sc13d

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VG0aQNKm26byOcqqkwhQOIswJa6bGRboM2kMpKeJkfiH3C6xpSQjgS0wBZmX25DZ 8a5vq5EFeIZ8SilPGKTJTw== 0000950133-07-002934.txt : 20070716 0000950133-07-002934.hdr.sgml : 20070716 20070716071507 ACCESSION NUMBER: 0000950133-07-002934 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20070716 DATE AS OF CHANGE: 20070716 GROUP MEMBERS: RADCLIFFE SPC, LTD. - CLASS A SEGREGATED PORTFOLIO SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EARTH BIOFUELS INC CENTRAL INDEX KEY: 0001268471 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 710915825 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-80984 FILM NUMBER: 07980353 BUSINESS ADDRESS: STREET 1: 3001 KNOX STREET STREET 2: SUITE 403 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 214 389 9800 MAIL ADDRESS: STREET 1: 3001 KNOX STREET STREET 2: SUITE 403 CITY: DALLAS STATE: TX ZIP: 75201 FORMER COMPANY: FORMER CONFORMED NAME: MEADOWS SPRINGS INC DATE OF NAME CHANGE: 20031029 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RG CAPITAL MANAGEMENT LP CENTRAL INDEX KEY: 0001218275 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3 BALA PLAZA EAST STE 501 CITY: BALA CYRWYD STATE: PA ZIP: 19004 BUSINESS PHONE: 6106175900 MAIL ADDRESS: STREET 1: 3 BALA PLAZA EAST STE 501 CITY: BALA CYRWYD STATE: PA ZIP: 19004 SC 13D 1 w37065sc13d.htm SC 13D sc13d


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

Under the Securities Exchange Act of 1934
(Amendment No. )*

Earth Biofuels, Inc.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

27031F102

(CUSIP Number)

RG Capital Management, L.P.
Attn: Gerald Stahlecker
3 Bala Plaza - East, Suite 501
251 St. Asaph’s Road
Bala Cynwyd, PA 19004
(610) 617-5900

With a Copy to:

Eric R. Markus, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
1875 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 663-6000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

July 11, 2007

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		27031F102

NAMES OF REPORTING PERSONS:

Radcliffe SPC, Ltd. for and on behalf of the Class A Segregated Portfolio

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) o

(b) þ

SEC USE ONLY:

SOURCE OF FUNDS (SEE INSTRUCTIONS):

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):

CITIZENSHIP OR PLACE OF ORGANIZATION:

Cayman Islands

SOLE VOTING POWER:

NUMBER OF

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

Warrant to purchase up to 375,000 shares of Common Stock;
Series A Warrant to purchase up to 862,069 shares of Common Stock;
$5,000,000 Principal Amount 8% Senior Convertible Note convertible into 1,724,138 shares of Common Stock

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER:

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

4.99%¹

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):


¹		See Items 4 and 5(a) hereof.


CUSIP No.		27031F102

NAMES OF REPORTING PERSONS:

RG Capital Management, L.P.

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) o

(b) þ

SEC USE ONLY:

SOURCE OF FUNDS (SEE INSTRUCTIONS):

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):

CITIZENSHIP OR PLACE OF ORGANIZATION:

Delaware

SOLE VOTING POWER:

NUMBER OF

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER:

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

4.99%²

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):


²		See Items 4 and 5(a) hereof.


CUSIP No.		27031F102


ITEM 1.		SECURITY AND ISSUER

This statement on Schedule 13D relates to the common stock, par value $0.001 per share (the “Common Stock”), of Earth Biofuels, Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at: 3001 Knox Street, Suite 403, Dallas, TX 75205.


ITEM 2.		IDENTITY AND BACKGROUND

(a) The names of the persons filing this statement on Schedule 13D are Radcliffe SPC, Ltd. for and on behalf of its Class A Segregated Portfolio (“Radcliffe”) ³ and RG Capital Management, L.P. (“RG Capital”). Radcliffe and RG Capital are referred to herein collectively as the “Reporting Persons.” The filing of this statement on Schedule 13D and any future amendments hereto, and the inclusion of information herein and therein, shall not be construed as an admission that any of the Reporting Persons (or any of the persons referred to on Exhibits 99.1 and 99.2) is the beneficial owner of any shares of Common Stock for the purpose of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations promulgated thereunder or otherwise. RG Capital disclaims beneficial ownership of securities held by Radcliffe.

(b) The principal business address for Radcliffe is c/o SEI Investments Global Fund Services, Ltd., Styne House, Upper Hatch Street, Dublin 2 Ireland. The principal business address for RG Capital is 3 Bala Plaza-East, Suite 501, 251 St. Asaph’s Road, Bala Cynwyd, PA 19004.

