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Exhibit 10.14
 
 
NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT
 
This NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT (the “Agreement”), dated as of
September 23, 2005, is between SILICON VALLEY BANK (“Buyer”) having a place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and EMCORE
CORPORATION (“Seller”), a New Jersey corporation, with its chief executive
office at 145 Belmont Drive, Somerset, New Jersey 08873.
 
1 Definitions.
 
When used herein, the following terms have the following meanings.
 
1.1 “Account Debtor” has the meaning set forth in the Massachusetts Uniform
Commercial Code and shall include any person liable on any Purchased Receivable,
including without limitation, any guarantor of the Purchased Receivable and any
issuer of a letter of credit or banker’s acceptance.
 
1.2 “Adjustments” means all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor with respect to any Purchased Receivable other than by reason of an
Insolvency Event.
 
1.3 “Administrative Fee” means for any Purchase the percentage of the Total
Purchased Receivables Amount set forth in the Schedule for such Purchase.
 
1.4 “Business Day” means any day other than a Saturday, Sunday, or other day on
which banks in California or Massachusetts are required or authorized by law to
close.
 
1.5 “Discount Rate” means for any Purchase the “Discount Rate” set forth in the
Schedule for such Purchase.
 
1.6 “Due Date” means for any Purchase the “Due Date” set forth in the Schedule
for such Purchase.
 
1.7 “Event of Default” has the meaning set forth in Section 10 hereof.
 
1.8 “Insolvency Event” means, with respect to any Account Debtor, (a) the
commencement of a case, action or proceeding with respect to such Account Debtor
before any court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, (b) such Account Debtor is generally not paying its debts
when due, (c) the financial inability to make payment on a Purchased Receivable,
or (d) the making or commencement of any general assignment for the benefit of
creditors, composition, marshaling of assets for creditors, or other similar
arrangement in respect of the creditors generally or any substantial portion of
the creditors of such Account Debtor.
 
1.9 “Invoice Amount” means for any Purchase, the “Invoice Amount” set forth in
the Schedule for such Purchase.
 
1.10 “Late Payment Settlement Fee” has the meaning set forth in Section 2.2.
 
1.11 “Open Amount” means the portion of any Purchased Receivable which has been
pre-paid to the Seller.
 
1.12 “Payment in Full” means the receipt by Buyer of one or more payments in
respect of a Purchased Receivable equal to the Purchased Receivable Amount.
 
1.13 “Prime Rate” means per annum rate of interest from time to time announced
and made effective by Buyer as its Prime Rate (which rate may or may not be the
lowest rate available from Buyer at any given time).
 
1.14 “Purchase” means the purchase by Buyer from Seller of one or more Purchased
Receivables on a Purchase Date as listed in the Schedule applicable to such
Purchase.
 
1.15 “Purchase Date” means for any Purchase the date set forth as the “Purchase
Date” in the Schedule for such Purchase.
 
1.16 “Purchase Price” means for any Purchase the “Purchase Price” set forth on
the Schedule for such Purchase.
 
1.17 “Purchased Receivable” means for any Purchase a Receivable identified on
the Schedule for such Purchase.
 
1.18 “Purchased Receivable Amount” means for any Purchased Receivable, the
“Invoice Amount” set forth with respect to such Purchased Receivable on the
applicable Schedule minus the Open Amount.
 
1.19 “Receivable” means an account, receivable, chattel paper, instrument,
contract right, documents, general intangible, letter of credit, draft, bankers
acceptances, and other right to payment, and all proceeds thereof.
 
1.20 “Related Property” has the meaning as set forth in Section 9 hereof.
 
1.21 “Repurchase Amount” has the meaning set forth in Section 4.2 hereof.
 
1.22 “Schedule” means for each Purchase a schedule executed by the parties in
the form of Exhibit A hereto identifying each Purchased Receivable subject to
such Purchase and setting forth financial and other details relating to such
Purchase, all as contemplated by Exhibit A.
 
1.23 “Settlement Date” has the meaning set forth in Section 3.2 hereof.
 
1.24 “Total Purchased Receivables Amount” means for any Purchase the total of
the Purchased Receivable Amounts for all Purchased Receivables subject to such
Purchase as set forth on the applicable Schedule.
 
2 Purchase and Sale of Receivables.
 
2.1 Sale and Purchase. Subject to the terms and conditions of this Agreement,
with respect to each Purchase, effective on each applicable Purchase Date,
Seller agrees to sell to Buyer and Buyer agrees to buy from Seller all right,
title, and interest (but none of the obligations with respect to) of the Seller
to the payment of all sums owing or to be owing from the Account Debtors under
each Purchased Receivable to the extent of the Purchased Receivable Amount for
such Purchased Receivable.
 
Each purchase and sale hereunder shall be in the sole discretion of Buyer and
Seller. In any event, Buyer will not (i) purchase any Receivables in excess of
an aggregate outstanding amount of Twenty Million Dollars ($20,000,000.00), or
(ii) purchase any Receivables under this Agreement after December 31, 2006,
unless the term of this Agreement has been extended by mutual written agreement
of the parties. The purchase of each Purchased Receivable may be evidenced by an
assignment or bill of sale in a form acceptable to Buyer.
 
2.2 Purchase Price and Related Matters. With respect to each Purchase:
 
(a) Payment of Purchase Price. On the Purchase Date, the Purchase Price, less
the Administrative Fee and legal fees and expenses of counsel related thereto,
shall be paid by Buyer to Seller.
 
(b) Late Payment Settlement Fee. In the event that Payment in Full of any
Purchased Receivable is not received on or before the Due Date, Seller agrees to
pay to Buyer an additional amount on any unpaid amount, calculated at the
Discount Rate, through the earlier to occur of (i) such date that Buyer receives
Payment in Full, and (ii) an additional ninety (90) days past the Due Date
(“Late Payment Settlement Fee”) (subject to Section 4.2 (Seller's Agreement to
Repurchase) herein). In the event that such Purchased Receivable is
uncollectible (due to an Account Debtor Insolvency Event), then the Late Payment
Settlement Fee period shall be the lesser of forty-five (45) days, and the date
on which such Purchased Receivable becomes uncollectible due to such Insolvency
Event.
 
2.3 Facility Fee. A fully earned, non-refundable facility fee of Seventy
Thousand Dollars ($70,000.00) is earned by Buyer upon execution of this
Agreement and is payable from Seller as follows: (i) Forty Thousand Dollars
($40,000.00)on the date hereof, and (ii) Thirty Thousand Dollars ($30,000.00) on
the earlier to occur of (a) the termination of this Agreement by Seller, or (b)
December 30, 2005. In addition, Seller shall pay to Buyer a facility fee of
Seventy Thousand Dollars ($70,000.00) on December 30th of each year after
December 30, 2005, provided that the term has been extended by mutual written
agreement of the parties.
 
2.4 Nature of Transaction. It is the intent of the parties hereto that each
purchase and sale of Receivables hereunder is and shall be a true sale of such
Receivables for all purposes (including, without limitation, accounting and tax
treatment) and not a loan arrangement. Each such sale shall be, subject to the
terms hereof, absolute and irrevocable, providing Buyer with the full risks and
benefits of ownership of the Purchased Receivables (such that the Purchased
Receivables would not be property of the Seller’s estate in the event of the
Seller’s bankruptcy). The parties agree that appropriate UCC financing
statements have been or shall promptly be filed to reflect that Seller is the
seller and Buyer is the purchaser of Receivables hereunder.
 
2.5 Good Faith Deposit. Seller has paid to Buyer a good faith deposit of Fifteen
Thousand Dollars ($15,000.00) (the “Good Faith Deposit”) to initiate the Buyer’s
due diligence review process, which Good Faith Deposit shall be applied to the
facility fee and/or other expenses (including attorneys’ fees) of the Buyer and
closing costs;
 
3 Collections, Charges and Remittances.
 
3.1 Application of Payments. All payments in respect of any Purchased
Receivable, whether received from an Account Debtor or any other source and
whether received by Seller or Buyer, shall be the property of Buyer and Seller
shall have no ownership interest therein.
 
