CONSENT TO AMENDMENT AND WAIVER
EXHIBIT
10.1
CONSENT
TO AMENDMENT AND WAIVER
This
CONSENT TO AMENDMENT AND WAIVER (this “Consent”),
dated
as of April 9, 2007 (the “Effective
Date”),
is
entered into among EMCORE Corporation, a New Jersey corporation (the
“Company”),
and
the beneficial owners party hereto (collectively,
the “Consenting
Holders”).
Capitalized terms used but not defined herein have the meanings assigned to
them
in the Indenture, dated as of February 24, 2004 (the “Indenture”),
between the Company and Deutsche Bank Trust Company Americas, as trustee (the
“Trustee”).
RECITALS
WHEREAS,
the Company announced on November 6, 2006 that its board of directors
established a special committee (the “Special
Committee”)
to
conduct an internal investigation relating to the Company’s historical stock
option grant procedures and that the Company has informed the Securities and
Exchange Commission (the “SEC”)
of the
Special Committee’s investigation;
WHEREAS,
on December 15, 2006, the Company filed a Form 12b-25 with the SEC stating
that
the Company is (i) continuing to review the findings of the Special Committee
as
well as the accounting guidance regarding stock option granting practices
recently published by the SEC to determine, among other things, for which
specific prior periods a restatement of its historical financial statements
may
be required and (ii) unable to file its Form 10-K for the fiscal year ended
September 30, 2006 (the “Form
10-K”)
within
the time period prescribed by the SEC;
WHEREAS,
on January 12, 2007, the Company received two letters purporting to constitute
notices of default from persons claiming to hold more than 25% of the 5%
Convertible Senior Subordinated Notes due 2011 issued pursuant to the Indenture
(the “Notes”)
and on
January 30, 2007 received three additional letters purporting to constitute
notices of default from Cede & Co., the nominee of The Depository Trust
Company (“DTC”)
and
the Holder of record of $21,000,000 in aggregate principal amount of the Notes
(collectively, the “Notices”);
WHEREAS,
on February 12, 2007, the Company filed a Form 12b-25 with the SEC stating
that
the Company would not be able to timely file its Quarterly Report on Form 10-Q
for the quarter ended December 31, 2006 (the “Form
10-Q”);
WHEREAS,
under Section 8.02 of the Indenture, if the Company does not cure the purported
default within sixty (60) calendar days following notice of default, an Event
of
Default would occur under the Indenture and the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Notes could accelerate
the
maturity of the Notes causing the outstanding principal amount of the Notes
and
accrued and unpaid interest thereon to become immediately due and payable;
WHEREAS,
Section 11.02 of the Indenture permits the Company and the Trustee to amend
or
supplement the Indenture with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding and Sections 8.04 and 11.02
of
the Indenture permit the Holders of at least a majority in principal amount
of
the Notes to waive compliance by the Company with any provision of the Indenture
and the Notes;
WHEREAS,
on April 5, 2007, the Company received a notice of acceleration purporting
to
accelerate payment of the Notes (the “Notice
of Acceleration”);
WHEREAS,
Section 8.02 of the Indenture permits the Holders of a majority in aggregate
principal amount of the then outstanding Notes to rescind an acceleration and
its consequences by written notice to the Trustee;
WHEREAS,
the Consenting Holders, representing a majority in aggregate principal amount
outstanding on the date thereof, desire to rescind the Notice of Acceleration
and its consequences in accordance with Section 8.02 of the Indenture;
and
WHEREAS,
the Company and the Consenting Holders desire to amend the Indenture and the
Notes in the form of the First Supplemental Indenture between the Company and
the Trustee, a copy of which is attached hereto as Exhibit
A
(the
“Supplemental
Indenture”).