(c) Radcliffe is a private investment fund primarily engaged in the business of investing in securities. RG Capital is primarily engaged in the business of acting as investment manager for Radcliffe. Exhibit 99.1 lists the name of the directors of Radcliffe and their business addresses and principal occupations. Exhibit 99.2 lists the names of the managers of RG Capital, their business addresses and principal occupations.

(d) None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) None of the Reporting Persons has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Radcliffe is a Caymans Islands segregated portfolio company. RG Capital is a Delaware limited partnership.


ITEM 3.		SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

Radcliffe paid the Issuer $2,500,000 to acquire a convertible note (the “Bridge Note”) and received a warrant to purchase Common Stock exercisable for up to 375,000 shares (the “Bridge Warrant”) pursuant to a Securities Purchase Agreement dated June 7, 2006. Upon the closing of the Securities Purchase Agreement dated June 7, 2006, Radcliffe, the other lenders under that agreement and the Issuer entered into a Registration Rights Agreement pursuant to which the Issuer agreed to provide certain registration rights with respect to the


³		The Class A Segregated Portfolio was formerly known as the “Class A Convertible Crossover Segregated Portfolio.”


CUSIP No.		27031F102

shares of Common Stock issuable upon conversion of the Bridge Note and exercise of the Bridge Warrant under the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder, and applicable state securities laws.

Radcliffe paid the Issuer $5,000,000 to acquire a senior convertible note (the “8% Senior Convertible Note”) and a Series A warrant to purchase Common Stock exercisable for up to 862,069 shares (the “Series A Warrant” and, together with the Bridge Warrant, the “Warrants”) ⁴ pursuant to a Securities Purchase Agreement dated July 24, 2006. Upon the closing of the Securities Purchase Agreement dated July 24, 2006, Radcliffe, the other lenders under that agreement (collectively, the “Noteholders”) and the Issuer entered into a Registration Rights Agreement pursuant to which the Issuer agreed to provide certain registration rights with respect to the shares of Common Stock issuable upon conversion of the 8% Senior Convertible Note and exercise of the Series A Warrant under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

A portion of the consideration paid by Radcliffe in connection with the purchase of the 8% Senior Convertible Note was through the surrender of the Bridge Note together with accrued but unpaid interest thereon. Funds for the purchase of the Bridge Note, the 8% Senior Convertible Note and the Warrants were derived from general working capital and margin account borrowings made in the ordinary course of business.

On March 13, 2007, Radcliffe delivered an Event of Default Redemption Notice (as defined in the Note) to the Issuer (the “Event of Default Notice”), which set forth certain Events of Default (as defined in the Note) of the Company that had occurred. The Events of Default required the Company to redeem the entire 8% Senior Convertible Note in full at the aggregate Event of Default Redemption Price (as defined in the Note) of approximately $8 million. On March 23, 2007, the Reporting Persons commenced suit against the Issuer in the United States District Court for the Southern District of New York alleging among other things, (1) the Issuer’s failure to disclose to Radcliffe material facts related to a transaction involving its primary shareholder; (2) its failure to register securities as required by the July 24, 2006 Registration Rights Agreement; and (3) its failure to pay interest as, when and in the amount due. Notwithstanding the Event of Default notice and the lawsuit described above, the Issuer has not redeemed the 8% Senior Convertible Note as of the date of this filing and the failure to repay the Note also constitutes an Event of Default thereunder. In addition, certain of the Noteholders have endeavored to negotiate with the Issuer a resolution of its various defaults; however, upon information and belief, they have been unable to reach any definitive agreement with the Issuer as of the date of this Schedule 13D filing.

On May 21, 2007, the Issuer filed a Quarterly Report on Form 10-QSB for the period ended March 31, 2007, which states that the Issuer “entered into a Forbearance and Amended agreement in the aggregate amount of $63,000,000 with the [Noteholders] whereby all default interest, interest penalties and registration right penalties [under the 8% Senior Convertible Notes] were removed and replaced with an interest premium. The agreement provides for a principal payment in the amount of $25 million on June 30, 2007, with the balance due on August 31, 2007 totaling $38 million.” This statement is not correct. The Reporting Persons did not enter into a Forbearance and Amended agreement with the Issuer and, upon information and belief, none of the other Noteholders had entered into a Forbearance and Amended agreement with the Issuer either as of May 21, 2007 or as of the date of this Schedule 13D filing. On June 13, 2007, the Issuer filed a Form 10QSB/A which


⁴		Radcliffe also received a Series B warrant to purchase Common Stock exercisable for up to 862,069 shares (the “Series B Warrant”) in connection with the July 24, 2006 transaction. The Series B Warrant, however, is not presently exercisable and can only become exercisable if and to the extent that the Issuer forces conversion of the 8% Senior Convertible Note prior to maturity, a right which the Issuer presently does not have.


CUSIP No.		27031F102

stated, among other things, that “[i]t has been determined subsequent to the filing of the Company’s first quarter [Form 10QSB] that an agreement has not yet been reached on the forbearance, and as such, the Company has restated its quarterly report to include interest and registration penalties according to the original Securities Purchase Agreements dated July 24, 2006 and August 11, 2006, respectively.”


ITEM 4.		PURPOSE OF TRANSACTION

Radcliffe acquired the Bridge Note, the 8% Senior Convertible Note and the Warrants for investment purposes in the ordinary course of business because the Reporting Persons believed these securities represented an attractive investment opportunity. Radcliffe’s beneficial ownership of Common Stock of the Issuer is subject to the Blocker described below in Item 5(a). Although Radcliffe is acting in its capacity as a creditor of the Issuer and not in its capacity as a potential equity holder, and although the Reporting Persons believe that, in any event, the Blocker described below would preclude them (and any group they may be or become a part of) from being deemed to have acquired beneficial ownership of more than 4.99% of the equity securities of the Issuer, the Reporting Persons have elected to file this Schedule 13D at this time out of an excess of caution.

By reason of the occurrence of certain “Events of Default,” as described above, the Issuer’s obligations to Radcliffe have been accelerated and debt currently due and owing by the Issuer to Radcliffe now exceeds $8,500,000. Likewise, upon information and belief, the Issuer’s obligations to the other Noteholders have been accelerated. Certain of the Noteholders, acting in their capacity as creditors of the Issuer, have decided to enforce their respective and collective rights and remedies under the 8% Senior Convertible Notes, applicable state law and/or federal bankruptcy law, by the filing of an involuntary petition under chapter 7 of the United States Bankruptcy Code. The involuntary petition was filed on July 11, 2007 in the U.S. Bankruptcy Court for the District of Delaware.

By virtue of such actions, such Noteholders may be deemed to have formed a “group” for purposes of Rule 13d-5(b)(1) promulgated under the 1934 Act; however, each of the Reporting Persons expressly disaffirms the existence of a group with regard to the Common Stock (or any securities convertible into or exercisable for Common Stock). None of the Reporting Persons has any plans or proposals to convert the outstanding principal of the 8% Senior Convertible Note into Common Stock or to exercise the Warrants or to exercise any remedy available to such Reporting Person by virtue of such Reporting Person’s beneficial ownership of equity securities of the Issuer and all of the foregoing actions which have been or may be taken by the Noteholders solely relate to the exercise of the Noteholders’ rights as creditors of the Issuer in respect of their 8% Senior Convertible Notes.

Certain of the other Noteholders have filed separately their own Schedule 13D with respect to the Issuer. Each of the Reporting Persons disclaims beneficial ownership of any securities owned by the other Noteholders.

Although none of the Reporting Persons has any specific plan or proposal to acquire or dispose of the shares of Common Stock, each Reporting Person at any time and from time to time may (i) acquire additional shares or securities of the Issuer, (ii) dispose of any or all of its securities of the Issuer, (iii) enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or all of its positions in the securities of the Issuer, depending upon the factors described below and/or other investment considerations or (iv) exercise its rights, if any, as holders of the Notes and Warrants (and/or the Series B Warrant).


CUSIP No.		27031F102

In addition, the Reporting Persons intend to review their investment in the Issuer on a continuing basis and may seek to influence or change the Issuer’s operations or business development plans, business strategy, management or directors, competitive position, capital structure or capital management policy, including, without limitation, through potential discussions with management, directors, other shareholders and Noteholders, existing or potential strategic partners or competitors of the Issuer, industry analysts, investment and financing professionals and/or other third parties. Such matters and discussions may materially affect, and result in, the Reporting Persons’ modifying their investment in the Issuer, exchanging information with any of such persons pursuant to appropriate confidentiality or similar agreements or otherwise, working together with any of such persons pursuant to joint agreements or otherwise, proposing changes in the Issuer’s operations, governance, capitalization or strategic plans, or proposing or engaging in one or more other actions set forth under subsections (a) through (j) of Item 4 of Schedule 13D. Factors that may influence the Reporting Persons’ actions include, but are not limited to, their views regarding the Issuer’s operations, business strategy, prospects, financial position and/or strategic direction, the outcome of the discussions and actions referenced herein, price levels of the Common Stock, availability of funds, subsequent developments affecting the Issuer, other investment and business opportunities available to the Reporting Persons, conditions in the securities market, general economic and industry conditions and other factors that the Reporting Persons may deem relevant from time to time. In addition, the Reporting Persons may review and seek to challenge the enforceability of the Consent Judgment and Settlement Agreement entered into by the Company on June 15, 2007, which was reported in a Form 8-K filed by the Company on July 5, 2007.

Except as described herein, none of the Reporting Persons has any plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.


ITEM 5.		INTEREST IN SECURITIES OF THE ISSUER

(a) Each of the Reporting Persons may be deemed to beneficially own (i) 375,000 shares of Common Stock issuable to Radcliffe upon exercise of the Bridge Warrant, (ii) 862,069 shares of Common Stock issuable to Radcliffe upon exercise of the Series A Warrant and (iii) 1,724,138 shares of Common Stock issuable to Radcliffe upon conversion of the outstanding principal of the 8% Senior Convertible Note. The shares of Common Stock issuable to Radcliffe upon conversion of the 8% Senior Convertible Note and upon exercise of the Warrants collectively represent approximately 1.19% of the Issuer’s total outstanding Common Stock (based on 246,017,970 shares of Common Stock issued and outstanding as of May 15, 2007 as reported in the Issuer’s Quarterly Report on Form 10-QSB for the period ended March 31, 2007). Neither the Warrants nor the 8% Senior Convertible Note (nor the Series B Warrant) may be exercised or converted if, after such exercise or conversion, the Reporting Persons would beneficially own, as determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder, including, without limitation, any beneficial ownership determinations based on any Reporting Persons being deemed part of a group for purposes of Section 13(d), more than 4.99% of the number of shares of Common Stock then issued and outstanding (all of the foregoing, the “Blocker”).

(b) None of the Reporting Persons has sole power to vote or direct the vote or sole power to dispose or direct the disposition of shares of Common Stock. Each of the Reporting Persons has shared power to vote or direct the vote and shared power to dispose or direct the disposition of (i) 375,000 shares of Common Stock issuable to Radcliffe upon exercise of the Bridge Warrant, (ii) 862,069 shares of Common Stock issuable to Radcliffe upon exercise of the Series A Warrant and (iii) 1,724,138 shares of Common Stock issuable to Radcliffe upon conversion of the outstanding principal of the 8% Senior Convertible Note.


CUSIP No.		27031F102

(d) No person other than the Reporting Persons is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock issuable to Radcliffe.

(e) Not applicable.


ITEM 6.		CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

Except as otherwise set forth herein (or incorporated herein by reference), the Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to the securities of the Issuer.


ITEM 7.		MATERIAL TO BE FILED AS EXHIBITS

The following documents are filed as appendices and exhibits:


Exhibit 99.1:		Information regarding directors and executive officers of Radcliffe SPC, Ltd.

Exhibit 99.2:		Information regarding managers of RG Capital Management, L.P.

Exhibit 99.3:		Joint Filing Agreement

Exhibit 99.4:		Securities Purchase Agreement, dated as of June 7, 2006, by and between Earth Biofuels, Inc. and the purchasers listed on Exhibit A thereto (incorporated by reference to Exhibit 4.1 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on June 12, 2006)

Exhibit 99.5:		8% Senior Convertible Note issued by Earth Biofuels, Inc., dated as of June 7, 2006, issued in favor of Radcliffe (incorporated by reference to Exhibit 4.4 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on June 12, 2006)

Exhibit 99.6:		Warrant to Purchase Common Stock of Earth Biofuels, Inc., dated as of June 7, 2006, issued in favor of Radcliffe (incorporated by reference to Exhibit 4.7 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on June 12, 2006)

Exhibit 99.7		Registration Rights Agreement, dated as of June 7, 2006, by and between Earth Biofuels, Inc. and the purchasers listed on Exhibit A thereto (incorporated by reference to Exhibit 4.8 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on June 12, 2006)

Exhibit 99.8		Securities Purchase Agreement, dated as of July 24, 2006, by and between Earth Biofuels, Inc. and the purchasers listed on the schedule of buyers (incorporated by reference to Exhibit 4.1 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on July 25, 2006)

Exhibit 99.9		Registration Rights Agreement, dated as of July 24, 2006, by and between Earth Biofuels, Inc. and the purchasers listed on Exhibit A thereto (incorporated by reference to Exhibit 4.2 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on July 25, 2006)


CUSIP No.		27031F102


Exhibit 99.10		Form of 8% Senior Convertible Note issued by Earth Biofuels, Inc., dated as of July 24, 2006 (incorporated by reference to Exhibit 4.3 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on July 25, 2006)

Exhibit 99.11		Form of Warrant to Purchase Common Stock of Earth Biofuels, Inc., dated as of July 24, 2006 (incorporated by reference to Exhibit 4.4 to the Issuer’s Form 8-K as filed with the Securities and Exchange Commission on July 25, 2006)

Exhibit 99.12		Event of Default Redemption Notice, dated March 13, 2007, from Radcliffe to Earth Biofuels, Inc.

Signatures

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Radcliffe SPC, Ltd. for and on behalf of the Class A Segregated Portfolio

By:

RG Capital Management, L.P.

By:

RGC Management Company, LLC

By:

/s/ Gerald F. Stahlecker

Gerald F. Stahlecker

Managing Director

Date:

July 13, 2007

RG Capital Management, L.P.

By:

RGC Management Company, LLC

By:

/s/ Gerald F. Stahlecker

Gerald F. Stahlecker

Managing Director

Date:

July 13, 2007

EX-99.1 2 w37065exv99w1.htm EX-99.1 exv99w1

Exhibit 99.1

Information regarding directors and executive officers of Radcliffe SPC, Ltd.

Radcliffe SPC, Ltd. does not have any executive officers or directors except as stated below in this Exhibit 99.1:

The Board of Directors of Radcliffe consists of Steven Katznelson, Tilly Directors Limited and Coultry Directors Ltd. Radcliffe has entered into an investment advisory agreement with RG Capital, pursuant to which RG Capital has investment discretion over Radcliffe’s Class A Segregated Portfolio. Radcliffe has also entered in an administration agreement (the “Administration Agreement”) with SEI Investments Global Fund Services, Ltd. (the “Administrator”) to perform certain financial, accounting, corporate, administrative and other services on behalf of the Class A Segregated Portfolio.

For further information on Mr. Katznelson, see Exhibit 99.2.

Each of Tilly Directors Limited and Coultry Directors Ltd. is a Cayman Islands company and a wholly-owned subsidiary of Queensgate Bank & Trust Company Ltd., Grand Cayman, Cayman Islands and holds a nominee trust license pursuant to the Cayman Islands’ Banks and Trust Companies Law. Queensgate Bank & Trust Company Ltd. is a Cayman Islands company which is licensed to carry on Banking and Trust Business in the Cayman Islands. The business address of Queensgate is 5th Floor, Harbour Place, 103 South Church Street, Grand Cayman, Cayman Islands. Queensgate has as its principal occupation providing offshore company management and administration, shareholder and fund services, commercial and personal trustee services and private banking. During the last five years, none of the persons named in this paragraph (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.⁵


⁵		The statements in this paragraph are made on information and belief.

EX-99.2 3 w37065exv99w2.htm EX-99.2 exv99w2

Exhibit 99.2

Information regarding managers of RG Capital Management, L.P.

RG Capital Management, L.P. does not have any general partner, manager or control person except as stated below in this Exhibit 99.2:

The general partner of RG Capital is RGC Management Company, LLC (“Management”). RG Capital also has an investment committee that includes, but is not limited to, the natural persons named below. Management is a Delaware limited liability company. The business address of Management is 3 Bala Plaza - East, Suite 501, 251 St. Asaph’s Road, Bala Cynwyd, PA 19004. Management is primarily engaged in the business of acting as the general partner of RG Capital.

The managing members of Management are Steven Katznelson and Gerald Stahlecker. Mr. Katznelson is a citizen of Canada. Mr. Stahlecker is a citizen of the United States. The business address of Messrs. Katznelson and Stahlecker is 3 Bala Plaza - East, Suite 501, 251 St. Asaph’s Road, Bala Cynwyd, PA 19004. Each of Messrs. Katznelson and Stahlecker is primarily engaged in the business of rendering investment advisory services to and on behalf of RG Capital.

During the last five years, none of the persons named in this Exhibit 99.2 (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Each of Management, Mr. Katznelson and Mr. Stahlecker disclaims beneficial ownership of securities held by the Reporting Persons and any other Noteholders.

EX-99.3 4 w37065exv99w3.htm EX-99.3 exv99w3

Exhibit 99.3

Joint Filing Agreement

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D may be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 13th day of July, 2007.

Radcliffe SPC, Ltd. for and on behalf of the Class A Segregated Portfolio

By:

RG Capital Management, L.P.

By:

RGC Management Company, LLC

By:

/s/

Gerald F. Stahlecker

Managing Director

RG Capital Management, L.P.

By:

RGC Management Company, LLC

By:

/s/

Gerald F. Stahlecker

Managing Director

EX-99.12 5 w37065exv99w12.htm EX-99.12 exv99w12

Exhibit 99.12

March 13, 2007

VIA FACSIMILE AND
OVERNIGHT COURIER

Earth Biofuels, Inc.
3001 Knox Street, Suite 403
Dallas, Texas 75205
Attention: Dennis McLaughlin
Facsimile No. (214) 389-9806

Event of Default Redemption Notice

Ladies and Gentlemen:

Reference is made to the Senior Convertible Note issued by Earth Biofuels, Inc., a Delaware corporation (the “Company”), to Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover Segregated Portfolio, a Cayman Islands segregated portfolio company (the “Investor”), in the original principal amount of $5 million (the “Note”), pursuant to the Securities Purchase Agreement, dated as of July 24, 2006 (the “Securities Purchase Agreement”), by and among the Company and the investors listed on the Schedule of Buyers attached thereto. Any capitalized term used herein and not defined herein shall have the meaning assigned to it in the Note or the Securities Purchase Agreement.

This notice constitutes an Event of Default Redemption Notice in accordance with the terms of Section 4(b) of the Note. Among other things, and without limiting any right the undersigned may have to declare other defaults or Events of Default by the Company, the Company has breached representations, warranties, covenants, and other terms and conditions in Transaction Documents. Each breach is incapable of being cured (and, in any event, the Company has failed to cure each breach within ten consecutive Business Days), and each breach has had a cost or adverse impact on the Holders in excess of $250,000, and, therefore, Events of Default have occurred as set forth in Section 4(a)(x) of the Note.

On August 4, 2006, Greenwich Power II, L.L.C. (“GP II”), Greenwich Power, L.L.C. (“GP”), and Lance A. Bakrow filed a Schedule 13D (the “Greenwich 13D”) that disclosed, among other things:

GP II, GP, and Mr. Bakrow “may be deemed to own beneficially” 22,000,000 shares of Common Stock of the Company, “representing approximately 9.3% of the Adjusted Outstanding Shares [as defined by the Greenwich 13D], . . . based on [the] shares of Common Stock outstanding as set forth in the [Company’s] Form 8-K filed on July 24, 2006.”

March 13, 2007
Page 2

	2.		On July 20, 2006, Apollo Resources International, Inc., a Utah corporation (“Apollo”), GP II and GP entered into a securities purchase agreement (the “Greenwich Transaction”), whereby GP II acquired (a) $8,000,000 in principal amount of 8% Exchangeable Notes due May 31, 2011 (the “Apollo Notes”) issued by Apollo (the principal and accrued interest of such Apollo Notes being exchangeable at any time prior to maturity at the option of the holder for shares of Common Stock of the Company presently owned of record by Apollo at an exchange price of $1.00 per share, subject to certain adjustments); and (b) a presently exercisable and in-the-money option expiring May 31, 2011 to purchase from Apollo up to 8,000,000 shares of Common Stock of the Company presently owned of record by Apollo at an exercise price equal to the lesser of (i) $1.50 per share or (ii) 80% of the average of the last reported sale prices of the Common Stock on each trading day during the 30 consecutive calendar days immediately preceding the effective date of exercise (the “Apollo Option”).

	3.		Each of GP II and GP is a party to registration rights agreements with Apollo, dated July 20, 2006, pursuant to which Apollo has agreed to cause the Company to file with the SEC one or more registration statements relating to the shares of Common Stock transferable upon exercise and/or exchange of the Apollo Notes and Apollo Option (the “Greenwich Registration Rights”). In addition, the Company has agreed to comply with such registration rights agreements.

	4.		Mr. Bakrow owns a presently exercisable and in-the-money warrant expiring May 31, 2011 to purchase from the Company 4,000,000 shares of Common Stock of the Company at an exercise price of $0.25 per share (the “Bakrow Warrant”) and Mr. Bakrow is entitled to registration rights related thereto (the “Bakrow Registration Rights”).

The Greenwich 13D reveals that multiple breaches of Transaction Documents constituting multiple Events of Default have occurred, including, without limitation, the following:

In Section 3(r) of the Securities Purchase Agreement, the Company represented and warranted that, except as disclosed in Schedule 3(r) to the Securities Purchase Agreement, (i) there are no options, warrants, 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, (ii) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities. The Company has breached Section 3(r) because Schedule 3(r) did not disclose the occurrence of the Greenwich Transaction, including, without limitation, (i) the issuance by Apollo of the Apollo Note and the Apollo Option, (ii) the existence of the Bakrow Warrant, and (iii) the existence of the Greenwich Registration Rights and the Bakrow Registration Rights.

March 13, 2007
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	2.		In Section 3(r) of the Securities Purchase Agreement, the Company also represented and warranted that Schedule 3(r) to the Securities Purchase Agreement set forth the shares of Common Stock owned beneficially or of record and Common Stock Equivalents held by each director and executive officer of the Company. In Schedule 3(r), the Company purported to set forth Common Stock beneficially owned by Apollo, whose chief executive officer is also the chief executive officer of the Company. In particular, the Company stated in Schedule 3(r) that Apollo beneficially owned 61.7% of the Common Stock of the Company. That was a material misstatement because, as revealed in the Greenwich 13D, GP II and GP are beneficial owners of the shares of Common Stock of the Company that Apollo would transfer to them upon exercise or exchange, as applicable, of the Apollo Option and Apollo Note, respectively. Schedule 3(r) incorrectly stated that those shares are beneficially owned by Apollo without qualification. By making this misstatement in Schedule 3(r) of the Securities Purchase Agreement, the Company breached Section 3(r) of the Securities Purchase Agreement in this respect as well.

	3.		Under Section 3(kk) of the Securities Purchase Agreement, the Company represented and warranted that all disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated by the Securities Purchase Agreement and the other Transaction Documents, including the Schedules to the Securities Purchase Agreement, furnished by or on behalf of the Company is true and correct and does 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 the light of the circumstances under which they were made, not misleading. The Company has breached Section 3(kk) of the Securities Purchase Agreement by (a) omitting the occurrence of the Greenwich Transaction on Schedule 3(r), (b) materially misstating on Schedule 3(r) that Apollo beneficially owned 61.7% of the Common Stock of the Company without qualification, notwithstanding the existence of the Apollo Notes and Apollo Options, and (c) omitting to disclose the Greenwich Transaction, including without limitation the Apollo Note and the Apollo Option, the Bakrow Warrant, the Greenwich Registration Rights, and the Bakrow Registration Rights.

	4.		The breaches of Section 3(kk) of the Securities Purchase Agreement described in the preceding paragraph also are breaches of Section 3(k) of the Securities Purchase Agreement. In Section 3(k), the Company represented and warranted that no information it had provided to the Buyers that it had not filed with the SEC contained any untrue statement of a material fact, or omitted to state any material fact the statement of which was necessary avoid being misleading.

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	5.		Under Section 2(b) of the Registration Rights Agreement, the Company was required to disclose on Schedule 2(b) to the Registration Rights Agreement all agreements by the Company to provide registration rights to any person with respect to Common Stock of the Company. The Company has breached Section 2(b) of the Registration Rights Agreement by failing to disclose on Schedule 2(b) to the Registration Rights Agreement the existence of the Greenwich Registration Rights and the Bakrow Registration Rights.

	6.		The Company has breached Section 5(b) of the Note by failing to disclose the occurrence of an Event of Default to the Investor, as the holder of the Note, within one Business Day after the occurrence thereof, as required by Section 5(b).

In addition to the foregoing, multiple additional Events of Default, and defaults under the Transaction Documents, have occurred and are continuing, including, without limitation, the following:

	1.		On or about August 18, 2006, the Company received an Event of Default Redemption Notice from Castlerigg Master Investments Ltd., a holder of Other Notes (the “August Event of Default Redemption Notice”), identifying various Events of Default and demanding that the Company redeem such holder’s interest in the Other Notes at the Event of Default Redemption Price on or before August 25, 2006. Pursuant to Sections 4(b) and 13(b) of the Note, the Company was required to notify the Investor of the occurrence of the various Events of Default and its receipt of the August Event of Default Redemption Notice so that the Investor would itself have the opportunity to deliver an Event of Default Redemption Notice to the Company. The Company, however, failed to provide the required notices. Such failure constitutes an Event of Default pursuant to Section 4(a)(x) of the Note.

	2.		Between August 18, 2006 and the date hereof, the Company received Event of Default Redemption Notices from various other holders of Other Notes. Pursuant to Section 13(b) of the Note, the Company was required to notify the Investor of its receipt of such other Event of Default Redemption Notices so that the Investor would itself have the opportunity to deliver an Event of Default Redemption Notice to the Company. The Company, however, failed to provide the required notices. Such failure constitutes an Event of Default pursuant to Section 4(a)(x) of the Note.

	3.		The Company has failed to file and obtain effectiveness of a Registration Statement covering the resale by the Investor of the shares of the Company’s common stock which are issuable upon conversion of the Note. Such failure is a breach of the provisions of the Registration Rights Agreement and constitutes an Event of Default pursuant to Section 4(a)(i) of the Note.

March 13, 2007
Page 5

	4.		The Company has failed to pay Registration Delay Payments resulting from the Company’s failure to file and obtain effectiveness of the Registration Statement referred to in the immediately preceding paragraph as required by the Registration Rights Agreement. Such failure to pay Registration Delay Payments constitutes an Event of Default pursuant to Section 4(a)(v) of the Note.

	5.		The Company has failed to make Interest payments due to the Investor as required by the Note. Such failure to pay Interest constitutes an Event of Default pursuant to Section 4(a)(v) of the Note.

	6.		On December 21, 2006, the Company entered into an interim resolution agreement with Kings Road Investments Ltd. (“Kings Road”), a holder of Other Notes, whereby the Company agreed to pay Kings Road the amount due and owing to it by March 31, 2007 and agreed to confess judgment in favor of Kings Road subject to certain conditions. The Company failed to extend a concurrent equivalent offer to the Investor and all other Buyers in violation of Section 9(e) of the Securities Purchase Agreement. Such failure constitutes an Event of Default pursuant to Section 4(a)(x) of the Note.

As a result of the occurrence of the above mentioned Events of Default and defaults under the Transaction Documents, the undersigned hereby notifies the Company of its election to exercise its redemption right pursuant to Section 4(b) of the Note and hereby submits this Event of Default Redemption Notice. The undersigned hereby elects to redeem the entire Note in full at the aggregate Event of Default Redemption Price of $7,997,313, which has been calculated as set forth in the attached Exhibit A. The attached calculation includes all Registration Delay Payments due and owing under the Registration Rights Agreement as well as Late Charges accrued since August 25, 2006, the date on which the undersigned would have been entitled to redemption of the Note had the Company notified the undersigned of the occurrence of the various Events of Default described in, and its receipt of, the August Event of Default Redemption Notice as required pursuant to Sections 4(b) and 13(b) of the Note. The Company shall pay to the undersigned Holder the Event of Default Redemption Price within five Business Days from the receipt of this Event of Default Redemption Notice pursuant to Section 13(a) of the Note.

This letter is without prejudice to the undersigned, and the undersigned fully and specifically reserves any and all rights, powers, privileges and remedies under the Transaction Documents or otherwise, including without limitation the right to seek rescissionary relief and/or damages from a court of competent jurisdiction. Nothing

March 13, 2007
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herein shall be construed to suggest that there are not currently existing other Events of Default, and the undersigned reserves all of its rights with respect to any such Events of Default.

This letter shall not entitle the Company or any other party to further notice or demand.


Sincerely yours, Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover Segregated Portfolio

By:	RG Capital Management, L.P.
By:	RGC Management Company, LLC

By:
	Name:	Gerald F. Stahlecker
	Title:	Managing Director

cc:

Roger A. Crabb, Esq., Scheef & Stone, LLP
Philip D. Anker, Esq., Wilmer Cutler Pickering Hale and Dorr, LLP


Earth Biofuels, Inc. — Calculation of Redemption Amount owed to:		RADCLIFFE


Assumptions
Conversion Amount (Note Amount)	$	5,000,000
Transaction Date		7/24/2006
Redemption Date		3/13/2007
Filing Deadline		8/23/2006
Effectiveness Deadline		9/22/2006
Redemption Premium		20.0	%	Definition Section in Note
Event of Default Interest		15.0	%	Defined under Interest in Section 2 of the Note
Annual Late Charge Rate		18.0	%	Section 25(b) of the Note
Registration Delay Percentage		1.5	%	Section 2(f) of the RRA
Registration Delay Interest		1.5	%	Section 2(f) of the RRA




INTEREST
Interest Starting Date		7/24/2006
Accrued Period		3/13/2007
Days Accrued		233
% of Year		64.7	%
Event of Default Interest		15.0	%
Conversion Amount (Note Amount)	$	5,000,000


Event of Default Interest since EOD	$	485,417

Redemption Premium		20.0	%
Event of Default Redemption Price	$	6,582,500





LATE CHARGES ON REDEMPTION AMOUNT — on principal amount only
From		8/25/2006
To		3/13/2007
Days Accrued		201
% of Year		55.8	%
Annual Late Charge Rate		18.0	%
Principal with Redemption Premium	$	6,000,000


Total Late Charge on Redemption Amount	$	603,000		Excluding redemption premium
Less Charges Already Paid		0

Subtotal	$	603,000
Redemption Premium		20.0	%
Late Charges with Redemption Premium	$	723,600		Including redemption premium





LIQUIDATED DAMAGES — Filing Delay and Effectiveness Failure

Filing Deadline		8/23/2006		Definition in RRA (30 days after Closing Date)

(i) Filing Delay Penalty	$	75,000		08/23/06
penalty for the period of 8/23/06 - 8/31/06		20,000		08/31/06
penalty for period 9/1/06 - 9/22/06		55,000		09/22/06

Total Filing Delay Penalties	$	150,000

(ii) Effectiveness Failure Penalty	$	75,000		09/22/06
penalty for period 9/22/06 - 9/30/06		20,000		09/30/06
penalty for October 06		77,500		10/31/06
penalty November 06		75,000		11/30/06
penalty for December 06		77,500		12/31/06
penalty for January 07		77,500		01/31/07
penalty for February 07		70,000		02/28/07
penalty for period 3/01/07 - 3/13/07		32,500		03/13/07

Total Effectiveness Failure Penalties	$	505,000
Total (filing and effectiveness failure penalties)	$	655,000

(iii) Late Charges
initial Filing Delay Penalty	$	7,575		08/23/06
filing delay for for period 8/23/06 - 8/31/06		1,940		08/31/06
filing delay for period 9/1/06 to 9/22/06		4,758		09/21/06
initial Effect. Failure Penalty		6,450		09/22/06
effectiveness failure for period 9/22/06 - 9/30/06		1,640		09/30/06
effectiveness failure for October 06		5,154		10/31/06
effectiveness failure for November 06		3,863		11/30/06
effectiveness failure for December 06		2,790		12/31/06
effectiveness failure for January 07		1,589		01/31/07
effectiveness failure for February 07		455		02/28/07


Total Late Charges on Filing and Effect. Failure	$	36,213

TOTAL Liquidated Damages	$	691,213



CASH PAYMENTS DUE ON REDEMPTION	$	7,997,313

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