3.2 Collection by Seller. In order to facilitate the collection of the Purchased
Receivables in the ordinary course of business, Seller agrees to act as Buyer’s
agent for collection of the Purchased Receivables. Accordingly, Buyer hereby
appoints the Seller its attorney-in-fact to ask for, demand, take, collect, sue
for and receive all payments made in respect of the Purchased Receivables and to
enforce all rights and remedies thereunder and designates Seller as Buyer’s
assignee for collection; provided that such appointment of Seller as such
attorney-in-fact or assignee for collection may be revoked by Buyer at any time
following an Event of Default (and any applicable cure period) or the failure of
a Purchased Receivable to be paid on the Due Date. Seller, as such
attorney-in-fact, shall use due diligence and commercially reasonable lawful
efforts in accordance with its usual policies and practices to collect all
amounts owed by the Account Debtors on each Purchased Receivable when the same
become due. In the enforcement or the collection of Purchased Receivables,
Seller shall commence any legal proceedings only in its own name as an assignee
for collection or on behalf of Buyer or, with Buyer’s prior written consent, in
Buyer’s name. Seller shall have no obligation to commence any such legal
proceedings unless Buyer has agreed to assume the legal fees and other expenses
to be incurred in such proceedings. In no event shall Seller take any action
which would make Buyer a party to any litigation or arbitration proceeding
without Buyer’s prior written consent. Until Buyer has received Payment in Full
as to any Purchase, Seller shall (i) hold in trust for Buyer and turn over to
Buyer forthwith upon receipt all payments made to Seller by Account Debtors with
respect to the Purchased Receivables subject to such Purchase and (ii) turn over
to Buyer forthwith on receipt all instruments, chattel paper and other proceeds
of the Purchased Receivables; provided that unless an Event of Default has
occurred and is continuing, Seller shall remit amounts received by Seller and
due to Buyer on a weekly basis on Friday of each week (each a “Settlement
Date”), commencing on the last business day of the second week after the
Purchase Date. On each Settlement Date, Seller shall deliver to Buyer a report,
in form and substance acceptable to Buyer, of the account activity (including
dates and amounts of payments) and changes in account status for each Purchased
Receivable.
 
3.3 No Obligation to Take Action. Buyer shall have no obligation to perform any
of Seller’s obligations under any Purchased Receivables or to take any action or
commence any proceedings to realize upon any Purchased Receivables (including
without limitation any defaulted Purchased Receivables), or to enforce any of
its rights or remedies with respect thereto.
 
4 Non-Recourse; Repurchase Obligations.
 
4.1 Non-Recourse. Except as otherwise set forth in this Agreement, Buyer’s
acquisition of Purchased Receivables from Seller hereunder shall be without
recourse against Seller.
 
4.2 Seller’s Agreement to Repurchase. In the event that (A) with respect to any
Purchased Receivable there has been any breach of warranty or representation set
forth in Section 6.1 hereof (except for breaches of warranty or representations
which are permitted to be, and have been, cured pursuant to Section 7 hereof) or
any breach of any covenant contained in this Agreement with respect to such
Purchased Receivable; or (B) with respect to such Purchased Receivable the
Account Debtor asserts any Adjustment (except for such matters as are permitted
to be, and have been, cured pursuant to Section 7 hereof), Seller shall, at its
option, either (X) pay to Buyer on demand, the full face amount, or any unpaid
portion, of such Purchased Receivable; together with, in the case of (A) or (B),
all reasonable attorneys’ fees and expenses and all court costs incurred by
Buyer in collecting such Purchased Receivable and/or enforcing its rights under,
or collecting amounts owed by Seller in connection with this Agreement
(collectively, the “Repurchase Amount”), (Y) shall substitute another Receivable
acceptable to Buyer in its sole and absolute discretion that is equal in amount
to such Purchased Receivable or, with respect to (B) above only, (Z) shall pay
to Buyer the amount of any Adjustment in accordance with Section 7 hereof;
provided, however, that Seller shall have no obligation to pay the Repurchase
Amount, substitute another Receivable or, with respect to (B) above only, pay
the amount of any Adjustment if there has been an Account Debtor Insolvency
Event with respect to such Purchased Receivable. Upon payment of the Repurchase
Amount or substitution of another Receivable, the Purchased Receivable subject
to the preceding paragraph shall be deemed property of and owned solely by the
Seller (and shall not be deemed to be a Purchased Receivable hereunder).
 