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereby agree as follows:
AGREEMENT
Section
1. Waiver.
Pursuant to Sections 8.04 and 11.02 of the Indenture and subject to the
provisions set forth in Section 13 f the Supplemental Indenture upon
effectiveness of the Supplemental Indenture, each Consenting Holder hereby
waives (the “Waiver”)
any
and all Defaults or Events of Default relating to any failure of the Company
to
observe or perform any covenant or agreement contained in the Notes or the
Indenture as a result of the Company’s failure to file with the SEC, or with the
Trustee, the Form 10-K, the Form 10-Q and/or any other reports that the Company
fails to file in a timely manner (collectively, the “Asserted
Reports Defaults”)
for
reasons in whole or in part directly or indirectly attributable to or arising
out of the Company’s review of its historical stock option grants as initially
reported in a Current Report on Form 8-K filed with the SEC on November 6,
2006.
Any Defaults or Events of Default that have occurred with respect to Section
6.03 of the Indenture shall be deemed to have been cured for all purposes and
the Notices are hereby withdrawn.
Section
2. Supplemental
Indenture.
Pursuant to Section 11.02 of the Indenture, each Consenting Holder hereby
consents to the execution and delivery by the Company and the Trustee of the
Supplemental Indenture in substantially the form attached hereto as Exhibit
A
and to
the amendments to the Indenture and the Notes set forth therein (the
“Amendments”).
Section
3. Recission
and Agreement to Rescind.
Each of
the Consenting Holders hereby rescinds the Notice of Acceleration and will
cause
the Depositary to be so advised. Furthermore, in the event that Holders or
beneficial owners of the Notes (other than the Consenting Holders) holding
at
least 25% in aggregate principal amount of the outstanding Notes deliver or
the
Trustee delivers a notice of default to the Company relating to any Asserted
Reports Defaults and/or declares all of the Notes to be due and payable (the
“Acceleration”),
each
of the Consenting Holders, severally and not jointly, hereby agrees to provide,
within three business days after the Company notifies such Consenting Holder
that Holders or beneficial owners of the Notes have given such Acceleration,
written notice to the Trustee that such Consenting Holder rescinds such notice
and/or the Acceleration, as applicable, in accordance with Section 8.02 of
the
Indenture.
Section
4. Transfer.
Any
Consenting Holder may transfer its Notes (together with its rights
hereunder) to any Person, subject to the ability of such Person to make the
representations and warranties set forth in Section 6 of this Consent and
subject to each such Person executing a counterpart to this Consent and
delivering such counterpart to the Trustee and the Company prior to the
transfer. Any transfer in violation of this Section 4 shall be null and void.
The provisions of this Section 4 will terminate on the Purchase Expiration
Date
(as defined in Section 5 hereof). The parties agree that the Trustee shall
have
no responsibility whatsoever with respect to any transfers in accordance with
this Section 4.
Section
5. Purchase
of Notes.
At any
time prior to the fifth Business Day following the Effective Date (the
“Purchase
Expiration Date”),
the
Company may purchase an aggregate of 12% of the outstanding principal amount
of
Notes held by each of the Consenting Holders, upon notice to the Consenting
Holders setting forth the purchase date (not later than the Purchase Expiration
Date), at a purchase price equal to $1,000 per $1,000 principal amount of the
Notes purchased plus accrued and unpaid interest, if any, to but excluding
the
date of purchase. On the purchase date, the Company shall notify the Trustee
as
to which Notes the Company intends to repurchase and shall transmit by wire
transfer to the Paying Agent (as defined in the Indenture) an aggregate amount
of money sufficient to pay the purchase price of and accrued interest on the
Notes to be purchased from the Consenting Holders. Each Consenting Holder shall
cause the broker or custodian holding such Consenting Holder’s beneficial
interest in the Notes to be purchased from such Consenting Holder to submit
an
instruction through DTC’s DWAC system to the Paying Agent to withdraw the amount
of Notes to be purchased from such Consenting Holder. Upon the Paying Agent’s
receipt of such instructions, the Company shall cause the Paying Agent to
deliver to the account number set forth next to each Consenting Holder’s name on
Schedule
I
hereto
payment in the amount set forth next to each Consenting Holder’s name on
Schedule
I
hereto.
The
Consenting Holder will not be entitled to receive interest accrued on and after
the purchase date, provided the purchase price has been deposited with the
Paying Agent.
Section
6. Representations
and Warranties of the Consenting Holders.
