EMCORE CORPORATION
Warrant To Purchase Common
Stock
Warrant No.: ______
Date of Issuance: October 1, 2009 (“
Issuance Date ”)
EMCORE Corporation, a New Jersey
corporation (the “ Company ”), hereby certifies
that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Commerce Court Small
Cap Value Fund, Ltd., the registered holder hereof or its permitted
assigns (the “ Holder ”), is entitled, subject
to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, upon exercise of
this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “ Warrant ”), at any time or times
on or after the date immediately following the six-month
anniversary of the Issuance Date (the “ Initial Exercise
Date ”), but not after 11:59 p.m., New York City time, on
the Expiration Date (as defined below), _________ (subject to
adjustment as provided herein) fully paid and nonassessable shares
of Common Stock (as defined below) (the “
Warrant Shares ”). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth
in Section 15. This Warrant is being issued pursuant to that
certain Common Stock Purchase Agreement, dated as of October 1,
2009 (the “ Purchase Agreement ”), by and
between the Company and Commerce Court Small Cap Value Fund, Ltd.,
and in partial consideration for Commerce Court Small Cap Value
Fund, Ltd.’s execution and delivery of the Purchase
Agreement.
(a) Mechanics of
Exercise . Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in
Section 1(f), this Warrant may be exercised by the Holder on
any day on or after the Initial Exercise Date, in whole or in part,
by delivery (whether via facsimile or otherwise) of a written
notice, in the form attached hereto as Exhibit A (the
“ Exercise Notice ”), of the Holder’s
election to exercise this Warrant. Within one (1)
Trading Day following an exercise of this Warrant as aforesaid, the
Holder shall deliver payment to the Company of an amount equal to
the Exercise Price in effect on the date of such exercise
multiplied by the number of Warrant Shares as to which this Warrant
was so exercised (the “ Aggregate Exercise Price
”) in cash or via wire transfer of immediately available
funds if the Holder did not notify the Company in such Exercise
Notice that such exercise was made pursuant to a Cashless Exercise
(as defined in Section 1(d)). The Holder shall not be required
to deliver the original of this Warrant in order to effect an
exercise hereunder. Execution and delivery of an Exercise Notice
with respect to less than all of the Warrant Shares shall have the
same effect as cancellation of the original of this Warrant and
issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. Execution and delivery of an
Exercise Notice for all of the then-remaining Warrant Shares shall
have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the
terms hereof. On or before the first (1 st )
Trading Day following the date on which the Company has received an
Exercise Notice, the Company shall transmit by facsimile or via
electronic mail an acknowledgment of confirmation of receipt of
such Exercise Notice to the Holder and the Company’s transfer
agent. On or before the third (3 rd )
Trading Day following the date on which the Company has received
such Exercise Notice, the Company shall credit such
aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with The Depository Trust Company
(“ DTC ”) through its Deposit/Withdrawal at
Custodian (DWAC) system, if the Company is then a participant in
such system and either (i) the Registration Statement (as defined
in the Purchase Agreement) is effective, (ii) there is an effective
registration statement permitting the resale of the Warrant Shares
that are the subject of such Exercise Notice by the Holder or (iii)
this Warrant is being exercised pursuant to a Cashless Exercise (as
specified in the applicable Exercise Notice), and otherwise shall
issue and deliver to the Holder or, at the Holder’s
instruction pursuant to the Exercise Notice, the Holder’s
agent or designee, in each case, sent by reputable overnight
courier to the address as specified in the applicable Exercise
Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee (as indicated in
the applicable Exercise Notice), for the number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares (as the case may
be). If this Warrant is submitted in connection with any
exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an
exercise, then, at the request of the Holder, the Company shall as
soon as practicable and in no event later than three (3) Business
Days after any exercise and at its own expense, issue and deliver
to the Holder (or its designee) a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to
which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant,
but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay
any and all taxes which may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this
Warrant.
(b) Exercise
Price . For purposes of this Warrant, “ Exercise
Price ” means $____, subject to adjustment as provided
herein.
(c) Company’s
Failure to Timely Deliver Securities . If the Company shall
fail, for any reason or for no reason, to use its best efforts to
issue to the Holder within three (3) Trading Days after receipt of
the applicable Exercise Notice, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register
such shares of Common Stock on the Company’s share register
or to credit the Holder’s balance account with DTC for such
number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise of this Warrant (as the case may
be), then, in addition to all other remedies available to the
Holder, the Company shall pay in cash to the Holder on each day
after such third (3 rd
) Trading Day that the issuance of
such shares of Common Stock is not timely effected an amount equal
to 1.5% of the product of (A) the aggregate the number of shares of
Common Stock not issued to the Holder on a timely basis and to
which the Holder is entitled and (B) the Closing Sale Price of the
Common Stock on the Trading Day immediately preceding the last
possible date which the Company could have issued such shares of
Common Stock to the Holder without violating Section 1(a). In
addition to the foregoing, if within three (3) Trading Days after
the Company’s receipt of the
applicable Exercise Notice, the Company shall fail to issue and
deliver a certificate to the Holder and register such shares of
Common Stock on the Company’s share register or credit the
Holder’s balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon the
Holder’s exercise hereunder (as the case may be), and if on
or after such third (3 rd )
Trading Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock issuable upon such
exercise that the Holder anticipated receiving from the Company (a
“ Buy-In ”), then, in addition to all other
remedies available to the Holder, the Company shall, within three
(3) Business 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, 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 or
credit the Holder’s balance account with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the
Holder’s exercise hereunder (as the case may be) (and to
issue such shares of Common Stock) shall terminate, or (ii)
promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such shares of Common
Stock or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder (as the case may be) 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 Sale Price of the Common Stock
on the Trading Day immediately preceding the date of the applicable
Exercise Notice.
(d) Cashless
Exercise . Notwithstanding anything contained herein to the
contrary (other than Section 1(f) below), if at the time of
exercise hereof (i) the Registration Statement is not effective (or
the Prospectus (as defined in the Purchase Agreement) contained
therein is not available for use by the Holder) and (ii) a
registration statement permitting the resale by the Holder of all
of the Warrant Shares is not effective, the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the
Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the “Net
Number” of shares of Common Stock determined according to the
following formula (a “ Cashless Exercise
”):
Net Number = (A x B) - (A x
C)
For purposes of the foregoing
formula:
A= the total number of shares with respect to
which this Warrant is then being exercised.
B= as applicable: (i) the Closing Sale Price of
the Common Stock on the Trading Day immediately preceding the date
of the applicable Exercise Notice if such Exercise Notice is (1)
both executed and delivered pursuant to Section 1(a) hereof on
a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 1(a) hereof on a Trading Day prior to the
opening of regular trading hours (as defined in Rule 600(b)(64) of
Regulation NMS promulgated under the federal securities laws) on
such Trading Day, (ii) the Bid Price (as defined below) of
the
Common Stock as of the time of the Holder’s execution of the
applicable Exercise Notice if such Exercise Notice is executed
during regular trading hours on a Trading Day and is delivered
within two (2) hours thereafter pursuant to Section
1(a) hereof and (iii) the Closing Sale Price of the Common
Stock on the date of the applicable Exercise Notice if the date of
such Exercise Notice is a Trading Day and such Exercise Notice is
both executed and delivered pursuant to Section 1(a) hereof
after the close of regular trading hours on such Trading
Day.
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C= the Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.
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(e) Disputes
. In the case of a dispute as to the determination of
the Exercise Price or the arithmetic calculation of the number of
Warrant Shares to be issued pursuant to the terms hereof, the
Company shall promptly issue to the Holder the number of Warrant
Shares that are not disputed and resolve such dispute in accordance
with Section 13.
(f) Limitations on
Exercises . Notwithstanding anything to the contrary contained
in this Warrant, this Warrant shall not be exercisable by the
Holder hereof to the extent (but only to the extent) that the
Holder or any of its affiliates would beneficially own in excess
of 9.9% (the “ Maximum Percentage ”) of
the Common Stock. To the extent the above limitation applies,
the determination of whether this Warrant shall be exercisable
(vis-à-vis other convertible, exercisable or exchangeable
securities owned by the Holder) and of which such securities shall
be exercisable (as among all such securities owned by the Holder)
shall, subject to such Maximum Percentage limitation, be determined
on the basis of the first submission to the Company for conversion,
exercise or exchange (as the case may be), and the Company shall
have no obligation to verify or confirm the accuracy of such
determination. No prior inability to exercise this Warrant pursuant
to this paragraph shall have any effect on the applicability of the
provisions of this paragraph with respect to any subsequent
determination of exercisability. For the purposes of this
paragraph, beneficial ownership and all determinations and
calculations (including, without limitation, with respect to
calculations of percentage ownership) shall be determined in
accordance with Section 13(d) of the 1934 Act (as defined below).
The provisions of this paragraph shall be implemented in a manner
otherwise than in strict conformity with the terms of this
paragraph to correct this paragraph (or any portion hereof) which
may be defective or inconsistent with the intended Maximum
Percentage beneficial ownership limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such Maximum Percentage limitation. The limitations
contained in this paragraph shall apply to a successor Holder of
this Warrant. The holders of Common Stock shall be third party
beneficiaries of this paragraph and the Company may not waive this
paragraph without the consent of holders of a majority of its
Common Stock. For any reason at any time, upon the written or oral
request of the Holder, the Company shall within one (1) Business
Day confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding, including by virtue of any
prior conversion or exercise of convertible or exercisable
securities into Common Stock, including, without limitation,
pursuant to this Warrant.