4.3 Seller’s Payment of the Amounts Due Buyer. All amounts due from Seller to
Buyer shall be paid by Seller to Buyer in immediately available funds by fedwire
to the account listed in the attached Schedule.
 
5 Power of Attorney.
 
Seller does hereby irrevocably appoint Buyer and its successors and assigns as
Seller’s true and lawful attorney-in-fact, and hereby authorizes Buyer: (a) to
sell, assign, transfer, pledge, compromise, or discharge the whole or any part
of the Purchased Receivables; (b) to demand, collect, receive, sue, and give
releases to any Account Debtor for the monies due or which may become due upon
or with respect to the Purchased Receivables and to compromise, prosecute, or
defend any action, claim, case or proceeding relating to the Purchased
Receivables, including the filing of a claim or the voting of such claims in any
bankruptcy case, all in Buyer’s name or Seller’s name, as Buyer may choose; (c)
to prepare, file and sign Seller’s name on any notice, claim, assignment,
demand, draft, or notice of or satisfaction of lien or mechanics’ lien or
similar document with respect to Purchased Receivables; (d) to notify all
Account Debtors with respect to the Purchased Receivables to pay Buyer directly;
(e) to receive, open, and dispose of all mail addressed to Seller for the
purpose of collecting the Purchased Receivables; (f) to endorse Seller’s name on
any checks or other forms of payment on the Purchased Receivables; (g) to
execute on behalf of Seller any and all instruments, documents, financing
statements and the like to perfect Buyer’s interests in the Purchased
Receivables; and (h) to do all acts and things necessary or expedient, in
furtherance of any such purposes.
 
6 Representations, Warranties and Covenants.
 
6.1 Receivables’ Warranties, Representations and Covenants. To induce Buyer to
purchase the Purchased Receivables and to render its services to Seller, and
with full knowledge that the truth and accuracy of the following are being
relied upon by the Buyer in determining whether to accept receivables as
Purchased Receivables, Seller represents, warrants, covenants and agrees, with
respect to each Purchased Receivable, that, as of the date of the applicable
Purchase pertaining to such Purchased Receivable:
 
(a) Seller is the absolute owner of each of the Purchased Receivables and has
full legal right to sell, transfer and assign such receivables;
 
(b) The correct amount of each Purchased Receivable is as set forth on the
applicable Schedule and is not in dispute;
 
(c) The payment of each Purchased Receivable is not contingent upon the
fulfillment of any obligation or contract, and any and all obligations required
of the Seller have been fulfilled as of the applicable Purchase Date;
 
(d) Such Purchased Receivable is based on an actual sale and delivery of goods
and/or services actually rendered, is due no later than the applicable Due Date
and is owing to Seller, is not past due or in default, has not been previously
sold, assigned, transferred, or pledged, and is free of any and all liens,
security interests and encumbrances other than liens, security interests or
encumbrances in favor of Buyer or any other division or affiliate of Silicon
Valley Bank;
 
(e) There are no defenses, offsets, or counterclaims against such Purchased
Receivable, and no agreement has been made under which the Account Debtor may
claim any deduction or discount, except as otherwise stated on the applicable
Schedule;
 
(f) Seller is not insolvent as that term is defined in the United States
Bankruptcy Code, and Seller has not filed or had filed against it a voluntary or
involuntary petition for relief under the United States Bankruptcy Code; and
 
(g) No Account Debtor set forth on the applicable Schedule with respect to such
Purchased Receivable has objected to the payment for, or the quality or the
quantity of the subject matter of, the Purchased Receivable, each such Account
Debtor is liable for the amount set forth on such Schedule.
 
6.2 Additional Warranties, Representations and Covenants. In addition to the
foregoing warranties, representations and covenants, to induce Buyer to buy the
Purchased Receivables, Seller hereby represents, warrants, covenants and agrees
that:
 
(a) Seller will not assign, transfer, sell, or grant, or permit any lien or
security interest in any interest the Seller may have in any Purchased
Receivables to or in favor of any other party, without Buyer’s prior written
consent.
 
(b) The Seller’s name, form of organization, chief executive office, and the
place where the records concerning all Purchased Receivables are kept is set
forth at the beginning of this Agreement or, if located at any additional
location, as set forth on a schedule attached to this Agreement, and Seller will
give Buyer at least five (5) Business Days prior written notice if such name,
organization, chief executive office or records concerning Purchased Receivables
is changed or added and shall execute any documents necessary to perfect Buyer’s
interest in the Purchased Receivables.
 
(c) If Payment in Full of any Purchased Receivable has not occurred by the
applicable Due Date, then Seller shall within twenty (20) days of such date
provide a written report to Buyer setting forth the reasons for such delay in
payment.
 
(d) So long as any Purchased Receivable is outstanding, to the extent not
available online from the SEC EDGAR website, Seller shall deliver to Buyer:
 
(i) within five (5) days of filing, copies or electronic notice of links to of
all statements, reports and notices made available to Seller’s security holders
and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission; and
 
(ii) any other financial information reasonably requested by Buyer.
 
7 Adjustments.
 
In the event any Adjustment is asserted by any Account Debtor, Seller shall
promptly advise Buyer and Seller shall, subject to the Buyer’s approval, resolve
such disputes and advise Buyer of any Adjustments and promptly remit to Buyer
the difference between the Invoice Amount on the Purchase Date and the Invoice
Amount after such Adjustment. Subject to Section 9 and Section 4.2, Buyer shall
remain the absolute owner of any Purchased Receivable which is subject to
Adjustment, and, until the amount of such Adjustment (as set forth above) is
paid by Seller to Buyer, any rejected, returned, or recovered personal property,
with the right to take possession thereof at any time, and if such possession is
not taken by Buyer, Seller agrees to resell it for Buyer’s account at Seller’s
expense with the proceeds made payable to Buyer. While Seller retains possession
of said returned goods and such goods are the property of Buyer, Seller shall
segregate said goods and mark them “property of Silicon Valley Bank.”
 
8 Indemnification.
 
(a) Seller hereby agrees that in the event any Account Debtor is released from
all or any part of its payment obligations with respect to any Purchased
Receivable by reason of: (1) any act or omission of Seller not permitted by this
Agreement or consented to in writing by Buyer; or (2) the operation of any of
the provisions of the documentation pertaining to such Purchased Receivables,
which result in the termination of the Account Debtor’s obligation to pay all or
any part of the Purchased Receivables, then, upon the happening of any such
event, Seller shall thereafter pay to Buyer on the date when the Account Debtor
would otherwise have paid the Purchased Receivable to Buyer an amount equal to
the lesser of (a) the amount of the Purchased Receivable not payable by the
Account Debtor as a result of such event and (b) the unpaid portion of the
Purchased Receivable Amount for such Purchased Receivable.
 
(b) Seller hereby agrees to pay, and to indemnify and hold harmless Buyer from
and against, any taxes which may at any time be asserted in respect of this
transaction or the subject matter thereof (including, without limitation, any
sales, occupational, excise, or gross receipts taxes, but not including taxes
imposed upon the Buyer with respect to its income arising out of this
transaction) and reasonable counsel fees in defending against the same, whether
arising by reason of the acts to be performed by Seller hereunder or imposed
against Buyer, Seller, the property involved or otherwise; provided that with
respect to any of the foregoing for which Seller shall be liable, Seller shall
receive prompt notice from Buyer of this assertion of any such taxes on Buyer of
which Buyer has notice.
 
9 Additional Rights.
 
To secure the obligations of Seller hereunder, Seller hereby grants to Buyer a
continuing lien upon and security interest in all of Seller’s now existing or
hereafter arising rights and interest in the following, whether now owned or
existing or hereafter created, acquired, or arising, and wherever located (the
“Related Property”): (A) Seller’s rights to any returned or rejected goods in
respect of the Purchased Receivables, with respect to which Buyer has all the
rights of any unpaid seller, including the rights of replevin, claim and
delivery, reclamation, and stoppage in transit; (B) All books and records
pertaining to the Purchased Receivables or the foregoing goods; and (C) All
proceeds of the foregoing, whether due to voluntary or involuntary disposition,
including insurance proceeds. Notwithstanding the security interest in favor of
Buyer, unless there is an Event of Default (after expiration of any cure
periods), Seller is authorized to sell, assign, transfer, dispose of, reuse
components of, rework, or otherwise convey any interest in any Related Property
without Buyer’s prior written consent. Seller agrees to sign UCC financing
statements, in a form acceptable to Buyer, and any other instruments and
documents requested by Buyer to evidence, perfect, or protect the interests of
Buyer in the Purchased Receivables and the Related Property. Seller agrees to
deliver to Buyer the originals of all instruments, chattel paper and documents
evidencing or related to Purchased Receivables and Related Property. Buyer
agrees that it shall only exercise its rights as a secured party upon an Event
of Default (after expiration of any cure periods) and shall not attempt to
exercise such rights if Seller has, prior to such Event of Default, sold,
assigned, transferred, disposed of, reused components of, reworked or otherwise
conveyed an interest in the Related Property. In addition, to the extent
practicable, before taking any actions permitted by law as a secured party,
including the rights of replevin, claim and delivery, reclamation, and stoppage
in transit, Buyer shall give Seller five (5) Business Days notice during which
period Seller may pay Buyer the full face amount, or any unpaid portion, of any
Purchased Receivable plus any accrued and unpaid interest thereon. In the event
that Seller makes Payment in Full with respect to the subject Purchased
Receivable, Buyer shall not take any of the aforementioned actions with respect
to the subject Purchased Receivable.
 
10 Default.
 
The occurrence of any one or more of the following shall constitute an Event of
Default hereunder:
 
(a) Seller fails to pay any amount owed to Buyer as and when due;
 
(b) There shall be commenced by or against Seller any voluntary or involuntary
case under the United States Bankruptcy Code and the petition is not
controverted within twenty (20) days, or is not dismissed within sixty (60) days
after commencement of the case; or Seller makes any assignment for the benefit
of creditors, or suffers appointment of a receiver or custodian for any of its
assets;
 
(c) Seller shall become insolvent in that its assets do not have a fair value in
excess of the amount required to pay its probable liabilities on its existing
debts as they become absolute and mature (taking into account the timing of and
amounts of cash to be received by it and the timing of and amounts of cash to be
payable on or in respect of such liabilities), or Seller is generally not paying
its debts as they become due;
 
(d) Any involuntary lien, garnishment, attachment or the like is issued against
or attaches to the Purchased Receivables or any Related Property (provided that
Seller shall have ten (10) Business Days to have removed any involuntary lien,
garnishment, attachment or the like against any of the Related Property);
 
(e) Seller shall breach any covenant, agreement, warranty, or representation set
forth herein, and the same is not cured (whether pursuant to the provisions of
Section 6 hereof, if applicable, or otherwise) to Buyer’s reasonable
satisfaction within 10 Business Days after Buyer has given Seller written notice
thereof; provided, that if such breach is incapable of being cured it shall
constitute an immediate default hereunder; or
 
(f) Seller is not in compliance with, or otherwise is in default under, any term
of any document, instrument or agreement evidencing a debt, obligation or
liability of any kind or character of Seller, now or hereafter existing, in
favor of Buyer or any division or affiliate of Silicon Valley Bank, regardless
of whether such debt, obligation or liability is direct or indirect, primary or
secondary, joint, several or joint and several, or fixed or contingent, together
with any and all renewals and extensions of such debts, obligations and
liabilities, or any part thereof.
 
11 Remedies Upon Default.
 
Upon the occurrence of an Event of Default, Buyer has and may exercise all the
rights and remedies under this Agreement and under applicable law, including the
rights and remedies of a secured party under the Massachusetts Uniform
Commercial Code, all the power of attorney rights described in Section 5 with
respect to all Purchased Receivables and, subject to the restrictions in Section
9, Related Property, and the right to collect, dispose of, sell, lease, use, and
realize upon all Purchased Receivables and, subject to the restrictions in
Section 9, all Related Property; PROVIDED THAT Buyer shall use due diligent and
commercially lawful efforts in accordance with its usual policies and practices
to collect all amounts owed by the Account Debtors on each Purchased Receivable
when the same become due. An Event of Default shall not, by itself, give rise to
an obligation of Seller to repurchase or substitute Receivables or make any
Adjustment.
 
12 TERM AND TERMINATION.
 
The term of this Agreement shall be through December 31, 2006 unless terminated
in writing by Buyer or Seller. Seller and Buyer may extend the term of this
Agreement beyond December 31, 2006 by mutual written agreement in each of the
parties’ sole and absolute discretion. Notwithstanding the foregoing, any
termination of this Agreement shall not affect Buyer’s ownership of the
Purchased Receivables, and this Agreement shall continue to be effective, and
Buyer’s rights and remedies hereunder shall survive such termination until
Payment in Full has been received on all Purchased Receivables other than those
Purchased Receivables in respect of which the Account Debtor has experienced an
Insolvency Event.
 
13 Accrual of Interest.
 
If any amount owed by Seller to Buyer hereunder is not paid when due, such
amount shall bear interest from such due date until paid at a per annum rate
equal to the Discount Rate plus 2.0%.
 
14 Fees, Costs and Expenses.
 
The Seller will pay to Buyer immediately upon demand all reasonable fees, costs
and expenses (including reasonable fees of attorneys and their costs and
expenses) that Buyer incurs with any of the following: (a) preparing and
negotiating this Agreement, provided that without the prior written consent of
Seller such fees shall not exceed Ten Thousand Dollars ($10,000.00), (b)
enforcing this Agreement or any other agreement executed by Buyer and Seller in
connection herewith, including any amendments, waivers or consents in connection
with any of the foregoing, (c) enforcing Buyer’s rights under, or collecting
amounts owed by Seller to Buyer in connection with this Agreement other than
relating solely to an Account Debtor Insolvency Event, including, without
limitation, to enforce (i) Seller’s agreement to repurchase as set forth in
Section 4.2, (ii) Seller’s payment of any amounts owing by Seller pursuant to
Section 7 hereof, or (iii) Seller’s payment of any amounts owing by Seller
pursuant to Section 8 hereof, (d) enforcing any other rights against Seller
hereunder, (e) protecting or enforcing its title to the Purchased Receivables or
its security interest in the Related Property, and (f) the representation of
Buyer in connection with any bankruptcy case or insolvency proceeding involving
Seller or any guarantor. Seller shall indemnify and hold Buyer harmless from and
against any and all claims, actions, damages, costs, expenses, and liabilities
of any nature whatsoever arising in connection with any of the foregoing, except
to the extent arising as a result of Buyer’s own gross negligence or willful
misconduct.
 
15 Severability, Waiver, and Choice of Law.
 
In the event that any provision of this Agreement is deemed invalid by reason of
law, this Agreement will be construed as not containing such provision and the
remainder of the Agreement shall remain in full force and effect. If Buyer
waives a default it may enforce a later default. Any consent or waiver under, or
amendment of, this Agreement must be in writing. Nothing contained herein, or
any action taken or not taken by Buyer at any time, shall be construed at any
time to be indicative of any obligation or willingness on the part of Buyer to
amend this Agreement or to grant to Seller any waivers or consents. This
Agreement has been transmitted by Seller to Buyer at Buyer’s office in the
Commonwealth of Massachusetts and has been executed and accepted by Buyer in the
Commonwealth of Massachusetts. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the Commonwealth of
Massachusetts.
 
16 Notices.
 
All notices under this Agreement shall be deemed to have been delivered and
received: (a) if mailed, three (3) Business Days after deposited in the United
States mail, first class, postage pre-paid, (b) one (1) Business Day after
deposit with an overnight mail or messenger service; or (c) on the same Business
Day of confirmed transmission if sent by hand delivery or confirmed facsimile
transmission, in each case addressed as follows:
 

If to Seller, to:
 
Emcore Corporation

145 Belmont Drive
Somerset, New Jersey 08873
Telephone: (732) 302-4077
Facsimile: (732) 302-9783
Attn: Howard W. Brodie, Esq.
 

If to Buyer, to:
 
Silicon Valley Bank
One Newton Executive Park, Suite 200
Newton, MA 02462
Telephone: (617) 630-4161
Facsimile: (617) 969-5965
Attn: David Reich

17 Jury Trial.
 
SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY
RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY;
(b) RECOGNIZE AND AGREE THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT; AND (c) REPRESENT AND WARRANT
THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO
REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL
RIGHTS TO A JURY TRIAL.
 
18 Titles and Section Headings.
 
The titles and section headings used herein are for convenience only and shall
not be used in interpreting this Agreement.

 

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IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement under seal as
of the date first written above.
 
SELLER:
 
EMCORE CORPORATION
 
By    /s/ Howard Brodie            
 
Title        Executive Vice President        
 
BUYER:
 
SILICON VALLEY BANK
 
By    /s/ David Reich                
 
Title        SVP                    
 
 

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EXHIBIT A
 
SCHEDULE
 
 
SCHEDULE DATED __________________
 
TO
 
NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT
 
DATED AS OF _________________________, 2005
 
Seller:    EMCORE Corporation
 
Buyer:    Silicon Valley Bank
 
Purchase Date:                                         
 
Due Date:   _____ days from Purchase Date (not less than 30 days or more than
180 days)
 
Total Purchased Receivables: $_____________ (List of Receivables total)
 
Discount Rate:   _________% (calculated as follows: (i) the Prime Rate plus 1.0%
per annum for Receivables with Due Dates less than 90 days, or (ii) such other
Discount Rate for invoices with Due Dates over 90 days or for which the Account
Debtor is located outside of the United States, as determined by Buyer in its
sole discretion).
 
Purchase Price: $________________ (is _________% of the Total Purchased
Receivables Amount which is the straight discount of the Total Purchased
Receivables Amount discounted from the Due Date to the Purchase Date at the
Discount Rate).
 
Administrative Fee:  ___% multiplied by the Total Purchased Receivables Amount
(calculated based upon the following: (i) with respect to Receivables owing from
an Account Debtor located in the United States, 0.375% of the Total Purchased
Receivables Amount set forth in the Schedule for such Purchase and (ii) with
respect to Receivables owing from an Account Debtor located outside of the
United States, 0.50% of the Total Purchased Receivables Amount set forth in the
Schedule for such Purchase).
 
Late Payment Settlement Fee. In the event that Payment in Full of any Purchased
Receivable is not received on or before the Due Date, Seller agrees to pay to
Buyer an additional amount on any unpaid amount, calculated at the Discount
Rate, through the earlier to occur of (i) such date that Buyer receives Payment
in Full, and (ii) an additional ninety (90) days past the Due Date (“Late
Payment Settlement Fee”) (subject to Section 4.2 (Seller's Agreement to
Repurchase) herein). In the event that such Purchased Receivable is
uncollectible (due to an Account Debtor Insolvency Event), then the Late Payment
Settlement Fee period shall be the lesser of forty-five (45) days, and the date
on which such Purchased Receivable becomes uncollectible due to such Insolvency
Event.
 
Buyer Wire Instructions:
 
Seller Wire Instructions:
 
Seller warrants and represents that (a) with respect to the Purchased
Receivables that are the subject of this Schedule, its warranties and
representations in the Agreement are true and correct as of the date of this
Schedule and (b) no Event of Default has occurred under the Agreement.
 
 
SELLER: EMCORE CORPORATION
 
By:                                                                     
 
Name:                                                               
 
Title:                                                                  
 
BUYER: SILICON VALLEY BANK
 
By:                                                                     
 
Name:                                                               
 
Title:                                                                  
 
 

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