Each of
the Consenting Holders hereby represents and warrants to the Company as
follows:
(a) Each
Consenting Holder is the beneficial owner of the principal amount of Notes
indicated below its name on the signature page hereto, has the power and
authority to vote such Notes, has full power and authority to execute and
deliver this Consent and to perform its obligations hereunder and owns the
Notes
through the DTC Participant or Custodian set forth in Schedule
I
hereto.
(b) Each
Consenting Holder has such knowledge and experience in financial and business
matters that such Consenting Holder is capable of protecting its own interests
in connection with the grant of the rights set forth herein and evaluating
the
merits and risks related thereto.
(c) Each
Consenting Holder and such Consenting Holder’s advisors have such knowledge and
experience in financial, tax and business matters so as to enable the Consenting
Holder to utilize the information made available to the Consenting Holder to
evaluate the merits and risks of transaction contemplated by this Consent and
to
make an informed investment decision with respect thereto.
(d) Each
Consenting Holder has its own tax advisors and has not relied upon the Company
and/or its representatives for tax advice in connection with the transactions
contemplated by this Consent.
(e) Each
Consenting Holder acknowledges that the Amendments, including, without
limitation, the amendment to Section 3.07(a) of the Indenture contained in
the
Supplemental Indenture, provide additional rights or benefits to the Holders
of
the Notes and that such Amendment does not adversely affect the legal rights
under the Indenture of such Consenting Holder.
Section
7. Representation
and Warranty of the Company.
The
Company hereby represents and warrants to the Consenting Holders that it has
full power and authority to execute and deliver this Consent and to perform
its
obligations hereunder.
Section
8. Tax
Consequences.
The
Consenting Holders acknowledge that the Amendments and Waiver may constitute
a
taxable event with respect to the Notes and that each Consenting Holder has
consulted its tax advisors regarding the risk that adoption of the Amendments
and Waiver constitutes a significant modification for U.S. federal income tax
purposes, the tax consequences to them if the Amendments and Waiver are so
treated, the characterization of the Notes and any new notes (if the Amendments
and Waiver constitute a significant modification) as securities for tax
purposes, and the tax consequences of continuing to hold Notes after the
adoption of the Amendments and Waiver (including the specific consequences
in
the event of a subsequent redemption of the Notes). The Consenting Holders
further acknowledge that, to
ensure
compliance with requirements imposed by the Internal Revenue Service, that
any
U.S. federal income tax advice contained in this communication (including
attachments) is not intended or written to be used, and cannot be used, for
the
purpose of (i) avoiding penalties under the Internal Revenue Code or (ii)
promoting, marketing, or recommending to another party any transaction or matter
addressed herein.
Section
9. Miscellaneous.
(a) Severability.
In case
any provision of this Consent shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby.
(b) Counterpart
Originals.
The
parties may sign any number of counterparts of this Consent and on separate
counterparts. Each signed counterpart shall be an original, but all of them
together represent the same agreement.
(c) Headings.
The
Headings of the Sections of this Consent have been inserted for convenience
of
reference only, are not to be considered part of this Consent and shall in
no
way modify or restrict any of the terms or provisions hereof.
(d) Governing
Law.
THE
INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS
CONSENT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
(e) Amendment.
This
Consent may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
(f) Notices.
All
notices provided for or permitted hereunder shall be made in writing by
hand-delivery, facsimile or air courier guaranteeing overnight delivery to
the
other party at the following addresses (or at such other address as shall be
given in writing by any party to the others):
If
to the
Company:
EMCORE
Corporation
0000
Xxxxxx Xxxx. XX
Xxxxxxxxxxx,
XX 00000
Attention:
Chief Financial Officer
Facsimile
No.: (000) 000-0000
with
a
copy to:
Xxxxx
Day
00
Xxxxxxxxx Xxxxxx X.X.
Xxxxxxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxx, Esq.
Facsimile
No.: (000) 000-0000
If
to the
Consenting Holders, at the addresses shown below their names on the signature
page attached to this Consent, or to such other address as has been designated
by notice in writing by such party to the others in accordance with the
provisions of this Section 9(f).