(g) Insufficient
Authorized Shares . The Company shall at all times keep
reserved for issuance under this Warrant no less than the maximum
number of shares of Common Stock as shall be necessary to satisfy
the Company’s obligation to issue shares of Common Stock
hereunder (without regard to any limitation otherwise contained
herein with respect to the
number of shares of Common Stock that may be acquirable upon
exercise of this Warrant). If, notwithstanding the foregoing, and
not in limitation thereof, at any time while this Warrant remains
outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its
obligation to reserve for issuance upon exercise of this Warrant at
least a number of shares of Common Stock equal to the number of
shares of Common Stock as shall from time to time be necessary to
effect the exercise of all of this Warrant (the “ Required
Reserve Amount ”) (an “ Authorized Share
Failure ”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to
reserve the Required Reserve Amount for all of this Warrant.
Without limiting the generality of the foregoing sentence, as soon
as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than sixty (60) days after the
occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in
the number of authorized shares of Common Stock. In connection with
such meeting, the Company shall provide each stockholder with a
proxy statement and shall use its best efforts to solicit its
stockholders’ approval of such increase in authorized shares
of Common Stock and to cause its board of directors to recommend to
the stockholders that they approve such proposal.
2. ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES . The Exercise
Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in
this Section 2.
(a) Stock Dividends
and Splits . If the Company, at any time on or after
the date of the Purchase Agreement, (i) pays a stock dividend on
one or more classes of its then outstanding shares of Common Stock
or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common Stock, (ii) subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or
more classes of its then outstanding shares of Common Stock into a
larger number of shares or (iii) combines (by combination, reverse
stock split or otherwise) one or more classes of its then
outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment
made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an
adjustment under this paragraph occurs during the period that an
Exercise Price is calculated hereunder, then the calculation of
such Exercise Price shall be adjusted appropriately to reflect such
event.
(b) Number of
Warrant Shares . Simultaneously with any adjustment to the
Exercise Price pursuant to paragraph (a) of this Section 2, the
number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable
hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to
such adjustment (without regard to any limitations on exercise
contained herein).
(c)
Calculations . All calculations under this Section 2 shall
be made to the nearest cent or the nearest 1/100
th of a share, as applicable. The number of shares
of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the
disposition of any such shares shall be considered an issue or sale
of Common Stock.
3. RIGHTS UPON
DISTRIBUTION OF ASSETS . In addition to any adjustments
pursuant to Section 2 above, if the Company shall declare or make
any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “ Distribution ”), at any time after the
issuance of this Warrant, then, in each such case, (i) the Company
shall provide notice to the Holder at least 15 days prior to the
date on which a record is taken for such Distribution, or if no
such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the participation
in such Distribution and (ii) upon each exercise of this Warrant,
the Holder shall receive the applicable Distribution to the same
extent that the Holder would have participated therein if the
Holder had held the number of shares of Common Stock acquirable
upon such exercise of this Warrant immediately before the date on
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (and such Distribution shall be held in abeyance for
the benefit of the Holder until such time, if ever, as its
exercises this Warrant in whole or in part).
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PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS .
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(a) Purchase
Rights . In addition to any adjustments pursuant to
Section 2 above, if at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “
Purchase Rights ”), then (i) the Company shall provide
notice to the Holder at least 15 days prior to the date on which a
record is taken for the grant, issuance or sale of such Purchase
Rights, or if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for
the participation in for the grant, issuance or sale of such
Purchase Rights and (ii) upon each exercise of this Warrant, the
Holder shall acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common
Stock acquirable upon such exercise of this Warrant immediately
before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock
are to be determined for the grant, issue or sale of such Purchase
Rights (and such Purchase Rights shall be held in abeyance for the
benefit of the Holder until such time, if ever, as its exercises
this Warrant in whole or in part).
(b) Fundamental
Transactions .
(i) The Company shall
not enter into or be party to a Fundamental Transaction unless the
Company uses it reasonable best efforts to cause the Successor
Entity to assume in writing all of the obligations of the Company
under this Warrant and
the other Transaction Documents (as defined in the Purchase
Agreement) in accordance with the provisions of this Section 4(b)
pursuant to written agreements in form and substance satisfactory
to the Holder and approved by the Holder prior to such Fundamental
Transaction (including agreements to deliver to the Holder in
exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and
substance to this Warrant, including, without limitation, which is
exercisable for a corresponding number of shares of capital stock
equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on
the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise
price hereunder to such shares of capital stock (but taking into
account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of
capital stock, such adjustments to the number of shares of capital
stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction)).
(ii) Upon the
consummation of each Fundamental Transaction in which the Successor
Entity so assumes this Warrant, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of the
applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant and
the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein.
(iii) In addition to and
not in substitution for any other rights hereunder, if (1) the
Successor Entity has not agreed prior to the consummation of a
Fundamental Transaction to assume this Warrant pursuant to, and in
accordance with, this Section 4(b) upon consummation of such
Fundamental Transaction and (2) such Fundamental Transaction is one
pursuant to which holders of shares of Common Stock are entitled to
receive securities or other assets (including, without limitation,
cash) with respect to or in exchange for shares of Common Stock (a
“ Corporate Event &rdquo
