ex10-1.htm


     

    
      

      

    

    EXHIBIT
10.1


    SHARE
PURCHASE AGREEMENT

     

    BY
AND BETWEEN

     

    EMCORE
CORPORATION

     

    and

     

    TANGSHAN
CAOFEIDIAN INVESTMENT CO., LTD.

     

    3rd
February, 2010

     


    
      
         


      

      
         


        
          

        

      

      
         


        
          
            	 
      


          

          


          TABLE OF
CONTENTS

           

          
            	
                     
      

                  	
                    Page

                  


          

          


        

      

    


    


     

    
      	
               
      

            	
              ARTICLE
      I PURCHASE AND SALE OF SHARES                                          

            


    

    
      	
               
      

            	
              1.1

            	
              Purchase
      and Sale                                                             

            	
            


    

    
      	
               
      

            	
              1.2

            	
              Purchase
      Price 

            	
               

            


    

    
      	
               
      

            	
              1.3

            	
              Initial
      Net Asset Value Adjustment and Payment of the Estimated Purchase
      Price. 

            	
               

            


    

    
      	
               
      

            	
              1.4

            	
              Post-Closing
      Adjustment of the Estimated Purchase Price. 

            	
               

            


    

    
      	
               
      

            	
              1.5

            	
              Closing 

            	
               

            


    

    
      	
               
      

            	
              1.6

            	
              Closing
      Obligations. 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      II REPRESENTATIONS AND WARRANTIES OF
SELLER

            


    

    
      	
               
      

            	
              2.1

            	
              Organization
      and Good Standing. 

            	
               

            


    

    
      	
               
      

            	
              2.2

            	
              Authority;
      No Conflict. 

            	
               

            


    

    
      	
               
      

            	
              2.3

            	
              Capitalization 

            	
               

            


    

    
      	
               
      

            	
              2.4

            	
              Financial
      Statements. 

            	
               

            


    

    
      	
               
      

            	
              2.5

            	
              Books
      and Records 

            	
               

            


    

    
      	
               
      

            	
              2.6

            	
              Title
      to Properties; Encumbrances. 

            	
               

            


    

    
      	
               
      

            	
              2.7

            	
              Sufficiency
      of Assets 

            	
               

            


    

    
      	
               
      

            	
              2.8

            	
              Accounts
      Receivable 

            	
               

            


    

    
      	
               
      

            	
              2.9

            	
              Inventory 

            	
               

            


    

    
      	
               
      

            	
              2.10

            	
              No
      Undisclosed Liabilities. 

            	
               

            


    

    
      	
               
      

            	
              2.11

            	
              Taxes. 

            	
               

            


    

    
      	
               
      

            	
              2.12

            	
              Employee
      Benefits. 

            	
               

            


    

    
      	
               
      

            	
              2.13

            	
              Compliance
      with Legal Requirements; Governmental
Authorizations. 

            	
               

            


    

    
      	
               
      

            	
              2.14

            	
              Legal
      Proceedings; Orders. 

            	
               

            


    

    
      	
               
      

            	
              2.15

            	
              Absence
      of Certain Changes and Events 

            	
               

            


    

    
      	
               
      

            	
              2.16

            	
              Contracts;
      No Defaults. 

            	
               

            


    

    
      	
               
      

            	
              2.17

            	
              Insurance 

            	
               

            


    

    
      	
               
      

            	
              2.18

            	
              Environmental
      Matters. 

            	
               

            


    

    
      	
               
      

            	
              2.19

            	
              Employees. 

            	
               

            


    

    
      	
               
      

            	
              2.20

            	
              Labor
      Relations; Compliance 

            	
               

            


    

    
      	
               
      

            	
              2.21

            	
              Intellectual
      Property. 

            	
               

            


    

    
      	
               
      

            	
              2.22

            	
              Accounts;
      Safe Deposit Boxes; Powers of Attorney and Directors and
      Officers 

            	
               

            


    

    
      	
               
      

            	
              2.23

            	
              Suppliers 

            	
               

            


    

    
      	
               
      

            	
              2.24

            	
              Customers 

            	
               

            


    

    
      	
               
      

            	
              2.25

            	
              Certain
      Payments 

            	
               

            


    

    
      	
               
      

            	
              2.26

            	
              Disclosure 

            	
               

            


    

    
      	
               
      

            	
              2.27

            	
              Brokers
      or Finders 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      III REPRESENTATIONS AND WARRANTIES OF
BUYER

            


    

    
      	
               
      

            	
              3.1

            	
              Organization
      and Good Standing 

            	
               

            


    

    
      	
               
      

            	
              3.2

            	
              Authority;
      No Conflict. 

            	
               

            


    

    
      	
               
      

            	
              3.3

            	
              Certain
      Proceedings 

            	
               

            


    

    
      	
               
      

            	
              3.4

            	
              Investment
      Intent; Ability to Evaluate and Bear Risks 

            	
               

            


    

    
      	
               
      

            	
              3.5

            	
              Brokers
      or Finders 

            	
               

            


    

    
      	
               
      

            	
              3.6

            	
              Financing 

            	
               

            


    

    
      	
               
      

            	
              3.7

            	
              No
      Military Affiliation.  . 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      IV COVENANTS OF SELLER PRIOR TO CLOSING
DATE

            


    

    
      	
               
      

            	
              4.1

            	
              Access
      and Investigation 

            	
               

            


    

    
      	
               
      

            	
              4.2

            	
              Operation
      of the Business 

            	
               

            


    

    
      	
               
      

            	
              4.3

            	
              Negative
      Covenant 

            	
               

            


    

    
      	
               
      

            	
              4.4

            	
              Notification 

            	
               

            


    

    
      	
               
      

            	
              4.5

            	
              Consultation 

            	
               

            


    

    
      	
               
      

            	
              4.6

            	
              Required
      Approvals 

            	
               

            


    

    
      	
               
      

            	
              4.7

            	
              Acquisition
      Proposals. 

            	
               

            


    

    
      	
               
      

            	
              4.8

            	
              Commercially
      Reasonable Efforts 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      V COVENANTS OF BUYER PRIOR TO CLOSING
DATE

            


    

    
      	
               
      

            	
              5.1

            	
              Notification 

            	
               

            


    

    
      	
               
      

            	
              5.2

            	
              Required
      Approvals 

            	
               

            


    

    
      	
               
      

            	
              5.3

            	
              Purchase
      Price and Loan Funding 

            	
               

            


    

    
      	
               
      

            	
              5.4

            	
              Commercially
      Reasonable Efforts 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      VI ADDITIONAL AGREEMENTS

            


    

    
      	
               
      

            	
              6.1

            	
              Tax
      Returns and Transfer Taxes. 

            	
               

            


    

    
      	
               
      

            	
              6.2

            	
              Other
      Intercompany Arrangements; Third Party Assurances. 

            	
               

            


    

    
      	
               
      

            	
              6.3

            	
              Excluded
      Insurance Policies; Continued Product Liability
      Insurance. 

            	
               

            


    

    
      	
               
      

            	
              6.4

            	
              Litigation
      Support 

            	
               

            


    

    
      	
               
      

            	
              6.5

            	
              Additions
      to and Modification of Schedules; Notification.

            	
               

            


    

    
      	
               
      

            	
              6.6

            	
              Non-Solicitation
      and Non-Competition. 

            	
               

            


    

    
      	
               
      

            	
              6.7

            	
              Restructuring.

            


    

    
      	
               
      

            	
              6.8

            	
              Technology
      Protection Plan 

            	
               

            


    

    
      	
               
      

            	
              6.9

            	
              Delivery
      of Documents, Etc. 

            	
               

            


    

    
      	
               
      

            	
              6.10

            	
              Collection
      of Accounts Receivable 

            	
               

            


    

    
      	
               
      

            	
              6.11

            	
              No
      Military Application 

            	
               

            


    

    
      	
               
      

            	
              6.12

            	
              Audit
      Right 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      VII CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO
  CLOSE

            


    

    
      	
               
      

            	
              7.1

            	
              Accuracy
      of Representations 

            	
               

            


    

    
      	
               
      

            	
              7.2

            	
              Seller’s
      Performance. 

            	
               

            


    

    
      	
               
      

            	
              7.3

            	
              Consents
      and Approvals 

            	
               

            


    

    
      	
               
      

            	
              7.4

            	
              No
      Injunction 

            	
               

            


    

    
      	
               
      

            	
              7.5

            	
              Amended
      and Restated Credit Agreement Release 

            	
               

            


    

    
      	
               
      

            	
              7.6

            	
              PRC
      Approvals 

            	
               

            


    

    
      	
               
      

            	
              7.7

            	
              Technology
      Protection Plan. 

            	
               

            


    

    
      	
               
      

            	
              7.8

            	
              US
      Approvals 

            	
               

            


    

    
      	
               
      

            	
              7.9

            	
              Restructuring 

            	
               

            


    

    
      	
               
      

            	
              7.10

            	
              Company
      Material Adverse Effect 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      VIII CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO
  CLOSE

            


    

    
      	
               
      

            	
              8.1

            	
              Accuracy
      of Representations 

            	
               

            


    

    
      	
               
      

            	
              8.2

            	
              Buyer’s
      Performance. 

            	
               

            


    

    
      	
               
      

            	
              8.3

            	
              Consents
      and Approvals 

            	
               

            


    

    
      	
               
      

            	
              8.4

            	
              No
      Injunction 

            	
               

            


    

    
      	
               
      

            	
              8.5

            	
              Bank
      Consent/Release 

            	
               

            


    

    
      	
               
      

            	
              8.6

            	
              [Alhambra
      Site 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      IX TERMINATION

            


    

    
      	
               
      

            	
              9.1

            	
              Termination
      Events 

            	
               

            


    

    
      	
               
      

            	
              9.2

            	
              Termination
      Fee. 

            	
               

            


    

    
      	
               
      

            	
              9.3

            	
              Effect
      of Termination 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      X INDEMNIFICATION; REMEDIES

            


    

    
      	
               
      

            	
              10.1

            	
              Survival 

            	
               

            


    

    
      	
               
      

            	
              10.2

            	
              Indemnification
      and Payment of Damages by Seller 

            	
               

            


    

    
      	
               
      

            	
              10.3

            	
              Indemnification
      and Payment of Damages by Buyer 

            	
               

            


    

    
      	
               
      

            	
              10.4

            	
              Time
      Limitations. 

            	
               

            


    

    
      	
               
      

            	
              10.5

            	
              Limitations
      on Amount 

            	
               

            


    

    
      	
               
      

            	
              10.6

            	
              Exclusive
      Remedy; Holdback Amount. 

            	
               

            


    

    
      	
               
      

            	
              10.7

            	
              Procedure
      for Indemnification–Third Party Claims. 

            	
               

            


    

    
      	
               
      

            	
              10.8

            	
              Procedure
      for Indemnification–Other Claims 

            	
               

            


    

    
      	
               
      

            	
              10.9

            	
              Interpretation 

            	
               

            


    

    
      	
               
      

            	
              10.10

            	
              Tax
      Purchase Price 

            	
               

            


    

     

    
      	
               
      

            	
              ARTICLE
      XI GENERAL PROVISIONS

            


    

    
      	
               
      

            	
              11.1

            	
              Expenses 

            	
               

            


    

    
      	
               
      

            	
              11.2

            	
              Public
      Announcements 

            	
               

            


    

    
      	
               
      

            	
              11.3

            	
              Confidentiality. 

            	
               

            


    

    
      	
               
      

            	
              11.4

            	
              Notices 

            	
               

            


    

    
      	
               
      

            	
              11.5

            	
              Arbitration. 

            	
               

            


    

    
      	
               
      

            	
              11.6

            	
              Further
      Assurances 

            	
               

            


    

    
      	
               
      

            	
              11.7

            	
              Waiver 

            	
               

            


    

    
      	
               
      

            	
              11.8

            	
              Entire
      Agreement and Modification 

            	
               

            


    

    
      	
               
      

            	
              11.9

            	
              Seller’s
      Schedule 

            	
               

            


    

    
      	
               
      

            	
              11.10

            	
              Assignments,
      Successors, and No Third-Party Rights 

            	
               

            


    

    
      	
               
      

            	
              11.11

            	
              Severability 

            	
               

            


    

    
      	
               
      

            	
              11.12

            	
              Time
      of Essence 

            	
               

            


    

    
      	
               
      

            	
              11.13

            	
              Governing
      Law 

            	
               

            


    

    
      	
               
      

            	
              11.14

            	
              Equitable
      Remedies 

            	
               

            


    

    
      	
               
      

            	
              11.15

            	
              Execution 

            	
               

            


    

    
      	
               
      

            	
              11.16

            	
              Other
      Definitional and Interpretive Matters. 

            	
               

            


    

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SHARE
PURCHASE AGREEMENT

     

    This
Share Purchase Agreement
(“Agreement”) is made as of the 3rd day
of February, 2010,
by and between EMCORE
Corporation, a New Jersey corporation with its principal executive office
at 10420 Research Road, SE Albuquerque, NM 87123 U.S.A. (“Seller”), and Tangshan Caofeidian Investment Co.,
Ltd., a limited liability company incorporated under the laws of the PRC,
with its legal address at: Kilometer Zero, Caofeidian Industrial Zone, Tanghai
County, Tangshan City, Hebei Province 063200, PRC (“Buyer”).  For
purposes of this Agreement, the terms set forth in Exhibit 1 shall have
the meanings specified or referred to therein.

     

    R E C I T A L
S

     

    A.           Seller
and its Subsidiaries (collectively, the “Emcore Companies” and each
individually, an “Emcore Company”) are engaged in the business of designing,
manufacturing and selling (i) telecom, enterprise, cable tv,
fiber-to-the-premises, video transport, satellite communication and specialty
photonics optical components, sub-systems and systems that enable the
transmission of video, voice and data over high-capacity fiber optic cables in
various fiber-optic transmission networks (the “Fiber Business”) and (ii) solar
products for satellite and terrestrial applications (the “Solar
Business”).

     

    B.           Buyer
is interested in acquiring control of, and entering into a joint venture with
Seller to operate a business (the “Business”) consisting of all aspects of the
Fiber Business other than the design, manufacture and sale of satellite
communication and specialty photonics products.  The Solar Business
and the satellite communication and specialty photonics products portion of the
Fiber Business (the “Retained Fiber Business” and, together with the Solar
Business, the “Retained Business”) would continue to be owned and operated
solely by Seller.

     

    C.           In
order to enter into a joint venture with Buyer with respect to the Business,
Buyer and Seller intend that the Emcore Companies enter into a restructuring
(the “Restructuring”) consisting of the transfer of substantially all of the
assets, liabilities, obligations, agreements, employees and operations of the
Business, other than cash and cash equivalents, as a going concern to Seller’s
wholly-owned Hong Kong subsidiary, to be incorporated and established before
Closing as part of the Restructuring (the “Company”), or to another Acquired
Company.  The basic step plan of the Restructuring as agreed between
the parties is set forth in Schedule C, and a detailed step plan substantially
consistent with the basic step plan shall be agreed between the Parties as soon
as practicable after signing of this Agreement which shall be attached to this
Agreement and replace the existing basic step plan (the “Restructuring
Plan”).

     

    D.           Following
the Restructuring, Buyer desires to purchase, and Seller desires to sell, 6,000,000 shares (the
“Shares”) of capital stock of the Company representing 60% of the total
outstanding shares to be issued by the Company to Seller prior to Closing, on
the terms and conditions set forth in this Agreement.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the mutual representations, warranties and
agreements contained herein, the parties hereto agree as follows:

     

    ARTICLE
I                      

     

    PURCHASE
AND SALE OF SHARES

     

    1.1 Purchase and
Sale

     

    .   Subject
to the terms and conditions set forth in this Agreement, at the Closing, Seller
will sell, transfer and deliver to Buyer, and Buyer will purchase from Seller,
the Shares, which shall constitute 60% of the total outstanding shares of
capital stock of the Company, free and clear of all Encumbrances, in exchange
for payment of the Purchase Price by Buyer.

     

    1.2 Purchase
Price

     

    .  The
amount payable to Seller for the purchase and sale of the Shares shall be $27,750,000, subject to
adjustment by reference to the Final Net Asset Value Amount pursuant to Section
1.4 (such adjusted amount being the “Final Purchase Price”).

     

    1.3 Initial Net Asset Value
Adjustment and
Payment of the Estimated Purchase Price.

     

    (a) On or
before a date not less than three (3) Business Days prior to the Closing Date,
Seller shall cause the Company to prepare and deliver to Buyer an estimated
consolidated net asset value statement for the Company, in the form of Exhibit 2, as of
12:01 a.m. (Albuquerque time) on the Closing
Date (the “Estimated Net Asset Value Statement”) setting forth a good faith
estimate of the Company Net Asset Value as of the Closing (the “Estimated Net
Asset Value Amount”), certified by Seller’s Chief Financial Officer as being (x)
prepared in accordance with GAAP using the same accounting methods, policies,
practices and procedures (other than footnotes), with consistent classifications
and estimation methodologies (with the exception that the June 30, 2009 balance
sheet includes $723,000 in cash and $12,530,000 in real property that are not
assets of the Business and are not included in any subsequent balance sheets of
the Business)  , as were used in the preparation of the pro forma
unaudited financial statements of the Business as of and for the nine months
ending June 30, 2009 and as of and for the six months ending December 31, 2009
as provided by Seller to Buyer prior to the date of this Agreement,(y) based on
all information known to such Chief Financial Officer at such time and such
other information then reasonably available to the Company, Seller or such Chief
Financial Officer and (z) prepared after due inquiry of all personnel
responsible for the preparation of financial information of the Company in the
Ordinary Course of Business.

     

    


     

    (b) Based on
the Estimated Net Asset Value Statement, if the Estimated Net Asset Value Amount
is:

     

    (i) equal to
or greater than 110% of the Target Net Asset Value Amount, the “Estimated
Purchase Price” shall equal (x) $27,750,000 plus (y) 60% of the amount (and only
such amount) of the Estimated Net Asset Value Amount that exceeds 110% of the
Target Net Asset Value Amount (the “Estimated Upward Adjustment Amount”) ;
or

     

    (ii) equal to
or less than 90% of
the Target Net Asset Value Amount, the “Estimated Purchase Price” shall equal
(x) $27,750,000 minus (y) 60% of the amount (and only such amount) of the
Estimated Net Asset Value Amount that is less than 90% of the Target Net Asset
Value Amount (the “Estimated Downward Adjustment Amount”);

     

    (iii) between
110% of the Target Net Asset Value Amount and 90% of the Target Net Asset
Value Amount, the “Estimated Purchase Price” shall equal
$27,750,000.

     

    (c) On the
Closing Date, Buyer shall pay 90% of the Estimated Purchase Price to a bank
account designated, no later than three (3) Business Days prior to the Closing
Date, by Seller.  The remaining 10% of the Estimated Purchase Price
(the “Holdback Amount”) shall be retained by Buyer as a holdback which amount
shall be applied in accordance with the terms of this Agreement.

     

    1.4 Post-Closing Adjustment of
the Estimated Purchase Price.

     

    (a) Within
the 45-day period immediately following the Closing Date, Buyer shall prepare
and deliver to Seller (i) a consolidated net asset value statement of the
Company, in the form of Exhibit 2, as of
12:01 a.m. (Albuquerque time) on the Closing Date (the “Closing Net Asset Value
Statement”) setting forth Buyer’s calculation of the Company Net Asset Value as
of the Closing (the “Closing Net Asset Value Amount”).  Unless
disputed by Seller in accordance with Section 1.4(c), the Closing Net Asset
Value Amount shown on the Closing Net Asset Value Statement shall be the final
and binding Closing Net Asset Value Amount (the “Final Net Asset Value
Amount”).  The Closing Net Asset Value Statement will be certified by
the Company’s Chief Financial Officer as being prepared in accordance with GAAP
using the same accounting methods, policies, practices and procedures (other
than footnotes), with consistent classifications and estimation methodologie
(with the exception that the June 30, 2009 balance sheet includes $723,000 in
cash and $12,530,000 in real property that are not assets of the Business and
are not included in any subsequent balance sheets of the Business)  s
, as were used in the preparation of the pro forma unaudited financial
statements of the Business as of and for the nine months ending June 30, 2009
and as of and for the six months ended December 31, 2009 as provided by Seller
to Buyer prior to the date of this Agreement, and will not include any changes
in assets or liabilities as a result of purchase accounting adjustments arising
from or resulting as a consequence of the transactions contemplated
hereby.  The Closing Net Asset Value Amount will be calculated in a
manner consistent with the calculation of the Estimated Net Asset Value Amount
in Section 1.3(a) above.

     

    (b) From the
Closing Date until the date the Final Net Asset Value Amount is agreed or
determined in accordance with Section 1.4(e), in order to allow Buyer to satisfy
its obligations under Section 1.4(a), (i) Seller shall provide, or cause to be
provided, to Buyer and its officers, employees and authorized agents and
representatives, including any accountants, counsel or financial advisor
retained by Buyer, reasonable access to the books, records and working papers of
Seller and its Affiliates, including taking electronic copies, to the extent
that they are reasonably required for the preparation of the Closing Net Asset
Value Statement or Buyer’s analysis of any Dispute Notice and (ii) the
individual employees of Seller or its Affiliates who prepared or were
responsible for the preparation of the Estimated Net Asset Value Statement shall
be made available to respond to the reasonable inquiries of Buyer and its
officers, employees and authorized agents and representatives and shall
otherwise cooperate with, and provide reasonable assistance to, Buyer in
connection with the preparation of the Closing Net Asset Value
Statement.

     

    (c) Seller
shall deliver to Buyer within sixty (60) days after receiving the Closing Net
Asset Value Statement (the “Dispute Deadline Date”) either a notice indicating
that Seller accepts the Closing Net Asset Value Amount set forth on the Closing
Net Asset Value Statement (an “Acceptance Notice”) or a notice indicating that
Seller disputes the Closing Net Asset Value Amount set forth on the Closing Net
Asset Value Statement (a “Dispute Notice”).  The Dispute Notice shall
set forth those items or amounts with which Seller disagrees in the Closing Net
Asset Value Statement, together with a reasonably detailed description of the
reasons for its objections to each such item or amount, and a calculation of the
Company Net Asset Value as of the Closing Date based on such
objections.  If Seller delivers to Buyer an Acceptance Notice, or
Seller does not deliver a Dispute Notice, on or before the Dispute Deadline
Date, then, effective as of the earlier of the date of delivery of such
Acceptance Notice or the Dispute Deadline Date, the Closing Net Asset Value
Amount shown on the Closing Net Asset Value Statement shall be deemed to be the
Final Net Asset Value Amount.  If Seller timely delivers a Dispute
Notice, only those matters specified in such Dispute Notice shall be deemed to
be in dispute with respect to the Closing Net Asset Value Amount, and all other
matters shall be final and binding upon Buyer and Seller.

     

    (d) The
disputed matters set forth on the Dispute Notice shall be resolved as
follows:

     

    (i) Buyer and
Seller shall negotiate in good faith to resolve any disagreement set forth in
the Dispute Notice within thirty (30) days after the date on which Buyer
receives the Dispute Notice.  If the parties resolve such dispute,
then the Company Net Asset Value as of the Closing agreed to by the parties
shall be deemed to be the Final Net Asset Value Amount;

     

    (ii) if the
parties do not reach a final resolution within thirty (30) days after Buyer
receives the Dispute Notice, unless the parties mutually agree to continue their
efforts to resolve such differences, within thirty (30) days following the
expiration of such 30-day period (or any extended period), then the parties
shall engage an accounting firm with international repute to be mutually agreed
(the “Neutral Accountants”) in the manner provided below to resolve, as expert
not arbitrator, any unresolved disputes matters (“Unresolved
Objections”).  Each of the parties shall make available to the Neutral
Accountants all work papers and all other information and material in their
possession relating to the matters in the Dispute Notice.  Each party
shall be permitted to present supporting materials to the Neutral Accountants
(which supporting materials shall also be concurrently provided to the other
party) within ten (10) Business Days of the submission of the Unresolved
Objections to the Neutral Accountants.  Within five (5) Business Days
of receipt of supporting materials, the receiving party may present responsive
materials to the Neutral Accountants (which responsive materials shall also be
concurrently provided to the other party).  Each party may make an
oral presentation to the Neutral Accountants (in which case, such presenting
party shall notify the other party of such presentation, and the other party
shall have the right to be present at such presentation) within twenty (20)
Business Days of the submission of the Unresolved Objections to the Neutral
Accountants.  In determining any Unresolved Objections, the Neutral
Accountants shall only consider the materials and oral presentations of the
parties and those items and amounts set forth in the Dispute Notice, and shall
not conduct any independent review.  The Neutral Accountants shall
make their final determination of any Unresolved Objections within sixty (60)
days of submission to them of such Unresolved Objections, which shall be
conclusive and binding upon the parties and shall be used to determine the Final
Net Asset Value Amount.  The Seller and Buyer agree that the procedure
set forth in this Section 1.4(d)(ii) with respect to Unresolved Objections for
resolving disputes with respect to the Closing Net Asset Value Statement and
Closing Net Asset Value Amount shall be the sole and exclusive method for
resolving any such disputes provided that this Section 1.4(d)(ii) shall not
prohibit Seller or Buyer from instituting Proceedings to enforce the ruling of
the Neutral Accountants;

     

    (iii) nothing
herein shall be construed to authorize or permit the Neutral Accountants (i) to
determine any questions or matters whatsoever under or in connection with this
Agreement except as expressly set forth herein, or (ii) to apply any accounting
methods, treatments, principles or procedures with respect to disputes under
this Section 1.4 other than as described in this Section 1.4.  If any
Unresolved Objection is submitted to the Neutral Accountants pursuant to this
Section 1.4, the Final Net Asset Value Amount shall not be finally determined
until the Neutral Accountants have issued their final determination under
Section 1.4(d)(ii); and

     

    (iv) the fees
and expenses of the Neutral Accountants shall be shared equally by Seller and
Buyer.

     

    (e) The Final
Net Asset Value Amount shall be final and binding on Buyer and Seller upon the
earliest of (i) the delivery by Seller of an Acceptance Notice or the failure of
the Seller to deliver a Dispute Notice by the Dispute Deadline Date pursuant to
Section 1.4(c), (ii) the resolution of all disputes by Seller and Buyer pursuant
to Section 1.4(d)(i) and (iii) resolution of all disputes by the Neutral
Accountants pursuant to Section 1.4(d)(ii).  The difference between
the Estimated Net Asset Value Amount and the Final Net Asset Value Amount shall
be the “Final Net Asset Value Adjustment Amount.”

     

    (f) If the
Final Net Asset Value Amount is:

     

    (i) equal to
or greater than
110% of the Target Net Asset Value Amount, the “Final Purchase Price” shall
equal (x) $27,750,000 plus (y) 60% of the amount (and only such amount) of the
Final Net Asset Value Amount that exceeds 110% of the Target Net Asset Value
Amount (the “Final Upward Adjustment Amount”); or

     

    (ii) equal to
or less than 90% of the Target Net Asset Value Amount, the “Final Purchase
Price” shall equal (x) $27,750,000 minus (y) 60% of the amount (and only such
amount) of the Final Net Asset Value Amount that is less than 90% of the Target
Net Asset Value Amount (the “Final Downward Adjustment Amount”);

     

    (iii) between
110% of the Target Asset Value Amount and 90% of the Target Net Asset Value
Amount, the “Final Purchase Price” shall equal $27,750,000.

     

    In the
case of (i) and (ii) above, within five (5) Business Days after determination of
the Final Net Asset Value Amount:

     

    (i)           if
there is determined to be a Final Upward
Adjustment Amount:

     

               (A)           if
the Final Upward Adjustment Amount is greater than the Estimated Upward
Adjustment Amount, Buyer shall pay to Seller an amount equal to 90% of the
difference between the Final Upward Adjustment Amount and the Estimated Upward
Adjustment Amount and the remaining 10% of such difference shall be held in
retention by Buyer and become part of the Holdback Amount to be handled in
accordance with the terms of this Agreement;

     

               (B)           if
the Final Upward Adjustment Amount is less than the Estimated Upward Adjustment
Amount, Seller shall pay to Buyer an amount equal to 90% of the difference
between the Final Upward Adjustment Amount and the Estimated Upward Adjustment
Amount;

     

    (ii)           if
there is determined to be a Final Downward Adjustment Amount:

     

               (A)           if
the Final Downward Adjustment Amount is greater than the Estimated Downward
Adjustment Amount, Seller shall pay to Buyer an amount equal to 90% of the
difference between the Final Downward Adjustment Amount and the Estimated
Downward Adjustment Amount;

     

               (B)           if
the Final Downward Adjustment Amount is less than the Estimated Downward
Adjustment Amount, Buyer shall pay to Seller an amount equal to 90% of the
difference between the Final Downward Adjustment Amount and the Estimated
Downward Adjustment Amount and the remaining 10% of such difference shall be
held in retention by Buyer and become part of the Holdback Amount to be handled
in accordance with the terms of this Agreement.

     

    All
amounts payable by either Buyer or Seller in accordance with the above shall be
made within five (5) Business Days after determination of the Final Net Asset
Value Amount in immediately available funds to a bank account specified by
Seller or Buyer, as the case may be, at least three (3) Business Days prior to
such payment  In the event Seller fails to pay all or part of any
amount payable by Seller to Buyer within the five (5) Business Day period as
provided above, Buyer shall be entitled to forever retain for its benefit from
the Holdback Amount the amount Seller fails to so pay.

     

    1.5 Closing

     

    .  Subject
to the terms and conditions of this Agreement, the purchase and sale of the
Shares provided for in this Agreement (the “Closing”) will take place, unless
this Agreement has previously been terminated pursuant to Section 9.1 hereof, at
the offices of Freshfields Bruckhaus Deringer LLP, Beijing at 10:00 a.m.
(Beijing time) on a mutually agreed date within five (5) Business Days after the
satisfaction or (to the extent permitted by applicable law and this Agreement)
waiver of the conditions set forth in Articles VII and VIII (other than those
conditions that by their nature are to be satisfied at the Closing, and subject
to the satisfaction or waiver of such conditions), or at such other time and
place as the parties may mutually agree upon in writing.  The
effective time of the Closing shall be 23:59 (Beijing time) on the Closing
Date.

     

    1.6 Closing
Obligations.

     

      At
the Closing:

     

    (a)           Seller
will cause to be delivered to Buyer:

     

    (i) share
certificate(s) representing the Shares, duly issued in the name of
Buyer;

     

    (ii) duly
executed and undated stock transfer forms and bought/sold notes in respect of
the Shares;

     

    (iii) a
certified copy of the updated members’ register of the Company showing Buyer as
the holder of the Shares;

     

    (iv) a receipt
for 90% of the Estimated Purchase Price;

     

    (v) a
transition services agreement substantially in the form of Exhibit 3 (the
“Transition Services Agreement”), executed by Seller and Company;

     

    (vi) a supply
agreement substantially in the form of Exhibit 4 (the
“Supply Agreement”), executed by Seller and Company;

     

    (vii) a
counterpart to a shareholders’ agreement substantially in the form of Exhibit 5 (the “Shareholders’
Agreement”), executed by Seller;

     

    (viii) the
sublease agreements substantially in the form of Exhibit 6 (the “Sublease
Agreements”), executed by Seller, US Subsidiary and Company;

     

    (ix) a copy of
the relevant legal documentation implementing the Restructuring, as set forth in
the Restructuring Plan (the “Restructuring Documents”), executed by Seller,
Company and the other Acquired Companies, as applicable;

     

    (x) the
license agreements substantially in the form of Exhibit 7
(the “License Agreements”), executed by Seller and Company;

     

    (xi) written
resignations as officers and directors (but not as employees, if applicable)
duly executed by each officer and director of the Company not remaining in such
position following the Closing pursuant to the terms of the Shareholders’
Agreement, in form and substance reasonably acceptable to Buyer;

     

    (xii) certificates
dated as of the Closing Date from Seller and/or the Company, as applicable, duly
executed by such Person’s Secretary, certifying (A) that attached thereto is a
true, correct and complete copy of the Organizational Documents of the Company
as in effect on the date of such certification, (B) that attached thereto is a
true, correct and complete copy of all resolutions duly and validly adopted by
the board of directors of the Company approving any Ancillary Agreements to
which it is a party and that all such resolutions are still in full force and
effect, and (C) that attached thereto is a true, correct and complete copy of
the resolutions duly adopted by the board of directors of Seller, authorizing
the entry into this Agreement, and each of the Ancillary Agreements to which it
is a party, by Seller and the performance by Seller of the terms hereof and
thereof;

     

    (xiii) legal
opinion from Seller’s New Jersey attorney Dillon, Bitar & Luther addressed
to Seller confirming that approval from the stockholders of Seller is not
required in respect of the execution, delivery and performance of this Agreement
and the Ancillary Agreements and the transactions contemplated hereby and
thereby;

     

    (xiv) all
original agreements, documents, books, records and files, including records and
files stored on computer disks or tapes or any other storage medium, if any, of
the Business and in the possession of any Emcore Company to the extent not then
in the possession of an Acquired Company, except that if such materials also
relate to the Retained Business or if the Emcore Companies are otherwise
required to retain the original of such materials, then copies
thereof.  Notwithstanding the foregoing, to the extent required by any
Legal Requirements, Seller may require Buyer to designate a United States
citizen as the recipient of any of the foregoing, and such recipient, as a
condition to receiving such items, shall agree to any restrictions on further
disclosures as may be required by such Legal Requirements;

     

    (xv) the
certificates required by Sections 7.1 and 7.2(a), dated as of the Closing
Date;

     

    (xvi) a copy of
the export license approvals issued by the U.S. Department of Commerce in
respect of the Export Controlled Technologies without conditions that are
unusual or unduly onerous;

     

    (xvii) a copy of
the approval document issued by CFIUS in respect of the transaction contemplated
under this Agreement without conditions that are unusual or unduly onerous;
and

     

    (xviii) the
Emcore Loan Agreement (the “Emcore Loan Agreement”), executed by Seller and
Company on terms substantially consistent with the terms set forth in Exhibit 8.

     

    (b) Buyer
will cause to be delivered to Seller :

     

    (i) 90% of
the Estimated Purchase Price by wire transfer of immediately available funds, in
accordance with wire instructions delivered by Seller to Buyer at least three
(3) Business Days prior to the Closing Date;

     

    (ii) a
counterpart to the Shareholders’ Agreement executed by Buyer;

     

    (iii) a
certificate dated as of the Closing Date from Buyer, duly executed by Buyer’s
Chairman of board of directors, certifying that attached thereto is a true,
correct and complete copy of all resolutions duly and validly adopted by the
board of directors of Buyer authorizing the execution, delivery and performance
of this Agreement and the Buyer’s Closing Documents and the transactions
contemplated hereby and thereby, and that all such resolutions are still in full
force and effect;

     

    (iv) the form
of Caofeidian Loan Agreement as agreed between Buyer and Seller on terms
substantially consistent with the terms set forth in Exhibit 8 (the “CFD Loan
Agreement”) initialed by Buyer;

     

    (v) the
certificates required by Sections 8.1 and 8.2(a), dated as of the Closing Date;
and

     

    (vi) a copy of
each of the PRC Approvals.

     

    ARTICLE
II                      

     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Except as
set forth in the attached Seller’s Schedule (as it may be revised pursuant to
Section 6.13, the “Seller’s Schedule”)
(which  lists exceptions and disclosures numbered to correspond to the
applicable representations and warranties set forth in this Article II to which
such exception or disclosure refers, and which shall only be deemed to refer to
another Article or Section of this Agreement if an explicit cross-reference
appears or if the applicability of such matter to another Article or Section is
reasonably apparent), Seller represents and warrants to Buyer as
follows:

     

    2.1 Organization and Good
Standing.

     

    (a) Seller is
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of organization.

     

    (b) Section 2.1 of the Seller’s
Schedule contains, as of the date of this Agreement, a complete and
accurate list for each Acquired Company of its name and its jurisdiction of
organization, and other jurisdictions in which it is authorized to do business,
as of the date of this Agreement.  Each Acquired Company is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of organization and each Acquired Company is duly qualified to do
business as a foreign corporation in every jurisdiction in which the nature of
its business or the location of its properties requires such
qualification.  Each Acquired Company has the requisite corporate
power (or other organizational powers required) and authority to conduct its
business as it is now being conducted and to own, lease or use the properties
and assets that it purports to own, lease or use.

     

    (c) Seller
has made available to Buyer copies of the Organizational Documents of each
Acquired Company, as currently in effect.

     

    2.2 Authority; No
Conflict.

     

    (a) This
Agreement constitutes the legal, valid, and binding obligation of Seller,
enforceable against Seller in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereinafter in effect affecting creditors’ rights generally
and general principles of equity.  Upon the execution and delivery by
Seller of each Ancillary Agreement to be executed or delivered by Seller at the
Closing, each such Ancillary Agreement will constitute the legal, valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms, subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect
affecting creditors’ rights generally and general principles of
equity.  Seller has all the necessary corporate power and authority to
execute and deliver this Agreement and the Ancillary Agreements and to perform
its obligations hereunder and thereunder and the transactions contemplated
hereby and thereby have been duly authorized by all requisite action on the part
of Seller.

     

    (b) Neither
the execution and delivery of this Agreement, nor any of the Ancillary
Agreements, by Seller nor the consummation or performance of any of the
transactions contemplated herein, or therein, by Seller or any Acquired Company
will, directly or indirectly (with or without notice or lapse of
time):

     

    (i) conflict
with, or result in a violation of, (A) any provision of the Organizational
Documents of Seller or any Acquired Company, or (B) any resolution adopted by
the board of directors or the stockholders of Seller or any Acquired
Company;

     

    (ii) materially
conflict with, or result in a material violation of, any Legal Requirement or
any Order to which Seller or any Acquired Company may be subject or give any
Governmental Body the right to challenge any of the transactions contemplated by
this Agreement or any of the Ancillary Agreements or to exercise any remedy,
obtain any relief under or revoke or otherwise modify any rights  held
under any such Legal Requirement;

     

    (iii) conflict
with, or result in a material violation of, any of the terms or requirements of,
or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Governmental Authorization that is held by any
Acquired Company or that otherwise relates to the Business, or any of the assets
owned, leased or used by any Acquired Company;

     

    (iv) conflict
with, constitute a default under or breach of, or give rise to a right of
termination, cancellation, prepayment or acceleration of an obligation of, or to
a loss of any benefits by any Emcore Company under, any Material Contract;
or

     

    (v) except as
contemplated by this Agreement or the Ancillary Agreements, result in the creation
or imposition of any Encumbrance upon the assets or
equity of any Acquired Company.

     

    (c) Neither
Seller nor any Acquired Company is required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or any of the Ancillary Agreements or the consummation or performance
of any of the transactions contemplated herein or therein.

     

    (d) Notwithstanding
the foregoing, the representations and warranties in Sections 2.2(b) and (c)
above do not extend to (i) changes to or new Organizational Documents,
resolutions, Legal Requirements, Orders, terms or requirements of any
Governmental Body, Governmental Authorization, Material Contract or Encumbrance
or other requirements that are adopted, approved, issued, entered into or
otherwise to take effect after the Closing or (ii) any Legal Requirements,
Orders, Governmental Authorization, terms or requirements of or by any Buyer
Governmental Body.

     

    2.3 Capitalization

     

    .  Details
of the authorized and outstanding equity securities of each Acquired Company, as
of the date of this Agreement, are set forth in Section 2.3 of the
Seller’s Schedule.  Seller is, and on the Closing Date will be,
the record and beneficial owner and holder of all of the Shares free and clear
of all Encumbrances.  Upon the transfer and delivery of the Shares to
Buyer in accordance with this Agreement and payment therefor, Buyer will become
the record and beneficial owner and holder of the Shares free and clear of all
Encumbrances.  On the Closing Date, all of the outstanding equity
securities and other securities of each Acquired Company, other than the
Company, will be owned of record and beneficially by one or more of the Acquired
Companies, free and clear of all Encumbrances.  All of the outstanding
equity securities of each Acquired Company have been duly authorized and validly
issued and are fully paid and nonassessable and were not issued  in
violation of any Legal Requirement, right of first refusal, purchase option,
call option, subscription right, pre-emptive right or any similar
right.  No Acquired Company owns any equity securities or other
securities of any Person (other than Acquired Companies) or any direct or
indirect equity or ownership interest in any other business.  Except
as set forth in this Agreement or as may be set forth in the Ancillary
Agreements, there are no Contracts relating to the issuance, sale or transfer or
any securities of any Acquired Company, including (but not limited to) any
outstanding subscriptions, warrants, options, purchase rights, convertible
securities, calls, agreements, arrangements or commitments of any character
relating to, or entitling any Person to purchase or otherwise acquire, the
Shares or other securities or equity interests of the Acquired
Companies.  There are no outstanding or authorized equity
appreciation, phantom stock, profit participation or similar rights with respect
to the Acquired Companies.  Except as may be set forth in the
Ancillary Agreements, there are no voting trusts, stockholder agreements,
proxies or other agreements or understanding in effect with respect to the
voting or transfer of any of the Shares or other securities or equity interests
of the Acquired Companies.  There are no bonds, debentures, notes or
other forms of indebtedness of any Acquired Company having the right to vote (or
that are convertible into, or exchangeable for Shares or any other securities or
equity interests of the Acquired Companies having the right to vote) on any
matters on which holders of Shares or other securities or equity interests of
the Acquired Companies may vote or whose holders’ consent is required in
connection with this Agreement or any of the Ancillary Agreements.

     

    2.4 Financial
Statements.

     

    (a) Seller
has provided to Buyer (i) a pro forma consolidated balance sheet of the
Business as of June 30, 2009 (the “June Pro Forma Balance Sheet”) and the
related pro forma consolidated statements of income  and cash flows of
the Business for the nine months ended June 30, 2009 (together with the
June Pro Forma Balance Sheet the “June Pro Forma Financial Statements”), and
(ii) a pro forma consolidated balance sheet of the Business as of December
 31, 2009 (the “December Pro Forma Balance Sheet”), and the related pro
forma consolidated statements of income and cash flows for the six months ended
December  31, 2009 (together with the December Pro Forma Balance Sheet, the
“December Pro Forma Financial Statements”).  The June Pro Forma
Financial Statements and the December Pro Forma Financial
Statements  are referred to collectively as the “Pro Forma Financial
Statements.”

     

    (b) The Pro
Forma Financial Statements have been derived from the books and records of
Seller and have not been separately audited.  The Pro Forma Financial
Statements (i) properly include adjustments for instances where adjustments were
material in respect of the Business but were not material for Seller’s financial
statements, (ii) were prepared in accordance with the books of account and other
financial records of Seller and can be legitimately reconciled with the books
and records of Seller, and (iii) present fairly and accurately in all material
respects the financial condition of the Business, the results of operations of
the Business and the cash flows of the Business as of the date indicated or for
the period indicated, as applicable; provided, that the Pro Forma
Financial Statements (i) do not contain financial statement footnotes necessary
to comply with GAAP, (ii) reflect to the extent possible the assets,
liabilities, revenues and expenses that would have resulted if the Business had
operated as an unaffiliated independent company, (iii) include estimations for
allocation of various assets, liabilities, revenues, costs and expenses on a
reasonable basis and (iv) have not been audited by any independent certified
public accountants or auditors.

     

    (c) Seller’s
system of internal controls over the Business’ financial reporting is
sufficient, in all material respects, to provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP.

     

    2.5 Books and
Records.

     

    The
accounting books and records, minute books and stock record books of the
Acquired Companies, and the accounting books and records of any other Emcore
Companies in so far as they relate to the Business, copies of which have been
made available to Buyer, are true, complete and correct in all material
respects.  The minute books of the Acquired Companies contain
materially accurate and complete records of all meetings held of, and corporate
action taken by, the equity holders, the boards of directors, and committees of
the boards of directors of the Acquired Companies, and comprise all corporate
records and minutes required to be kept by the Acquired Companies.  At
the Closing, all such books and records will be in the possession of the
Acquired Companies.

     

    2.6 Title to Properties;
Encumbrances.

     

    (a) The
Acquired Companies do not own any real property.  Section 2.6 of the Seller’s
Schedule contains a list, as of the date of this Agreement, of all real
estate leasehold interests owned by any Emcore Company and used in the Business
(“Leased Real Properties”).  As of the date of this Agreement, all
leases or subleases of the Emcore Companies used in the Business are, and as of
the Closing all leases or subleases of the Emcore Companies will be, in full
force and effect, valid and effective in accordance with their respective terms
and enforceable against the respective lessors thereto, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect affecting creditors’ rights generally
and general principles of equity, and there is not, under any of such lease or
sublease, any existing default or event of default (or event which with notice
or lapse of time, or both, would constitute a default) by the Emcore Companies
or, to the Knowledge of Seller, by the other party to such lease or
sublease.  There are no subleases, licenses, concessions, or other
agreements, written or oral, granting any Person, other than another Emcore
Company, the right of use or occupancy of all or any portion of any Leased Real
Properties.  All leases and subleases of Leased Real Properties are
currently in material compliance with all Legal Requirements and the Leased Real
Properties currently conform in all material respects with all covenants,
conditions, restrictions, reservations, land use, zoning, health, fire, water
and building codes and any applicable Legal Requirements.  Copies of
such leases and subleases have been delivered, or made available, to
Buyer.

     

    (b) As of the
date of this Agreement, the Emcore Companies own, and, except for cash and cash
equivalents, as of the Closing the Acquired Companies will own, all the
properties and assets (whether real, personal, or mixed and whether tangible or
intangible, including but not limited to such assets as listed in the Fixed
Assets List) of the Business reflected as owned in the books and records of the
Emcore Companies, including all of the properties and assets reflected in the
December  Pro Forma Balance Sheet (except for assets held under
capitalized leases and personal property sold since the Pro Forma Balance Sheet
Date in the Ordinary Course of Business), and all of the properties and assets
of the Business purchased or otherwise acquired by the Emcore Companies since
the Pro Forma Balance Sheet Date (except for personal property acquired and sold
since the Pro Forma Balance Sheet Date in the Ordinary Course of
Business).  All properties and assets reflected in the
December  Pro Forma Balance Sheet are free and clear of all
Encumbrances except for (i) those relating to Taxes not yet delinquent, (ii)
those that do not materially detract from the value of the property subject
thereto or interfere in any material respect with the Emcore Companies’ ability
to conduct the Business as currently conducted or to occupy and utilize such
properties for their intended purposes and (iii) those listed in Section 2.6 of the Seller’s
Schedule (“Permitted Encumbrances”).

     

    2.7 Sufficiency of
Assets

     

    .  All
assets (including, without limitation, Leased Real Properties, buildings,
plants, leasehold improvements, structures, facilities, equipment, mechanical
assets, computer systems, offices, other items of tangible property and software
owned, leased or used, including but not limited to such assets as listed in the
Fixed Assets List) used in the Business are (as applicable) structurally sound,
in good operating condition and repair, free from material defect (subject to
normal wear and tear given the use and age of such assets), have been maintained
in all material respects in accordance with generally accepted industry
practice, are useable in the Ordinary Course of Business and conform in all
material respects to Legal Requirements and Permits relating to their
construction, use and operation.  The rights, properties and tangible
and intangible assets of the Acquired Companies (including but not limited to
such assets as listed in the Fixed Assets List) and the facilities and services
to which the Acquired Companies have or will have a contractual right, and the
rights of Buyer and its respective Affiliates (including the Acquired Companies)
pursuant to this Agreement and the Ancillary Agreements will, include all
rights, properties, assets, facilities and services that are necessary for Buyer
and their Affiliates (including the Acquired Companies) to carry on the Business
immediately after the Closing in the places and substantially in the manner as
conducted as at the date of this Agreement and as the Business was carried on in
the twelve (12) months prior to the date of this Agreement.

     

    2.8 Accounts
Receivable

     

    .  All
accounts receivable of the Emcore Companies arising from the Business that are
reflected on the December  Pro Forma Balance Sheet (collectively, the
“Accounts Receivable”) represent valid obligations arising from sales actually
made or services actually performed in the Ordinary Course of
Business.  There is no contest, claim or right of set-off, other than
returns in the Ordinary Course of Business, under any Contract with any obligor
of an Accounts Receivable relating to the amount or validity of such Accounts
Receivable.  The Accounts Receivable have been recorded in accordance
with GAAP and in a manner consistent with historical practice.  Seller
has made available to Buyer a complete and accurate list of all Accounts
Receivable as of the Pro Forma Balance Sheet Date, which list sets forth the
aging of such Accounts Receivable.

     

    2.9 Inventory

     

    .  All
Inventory with respect to the Business, whether reflected on the
December  Pro Forma Balance Sheet or subsequently acquired, consists,
and as of the Closing Date all Inventory of the Acquired Companies will consist,
of a quality and quantity usable and salable in the Ordinary Course of Business,
except for excess and obsolete items and items of below-standard quality, all of
which have been written off or written down (through general reserves or
otherwise) to net realizable value in the December  Pro Forma Balance
Sheet or on the accounting records of the Acquired Companies as of the Closing
Date, as the case may be.  All Inventory of the Acquired
Companies is
properly reflected
on the books and records of the Acquired Companies, and to the extent not
written off, is recorded at the lesser of cost and fair market value, on a
standard cost basis, as of the Closing Date
on a consistent basis in accordance with GAAP.  The quantities of each
item of Inventory (whether raw materials, work in process, or finished goods)
are sufficient for the normal operation of the Business in accordance with past
practice.

     

    2.10 No Undisclosed
Liabilities.

     

    (a) The
Acquired Companies have no liabilities or obligations of any nature (whether
known or unknown and whether absolute, accrued, contingent or otherwise)
required to be reflected as liabilities on the financial statements in
accordance with GAAP except for (i) liabilities or obligations reflected or
reserved against in the December Pro Forma
Financial Statements and (ii) current liabilities incurred in the Ordinary
Course of Business since the Pro Forma Balance Sheet Date and not in violation
of this Agreement.  Since the Pro Forma Balance Sheet Date, none of
the Acquired Companies has experienced any loss or liability contingencies (as
such term is used in Accounting Standards Codification 450 issued by the
Financial Accounting Standards Board).

     

    2.11 Taxes.

     

    (a) All Tax
Returns required to be filed by or on behalf of the Acquired Companies, either
separately or as a member of a group of corporations, on or before the date
hereof are true, correct and complete.  All such Tax Returns were duly
and timely filed (taking into account any extension of time to file granted or
obtained) and all Taxes (including, Taxes withheld from employees’ salaries and
all other withholding Taxes and obligations and deposits required to be made by
or with respect to the Acquired Companies) due have been timely paid, or to the
extent not due and payable as of the date hereof, adequate provision for the
payment thereof has been made.  The charges, accruals, and reserves
with respect to Taxes on the books, records and financial statements of the
Acquired Companies, in the aggregate, are adequate (determined in accordance
with GAAP) and are at least equal to the Acquired Companies’ liability for Taxes
for all fiscal periods through the Closing Date.

     

    (b) No audit
or other examination of any Tax Return of any of the Acquired Companies or any
Tax group of which an Acquired Company is a member is presently in progress, nor
have any of the Acquired Companies or any Tax group of which an Acquired Company
is a member been notified of any request for such an audit or other
examination.

     

    (c) None of
the Shares or the assets of the Business is subject to any lien
relating to or attributable to Taxes.  To the Knowledge of Seller, no
claim has been asserted relating to or attributable to Taxes, which, if
adversely determined, would result in any lien on the Shares or the assets of
the Business.

     

    (d) Neither
Seller nor any of the Acquired Companies have received any notice of a proposed
assessment of Taxes with respect to the Business or an Acquired Company, or
executed any waiver of any statute of limitations on or extending the period
for, the assessment or collection of any Tax with respect to the Business which
is still in effect.

     

    (e) There are
no actions, suits, proceedings or claims now pending by or against any of the
Emcore Companies in respect of any Taxes or assessments with respect to the
Business.

     

    (f) No claim
has been made by an authority in a jurisdiction where an Acquired Company does
not file Tax Returns that the Acquired Company is or may be subject to taxation
by that jurisdiction.

     

    (g) None of
the Acquired Companies is party to, bound by, or has any obligations under any
tax sharing or allocation agreements, tax indemnification agreement or similar
contract or arrangement, whether written or unwritten.

     

    (h) None of
the Acquired Companies has been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code (or any similar provision of
state, local or foreign law), other than an affiliated group of which Seller is
the common parent.

     

    (i) None of
the Acquired Companies has an interest in or is subject to any joint venture,
partnership, or other arrangement or contract which is treated as a partnership
for U.S. federal income Tax purposes.  None of the Acquired Companies
is a successor to any other Person by way of merger, reorganization or similar
transaction.

     

    (j) No
Acquired Company is a party to an arrangement under which it has paid or could
be required to pay any excess parachute payment or any other amount that might
not be fully deductible under Sections 162(m) or 280G of the Code (or similar
provisions of an analogous state, local or foreign law).

     

    (k) No
Acquired Company and no other member of a Tax group to which an Acquired Company
is a member has engaged or agreed to engage in a reportable transaction within
the meaning of Section 6707A of the Code that could affect its Tax liability for
any taxable period as to which the period for audit and assessment has not
expired.

     

    (l) The
Seller is not a foreign person within the meaning of Section 1445 of the
Code.

     

    2.12 Employee
Benefits.

     

    (a) Section 2.12 of the Seller’s
Schedule contains a list, as of the date of this Agreement, of all plans,
agreements, arrangements or commitments (whether provided by insurance,
self-insurance or otherwise) that are (i) employment, consulting or deferred
compensation agreements, (ii) executive compensation, incentive, equity
compensation, bonus, employee pension, profit-sharing, savings, retirement,
stock option, stock purchase, or severance pay plans, (iii) welfare, life
insurance, health, dental, vision, cafeteria benefit, dependent care,
post-retirement benefit, worker’s compensation, unemployment benefit, disability
or accident plans, (iv) holiday, vacation, leave of absence, or other bonus
practice, (v) fringe benefits, expense reimbursement, automobile or other
transportation allowance or (vi) any other employee benefit plans, agreements,
arrangements or commitments, including, without limitation, any “employee
benefit plan,” as defined in Section 3(3) of ERISA, (collectively, “Plans”)
currently sponsored, maintained, or contributed to by the Emcore Companies or
any of their ERISA Affiliates with respect to current or former employees or
consultants of the Business.  Section 2.12 of the Seller’s
Schedule also contains a list, as of the date of this Agreement, of all
Plans sponsored, maintained, or contributed to by any Acquired Company, or with
respect to which any Acquired Company has or may have any Liability, other than
pursuant to the Transition Services Agreement, (collectively (together with the
Plans to be established pursuant to Section 4.2), the “Acquired Company
Plans”).

     

    (b) No
Acquired Company Plan was in effect prior to the Restructuring.  No
Acquired Company Plan has received assets or Liabilities from any
Plan.  No Acquired Company Plan nor any trust created thereunder, now
holds or has heretofore held as assets any stock or securities issued by Seller,
any ERISA Affiliate or any Acquired Company.  No Acquired Company Plan
provides benefits that are materially different from those provided to current
employees of the Business under any Plan.

     

    (c) None of
Seller, any Acquired Company nor any of their respective ERISA Affiliates has
ever sponsored, maintained, contributed to or been required to contribute to (i)
an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA)
that is subject to Title IV of ERISA or Section 412 of the Code, (ii) a
“multiemployer plan” within the meaning of Sections 3(37) or 4001(a)(3) of
ERISA), (iii) any “multiple employer welfare arrangement” (within the meaning of
Section 3(40) of ERISA), or (iv) a multiple employer plan for which the Company
would reasonably be expected to incur liability under Sections 4063 or 4064 of
ERISA.

     

    (d) Seller
has made available to Buyer true, complete and correct copies of all documents
and summary plan descriptions of the Acquired Company Plans or summary
descriptions of any such Acquired Company Plan not otherwise in
writing.  Seller has made available to Buyer true, complete and
correct copies of the most recent determination letters and opinion letters and
the Forms 5500 filed in the most recent three plan years with respect to each
Section 401(k) Acquired Company Plan, including all schedules thereto and
financial statements with attached opinions of independent
accountants.  Seller has made available to Buyer summaries of material
modifications and material communications distributed within the last year to
the participants of each Section 401(K) Acquired Company
Plan.  Seller has made available to Buyer all communications received
from, or sent to, the Internal Revenue Service, Pension Benefit Guaranty
Corporation, the United States Department of Labor or any other Governmental
Body within the last three years and any Forms 5330 required to be filed,
whether related to an Acquired Company Plan or otherwise.  The Seller,
the Acquired Companies and their respective ERISA Affiliates, as applicable,
have maintained all employee data necessary to administer each Acquired Company
Plan, including all data required to be maintained under Sections 107 and 209 of
ERISA, and such data are true, complete and correct and are maintained in usable
form.

     

    (e) Each of
the Acquired Companies has performed all obligations required to be performed by
it under, is not in default under or in violation of, and, to the Knowledge of
Seller, no default or violation by any other party has occurred with respect to,
any of the Acquired Company Plans.  No breach of fiduciary duty has
occurred, nor have the Acquired Companies or any “fiduciary” (as such term is
defined in Section 3(21) of ERISA) with respect to the Acquired Company Plans
has engaged in any conduct, that would result in the assessment of any excise
Tax, Liability or penalty under the Code, including, without limitation Code
Sections 4971 through 4980G, or under Title I of ERISA, including, without
limitation, ERISA Sections 502(i) and 502(l).

     

    (f) None of
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby will (i) result in any current or former
employee, director or consultant of the Acquired Companies becoming entitled to
any deferred compensation, bonus or severance pay, materially increase or
otherwise enhance any benefits otherwise payable by the Acquired Companies, (ii)
result in the acceleration of time of payment or vesting, or an increase in the
amount of any compensation due to any current or former employee, director or
consultant of the Acquired Companies, (iii) result in forgiveness in whole or in
part of any outstanding loans made by the Acquired Companies to any of their
current or former employees, directors or consultants or (iv) result in a
payment by an Acquired Company that would be considered an “excess parachute
payment” or any other amount that might not be fully deductible under Section
280G of the Code or subject to the excise Tax under Section 4999 of the Code (or
similar provisions of state, local or foreign law).

     

    (g) All
contributions and other payments required to be made by any of the Acquired
Companies to or under any Acquired Company Plan (or to any Person pursuant to
the terms thereof) have been made when due, or, if not yet due, the amount of
such payment or contribution obligation has been reflected on the books, records
and financial statements of the Acquired Companies.  In addition, with
respect to each Acquired Company Plan intended to include an arrangement
described in Section 401(k) of the Code, the Acquired Companies have at all
times made timely deposits of employee salary deferral contributions and
participant loan repayments, as determined pursuant to regulations issued by the
United States Department of Labor.

     

    (h) Each of
the Acquired Company Plans intended to be “qualified” within the meaning of
Section 401(a) of the Code has either (i) received a favorable determination
letter issued by the IRS as to its qualified status or (ii) has been established
under a standardized master and prototype or volume submitter plan for which a
favorable advisory letter or opinion letter issued by the IRS has been obtained
by the plan sponsor and is valid as to the adopting employer, and each trust
established in connection with any Acquired Company Plan which is intended to be
exempt from federal income taxation under Section 501(a) of the Code is so
exempt, and, to the Knowledge of Seller, no events have occurred since the
issuance of such letter that would be reasonably expected to adversely affect
the tax-qualified status of such Acquired Company Plan or the exempt status of
such trust.

     

    (i) Each
Acquired Company Plan has at all times been maintained, administered, and
operated in compliance with its terms, and all applicable Legal Requirements,
including, without limitation, ERISA and the Code.  The Acquired
Companies are in compliance with all applicable Legal Requirements, including,
without limitation, ERISA and the Code.  With respect to the Acquired
Company Plans, all Tax, annual reporting and other governmental filings required
by ERISA and the Code have been timely filed with the appropriate Governmental
Body (which were true, correct and complete as of the date filed) and all
notices and disclosures have been timely provided to Acquired Company Plan
participants.  All fees, interest, penalties and assessments that are
payable by or for the Acquired Companies have been timely reported, fully paid
and discharged.

     

    (j) None of
the Acquired Company Plans that are “welfare plans” within the meaning of
Section 3(1) of ERISA provides for any post-employment or retiree benefits,
including but not limited to medical, disability or life insurance, other than
continuation coverage required to be provided under Section 4980B of the Code,
Part 6 of Title I of ERISA, or applicable state law.  No Acquired
Company Plan is, or is funded through, a voluntary employee benefit association
under Section 501(a)(9) of the Code.  The Acquired Companies are in
compliance with (i) the requirements of the applicable health care continuation
and notice provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and the regulations promulgated thereunder and any similar
state law, and (ii) the applicable requirements of the Health Insurance
Portability and Accountability Act of 1996, as amended, and the regulations
promulgated thereunder.

     

    (k) Other
than benefit claims under the Acquired Company Plans in the Ordinary Course of
Business, there are no actions, suits, investigations, audits, proceedings or
litigation of any kind pending against, involving or, to the Knowledge of
Seller, Threatened against, any Acquired Company Plan, the Acquired Companies by
an Acquired Company Plan participant (or beneficiary thereof) or by any
Governmental Body with respect to an Acquired Company Plan.

     

    (l) Each
“nonqualified deferred compensation plan” (as defined in section 409A(d)(1) of
the Code) with respect to which any Acquired Company is a “service recipient”
(within the meaning of section 409A of the Code) has been operated since January
1, 2005, in compliance with the applicable provisions of section 409A of the
Code and the treasury regulations and other official guidance issued thereunder
(or similar provision of state law) (collectively, “Section 409A”), and has been
since January 1, 2009, in documentary compliance with the applicable provisions
of Section 409A; and none of the Acquired Companies has been required to report
any Taxes due as a result of a failure to comply with Section
409A.  None of the Acquired Companies has any indemnity obligation for
any Taxes or interest imposed or accelerated under Section 409A.

     

    (m) With
respect to each employee benefit plan, program, or other arrangement providing
compensation or benefits to any employee or former employee of any of the
Acquired Companies (or any dependent thereof) which is subject to the laws of
any jurisdiction outside of the United States (the “Foreign Plans”): (i) such
Foreign Plan has been maintained in all material respects in accordance with all
applicable requirements and all Legal Requirements, (ii) if intended to qualify
for special tax treatment, such Foreign Plan meets all requirements for such
treatment, (iii) if intended or required to be funded and/or book-reserved, such
Foreign Plan is fully funded and/or book reserved, as appropriate, based upon
reasonable actuarial assumptions, and (iv) no material Liability exists or
reasonably could be imposed upon the assets of any of the Acquired Companies by
reason of such Foreign Plan.

     

    2.13 Compliance with Legal
Requirements; Governmental Authorizations.

     

    (a) Since
January 1, 2008, the Emcore Companies have conducted and currently are
conducting the Business in compliance in all material respects with all Legal
Requirements applicable to the Business.

     

    (b) None of
the Emcore Companies has received, at any time since January 1, 2008, any notice
from any Governmental Body regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any Legal Requirement applicable to an
Acquired Company or the Business.

     

    (c) Section 2.13(c) of the
Seller’s Schedule sets forth, as of the date of this Agreement, all
material certificates, franchises, licenses, permits, orders, authorizations,
registrations, declarations, filings, approvals and clearances of any
Governmental Body (collectively, the “Company Permits”) issued or granted to the
Emcore Companies to carry on the Business.  None of such Company
Permits will be subject to suspension, modification, revocation or non-renewal
as a result of the execution and delivery of this Agreement or the Ancillary
Agreements or the consummation of the transactions contemplated hereby and
thereby.  The Company Permits disclosed in Section 2.13(c) of the
Seller’s Schedule constitute all Company Permits required of each
Acquired Company to enable the Acquired Companies to own, lease, operate or
otherwise hold their properties and assets and in order to carry on the Business
as it is being conducted as of the date of this Agreement and as it was carried
on in the twelve (12) months prior to the date of this Agreement.

     

    2.14 Legal Proceedings;
Orders.

     

    (a) There is
no pending Proceeding:

     

    (i) that has
been commenced by or against any Acquired Company or that relates to any of the
assets owned, leased or used by any Emcore Company and relating to the Business;
or

     

    (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions contemplated herein or in
any of the Ancillary Agreements, and, to the Knowledge of Seller, no such
Proceeding has been Threatened.

     

    (b) There is
no Order to which any Emcore Company is party or subject to or in default of or
to which any of the assets owned, leased or used by any Emcore Company is
subject that would be material to the Business or, taken as a whole, the
Acquired Companies or would affect the legality, validity or enforceability of
this Agreement, any Ancillary Agreement or the consummation of the transactions
contemplated hereby or thereby, and, to the Knowledge of Seller, no employee of
any Acquired Company is subject to any Order that prohibits such employee from
engaging in or continuing any conduct, activity, or practice relating to the
Business.

     

    2.15 Absence of Certain Changes
and Events

     

    .  Since
the Pro Forma Balance Sheet Date, except as contemplated by this Agreement
(including the Restructuring Plan) or the Ancillary Agreements, (i) the Emcore
Companies have conducted the Business only in the Ordinary Course of Business
and (ii) there has not been any Company Material Adverse Effect.

     

    (a) the
Seller has not, and none of the Acquired Companies have (i) issued, sold,
pledged, granted, transferred or otherwise disposed of (or authorized the
issuance, sale, pledge, grant transfer or other disposition) or (ii) created,
permitted, allowed or suffered to exist any Encumbrance in respect of, any
notes, bonds or other debt securities of an Acquired Company, any equity
securities of an Acquired Company or any other securities exchangeable for,
convertible into or exercisable for any equity securities (or derivative
securities thereof) of an Acquired Company;

     

    (b) none of
the Acquired Companies has acquired (including by merger, consolidation or
acquisition of stock or assets) any interest in any corporation, partnership,
other business organization or Person or any division thereof;

     

    (c) none of
the Acquired Companies has incurred or assumed any liabilities, obligations or
indebtedness for borrowed money (including any amounts owed to Seller or any
other Emcore Companies), except in the Ordinary Course of Business or guaranteed
any such liabilities, obligations or indebtedness, or issued any other debt
securities;

     

    (d) none of
the Emcore Companies has sold (other than sales of Inventory in the Ordinary
Course of Business), transferred, leased, licensed or otherwise disposed of any
material asset or any real or material personal property of the Business or
mortgaged, pledged or imposed any Encumbrance on any material asset or any real
or material personal property of the Business, tangible or intangible, including
the sale, transfer, lease, license or other disposition of any of the
Intellectual Property Assets (other than in the Ordinary Course of
Business);

     

    (e) none of
the Emcore Companies has cancelled, paid, discharged, compromised, waived, or
released any debt, liability, claim or obligation (whether absolute, accrued,
asserted or unasserted, contingent or otherwise) of the Business, except for
debts, liabilities, claims or obligations cancelled, paid, discharged,
compromised, waived or released with creditors, customers, contractors or
subcontractors of the Business in the Ordinary Course of Business;

     

    (f) none of
the Emcore Companies has suffered any damage to or destruction or loss of any
material asset or property of the Business;

     

    (g) none of
the Emcore Companies has intentionally waived, cancelled or released any
material right, claim or amount receivable of the Business except for rights
waived in the Ordinary Course of Business;

     

    (h) none of
the Emcore Companies has made any material change in its accounting principles,
methods, practices, procedures or policies, including revenue recognition
procedures, with respect to the Business;

     

    (i) none of
the Emcore Companies has made any capital expenditures with respect to the
Business that are, in the aggregate, in excess of $250,000;

     

    (j) none of
the Acquired Companies has assumed, guaranteed or endorsed, or otherwise as an
accommodation become responsible for, any obligations or liabilities of any
Person, or otherwise made any loans or advances in connection with the
Business;

     

    (k) none of
the Emcore Companies has entered into, terminated, or received notice of
termination of, any Contract or transaction with respect to the Business
involving a total remaining commitment by or to any Emcore Company of at least
$250,000, other than in the Ordinary Course of Business;

     

    (l) none of
the Acquired Companies or any Tax group of which any such Acquired Company is a
member has made any material Tax election or settlement or compromise of any
material Tax Liability or refund by or affecting any Acquired Company or change
in any annual Tax accounting period or method of Tax accounting, filing of any
material amendment to a Tax Return, entry into any closing agreement relating to
any material Tax, surrender of any right to claim a material Tax refund, or
consent to any extension or waiver of the statute of limitations period
applicable to any material Tax claim or assessment;

     

    (m) none of
the Emcore Companies has accelerated, terminated, modified or cancelled any
Contract (or series of related Contracts) of the Business to which any of the
Emcore Companies is a party or by which any of them is bound outside the
Ordinary Course of Business;

     

    (n) none of
the Acquired Companies has made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) either involving more than
$250,000 or outside the Ordinary Course of Business;

     

    (o) none of
the Emcore Companies has granted any license or sublicense of any rights under
or with respect to any Intellectual Property Assets outside the Ordinary Course
of Business;

     

    (p) none of
the Acquired Companies has amended or otherwise modified the Organizational
Documents of any Acquired Company;

     

    (q) none of
the Acquired Companies has declared, set aside or paid any dividend or
distribution payable in cash, stock, property or otherwise to any stockholder or
member of the Acquired Companies with respect to its equity or debt
securities;

     

    (r) none of
the Acquired Companies has reclassified, combined, split, subdivided or
otherwise amended the terms of, or purchased, redeemed or otherwise acquired,
directly or indirectly, any of its equity or debt securities (or securities
convertible into, or exercisable or exchangeable for equity or debt securities)
or issued or redeemed any warrants, options or other rights of any kind to
acquire its equity securities;

     

    (s) none of
the Acquired Companies has made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside the
Ordinary Course of Business;

     

    (t) none of
the Emcore Companies has entered into, modified, amended, terminated, permitted
the lapse of or renewed any lease or reciprocal easement agreement, operating
agreement or other material agreement relating to, real property of the
Business;

     

    (u) with
respect to the Business, none of the Emcore Companies has entered into, adopted,
extended, renewed or amended any collective bargaining agreement or other
Contract with any labor organization, union or association, except in each case
as required by Legal Requirements;

     

    (v) with
respect to the Business, other than in the Ordinary Course of Business, none of
the Emcore Companies has (i) granted or announced any increase in or
acceleration of the compensation, bonus or benefits, or otherwise increased the
compensation, bonus or benefits payable, or to become payable, to any employee,
director, officer, manager, or consultant of, any Emcore Company, (ii) granted
any rights to retention, severance or termination pay to, or entered into any
new (or amended any existing) employment, consulting, retention, severance or
other Contract with, any such employee, director, officer, agent or consultant,
in each case except as may be required by Legal Requirements or (iii) adopted or
established any new employee benefit plans for employees, or taken any action to
accelerate the vesting, payment or funding of compensation or benefits under any
Plan, to the extent not already provided in any such Plan; and

     

    (w) none of
the Emcore Companies has entered into any Contract to do any of the
foregoing.

     

    2.16 Contracts; No
Defaults.

     

    (a) The
following Contracts shall be deemed to be “Material Contracts”: any Contract
with respect to the Business to which any Emcore Company is a party or by which
any Emcore Company is bound that:

     

    (i) involves
performance of services or delivery of goods or materials by one or more Emcore
Company of an amount or value in excess of $250,000 in the
aggregate;

     

    (ii) involves
performance of services for or delivery of goods or materials to one or more
Emcore Company of an amount or value in excess of $250,000 in the
aggregate;

     

    (iii) was not
entered into in the Ordinary Course of Business and that involves expenditures
or receipts of one or more Emcore Companies in excess of $250,000 in the
aggregate;

     

    (iv) is a
lease, rental or occupancy agreement, license, installment and conditional sale
agreement, or other Contract affecting the ownership of, leasing of, title to,
use of, or any leasehold or other interest in, any real or personal property
(except personal property leases and installment and conditional sales
agreements having a value per item or aggregate payments of less than $50,000
annually and with terms of less than one year);

     

    (v) is a
licensing agreement or other Contract with respect to patents, trademarks,
copyrights or other intellectual property, other than (A) standard
non-disclosure agreements with employees and consultants and (B) non-exclusive
licenses to or with any Person entered into in the Ordinary Course of
Business;

     

    (vi) is a
joint venture, partnership or similar arrangement, however named, involving a
sharing of profits, losses, costs or liabilities by any Emcore Company with any
other Person or any Contract relating to holding, voting or transferring any
capital stock or other equity interest by any Acquired Company (including any
stockholders’ agreement);

     

    (vii) contains
covenants, including non-solicitation provisions, that purport to restrict the
business activity of any Acquired Company or limits the freedom of any Acquired
Company to engage in any line of business or to compete with any
Person;

     

    (viii) requires
any Emcore Company to incur in excess of $250,000 in the aggregate for capital
expenditures;

     

    (ix) is a
sales agency, marketing or distribution agreement of the Emcore Companies,
involving an amount in excess of $250,000 or provides for payments to or by any
Person based on sales, purchases or profits, other than direct payments for
goods;

     

    (x) is a
power of attorney that is currently effective and outstanding;

     

    (xi) is an
agreement by any Acquired Company to purchase any capital stock or other debt or
equity securities of any Person;

     

    (xii) is an
agreement (or group of related agreements) under which any Acquired Company has
created, incurred or guaranteed any indebtedness, liabilities or obligations, or
issued any note, bond, debenture or similar instrument, for borrowed money, or
any capitalized lease obligation or under which it has imposed an Encumbrance on
any of its assets, tangible or intangible;

     

    (xiii) is a
bonus, profit sharing, incentive, deferred compensation, severance or change in
control (exclusive of generally applicable severance policy) or other material
plan or arrangement for the benefit of any of the Acquired Companies’ managers,
directors, officers or employees;

     

    (xiv) is a
collective bargaining agreement, or other Contract with any labor organization,
union or other similar association;

     

    (xv) is an
employment agreement with an Emcore Company providing for payments to any Person
in excess of $100,000 annually;

     

    (xvi) is a
Contract between or among any Acquired Company on the one hand, and any Seller
Affiliate (other than an Acquired Company) or any current or former officer,
director (or nominee for director) or employee of any Seller Affiliate (other
than an Acquired Company) on the other hand;

     

    (xvii) is an
agreement under which the consequences of a default or termination would have a
material adverse effect on the Business;

     

    (xviii) is a
hedging or factoring Contract related to currency exchange, interest rates,
commodity prices or similar Contract; or

     

    (xix) is a
material amendment, supplement or modification (whether oral or written) of any
of the foregoing.

     

    (b) Each
Material Contract is in full force and effect and is valid, binding and
enforceable by the applicable Emcore Company in accordance with its
terms.

     

    (c) Each
Emcore Company is in material compliance with all applicable terms and
requirements of each Material Contract under which such Emcore Company has any
obligation or liability or by which such Emcore Company or any of the assets
owned, leased or used by such Emcore Company is bound.

     

    (d) To the
Knowledge of Seller, each other Person that has any obligation or liability
under any Material Contract under which an Emcore Company has any rights is in
material compliance with all applicable terms and requirements of such Material
Contract.

     

    (e) No Emcore
Company has given to or received from any other Person any notice regarding any
actual, alleged, possible, or potential material violation or breach of, or
material default under, any Material Contract or any intention to terminate any
Material Contract.

     

    (f) Section 2.16 of the Seller’s
Schedule contains a list, as of the date of this Agreement, of all
Material Contracts, including the parties to such Material
Contracts.  Seller has made available to Buyer true, complete and
correct copies (or in the case of oral agreements, a reasonably complete
summary) of all Material Contracts as of the date of this Agreement, together
with any amendments or waivers thereto.

     

    2.17 Insurance

     

    .  Section 2.17 of the Seller’s
Disclosure sets forth a true, complete and correct list, as of the date
of this Agreement, of (a) all material fire and casualty, general liability,
life and workers’ compensation, business interruption, product liability, and
sprinkler and water damage insurance policies maintained by, or on behalf of,
the Emcore Companies that relate to the Business, and (b) if policies have been
issued to, but not received by, or on behalf of each of the Emcore Companies,
binders relating to such policies (the “Insurance Policies”).  Seller
has provided Buyer with a list, as of the date of this Agreement, of each
outstanding claim under the Insurance Policies for an amount in excess of
$50,000.  As of the date of this Agreement, all of such Insurance
Policies are legal, valid, binding and enforceable and in full force and effect
and none of the Emcore Companies is in breach or default with respect to its
obligations under such Insurance Policies (including with respect to payment of
premiums).  To the Knowledge of Seller, there are no circumstances
that exist that would relieve the insurer of any obligation to provide coverage
under any of the Insurance Policies and no notice of cancellation has been
received with respect to any Insurance Policy which has not been replaced on
substantially similar terms prior to the date of such
cancellation.  The Insurance Policies comprise all such insurance
policies in respect of the Business as the Emcore Companies are required to
maintain by Legal Requirements.  All Insurance Policies are with
insurance companies reasonably believed by Seller to be financially sound and
reputable.  The activities and operations of the Emcore Companies
relating to the Business have been conducted in a manner so as to conform in all
material respects to all applicable provisions of such Insurance
Policies.

     

    2.18 Environmental
Matters.

     

    (a) The
conduct of the Business is not in violation of any Environmental Law and any
past violations with respect to the Business have been resolved without any
ongoing or pending costs or obligations.

     

    (b) The
Emcore Companies have obtained, and are in compliance with all, Environmental
Permits required for the Business and any past non-compliance related to the
Business has been resolved without any ongoing or pending costs or
obligations.

     

    (c) There has
been no Release of any Hazardous Materials arising from or related to the
Business that require any Remedial Action pursuant to Environmental
Law.

     

    (d) No Emcore
Company is conducting or funding any Remedial Action that arises from or in any
way is related to the Business.

     

    (e) No Emcore
Company has received any written notice from any Governmental Body or other
Person of a Proceeding, nor to the Knowledge of Seller is any Proceeding
Threatened or pending against any Emcore Company, that relates to, or arises
from:

     

    (i) the
Business being in violation, or alleged violation, of any Environmental Law;
or

     

    (ii) any
Liability, or alleged Liability under, any Environmental Law.

     

    (f) The
Emcore Companies’
operations at the Leased Real Properties in Alhambra, California and at real
property formerly leased or otherwise occupied in Alhambra,
California  have not involved the use, storage, Release, or generation
of material or waste containing or comprised of chemicals that are (i) the
contaminants of concern at the San Gabriel Valley Area 3 Superfund Site (United
States Environmental Protection Agency ID No. CAD980818579, the “Superfund Site”), including, but not limited
to, Perchloroethene (“PCE”), Trichloroethene (“TCE”), cis 1,2-Dichloroethene and
other PCE and TCE degradation products, 1,1-Dichloroethene, carbon
tetrachloride, 1,2,3-Trichloropropane, other chlorinated volatile organic
compounds, 1,4-Dioxane, Perchlorate, and Nitrate, or (ii) the subject of any
outstanding, pending or Threatened Orders or Proceedings by any Governmental
Body or other Person relating to Remedial Action.

     

    2.19 Employees.

     

    (a) Section 2.19 of the Seller’s
Schedule contains a true, complete and correct list, as of the date of
this Agreement, of the names of each employee and independent contractor of the
Business who is paid in excess of $25,000 annually, together with
each such person’s date of hire, position or function, exempt or non-exempt,
furloughed or leave status, annual current rate of compensation, and any
entitlement to bonus, commission, severance or other additional
compensation.  To the Knowledge of Seller, no employee of the Emcore
Companies is a party to, or is otherwise bound by, any agreement or arrangement,
including any confidentiality, noncompetition, or proprietary rights agreement,
between such employee and any other Person that in any way adversely affects or
will adversely affect (i) the performance of his or her duties as an employee of
the Acquired Companies or (ii) the ability of any Acquired Company to conduct
the Business.

     

    (b) There is
no material dispute with respect to the Business pending or, to the Knowledge of
Seller, Threatened between any Emcore Company and any of its current or former
officers, directors, supervisory personnel or any employee or group of
employees.

     

    2.20 Labor Relations;
Compliance

     

    No
Acquired Company has been or is a party to any collective bargaining
agreement.  There is not presently pending or existing, and to the
Knowledge of Seller there is not Threatened, with respect to any Acquired
Company or the Business (i) any strike, slowdown, picketing, or work stoppage,
(ii) any Proceeding against or affecting any Emcore Company relating to the
alleged violation of any Legal Requirement pertaining to labor relations or
employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, the Department of Labor, or any comparable Governmental Body,
organizational activity, or other labor or employment dispute against or
affecting any of the Emcore Companies or their premises, (iii) any application
for certification of a collective bargaining agent or (iv) any internal Seller
investigations or Governmental Body investigations relating to any alleged
violation of any Legal Requirements by Emcore Companies pertaining to labor
relations or employment matters.  To the Knowledge of Seller, no event
has occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute with respect to the Business.  With
respect to the Business, there is no lock-out of any employees by any Emcore
Company and no such action is contemplated by any Emcore Company.  The
Emcore Companies, with respect to the Business, have complied and are in
compliance in all material respects with their own employment policies and all
Legal Requirements relating to labor relations and employment matters, including
but not limited to, employment status (temporary, leased, independent contractor
or otherwise), equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, leave, collective bargaining, withholding and payment of
employment taxes, including social security and similar taxes, occupational
safety and health, affirmative action, workers’ compensation, disability
insurance, unemployment insurance, plant closings, mass layoffs and other
terminations.  No Emcore Company is, with respect to the Business,
subject to any Order for the payment of any material compensation, damages,
taxes, fines, penalties, or other amounts, however designated, or any other
Order, for the alleged failure to comply with any of the foregoing Legal
Requirements.  With respect to labor relations and employment matters
of the Business, each Emcore Company is in compliance with all directives and
requests of any Governmental Body, whether in the form of an Order or
otherwise.

     

    2.21 Intellectual
Property.

     

    (a) Intellectual Property
Assets.  The term “Intellectual Property Assets”
means:

     

    (i) all
fictitious business names, trade names, logos, designs, emblems and product
names, registered and unregistered trademarks, service marks, domain names,
internet addresses, and applications therefor as may exist anywhere in the world
together with the associated goodwill, owned by or licensed to any Emcore
Company and used in the Business (collectively, “Marks”);

     

    (ii) all
patents and patent applications as may exist anywhere in the world, owned by or
licensed to any Emcore Company and used in the Business (collectively,
“Patents”);

     

    (iii) all
copyrights, including mask works, whether or not registered in both published
works and unpublished works as may exist anywhere in the world, owned by or
licensed to any Emcore Company and used in the Business (collectively,
“Copyrights”); and

     

    (iv) all
know-how, trade secrets, confidential information, customer lists, software,
technical information, data, plans, drawings, and blue prints as may exist
anywhere in the world, owned by or licensed to any Emcore Company and used in
the Business (collectively, “Trade Secrets”).

     

    (b) Agreements.

     

    Section 2.21(b) of the
Seller’s Schedule contains a true, complete and correct list, as of the
date of this Agreement, of all Material Contracts relating to the Intellectual
Property Assets to which any Emcore Company is a party or by which any Emcore
Company is bound, except for any license implied by the sale of a product,
outbound licenses to any Intellectual Property Assets pursuant to any Emcore
Company’s standard form(s) of outbound license agreements, copies of which have
been provided to Buyer, and licenses for commonly available software programs
with a value of less than $50,000 or open source software programs under which
an Emcore Company is the licensee.  There are no outstanding and, to
the Knowledge of Seller, no Threatened claims of material breach by any Emcore
Company with respect to any Material Contract set forth on Section 2.21(b) of the
Seller’s Schedule.

     

    (c) Patents.

     

    (i) Section 2.21(c) of the
Seller’s Schedule contains a true, complete and correct list, as of the
date of this Agreement, of all Patents, including the application or
registration number, title, jurisdiction in which the application was made or
from which registration issued, date of application and date of issuance (if
issued), and names of all current applicant(s) and registered owners(s) (as
applicable).  One or more of the Emcore Companies is, and as of the
Closing one or more of the Acquired Companies will be, the owner of all right,
title, and interest in and to each of the Patents (other than Patents licensed
to an Emcore Company), free and clear of all Encumbrances and other adverse
claims.

     

    (ii) All of
the issued Patents are currently in material compliance with formal Legal
Requirements, and are valid and subsisting and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the
date of this Agreement.

     

    (iii) All
products made, used or sold under the Patents have been marked with proper
patent notice.

     

    (iv) To the
Knowledge of Seller, no product of the Business infringes any third party patent
rights, except where such infringement would not have a material adverse effect
on the Business.

     

    (v) No Patent
has been or is now involved in any interference, reissue, re-examination, or
opposition proceeding.  To the Knowledge of Seller, there is no patent
or patent application of any third party interfering with any
Patent.

     

    (d) Trademarks.

     

    (i) Section 2.21(d) of the
Sellers’ Schedule contains a true, complete and correct list, as of the
date of this Agreement, including jurisdictions where applied for or registered
(if applicable), of all (A) registered Marks, (B) applications for registration
of Marks and (C) material unregistered Marks.  One or more of the
Emcore Companies is, and as of the Closing one or more of the Acquired Companies
will be, the owner of all right, title, and interest in and to each of the
Marks, free and clear of all Encumbrances and other adverse claims.

     

    (ii) No Mark
has been or is now involved in any opposition, invalidation or cancellation
proceedings.

     

    (iii) To the
Knowledge of Seller, no Mark infringes any third party trademark rights, except
where such infringement would not have a material adverse effect on the
Business.

     

    (iv) All
products, materials and services rendered under a Mark have been and are
properly marked in accordance with Legal Requirements.

     

    (e) Copyrights.

     

    (i) Section 2.21(e) of the
Sellers’ Schedule contains a true, complete and correct list, as of the
date of this Agreement, of all registered Copyrights, including jurisdictions
where registered.  All registered Copyrights are currently in
compliance with all Legal Requirements, are valid and enforceable and are not
subject to any maintenance fees or taxes or actions falling due within ninety
days after the date of this Agreement.  One or more of the Emcore
Companies is, and as of the Closing one or more of the Acquired Companies will
be, the owner of all right, title, and interest in and to each of the Copyrights
listed in Section
2.21(e) of the Seller’s Schedule and unregistered mask works which are
Copyrights, free and clear of all Encumbrances and other adverse
claims.

     

    (ii) To the
Knowledge of Seller, no Copyright infringes any third party copyrights, except
where such infringement would not have a material adverse effect on the
Business.

     

    (f) Trade
Secrets.

     

    (i) The
Emcore Companies have taken all commercially reasonable precautions to protect
the secrecy, confidentiality, and value of their Trade Secrets.  As of
the date of this Agreement, one or more of the Emcore Companies has, and as of
the Closing one or more of the Acquired Companies will have, good title to the
Trade Secrets (other than Trade Secrets licensed to Seller) and an absolute (but
not necessarily exclusive) right to use the Trade Secrets.

     

    (ii) The Trade
Secrets are not part of the public domain, and, to the Knowledge of Seller, have
not been used, divulged, or appropriated to the detriment of the
Business.

     

    (g) To the
Knowledge of Seller (i) the Business as currently conducted does not infringe or
otherwise violate any Person’s marks, patents, copyrights or trade secrets in
any manner that could materially and adversely affect the Business and the
Acquired Companies’ operation of the Business after the Closing in the same
manner as previously conducted by any Emcore Company, (ii) there is no claim
Threatened against any Emcore Company related to any infringement, violation or
misuse of any Person’s marks, patents, copyrights or trade secrets and (iii) no
Person is materially infringing or otherwise materially violating any
Intellectual Property Assets, and no such infringement claims are Threatened
against any Person by any Emcore Company.

     

    (h) All
personnel, including employees, agents, consultants and contractors, who have
contributed to or participated in the conception, reduction to practice or
development of any Intellectual Property Asset, have so contributed or
participated either (i) in a “work for hire” arrangement or agreement with
Seller or an Emcore Company, in accordance with applicable Law, that by its
terms accords Seller or an Emcore Company full, effective, exclusive and
original ownership of, and all right, title and interest in and to, all tangible
and intangible property included in the Intellectual Property Assets; or (ii)
under appropriate instruments of assignment in favor of Seller or an Emcore
Company as assignee that by their terms convey to Seller or an Emcore Company
full, effective and exclusive ownership of all right, title and interest in and
to all tangible and intangible property included in the Intellectual Property
Assets.

     

    2.22 Accounts; Safe Deposit
Boxes; Powers of Attorney and Directors and Officers

     

    .  Section 2.22 of the Seller
Schedule sets forth, as of the date of this Agreement, (a) a true and
correct list of all bank and savings accounts, certificates of deposit and safe
deposit boxes of each Acquired Company and those Persons authorized to sign
thereon, (b) true and correct copies of all corporate borrowing, depository and
transfer resolutions of each Acquired Company and those Persons entitled to act
thereunder, (c) a true and correct list of all powers of attorney granted by
each Acquired Company and those Persons authorized to act thereunder and (d) a
true and correct list of all officers and directors of each Acquired
Company.

     

    2.23 Suppliers

     

    .  To
the Knowledge of Seller, since the Pro Forma Balance Sheet Date, no Emcore
Company has entered into any Contract with respect to the Business for the
purchase of goods or services other than in the Ordinary Course of
Business.  Section 2.23 of the Seller’s
Schedule sets forth a list of the top twenty (20) (by total cost to the
Emcore Companies with respect to the Business) suppliers of goods and services
to the Business for each of the twelve months ended December 31, 2009 and
December 31, 2008.  Since the Pro Forma Balance Sheet Date, no
supplier of goods and services named in Section 2.23 of the Seller’s
Schedule has terminated or has indicated the intention to terminate their
relationship with the Company.

     

    2.24 Customers

     

    .  Section 2.24 of the Seller’s
Schedule sets forth a list of the top twenty (20) (by revenue to the
Emcore Companies) customers of the Business for each of the twelve months ended
December 31, 2009 and December 31, 2008.  Since the Pro Forma Balance
Sheet Date, no customer named in Section 2.24 of the Seller’s
Schedule has terminated or has indicated the intention to terminate their
relationship with the Company.

     

    2.25 Certain
Payments

     

    .  No
Emcore Company nor, to the Knowledge of Seller, any director, officer, agent, or
employee of any Emcore Company or any Person acting for or on behalf of any
Emcore Company, has, with respect to the Business, directly or indirectly, (a)
made any contribution, gift, bribe, rebate, payoff, influence payment or
kickback, or has made, authorized, offered or promised to make any other
payment, gift or transfer of anything of value to any Person, private or public,
regardless of form, whether in money, property, or services in violation of
Anti-Bribery Law or other Legal Requirement, or (b) established or maintained
any fund or asset, or made any payment or entered into any other transaction,
that has not been recorded appropriately and accurately in the books and records
of the Emcore Companies.

     

    2.26 Disclosure

     

    .  No
representation or warranty of Seller contained in this Agreement or in any
Ancillary Agreement, and no statement contained in the Seller’s Schedule and the
Fixed Assets List, contains or will contain when delivered any material untrue
statement of fact, or to the knowledge of Seller, omits or will omit to state
when delivered any material fact necessary, in light of the circumstances under
which it was or will be made, in order to make the statements herein or therein
not misleading in all material respects.

     

    2.27 Brokers or
Finders

     

    .  No
Emcore Company has incurred any obligation or liability, contingent or
otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement or any Ancillary
Agreement.

     

    ARTICLE
III                                

     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Seller as follows:

     

    3.1 Organization and Good
Standing

     

    .  Buyer
is a limited liability company duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
organization.

     

    3.2 Authority; No
Conflict.

     

    (a) This
Agreement constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect affecting creditors’ rights generally
and general principles of equity.  Upon the execution and delivery by
Buyer of each Ancillary Agreement (other than the CFD Loan Agreement) to be
executed or delivered by Buyer at Closing, each such Ancillary Agreement will
constitute the legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its respective terms.  Buyer has all
necessary corporate power and authority to
execute and deliver this Agreement and the Ancillary Agreements (other than the
CFD Loan Agreement) to be executed and delivered by Buyer at the Closing and to
perform its obligations under this Agreement and such Ancillary Agreements and
the transactions contemplated hereby and thereby have been duly authorized by
all requisite action on the part of Buyer.

     

    (b) Neither
the execution and delivery of this Agreement, nor any of the Ancillary
Agreements, by Buyer nor the consummation or performance of any of the
transactions contemplated herein, or therein, by Buyer will, directly or
indirectly (with or without notice or lapse of time):

     

    (i) conflict
with or result in a violation of (A) any provision of Buyer’s Organizational
Documents or (B) any resolution adopted by the board of directors or
stockholders of Buyer;

     

    (ii) except
for the need to obtain PRC Approvals, conflict with, or result in a violation
of, any Legal Requirement or Order to which Buyer may be subject or give any
Governmental Body the right to challenge any of the transactions contemplated by
this Agreement or any of the Ancillary Agreements or to exercise any remedy,
obtain any relief under or revoke or otherwise modify any rights held under any
such Legal Requirement; or

     

    (iii) give any
Person the right to prevent, delay, or otherwise interfere with any of the
transactions contemplated herein or in any Ancillary Agreement pursuant to any
Contract to which Buyer is a party or by which Buyer may be bound.

     

    (c) Other
than the PRC Approvals, Buyer is not and will not be required to give any notice
to or obtain any Consent from any Person in connection with the execution and
delivery of this Agreement or any of the Ancillary Agreements or the
consummation or performance of any of the transactions contemplated herein or
therein.

     

    3.3 Certain
Proceedings

     

    .  There
is no pending Proceeding that has been commenced against Buyer or that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the transactions contemplated herein or in
any of the Ancillary Agreements.  To the Knowledge of Buyer, no such
Proceeding has been Threatened.

     

    3.4 Investment Intent; Ability
to Evaluate and Bear Risks

     

    .  Buyer
is acquiring the Shares for its own account and not with a view to their
distribution within the meaning of Section 2(11) of the Securities
Act.  Buyer is able to bear the economic risk of holding the Shares
for an indefinite period, and has knowledge and experience in financial and
business matters such that it is capable of evaluating the risks of the
investment in the Shares.

     

    3.5 Brokers or
Finders

     

    .  Buyer
and its officers and agents have incurred no obligation or liability, contingent
or otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement or any Ancillary
Agreement.

     

    3.6 Financing

     

    .  Buyer
will have on the Closing Date, funds in its possession in an amount sufficient
to enable it to (i) pay the Estimated Purchase Price and (ii) pay all fees and
expenses required to be paid by Buyer in connection with the transactions
contemplated by this Agreement.

     

    3.7 No Military
Affiliation.  Buyer has no affiliation with nor is it controlled by the
military of the People’s Republic of China.

     

    ARTICLE
IV                                

     

    COVENANTS
OF SELLER PRIOR TO CLOSING DATE

     

    4.1 Access and
Investigation

     

    .  Subject
to any Legal Requirement, between the date of this Agreement and the Closing
Date, Seller will, and will cause each of the other Emcore Companies and its
representatives to, (a) afford Buyer and its representatives and prospective
lenders and their representatives (collectively, “Buyer’s Advisors”) reasonable
access during normal business hours to each Emcore Company’s personnel,
properties, Contracts, books and records, Tax Returns (excluding Emcore’s
consolidated income Tax Returns) and other documents and
data relating to the Business, (b) furnish Buyer and Buyer’s Advisors with
copies of all such Contracts, books and records, and other existing documents
and data relating to the Business as Buyer may reasonably request and (c)
furnish Buyer and Buyer’s Advisors with such additional financial, operating,
and other data and information (including but not limited to monthly balance
sheet, profit and loss statement, back-log and cash flow statement) as Buyer may
reasonably request, in each case, so long as such actions (1) do not materially
interfere with the business of the Emcore Companies and (2) would not violate
any Legal Requirement.

     

    4.2 Operation of the
Business

     

    .  Except
as otherwise provided or contemplated by this Agreement (including the
Restructuring Plan) or the Ancillary Agreements or required by any applicable
Legal Requirement, between the date of this Agreement and the Closing Date,
Seller will, and will cause each of the other Emcore Companies to:

     

    (a) conduct
the Business in the Ordinary Course of Business;

     

    (b) separately
account for all cash and cash equivalents generated by the Business, inventory,
accounts payables and accounts receivables, and all other assets and liabilities
(including all movements thereof) and all cash and cash equivalents generated by
the Business shall be applied to discharge accounts payables and liabilities of
the Business arising in the Ordinary Course of Business consistent with the
usual and customary conduct of the Business.

     

    (c) maintain
a level and quality of Inventory and supplies, raw materials and spare parts
that is sufficient for the normal operation of the Business in accordance with
past practice;

     

    (d) use
commercially reasonable efforts to (i) maintain the relations and goodwill with
suppliers, customers, landlords, creditors, employees, agents, and others having
business relationships with the Emcore Companies relating to the Business so
that the Business shall be unimpaired in every material respect at Closing (ii)
maintain the facilities and assets owned, leased or used in connection with the
Business in the same state of repair, order and condition as they are on the
date of this Agreement (except for reasonable wear and tear) and (iii) complete
the Restructuring;

     

    (e) send a
letter to LSI Corporation confirming their statement made on a conference call
dated 1 February 2010 that, as between LSI Corporation and Seller, the
environmental condition at the Alhambra, CA facility and the Superfund Site is
the responsibility of LSI Corporation, and that LSI Corporation will indemnify
Seller against such liability as provided under the transaction documents
between Seller and Agere Systems, Inc.;

     

    (f) use
reasonable commercial efforts to renegotiated the master leases for the
Alhambra, CA facility to clarify the environmental conditions on the site and
the associated liabilities which pre-date Seller’s occupancy of the site,
provided that Seller shall not be obligated to incur substantial direct or
indirect costs associated with renegotiation of such leases; and

     

    (g) as promptly as
practicable after the date of this Agreement, Seller will use commercially
reasonable efforts to fund the initial draw down of $2,000,000 by the Company
pursuant to the Emcore Loan Agreement.

     

    In
addition, prior to Closing, Seller shall establish new Plans (which shall
be Acquired Company Plans to take effect from Closing), or ensure that
immediately after the Closing the employees of the Acquired Companies can
participate under existing Plans as provided in the Transition Services
Agreement, for the benefit of the Business employees that provide benefits
(other than equity compensation) which are substantially similar to the benefits
provided under the comparable Plans (excluding equity plans) maintained by the
Emcore Companies.  Notwithstanding anything in this Agreement to the
contrary, nothing contained herein shall (i) be treated as an amendment to any
particular employee benefit plan of Buyer or Seller or the Company, (ii)
obligate Buyer or any of its Affiliates (including the Company or any other
Acquired Company) to (A) maintain any particular benefit plan or arrangement or
(B) retain the employment of any particular employee, (iii) prevent Buyer, the
Company or any of their Affiliates from amending or terminating any benefit plan
or arrangement, or (iv) give any third party the right to enforce any of the
provisions of this Agreement.

     

    4.3 Negative
Covenant

     

    .  Except
as otherwise permitted or contemplated by this Agreement (including the
Restructuring Plan) or any Ancillary Agreement or required by any applicable
Legal Requirement, between the date of this Agreement and the Closing Date
Seller will not, and will cause each other Emcore Company not to, without the
prior Consent of Buyer:

     

    (a) take, or
fail to take, any commercially reasonable action, as a result of which any of
the changes or events listed in Section 2.15 would occur;

     

    (b) adopt or
establish any new employee benefit plans for employees of the Business or amend
an Acquired Company Plan to the extent that such action would result in an
Acquired Company Plan providing a level of benefits that is materially greater
than the level of benefits currently provided to employees of the Business under
the comparable Plan maintained by the Emcore Companies;

     

    (c) enter
into any consulting Contract with respect to the Business which would become a
Liability of the Acquired Companies following the Closing and providing for
payments in excess of $200,000 in aggregate;

     

    (d) if it may
affect an Acquired Company, make any material Tax election or settlement or
compromise of any material Tax Liability or refund, make any change in any
annual Tax accounting period or method of Tax accounting, file any material
amendment to a Tax Return, enter into any closing agreement relating to any
material Tax, surrender any right to claim a Tax refund, or consent to any
extension or waiver of the statute of limitations period applicable to any Tax
claim or assessment; or

     

    (e) enter
into any material contract or transaction relating to the Business or the
Acquired Companies with any Affiliate, director or officer of Seller that is
outside of the Ordinary Course of Business.

     

    provided
that Seller may, and may cause the Emcore Companies to grant rights to
retention, severance or termination pay to, or enter into any new (or amend any
existing) employment, retention, severance or other Contract with, any employee,
director, officer, agent or consultant of an Emcore Company who will be employed
or engaged by an Acquired Company as may be required by Legal Requirement or
where the effect of any of the foregoing would not increase the total staff
costs of the Business by more than five percent (5%) per annum.

     

    4.4 Notification

     

    .  Between
the date of this Agreement and the Closing Date, Seller will notify Buyer as
soon as practicable in writing if Seller becomes aware of any fact or condition
that causes or constitutes a material Breach of any of Seller’s representations
and warranties as of the date of this Agreement and of the occurrence of any
material Breach of any covenant of Seller in this Article IV or of the
occurrence of any event that may make the satisfaction of the conditions in
Article VII impossible or unlikely.  Notwithstanding anything herein
to the contrary, no notice provided pursuant to this Section 4.4 shall limit or
otherwise affect the remedies available hereunder to the party receiving such
notice, or the representations or warranties of, or the conditions to the
obligations of, the parties hereto.

     

    4.5 Consultation

     

    .  In
connection with the continuing operation of the Business between the date of
this Agreement and Closing, to the extent not reasonably believed by Seller to
be prohibited by Legal Requirements, Seller shall use reasonable efforts to
consult in good faith on a regular and frequent basis with one or more
designated representatives of Buyer, to report material operational developments
and the general status of ongoing operations pursuant to procedures reasonably
requested by Buyer or such representatives.  Seller acknowledges that
any such consultation (or any information shared in connection therewith) shall
not constitute a waiver by Buyer of any rights it may have under this Agreement,
and that Buyer shall not have any liability or responsibility for any actions of
Seller or any of its officers or directors with respect to matters that are the
subject of such consultations unless Buyer expressly consents to such action in
writing.

     

    4.6 Required
Approvals

     

    .  Except
as otherwise permitted by this Agreement, as promptly as practicable after the
date of this Agreement, Seller will, and will cause each other Emcore Company
to, (a) make all filings required by Legal Requirements to be made by it in
order to consummate the transactions contemplated herein and (b) make
commercially reasonable efforts to obtain all Consents required to be obtained
by Seller or the other Emcore Companies to consummate the transactions
contemplated hereby.  Between the date of this Agreement and the
Closing Date, Seller will, and will cause each other Emcore Company to, (i)
reasonably cooperate with Buyer with respect to all filings that Buyer elects to
make or is required by Legal Requirements to make in connection with the
transactions contemplated herein, and (ii) reasonably cooperate with Buyer in
obtaining all Consents identified in Schedule
3.2.

     

    4.7 Acquisition
Proposals.

     

    (a) Seller
agrees that, except as expressly contemplated by this Agreement or with respect
to a Seller Sale Proposal, Seller shall not and shall cause the Emcore Companies
and its and their respective officers, directors, investment bankers, attorneys,
accountants, financial advisors, agents and other representatives (collectively,
“Representatives”) not to (i) directly or indirectly initiate, solicit,
knowingly encourage or facilitate (including by way of furnishing information)
any inquiries or the making or submission of any proposal that constitutes, or
could reasonably be expected to lead to, an Acquisition Proposal, (ii)
participate or engage in discussions or negotiations with, or disclose any
non-public information or data relating to Seller or any Emcore Company or
afford access to the properties, books or records of Seller or any Emcore
Company to any Person that has made an Acquisition Proposal or to any Person in
contemplation of an Acquisition Proposal, or (iii) accept an Acquisition
Proposal or enter into any agreement (A) constituting or related to, or that is
intended to or could reasonably be expected to lead to, any Acquisition Proposal
(other than a confidentiality agreement permitted pursuant to this Section
4.7(a)) or (B) requiring, intended to cause, or which could reasonably be
expected to cause Seller to abandon, terminate or fail to consummate the sale of
the Shares pursuant to this Agreement (each an “Acquisition
Agreement”).  Notwithstanding anything to the contrary in this
Agreement, Seller and the Board of Directors of Seller (the “Board”) may take
any actions described in clause (ii) of this Section 4.7(a) with respect to a
third party if (x) Seller receives a written Acquisition Proposal from such
third party (and such Acquisition Proposal was not during such time period
initiated, solicited, knowingly encouraged or facilitated by Seller or any of
its Representatives) and (y) such proposal constitutes, or the Board determines
in good faith (after consultation with its financial advisors and outside legal
counsel) that such proposal could reasonably be expected to lead to, a Superior
Proposal, provided that Seller shall not deliver any information to such third
party without entering into a customary confidentiality
agreement.  Nothing contained in this Section 4.7 shall prohibit
Seller or the Board from taking and disclosing to Seller’s stockholders a
proposition with respect to an Acquisition Proposal pursuant to Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act or from making any similar
disclosure, in either case to the extent required by applicable Legal
Requirement.

     

    (b) Neither
(i) the Board nor any committee thereof shall directly or indirectly (A)
withdraw (or amend or modify in a manner adverse to Buyer), or publicly propose
to withdraw (or amend or modify in a manner adverse to Buyer), the approval or
recommendation by the Board of this Agreement and the sale of the Shares
pursuant to this Agreement or (B) recommend, adopt or approve, or propose
publicly to recommend, adopt or approve, any Acquisition Proposal (any action
described in this clause (i) being referred to as a “Seller Adverse
Recommendation Change”) nor (ii) shall Seller execute or enter into an
Acquisition Agreement.  Notwithstanding the foregoing, subject to
Seller’s compliance at all times with the provisions of this Section 4.7, (Y) in
response to a Seller Sale Proposal, the Board or any committee thereof may make
a Seller Adverse Recommendation Change if the Board or any committee thereof
determines in good faith, after consultation with outside legal counsel, that it
is required for purposes of fulfilling its fiduciary duties under applicable
Legal Requirements, or (Z) in response to a Superior Proposal, the Board or any
committee thereof may make a Seller Adverse Recommendation Change and/or enter
into an Acquisition Agreement; provided, however, that Seller shall not be
entitled to exercise its right under this clause (Z) to make a Seller Adverse
Recommendation Change and/or enter into an Acquisition Agreement in response to
a Superior Proposal (aa) until fifteen (15) Business Days after Seller provides
written notice to Buyer (a “Seller Notice”) advising Buyer that the Board or any
committee thereof has received a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal, and identifying the Person or
group making such Superior Proposal and (bb) if during such fifteen (15)
Business Day period, Buyer proposes any alternative transaction (including any
modifications to the terms of this Agreement), unless the Board or any committee
thereof determines in good faith (after consultation with its financial advisors
and outside legal counsel, and taking into account all financial, legal, and
regulatory terms and conditions of such alternative transaction proposal) that
such alternative transaction proposal is not at least as favorable to Seller and
its stockholders as the Superior Proposal (it being understood that any change
in the financial or other material terms of a Superior Proposal shall require a
new Seller Notice and a new fifteen (15) Business Day period under this Section
4.7(b)).

     

    (c) As
promptly as practicable after receipt thereof, Seller shall advise Buyer in
writing of any request for information or any Acquisition Proposal received from
any Person, or any inquiry, discussions or negotiations with respect to any
Acquisition Proposal, and the terms and conditions of such request, Acquisition
Proposal, inquiry, discussions or negotiations, and Seller shall promptly
provide to Buyer copies of any written materials received by Seller in
connection with any of the foregoing, and the identity of the Person or group
making any such request, Acquisition Proposal or inquiry or with whom any
discussions or negotiations are taking place.  Seller agrees that it
shall simultaneously provide to Buyer any non-public information concerning
itself or its subsidiaries provided to any other Person or group in connection
with any Acquisition Proposal which was not previously provided to
Buyer.  Seller shall keep Buyer fully informed of the status of any
Acquisition Proposals (including the identity of the parties and price involved
and any changes to any material terms and conditions thereof).  Seller
agrees not to release any third party from, or waive any provisions of, any
confidentiality or standstill agreement to which it is a party.

     

    (d) For
purposes of this Agreement “Acquisition Proposal” shall mean any bona fide
proposal, whether or not in writing, for the direct or indirect acquisition or
purchase of a business or assets that constitute 90% or more of the net
revenues, net income or the assets (based on fair market value thereof) of the
Business, but specifically excluding any (i) direct or indirect acquisition or
purchase of any class of equity securities or capital stock of Seller, (ii)
merger, consolidation, business combination, tender offer, exchange offer,
recapitalization or other similar transaction involving a Person that if
consummated would result in such Person beneficially owning 50% or more of any
class of equity securities of Seller (a “Seller Sale Proposal”) and (iii) the
transactions contemplated by this Agreement.  The term “Superior
Proposal” shall mean any bona fide written Acquisition Proposal for the direct
or indirect acquisition or purchase of a business or assets that constitute 90%
or more of the net revenue, net income or the assets (based on fair market value
thereof) of the Business made by a third party on terms which a majority of the
Seller’s Board or any committee thereof determines in good faith (after
consultation with its financial advisors and outside legal counsel, and taking
into account all financial, legal and regulatory terms and conditions of the
Acquisition Proposal and this Agreement (including any modifications to the
terms of this Agreement) proposed by any other party in response to such
Superior Proposal, including any conditions to and expected timing of
consummation, and any risks of non-consummation, of such Acquisition Proposal)
to be superior to Seller and its stockholders as compared to the transactions
contemplated hereby (including any modifications to the terms of this Agreement
proposed by the Buyer pursuant to this Section 4.7(b)).

     

    4.8 Commercially Reasonable
Efforts

     

    .  Except
as otherwise permitted by this Agreement, between the date of this Agreement and
the Closing, Seller will use, and will cause each Acquired Company to use, its
commercially reasonable efforts to cause the conditions in Articles VII and VIII
to be satisfied and to cause the Closing to occur as soon as reasonably
practicable, including taking all commercially reasonable actions necessary to
comply promptly with Legal Requirements that may be imposed on it or any Emcore
Company with respect to the Closing.  Notwithstanding the foregoing,
Seller may take any of the actions permitted by Section 4.7, and such actions
shall not constitute a Breach of this Agreement.

     

    ARTICLE
V                      

     

    COVENANTS
OF BUYER PRIOR TO CLOSING DATE

     

    5.1 Notification

     

    .  Between
the date of this Agreement and the Closing Date, Buyer will notify Seller as
soon as practicable in writing if Buyer becomes aware of any fact or condition
that causes or constitutes a material Breach of any of Buyer’s representations
and warranties as of the date of this Agreement and of the occurrence of any
material Breach of any covenant of Buyer in this Article V or of the occurrence
of any event that may make the satisfaction of the conditions in Article VIII
impossible or unlikely.  Notwithstanding anything herein to the
contrary, no notice provided pursuant to this Section 5.1 shall limit or
otherwise affect the remedies available hereunder to the party receiving such
notice, or the representations or warranties of, or the conditions to the
obligations of, the parties hereto.

     

    5.2 Required
Approvals

     

    .  Except
as otherwise permitted by this Agreement, as promptly as practicable after the
date of this Agreement, Buyer will (a) make all filings required by Legal
Requirements to be made by it to consummate the transactions contemplated herein
and (b) make commercially reasonable efforts to obtain all Consents required to
be obtained by Buyer to consummate the transactions contemplated
hereby.  Between the date of this Agreement and the Closing Date,
Buyer will (i) reasonably cooperate with Seller with respect to all filings and
applications that the Emcore Companies elect to make or are required by Legal
Requirements to make in connection with the transactions contemplated herein
(including but not limited to obtaining export control licenses from the U.S.
Department of Commerce in respect of the Export Controlled Technologies and
approval by CFIUS in respect of the transaction contemplated under this
Agreement, and (ii) reasonably cooperate with Seller in obtaining all Consents
identified in Section
2.2 of the Seller’s Schedule, provided that Seller shall (upon production
of relevant invoice) reimburse or pay on behalf of Buyer (as Buyer may direct in
writing) in full for all attorney’s expenses outside of the PRC reasonably and
properly incurred by Buyer in connection with obtaining export control licenses
for the Export Controlled Technologies and approval by CFIUS, up to a maximum of
$100,000.

     

    5.3 Commercially Reasonable
Efforts

     

    .  Between
the date of this Agreement and the Closing, Buyer will use its commercially
reasonable efforts to cause the conditions in Articles VII and VIII to be
satisfied and to cause the Closing to occur as soon as reasonably practicable,
including taking
all commercially reasonable actions necessary to comply promptly with Legal
Requirements that may be imposed on it with respect to the Closing.

     

    ARTICLE
VI                                

     

    ADDITIONAL
AGREEMENTS

     

    6.1 Tax Returns and Transfer
Taxes.

     

    (a) Seller’s Consolidated Income
Tax Returns.  Seller shall, at its own expense, prepare and
file, or cause to be prepared and filed, all Tax Returns (including amended Tax
Returns) of the Acquired Companies that are income Tax Returns and are prepared
on a consolidated, unitary, or combined basis and that include Seller for all
taxable periods ending on or before the Closing Date.  Any Tax Returns
prepared by Seller for any taxable period ending on or prior to the Closing
(including any amended Tax Returns) shall be prepared in a manner consistent
with past practice (except as required by Legal Requirements) during the taxable
periods ending on or prior to the Closing.  Seller shall timely pay,
or cause to be paid, any such Taxes shown as due on such Tax
Returns.

     

    (b) Other
Returns.  Buyer and Seller shall cause the Acquired Companies
to, at the Acquired Companies’ own expense, prepare and file, or cause to be
prepared and filed, all Tax Returns of the Acquired Companies (other than the
Tax Returns that are prepared by Seller pursuant to Section 6.1(a) above) that
are required to be filed after the Closing with respect to taxable periods
beginning on or before the Closing Date or any period commencing after the
Closing, and, subject to the right to payment from Seller pursuant to this
Section, Buyer and Seller shall cause the Acquired Companies to pay, all Taxes
shown as due on those Tax Returns.  Seller shall reimburse the
Acquired Companies for all Taxes shown on Tax Returns of the Acquired Companies
(other than the Tax Returns that are prepared by Seller pursuant to Section
6.1(a) above) for all periods (or portions thereof) ending on or prior to the
Closing Date which are filed after the Closing Date, but Seller shall be
credited for any estimated tax payments made by it prior to
Closing.  For Tax periods which begin before the Closing Date and end
after the Closing Date (a “Straddle Period”), Seller shall reimburse Buyer for
an amount equal to the Pre-Closing Taxes due with respect to any such Tax
Returns filed by the Acquired Companies and payable by such Acquired
Companies.  Seller shall also reimburse Buyer for all costs and
expenses incurred by Buyer or any of its Affiliates with respect to the
preparation and filing of any Tax Returns of the Acquired Companies for any
taxable period ending on or prior to the Closing Date and for a pro rata share
of any Tax Returns of the Acquired Companies for a Straddle
Period.  Any amounts owed by Seller to Buyer or the Acquired Companies
pursuant to this Section 6.1(b) shall be paid by Seller within thirty (30)
Business Days of Buyer’s request therefor.  Buyer and Seller shall
cause each Acquired Company to timely pay all such Taxes on or prior to their
due date.  With respect to a Straddle Period, such Pre-Closing Taxes
shall be calculated as follows:  for purposes of this Section 6.1(b),
in the case of any Taxes that are imposed on a periodic basis and are payable
for a Straddle Period, the portion of such Taxes that relates to the portion of
the Straddle Period ending on or prior to the Closing Date shall (A) in the case
of any Taxes other than Taxes based upon or related to income or receipts, be
deemed to be the amount of such Taxes for the entire Straddle Period multiplied
by a fraction, the numerator of which is the number of days in the Straddle
Period from the first day of the Straddle Period through and including the
Closing Date, and the denominator of which is the number of days in the entire
Straddle Period and (B) in the case of any Taxes based upon or related to income
or receipts, be deemed equal to the amount that would be payable if the relevant
Straddle Period ended on the Closing Date, using the “closing of the books”
method of accounting.

     

    (c) Amended
Returns.  Unless required by Legal Requirements, Buyer shall
not (nor shall it cause or permit the Acquired Companies to) amend, re-file or
otherwise modify any Tax Return relating in whole or in part to the Acquired
Companies with respect to any taxable year or period ending on or before the
Closing Date, or that includes the Closing Date, without the prior written
Consent of Seller, not to be unreasonably withheld or delayed.

     

    (d) Tax
Proceedings.  In the event Buyer or any Acquired Company
receives notice of any pending or Threatened Tax audits or assessments by any
Tax authority or other disputes concerning Taxes with respect to which Seller or
its Affiliates may incur Liability under this Agreement, the party in receipt of
such notice shall promptly notify Seller of such matter in
writing.  Seller shall have the right, at its own expense, to
represent the interests of the Acquired Companies in any such Tax audit or
administrative or court proceeding to the extent relating to Taxes for which
Seller is liable under this Agreement if Seller acknowledges in writing to Buyer
its responsibility for any such Liability which may result.  Seller
shall promptly commence and diligently pursue any such contest.  Buyer
shall have the right to observe the proceedings with its own counsel and to
receive copies of all materials relevant to the proceedings.  Seller
shall not settle or compromise any such claim, accept any final determination or
resolution or agree to any payment, refund or credit of Tax without the written
consent of Buyer (which shall not be unreasonably withheld or
delayed).  To the extent they reasonably are needed in connection with
the proceedings, Buyer shall make officers, employees, agents, auditors and
representatives of the Acquired Companies available to Seller at Seller’s
expense at mutually convenient times and places.

     

    (e) Cooperation on Tax
Matters.  Buyer, the Acquired Companies, and Seller shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of all Tax Returns (including any amended Tax
Return or claim for refund) and any audit, litigation, or other proceeding with
respect to Taxes.  Buyer and Seller further agree to use commercially
reasonable efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed.

     

    (f) Tax Sharing
Agreements.  All Tax sharing agreements or similar agreements,
if any, between any of the Acquired Companies and any other Affiliate of Seller
shall be terminated as of the Closing Date and, after the Closing, none of the
Acquired Companies, nor Seller, nor any Affiliate thereof, shall be bound
thereby or have any Liability thereunder and no payments (or any other
obligations) that are owed by or to the Acquired Companies pursuant thereto
shall be required to be made (or performed) thereunder.

     

    (g) Transfer
Taxes.  Buyer and Seller each shall be responsible for and
shall pay 50% of all documentary stamp Taxes, recording charges and other
similar Taxes, if any, in respect of the sale of the Shares to
Buyer.  Seller shall be responsible for any income Taxes, capital gain
Taxes or other similar Taxes, if any, in respect of the sale of the Shares to
Buyer. Each of the parties hereto shall prepare and file, and shall fully
cooperate with each other party with respect to the preparation and filing of,
any Tax Returns and other filings relating to any such Taxes or charges as may
be required.

     

    6.2 Other Intercompany
Arrangements; Third Party Assurances.

     

    (a) Except as
otherwise expressly contemplated by this Agreement (including the Restructuring
Plan) or the Ancillary Agreements, all Contracts, whether written, oral or
otherwise, which are solely between the Acquired Companies, on the one hand, and
Seller and its Affiliates (excluding the Acquired Companies), on the other hand,
shall be terminated and of no further effect, simultaneously with the Closing
without any further action on the part of the parties thereto, including,
without limitation, any promissory notes, interest bearing liabilities,
shareholder loans, accounts receivables and payables, and other intercompany
charges.  For the avoidance of doubt, as of the Closing Date, none of
the Company nor any of the other Acquired Companies shall owe or have
outstanding any of the aforementioned liabilities towards Seller or any of its
Affiliates, except for those arising in the Ordinary Course of
Business.

     

    (b) Seller
shall use its commercially reasonable efforts to ensure that as soon as
reasonably practicable after Closing, each Acquired Company is released from all
Third Party Assurances given by such Acquired Company in respect of obligations
of any Emcore Company (other than an Acquired Company).  Pending
release of any Third Party Assurance, Seller shall indemnify Buyer and each of
its Affiliates (including the Acquired Companies) against any and all Damages
arising after Closing under or by reason of any such Third Party
Assurances.

     

    (c) Buyer and
Seller shall each use its commercially reasonable efforts to ensure that as soon
as reasonably practicable after Closing, each Emcore Company (other than an
Acquired Company) is released from all Third Party Assurances given by such
Emcore Company in respect of the obligations of any Acquired
Company.  Pending release of any such Third Party Assurance, Buyer
shall indemnify such Emcore Company against any and all Damages arising after
Closing under or by reason of any such Third Party Assurance.

     

    6.3 Excluded Insurance Policies;
Continued Product Liability Insurance.

     

    (a) Buyer
shall not, and shall cause its Affiliates (including the Acquired Companies
after the Closing) not to, assert, by way of claim, action, litigation or
otherwise, any right to any Excluded Insurance Policy or any benefit under any
Excluded Insurance Policy.  Seller and its Affiliates (other than the
Acquired Companies) shall retain all right, title and interest in and to the
Excluded Insurance Policies, including the right to any credit or return
premiums due, paid or payable in connection with the termination thereof; provided, however, that to the extent
any returned premiums have been paid by an Acquired Company, such returned
premiums shall belong to Buyer.

     

    (b) Promptly
upon the Closing and except as otherwise provided herein, Buyer shall release,
and shall cause its Affiliates, including the Acquired Companies, to release,
all rights to all Excluded Insurance Policies that covered the Acquired
Companies prior to the Closing Date.  All Excluded Insurance Policies
issued prior to the Closing Date in the name of or to the Acquired Companies
shall remain with Seller or its Affiliates (other than the Acquired
Companies).  Notwithstanding anything to the contrary herein, (i) if
any Insurance Policy (including any Excluded Insurance Policy) is
occurrence-based and provides coverage to an Acquired Company or (ii) provides
coverage to an Acquired Company in respect of an outstanding insurance claim,
then the parties shall use commercially reasonable efforts to provide the
benefits of such coverage to the applicable Acquired Companies.  In
furtherance of and without limiting the foregoing, Seller shall and shall cause
its Affiliates to (in each case, promptly upon the request of
Buyer)  (i) provide copies of any Excluded Insurance Policy to Buyer
for the sole purposes of determining whether a potential claim may be covered
thereunder, (ii) to the extent Buyer reasonably believes such potential claim
would be covered under an Excluded Insurance Policy, submit such claim to the
applicable insurance company and take all reasonable action to have such claim
promptly processed, (iii) upon receipt by Seller or its Affiliates of any
proceeds received pursuant to an Excluded Insurance Policy in connection with
the foregoing, remit such proceeds to the applicable Acquired Company within ten
(10) Business Days and (iv) otherwise keep Buyer reasonably informed, and take
any other action as may be reasonably requested by Buyer, in respect of the
foregoing.

     

    6.4 Litigation
Support

     

    .  So
long as any party actively is contesting or defending against any Proceeding in
connection with (a) the transactions contemplated hereby or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Business or any Acquired Company, each other
party will cooperate with such party and such party’s counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as will be reasonably necessary in connection with
the contest or defense, at the sole cost and expense of the contesting or
defending party (subject to any indemnification rights under Article X). For the
avoidance of doubt, unless the Acquired Companies have assumed the same under
this Agreement, none of the Acquired Companies shall be liable for any judgment,
award or order for damages of any court or tribunal or other Governmental Body
relating to any Proceeding (whether or not relating to the Business and whether
arising before or after the date of this Agreement) against Seller or any of its
Affiliates or any damage or compensation payment, settlement pay-out or any
other costs (including but not limited to attorney’s costs) in connection with
such Proceeding, and Seller shall indemnify and hold Buyer and the Acquired
Companies harmless against such liabilities, damage or compensation payments,
settlement pay-outs and other costs in connection with any matter or event
arising prior to Closing.

     

    6.5 Additions to and
Modification of Schedules; Notification

     

    .  Except
as otherwise provided by this Agreement or the Ancillary Agreements, if, from the date hereof, any of
the information in the Seller’s Schedule or
any other schedule of Seller is not true, accurate and complete in all material
respects on and as of such date, Seller shall have the continuing obligation
until Closing promptly (a) to notify Buyer in writing with respect to any matter
arising subsequent to the date hereof that, if existing at the date of this
Agreement, would have been required to be set forth or described in the Seller’s
Schedule and (b) to amend or supplement such schedules to make additions to or
modifications of such schedules necessary to make the information set forth
therein true, accurate and complete in all material respects; provided, however, that,
except as consented to in writing by Buyer, no such amendment or
supplement shall have any effect for the purpose of determining the satisfaction
of the conditions set forth in Article VII and no such amendment or supplement
to the Seller’s Schedule shall have any effect for the purpose of determining
any right to indemnification.

     

    6.6 Non-Solicitation and
Non-Competition.

     

    (a) For the
period commencing on the Closing Date and ending on the date three (3) years
after the Closing Date, Seller agrees with Buyer, and for the benefit of the
Company, that it will not, and it will cause the other Emcore Companies not to,
directly or indirectly, without the prior written consent of Buyer, hire any
employee of the Acquired Companies, or persuade or solicit any such employee to
leave the employ of the Acquired Companies, or to become employed by the Emcore
Companies.  Notwithstanding the foregoing, Seller and the other Emcore
Companies shall not be precluded from soliciting for employment, hiring or
employing any such employee who has been terminated by an Acquired Company or
has terminated his or her employment with an Acquired Company before Seller or
the other Emcore Companies commences employment discussions with such
employee.

     

    (b) None of
Seller or any of the other Emcore Companies shall at any time during the period
commencing on the Closing Date and ending on the date three (3) years after the
Closing Date, other than through the Acquired Companies, directly or indirectly,
develop, own, manage, control or operate, or participate in the development,
ownership, management, control or operation of, any business engaged in the
Business as conducted by the Emcore Companies as of the Closing.  For
purposes of this Section 6.6, ownership by Seller or any other Emcore Company of
an aggregate of 5% or less of any class of securities of any Person shall not be
prohibited.

     

    (c) If any of
Seller or the other Emcore Companies violates any of its obligations under this
Section 6.6, Buyer may proceed against it in law or in equity for such damages
or other relief as a court may deem appropriate.  Seller acknowledges
that a violation of this Section 6.6 may cause Buyer irreparable harm which may
not be adequately compensable by money damages.  Seller therefore
agrees that in the event of any actual or threatened violation of this Section
6.6, Buyer shall be entitled, in addition to other remedies that it may have
available to it under law or in equity, to a temporary restraining order and to
preliminary and final injunctive relief against Seller or the other Emcore
Companies to prevent any violations of this Section 6.6, without the necessity
of posting of a bond or other security.

     

    6.7 Restructuring

     

    .  Buyer
and Seller acknowledge and agree that the assets, Liabilities, Contracts,
employees and operations of the Emcore Companies with respect to the Retained
Business are not, and are not intended to be, considered part of the Business
and will not be transferred to the Acquired Companies in the Restructuring or
will be transferred out of the Acquired Companies as part of the
Restructuring.  In addition, certain assets, contracts and services of
the Emcore Companies are used by or exist for the benefit of both the Business
and the Retained Business.  Seller shall bear all costs, expenses and
Taxes (including all Taxes that may be incurred or levied after Closing) arising
or in connection with the preparation and implementation of the Restructuring
Plan.

     

    6.8 Technology Protection
Plan

     

    .  As
soon as practicable after the date of this Agreement, Seller shall apply for any
necessary export license or licenses from the U.S. Department of Commerce Bureau
of Industry and Security ("BIS") with respect to the Export Controlled
Technologies, including technology, requiring such licenses under the US Export
Administration Regulations ("EAR") for transfer to non-US nationals or to
China.  In connection with the export license application process,
Seller shall submit to BIS its Technology Control Plan, which shall include
specific references to export control procedures that Seller may establish
specifically as a result of this transaction.  If as a condition to
obtaining the necessary export license (or other applicable US government
approvals), the Technology Control Plan needs to contain provisions materially
more onerous to the operation of the Company following closing than those
contained in the draft plan reviewed by Buyer prior to the signing of this
Agreement, the Buyer at its sole discretion may terminate the Agreement. Seller
shall bear all costs (including costs for asset valuation), expenses and Taxes
(including all Taxes that may be incurred or levied after Closing) arising or in
connection with the preparation and implementation of the technology protection
plan.

     

    6.9 Delivery of Documents,
Etc.

     

      Seller
hereby undertakes and agrees that if any agreement, document, book, record or
file, including those stored on computer disks or tapes or any other storage
medium, if any, reasonably related to the ongoing operation and management of
the Business and in the possession of any Emcore Company to the extent not
provided to Buyer or any Acquired Company on or prior to Closing, including any
material which also relates to the Retained Business or if the Emcore Companies
are otherwise required to retain the original of such material, then upon
request by Buyer or any Acquired Company, Seller shall as soon as practicable
provide or cause a hard or electronic copy (as appropriate) of such requested
material to be provided to the requesting party, subject in appropriate
circumstances to the recipient agreeing to maintain the confidentiality of such
information.  Notwithstanding the foregoing, to the extent required by
any Legal Requirements, Seller may require Buyer to designate a United States
citizen as the recipient of any of the foregoing, and such recipient, as a
condition to receiving such items, shall agree to any restrictions on further
disclosures as may be required by such Legal Requirements.

     

    6.10 Collection of Accounts
Receivable

     

    .  The
ownership and title over all accounts receivables and accounts payables of the
Business shall be assigned and transferred to the Acquired Companies with effect
from Closing.  Seller shall provide all necessary assistance to the
Acquired Companies with regard to the collection of accounts receivables and
payment of accounts payables in accordance with the terms of the Transition
Services Agreement.