All
such
notices shall be deemed to have been duly given (i) when delivered by hand,
if personally delivered, (ii) when confirmation of receipt is delivered by
facsimile transmission or (iii) on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery. For purposes of
this Consent, “business day” shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are authorized
or
obligated by law or executive order to close.
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
EMCORE
CORPORATION
By:
/s/
Xxxxxx Xxxxxxxx Xx.
Name:
Xxxxxx Xxxxxxxx Xx.
Title:
Chief Executive Officer
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
Akanthos
Arbitrage Master Fund, LP
By
Akanthos Capital Mgmt, LLC its GP
By:
/s/
Xxxxxxx Xxx
Xxxxxxx
Xxx, Manager
Holder
of
$21,000,000 principal amount of the Notes
Address:
|
c/o
Akanthos Capital Management, LLC
|
00000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx
Xxxxx, XX 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
ALEXANDRA
GLOBAL MASTER FUND LTD.
By:
ALEXANDRA INVESTMENT MANAGEMENT, LLC, as Investment Manager
By:
/s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
Chairman & CEO
Holder
of
$6,475,000 principal amount of the Notes
Address:
c/o
Alexandra Investment Management, LLC
000
Xxxxx
Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
CC
ARBITRAGE LTD.
By:
/s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
Managing Director
Holder
of
$10,500,000 principal amount of the Notes
Address:
000
X.
Xxxxxxx 00xx
Xxxxx
Xxxxxxx,
XX 00000
Facsimile
No.: 312-692-7551
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
CITIGROUP
GLOBAL MARKETS INC.
By:
/s/
Xxxxx X. Xxxxxxx
Name:
Xxxxx X. Xxxxxxx
Title:
M.D.
Holder
of
$22,775,000 principal amount of the Notes
Address:
000
Xxxxxxxxx Xxxxxx - 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
FIDELITY
CONVERTIBLE SECURITIES FUND
By:
/s/
Xxxxx Xxxxxxxx
Name:
Xxxxx Xxxxxxxx
Title:
Assistant Treasurer
Holder
of
$9,000,000 principal amount of the Notes
Address:
00
Xxxxxxxxxx Xxxxxx X00X
Xxxxxx,
XX 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
FIDELITY
STRATEGIC DIVIDEND & INCOME FUND
By:
/s/
Xxxxx Xxxxxxxx
Name:
Xxxxx Xxxxxxxx
Title:
Assistant Treasurer
Holder
of
$1,000,000 principal amount of the Notes
Address:
00
Xxxxxxxxxx Xxxxxx X00X
Xxxxxx,
XX 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
FORUM
FUNDS - ABSOLUTE STRATEGIES FUND, managed by Mohican Financial Management,
LLC
By:
/s/
Xxxx Xxxx
Name:
Xxxx Xxxx
Title:
Chief Investment Officer
Holder
of
$300,000 principal amount of the Notes
Address:
00
Xxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxxx,
XX 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
MOHICAN
VCA MASTER FUND LTD.
By:
/s/
Xxxx Xxxx
Name:
Xxxx Xxxx
Title:
Chief Investment Officer
Holder
of
$2,500,000 principal amount of the Notes
Address:
00
Xxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxxx,
XX 00000
Facsimile
No.: 000-000-0000
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
ONYX
FUNDS HOLDINGS LDC
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
Portfolio Manager
Holder
of
$1,000,000 principal amount of the Notes
Address:
00
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Facsimile
No.: 212-514-6767
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
TQA
SPECIAL OPPORTUNITIES MASTER FUND LTD
By:
/s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
CEO
Holder
of
$3,100,000 principal amount of the Notes
Address:
000
Xxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Facsimile
No.:
IN
WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
as of the date first above written.
CONSENTING
HOLDER:
WHITEBOX
DIVERSIFIED CONVERTIBLE ARBITRAGE PARTNERS LP
By:
/s/
Xxxxxxxx Xxxx
Name:
Xxxxxxxx Xxxx
Title:
Chief Financial Officer/Director
Holder
of
$1,000,000 principal amount of the Notes
Address:
0000
Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx,
XX 00000
Facsimile
No.:
