best
      reasonable efforts to file and cause to be effective a registration
      statement registering the re-sale of shares of Conversion Stock to the
      extent not previously registered, and provide for substantially similar
      registration rights as those provided to the holders of the Series A Notes
      pursuant to that certain Registration Rights Agreement dated March 7, 2007
      by and among the Company and the holders of the Series A
      Notes.

            

    

    

    
      	
               
      

            	
              6.

            	
              CLOSING
      MATTERS.

            

    

    
      	
               
      

            	
              (a)

            	
              The
      Closing.  Subject to the termination of this Agreement as
      provided in Section 9
      below, the closing of the conversion of the Notes by the Required
      Holders and the issuance by the Company of the Conversion Stock (the
      “Closing”) shall
      be held at the offices of DLA Piper LLP (US), counsel to the Company at
      2000 University Avenue, East Palo Alto, CA  94403, on January 7,
      2010, or such other date as the Company and the Required Holders shall
      agree (such date, the “Closing Date”).

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Conversion
      Deliverables.  As soon as practicable after the
      Closing,

            

    

    

    
      	
               
      

            	
              (i)

            	
              each
      Required Holder will physically surrender its
  Note;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Company will deliver via electronic mail the Stock Issuance Letter to
      Continental Stock Transfer & Trust Company, the Company’s transfer
      agent, to issue stock certificates for the Conversion Stock issuable for
      all Notes physically surrendered to the Company (the “Issuance Letter”);
      and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              within
      three (3) Trading Days after the delivery of the Issuance Letter to
      Continental Stock Transfer & Trust Company, the Company will issue to
      each Required Holder a stock certificate representing the Required
      Holder’s Conversion Stock for all Notes physically surrendered to the
      Company.

            

    

     

    
      	
               
      

            	
              7.

            	
              CONDITIONS
      TO THE COMPANY’S OBLIGATION TO CLOSE.  The obligation of
      the Company hereunder to issue the Conversion Stock at the Closing is
      subject to the satisfaction, at or before the Closing Date, of each of the
      following conditions, provided that these conditions are for the Company’s
      sole benefit and may be waived by the Company at any time in its sole
      discretion by providing the Required Holders with prior written notice
      thereof:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Executed
      Agreement.  The Required Holders shall have executed this
      Agreement and delivered the same to the
Company.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Executed Voting
      Agreement.  The Required Holders shall have executed the
      Voting Agreement dated as of the Closing Date and attached hereto as Exhibit
      B (the “Voting
      Agreement”).

            

    

    

    
      	
               
      

            	
              (c)

            	
              Executed Warrant
      Amendment.  The Required Holders shall have executed the
      Warrant Amendment dated as of the Closing Date and attached hereto as
      Exhibit
      C (the “Warrant
      Amendment”).

            

    

    

    
      	
               
      

            	
              (d)

            	
              Consent to Conversion
      by Goldman Sachs.  The Quercus Trust shall have delivered
      a consent from Goldman Sachs consenting to the conversion of Notes held by
      The Quercus Trust pursuant to this
Agreement.

            

    

    

    
      	
               
      

            	
              8.

            	
              CONDITIONS
      TO REQUIRED HOLDER’S OBLIGATION TO CLOSE.  The obligation
      of each Required Holder to surrender and convert the Required Holder’s
      Notes is subject to the satisfaction, at or before the Closing Date, of
      each of the following conditions, provided that these conditions are for
      each Required Holder’s sole benefit and may be waived by such Required
      Holder at any time in its sole discretion by providing the Company with
      prior written notice thereof:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Executed
      Agreements.  The Company shall have duly executed and
      delivered (physically or by electronic copy) to such Required Holder an
      executed signature page to this Agreement, the Warrant Amendment and the
      Voting Agreement.

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Incorporation
      Documents; Good Standing Certificates.  The Company shall
      have delivered to such Required Holder a certificate evidencing the
      formation and good standing of the Company and each of its U.S.
      subsidiaries in such entity’s jurisdiction of formation issued by the
      Secretary of State (or comparable office) of such
      jurisdiction.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Foreign
      Qualifications; Good Standing Certificates.  The Company
      shall have delivered to such Required Holder a certificate evidencing the
      Company’s qualification as a foreign corporation and good standing issued
      by the Secretary of State (or comparable office) in each jurisdiction in
      which the Company has so qualified.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Accuracy of
      Representations and Warranties.  The representations and
      warranties of the Company shall be true and correct in all material
      respects (except for those representations and warranties that are
      qualified by materiality or Material Adverse Effect, which shall be true
      and correct in all respects) as of the date when made and as of the
      Closing Date, as though made at that time (except for representations and
      warranties that speak as of a specific date, which shall be true and
      correct as of such specified date) and the Company shall have performed,
      satisfied and complied in all material respects with the covenants,
      agreements and conditions required by the Transaction Documents to be
      performed, satisfied or complied with by the Company at or prior to the
      Closing Date.  Such Required Holder shall have received a
      certificate, executed by the Chief Executive Officer of the Company, dated
      as of the Closing Date, to the foregoing effect and as to such other
      matters as may be reasonably requested by such Required Holder in the form
      attached hereto as Exhibit
      D;

            

    

    

    
      	
               
      

            	
              (e)

            	
              Size of
      Board.  The Company shall have increased the size of its
      Board of Directors by three seats.

            

    

    

    
      	
               
      

            	
              (f)

            	
              Appointment of
      Directors. The Company shall have nominated two directors nominated
      by the holders of the Notes holding a majority of the outstanding
      principal of the Notes (the “Noteholder Nominees”),
      who shall have been appointed to fill vacancies on the Board by the then
      current directors, effective upon date which his the later of (i) the
      Closing and (ii) the filing of the Company’s Form 10-K with the Securities
      and Exchange Commission for the fiscal year ended September 30,
      2009.

            

    

    

    
      	
               
      

            	
              (g)

            	
              Resignation of
      Directors.  After appointment of the Noteholder Nominees,
      the Company shall have received from each Robert Coackley and Kevin Koy a
      letter resigning from the Company’s Board of Directors, effective upon the
      later of (i) the Closing and (ii) the filing of the Company’s Form 10-K
      with the Securities and Exchange Commission for the fiscal year ended
      September 30, 2009.

            

    

    

    
      	
               
      

            	
              (h)

            	
              Consent to Conversion
      by Goldman Sachs.  The Quercus Trust shall have delivered
      a consent from Goldman Sachs consenting to the conversion of Notes held by
      The Quercus Trust pursuant to this
Agreement.

            

    

    

    
      	
               
      

            	
              9.

            	
              TERMINATION.  This
      Agreement may be terminated by (i) the Company with written notice to the
      Required Holders or (ii) the Required Holders by written notice to the
      Company, if the Closing has not been consummated on or before January 30,
      2010; provided, however, that
      no such termination will affect the right of any party to sue for any
      breach by the other party (or
parties).

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              10.

            	
              MISCELLANEOUS.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Governing Law;
      Jurisdiction; Jury Trial.  All questions concerning the
      construction, validity, enforcement and interpretation of this Agreement
      shall be governed by the internal laws of the State of Delaware, without
      giving effect to any choice of law or conflict of law provision or rule
      (whether of the State of California or any other jurisdictions) that would
      cause the application of the laws of any jurisdictions other than the
      State of Delaware.  Each party hereby irrevocably submits to the
      exclusive jurisdiction of the state and federal courts sitting in County
      of Kent, Delaware for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or
      discussed herein, and hereby irrevocably waives, and agrees not to assert
      in any suit, action or proceeding, any claim that it is not personally
      subject to the jurisdiction of any such court, that such suit, action or
      proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper.  Each party hereby
      irrevocably waives personal service of process and consents to process
      being served in any such suit, action or proceeding by mailing a copy
      thereof to such party at the address for such notices to it under this
      Agreement and agrees that such service shall constitute good and
      sufficient service of process and notice thereof.  Nothing
      contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law.  EACH PARTY HEREBY
      IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
      JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
      WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which
      shall be enforceable against the parties actually executing such
      counterparts, and all of which together shall constitute one
      instrument.  The exchange of a fully executed signature page to
      this Agreement (in counterparts or otherwise) by facsimile or by
      electronic delivery in PDF format shall be sufficient to bind the parties
      to the terms and conditions of this
Agreement.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Expenses.  The
      Company and the Required Holders shall each bear their respective expenses
      and legal fees incurred in connection with the negotiation and
      consummation of this Agreement

            

    

    

    
      	
               
      

            	
              (d)

            	
              Headings.  The
      headings of this Agreement are for convenience of reference and shall not
      form part of, or affect the interpretation of, this
    Agreement.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Non-Severability.  Unless
      otherwise agreed to by the Company and the Required Holders, if any
      material provision of this Agreement shall be invalid or unenforceable in
      any jurisdiction, such invalidity or unenforceability shall cause the
      Agreement to be null and void and the parties shall be entitled to rescind
      the transactions contemplated by this
Agreement.

            

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (f)

            	
              Entire Agreement;
      Amendments.  This Agreement and the other Transaction
      Documents supersede all other prior oral or written agreements between the
      Require Holders, the Company, their affiliates and Persons acting on their
      behalf with respect to the matters discussed herein, and this Agreement,
      the other Transaction Documents and the instruments referenced herein and
      therein contain the entire understanding of the parties with respect to
      the matters covered herein and therein and, except as specifically set
      forth herein or therein, neither the Company nor any Required Holders
      makes any representation, warranty, covenant or undertaking with respect
      to such matters.  No provision of this Agreement may be amended
      other than by an instrument in writing signed by the Company and a
      majority of the Required Holders.  No provision hereof may be
      waived other than by an instrument in writing signed by the party against
      whom enforcement is sought.

            

    

    

    
      	
               
      

            	
              (g)

            	
              Notices.  Any
      notice, request or other communication required or permitted hereunder
      shall be in writing and shall be deemed to have been duly given if
      delivered personally, by facsimile when receipt is electronically
      confirmed, one business day after delivery to a nationally recognized
      courier service that promises overnight delivery, or otherwise upon
      receipt, addressed (i) if to a Required Holder, at the address set forth
      below the Required Holder’s name on the signature page to this Agreement,
      and (ii) if to the Company, at the address set forth below the Company’s
      name on the signature page to this Agreement. Any party hereto may, by ten
      (10) days’ prior notice so given, change its address for future notices
      hereunder.

            

    

    

    
      	
               
      

            	
              (h)

            	
              Successors and
      Assigns.  This Agreement shall be binding upon and inure
      to the benefit of the parties and their respective successors and
      assigns.  The Required Holder may not assign any of its rights
      hereunder without the consent of the
Company.

            

    

    

    
      	
               
      

            	
              (i)

            	
              No Third Party
      Beneficiaries.  This Agreement is intended for the
      benefit of the parties hereto and their respective permitted successors
      and assigns, and is not for the benefit of, nor may any provision hereof
      be enforced by, any other Person.

            

    

    

    
      	
               
      

            	
              (j)

            	
              Survival.  Unless
      this Agreement is terminated under Section 9, the
      representations and warranties of the Company contained in Sections 3, and the
      agreements and covenants set forth in Sections 4, 5 and 9 shall survive
      the Closing.  Each Required Holder shall be responsible only for
      its own representations, warranties, agreements and covenants
      hereunder.

            

    

    

    
      	
               
      

            	
              (k)

            	
              Further
      Assurances.  Each party shall do and perform, or cause to
      be done and performed, all such further acts and things, and shall execute
      and deliver all such other agreements, certificates, instruments and
      documents, as any other party may reasonably request in order to carry out
      the intent and accomplish the purposes of this Agreement and the
      consummation of the transactions contemplated
  hereby.

            

    

    

    
      	
               
      

            	
              (l)

            	
              No Strict
      Construction.  The language used in this Agreement will
      be deemed to be the language chosen by the parties to express their mutual
      intent, and no rules of strict construction will be applied against any
      party.

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (m)

            	
              Remedies.  The
      Company, each Required Holder, and each holder of the Conversion Stock
      shall have all rights and remedies set forth in the Transaction Documents
      and all rights and remedies which such Company or holders have been
      granted at any time under any other agreement or contract and all of the
      rights which such holders have under any law.  Any Person having
      any rights under any provision of this Agreement shall be entitled to
      enforce such rights specifically (without posting a bond or other
      security), to recover damages by reason of any breach of any provision of
      this Agreement and to exercise all other rights granted by
      law.  Furthermore, the Company recognizes that in the event that
      it fails to perform, observe, or discharge any or all of its obligations
      under the Transaction Documents, any remedy at law may prove to be
      inadequate relief to the Required Holders.  The Company
      therefore agrees that each Required Holder shall be entitled to seek
      temporary and permanent injunctive relief in any such case without the
      necessity of proving actual damages and without posting a bond or other
      security.

            

    

    

    
      	
               
      

            	
              (n)

            	
              Attorney’s
      Fees.  In the event that any suit or action is instituted
      under or in relation to this Agreement, including without limitation to
      enforce any provision in this Agreement, the prevailing party in such
      dispute shall be entitled to recover from the losing party all fees, costs
      and expenses of enforcing any right of such prevailing party under or with
      respect to this Agreement, including without limitation, such reasonable
      fees and expenses of attorneys and accountants, which shall include,
      without limitation, all fees, costs and expenses of
    appeals.

            

    

    

    
      	
               
      

            	
              (o)

            	
              Replacement of
      Securities.  If any certificate or instrument evidencing
      any Conversion Stock is mutilated, lost, stolen or destroyed, the Company
      shall issue or cause to be issued in exchange and substitution for and
      upon cancellation thereof, or in lieu of and substitution therefor, a new
      certificate or instrument, but only upon receipt of evidence reasonably
      satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any
      reasonable third-party costs associated with the issuance of such
      replacement Conversion Stock. If a replacement certificate or instrument
      evidencing any Conversion Stock is requested due to a mutilation thereof,
      the Company may require delivery of such mutilated certificate or
      instrument as a condition precedent to any issuance of a
      replacement.

            

    

    

    [Signature Pages
Follows]

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Series A and Series B Note
Conversion Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

     

    COMPANY

     

    Solar
EnerTech Corp.

     

    
      
        	
                By:

              	
                  /s/ Leo Shi
      Young

              
	
                Name:
      Leo Shi Young

              
	
                Title:
      Chief Executive Officer

              

      

    

    

    Address
for Notice:

    444
Castro Street, Suite# 707

    Mountain
View, CA  94041

    Facsimile:
(815) 336-8068

    Attention:
Leo Shi Young,

    Chief
Executive Officer

    

    With a
copy to (which shall not constitute notice):

     

    Eric
Wang

    DLA Piper
LLP (US)

    2000
University Ave

    East Palo
Alto, CA  94303

    Facsimile:
(650) 687-1205

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Series A and Series B Note
Conversion Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

     

    REQUIRED
HOLDER

    

    The
Quercus Trust

     

    
      
        	
                By:

              	
                 /s/ David
  Gelbaum

              

      

    

    Name:
David Gelbaum

    Title:

    

    Address
for Notice:

    1835
Newport Blvd.

    A109 -
PMB 467

    Costa
Mesa, CA 92627

     

    With a
copy to (which shall not constitute notice):

     

    Joseph P.
Bartlett, Esq.

    The Law
Offices of Joseph P. Bartlett

    17050
Sunset Blvd. #D

    Pacific
Palisades, CA 90067

    Telephone:  (310)
584-1234

    Facsimile:  (310)
573-0314

    

    And:

     

    Goldman
Sachs Bank USA

    The
Williams Building

    295
Chipeta Way, 4th Floor

    Salt Lake
City, UT 84108

    Facsimile:
801-884-1525

    Attention:      Chief
Credit Officer

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