     

    6.11 No Military
Application

     

    .  Buyer
and Seller agree that they will, and will cause each of the Acquired Companies
to, use the assets and technologies of the Acquired Companies as of the Closing
solely for civilian and commercial applications and not for any military
applications.  Buyer and Seller further agree that they will cause the
Acquired Companies to comply with the provisions of applicable Anti-Bribery Law
and with all export control Legal Requirements.

     

    6.12 Audit
Right

     

    .  Buyer
shall be entitled at any time after Closing to commission an audit of the
Acquired Companies and the Business for such purposes as it deems reasonably
necessary to protect its rights as the buyer of the Shares, including for the
purpose of verifying the accuracy of the representations and warranties of
Seller given hereunder and compliance of Seller with its undertakings, covenants
and obligations hereunder.  Seller shall provide, or cause to be
provided, to Buyer and its employees, agents, representatives and advisors
reasonable access to the books, records and working papers held by Seller
relating to the Business, including taking electronic copies, to the extent that
they are reasonably required for the purpose of the said audit.  Buyer
will pay the costs for any audit it has commissioned but nothing here shall
preclude Buyer from claiming such costs from Seller in connection with any
claims made under this Agreement to the extent Buyer is legally entitled to do
so.

     

    6.13 Seller’s
Schedule

     

    .  Seller
undertakes that, within 14 days from the date of this Agreement, it shall
provide an updated Seller’s Schedule, which shall contain such disclosures that
are true, complete and not misleading in all material respects and to the extent
reasonably practicable addresses comments provided by Buyer’s counsel prior to
the date hereof on the draft Seller’s Schedule provided on 30 January 2010 but
shall be in no respect less favorable to Buyer than the Seller’s Schedule (the
“Updated Seller’s Schedule”).  The Updated Seller’s Schedule shall
replace the Seller’s Schedule attached hereto on the date hereof, and the
Updated Seller’s Schedule shall be deemed to have been delivered as of the date
of this Agreement.  Buyer agrees that during the said 14-day period,
it shall not make any claims against Seller under any of the representations and
warranties hereunder or otherwise seek to terminate this Agreement on the basis
of an alleged breach of any representation or warranty.  The Parties
hereby agree that Buyer shall be entitled to verify the content of the Updated
Seller’s Schedule and may terminate this Agreement in accordance with Section
9.1(l) by written notice to Seller if Buyer discovers that any disclosure
therein: (a) is materially untrue, incomplete or misleading and which
individually or taken in aggregate with other untrue, incomplete or misleading
disclosures, will have a material adverse effect on Buyer’s interest as a holder
of the Shares following Closing; or (b) otherwise reveals or gives rise to a
Company Material Adverse Effect. 

     

    ARTICLE
VII                                

     

    CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

     

    Buyer’s
obligation to purchase the Shares and to take the other actions required to be
taken by Buyer at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived in
writing by Buyer, in whole or in part):

     

    7.1 Accuracy of
Representations

     

    .  All
of Seller’s representations and warranties contained in this Agreement must have
been true and correct in all respects as of the date of this Agreement and,
except as otherwise contemplated by this Agreement (including the
Restructuring) or
the Ancillary Agreements, must be true and correct in all respects as of the
Closing as if made on the Closing Date (except to the extent made as of an
earlier date, in which case as of the earlier date), except where the failure of
such representations and warranties (to the extent they relate to the assets,
liabilities, operations or business of the Business or the Acquired Companies)
to be true and correct (a) would not, in the aggregate, result in a Company
Material Adverse Effect or (b) is the result of actions taken by a Buyer
Governmental Body.  Buyer shall have received a certificate signed on
behalf of Seller by the Chief Executive Officer of Seller to such
effect.

     

    7.2 Seller’s
Performance.

     

    (a) All of
the covenants and obligations that Seller is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively) must have been duly performed and complied with in all material
respects.  Buyer shall have received a certificate signed on behalf of
Seller by the Chief Executive Officer of Seller to such effect.

     

    (b) Each
document required to be delivered by Seller pursuant to Section 1.6 must have
been delivered.

     

    7.3 Consents and
Approvals

     

    .  Each
of the Consents and permits identified in Schedule 7.3 must
have been obtained and a copy delivered to Buyer and must be in full force and
effect.

     

    7.4 No
Injunction

     

    .  There
shall not be in effect any Legal Requirement or any injunction or other Order
(other than a Legal Requirement, injunction or Order of a Buyer Governmental
Body) that prohibits, restrains, prevents, makes illegal or otherwise materially
impairs the sale of the Shares by Seller to Buyer and the consummation of any
other material transactions contemplated by this Agreement and the Ancillary
Agreements and there shall not be pending or Threatened on the Closing Date any
Proceeding which could reasonably be expected to result in the issuance of any
such Legal Requirement, injunction or other Order (other than a Legal
Requirement, injunction or Order of a Buyer Governmental Body).

     

    7.5 Amended and Restated Credit
Agreement Release

     

    .  Seller
shall provide evidence to Buyer’s reasonable satisfaction that the security
interests over the Acquired Companies’ stock and assets, pursuant to the Loan
and Security Agreement among Seller (and certain subsidiaries of Seller) and
Bank of America N.A. dated September 26, 2008, as amended (the “Bank
Agreement”), has been terminated and discharged or will be terminated and
discharged as part of the Closing.

     

    7.6 PRC
Approvals

     

    .  Buyer
shall have obtained the PRC Approvals and the approval of its board of directors
authorizing the execution, delivery and performance of this
Agreement.

     

    7.7 US
Approvals

     

    .  Seller
shall have obtained export control licenses from the U.S. Department of Commerce
in respect of the Export Controlled Technologies and approval by CFIUS in
respect of the transactions contemplated hereby, each in substance and form
reasonably satisfactory to Buyer.

     

    7.8 Restructuring

     

    .  Seller
shall provide evidence to Buyer’s reasonable satisfaction that the Restructuring
has been completed in accordance with the Restructuring Plan.

     

    7.9 Company Material Adverse
Effect

     

    .  Since
the date of this Agreement, there shall not have occurred a Company Material
Adverse Effect, nor shall any event or events have occurred that, individually
or in the aggregate, with or without the lapse of time, is reasonably likely to
result in a Company Material Adverse Effect.

     

    ARTICLE
VIII                                .

     

    CONDITIONS
PRECEDENT TO SELLER’S OBLIGATION TO CLOSE

     

    Seller’s
obligation to sell the Shares and to take the other actions required to be taken
by it at the Closing is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions (any of which may be waived in writing by
Seller, in whole or in part):

     

    8.1 Accuracy of
Representations

     

    .  All
of Buyer’s representations and warranties contained in this Agreement
(considered collectively) must have been true and correct in all material
respects as of the date of this Agreement and must be true and correct in all
material respects as of the Closing as if made on the Closing (except to the
extent made as of an earlier date, in which case as of such earlier
date).  Seller shall have received a certificate signed on behalf of
Buyer by the Chief Executive Officer of Buyer to such effect.

     

    8.2 Buyer’s
Performance.

     

    (a) All of
the covenants and obligations that Buyer is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively) must have been performed and complied with in all material
respects.  Seller shall have received a certificate signed on behalf
of Buyer by the Chief Executive Officer of Buyer to such effect.

     

    (b) Each
document required to be delivered by Buyer pursuant to Section 1.6 must have
been delivered.

     

    8.3 Consents and
Approvals

     

    .  Each
of the Consents and permits identified in Schedule 8.3
must have been obtained and a copy delivered to Seller and must be in full force
and effect.  Buyer shall have obtained the PRC Approvals and the
approval of its board of directors authorizing the execution, delivery and
performance of this Agreement.  Seller shall have obtained the
approval of its board of directors authorizing the execution, delivery and
performance of this Agreement.

     

    8.4 No
Injunction

     

    .  There
shall not be in effect any Legal Requirement or any injunction or other Order
that prohibits, restrains, prevents, makes illegal or otherwise materially
impairs the sale of the Shares by Seller to Buyer and the consummation of any
other material transactions contemplated by this Agreement and the Ancillary
Agreements or could reasonably be expected to result in a material diminution of
the benefits of the transactions contemplated herein and therein (taken as a
whole) and there shall not be pending or Threatened on the Closing Date any
Proceeding which could reasonably be expected to result in the issuance of any
such Legal Proceeding, injunction or other Order.

     

    8.5 Bank
Consent/Release

     

    .  Seller
shall have received the Consent of Bank of America to the sale of Shares to
Buyer pursuant to this Agreement and the release by Bank of America of all liens
with respect to the stock and assets of the Acquired Companies.

     

    ARTICLE
IX                                

     

    TERMINATION

     

    9.1 Termination
Events

     

    .  This
Agreement may, by written notice given prior to or at the Closing to the other
parties hereto, be terminated and the transactions contemplated by this
Agreement abandoned:

     

    (a) by Seller
if a material Breach of any provision of this Agreement has been committed by
Buyer which (i) would result in a failure of a condition set forth in Section
8.1 or 8.2 and (ii) is not cured, or cannot be cured, in all material respects
within thirty (30) days after written notice thereof and such Breach has not
been waived in writing by Seller;

     

    (b) by Seller
if the Closing shall not have occurred on or prior to the expiration of a
180-day period from
the date of this Agreement; provided, however, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available to
Seller if Seller is in material Breach of this Agreement;

     

    (c) by
Seller, upon written notice to Buyer, if (i) Seller, or the Board, as the case
may be, shall have (A) entered into any Acquisition Agreement or (B) approved or
recommended, or, in the case of a committee, proposed to the Board, to approve
or recommend, any Acquisition Proposal, (ii) the Board or any committee thereof
shall have resolved to do any of the foregoing, or (iii) a Seller Adverse
Recommendation Change shall have occurred in response to a Superior Proposal or
a Seller Sale Proposal or the Board or any committee thereof shall have resolved
to make such Seller Adverse Recommendation Change;

     

    (d) by Buyer
if a material Breach of any provision of this Agreement has been committed by
Seller which (i) would result in a failure of a condition set forth in Section
7.1 or 7.2 and (ii) is not cured, or cannot be cured, in all material respects
within thirty (30) days after written notice thereof and such Breach has not
been waived in writing by Buyer;

     

    (e) by Buyer
if the Closing shall not have occurred on or prior to expiration of a 180-day
period from the date of this Agreement; provided, however, that the right to
terminate this Agreement under this Section 9.1(e) shall not be available to
Buyer if Buyer is in material Breach of this Agreement;

     

    (f) by either
Seller or Buyer if any Governmental Body shall have issued an Order or taken any
other action preventing or prohibiting Closing and such Order or other such
action shall have become final without possibility of appeal, or there shall be
any Legal Requirement enacted, promulgated, issued or applicable to the material
transactions contemplated herein by any Governmental Body that would make
consummation of such transactions illegal;

     

    (g) by Buyer
if (A) a Seller Adverse Recommendation Change shall have occurred or (B) Seller
shall have entered into, or the Board (or any committee thereof) shall have
publicly announced an intention that the Seller enter into, an Acquisition
Agreement;

     

    (h) by Buyer
if a Change of Control occurs in respect of Seller (which for the purpose of
this Section 9.1(h) shall deemed to have occurred upon (A) Seller entering into
any binding or non-binding agreement, letter of intent or other document with
any third party which contemplates a Change of Control of Seller; (B) the Board
of Seller having made a favorable recommendation to shareholders regarding a
transaction contemplating a Change of Control of Seller; or (C) a third party
makes an offer to acquire a majority shareholding in Seller (whether through a
tender offer or otherwise) and such offer has been accepted by shareholders
holding 25% or more of the total outstanding shares of Seller;

     

    (i) by mutual
consent of Seller and Buyer;

     

    (j) by Buyer
prior to Closing if a Company Material Adverse Effect has occurred;

     

    (k) by Buyer
in accordance with Section 6.8;

     

    (l) by Buyer
in accordance with Section 6.13;

     

    (m) by Buyer
if Seller fails to obtain export control licenses from the U.S. Department of
Commerce in respect of the Export Controlled Technologies or approval by CFIUS
in respect of the transaction by the end of a 180-day period from the date of
this Agreement.

     

    9.2 Termination
Fee.

     

    (a) In the
event this Agreement is terminated pursuant to (i) Section 9.1(a) and Buyer’s
material breach of its obligations under this Agreement shall have been the
direct and proximate cause for the failure of Closing to occur in accordance
with this Agreement, and provided Seller is not in material breach of this
Agreement and has not received written notice thereof from Buyer, or (ii) where
this Agreement is terminated by Seller due to the failure of Buyer to obtain the
PRC Approvals (other than approvals by the State Administration of Foreign
Exchange or its relevant local branch) by the end of a 180-day period from the
date of this Agreement then Buyer shall pay to Seller $2,775,000 (the “Buyer
Termination Fee”) by wire transfer in immediately available United States Dollar
funds within twenty (20) Business Days after such termination of this
Agreement.  The Buyer Termination Fee shall be Seller’s sole remedy
for any such termination of this Agreement.  The Parties agree that
the Buyer Termination Fee shall constitute a fair and reasonable estimation of
the losses and damages that Seller would suffer as a result of the termination
of this Agreement pursuant to Section 9.1(a), and Buyer hereby agrees to
irrevocably waive any right to challenge the said amount or its liability to pay
the same.

     

    (b) In the
event this Agreement is terminated pursuant to (i) Section 9.1(d) and Seller’s
material breach of its obligations under this Agreement shall have been the
direct and proximate cause for the failure of Closing to occur in accordance
with this Agreement, and provided Buyer is not in material breach of this
Agreement and has not received written notice thereof from Seller, (ii) Section
9.1(c), (iii) Section 9.1(k), or (iv) Section 9.1(m), then Seller shall pay
to Buyer $2,775,000 (the “Seller Termination Fee”) by wire transfer in
immediately available United States Dollar funds within twenty (20) Business
Days after such termination of this Agreement.  The Seller Termination
Fee shall be Buyer’s sole remedy for any such termination of this
Agreement.  The Parties agree that the Seller Termination Fee shall
constitute a fair and reasonable estimation of the losses and damages that Buyer
would suffer as a result of the termination of this Agreement pursuant to
Sections 9.1(c), 9.1(d), 9.1(k) or
9.1(m), and Seller hereby agrees to irrevocably waive any right to challenge the
said amount or its liability to pay the same.

     

    9.3 Effect of
Termination

     

    .  Each
party’s right of termination under Section 9.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies.  If this
Agreement is terminated pursuant to Section 9.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Sections 9.1, 9.2, Article X (in respect of claims for indemnification in
respect of any breach of the terms and provisions of this Agreement prior to the
date of such termination) 11.1, 11.3, 11.4, 11.5, 11.13 and Exhibit 1 (to the
extent applicable) will survive; provided, however, that if this Agreement is
terminated by a party because of the Breach of this Agreement by the other party
or because one or more of the conditions to the terminating party’s obligations
under this Agreement is not satisfied as a result of the other party’s failure
to comply with its obligations under this Agreement, the terminating party’s
right to pursue all legal remedies will survive such termination
unimpaired.

     

    ARTICLE
X                      

     

    INDEMNIFICATION;
REMEDIES

     

    10.1 Survival

     

    .  Subject
to the terms and conditions of this Article X, all representations, warranties,
covenants, and obligations in this Agreement will survive the
Closing.

     

    10.2 Indemnification and Payment
of Damages by Seller

     

    .  Seller
will indemnify and hold harmless Buyer and its Affiliates (including, after
Closing, the Acquired Companies) and their respective representatives, agents,
successors, assigns, employees, officers, directors, stockholders and
controlling persons (collectively, the “Buyer Indemnified Persons”) for, and
will pay to the Buyer Indemnified Persons the amount of, any loss, liability,
claim, damage, interest, awards, judgment, penalty, cost or expense (including
all reasonable costs of investigation and defense, any expense of enforcement of
obligations and reasonable attorneys’ and consultants’ fees and other fees and
expenses reasonably incurred in connection with the investigation, defense or
settlement thereof) suffered or incurred by, or imposed on, them (collectively,
“Damages”), arising out of or resulting from (a) any Breach of any
representation or warranty contained in Article II (other than the
representations and warranties contained in Section 2.11) or in any certificate
delivered by or on behalf of Seller pursuant to this Agreement, (b) any Breach
by Seller of any covenant or obligation of Seller in this Agreement, (c) any
Pre-Closing Environmental Liability; (d) any Non-Business Liability or (e) any
Pre-Closing Taxes.

     

    10.3 Indemnification and Payment
of Damages by Buyer

     

    .  Buyer
will indemnify and hold harmless Seller and its Affiliates and their respective
representatives, agents, successors, assigns, employees, officers, directors,
stockholders and controlling persons (collectively, the “Seller Indemnified
Persons”), and will pay to the Seller Indemnified Persons the amount of any
Damages arising out of or resulting from (a) any Breach of any representation or
warranty contained in Article III or in any certificate delivered by or on
behalf of Buyer pursuant to this Agreement or (b) any Breach by Buyer of any
covenant or obligation of Buyer in this Agreement.  Buyer will
indemnify and hold harmless the Seller Indemnified Persons, and will pay to the
Seller Indemnified Persons the amount of any:

     

    (i) Taxes
imposed on the Emcore Companies (other than the Acquired Companies) with respect
to a taxable period beginning after the Closing;

     

    (ii) Taxes
allocated as provided in Section 6.1 to the portion of a Straddle Period
beginning after the Closing; and

     

    (iii) Taxes
attributable to any breach by Buyer of its obligations under this
Agreement.

     

    10.4 Time
Limitations.

     

    (a) Neither
Seller, or any of its Affiliates, nor Buyer, or any of its Affiliates, will have
any liability (for indemnification or otherwise) with respect to any
representation or warranty unless, on or before the eighteen (18) month
anniversary of the Closing Date, Seller, or Buyer (as the case may be), is
notified in writing by the other party of a claim specifying the factual basis
of that claim in reasonable detail to the extent then known by Buyer, or Seller
(as the case may) except:

     

    (i) with
respect to claims in relation to Sections 2.1, 2.18 and 2.26, which may be made
by Buyer indefinitely and claims in relation to Section 3.1, which may be made
by Seller indefinitely;

     

    (ii) with
respect to claims arising in relation to Section 2.12 or in respect of any
Pre-Closing Environmental Liability, any Non-Business Liability or any
Pre-Closing Taxes which may be made until the expiration of the statute of
limitations under the applicable Legal Requirement; and

     

    (iii) with
respect to claims arising under Section 2.11 which may be made at any time until
all Tax liabilities of Seller are decided by final determination of the IRS,
judicial decision or upon thirty (30) days after the expiration of the statute
of limitations, taking into account any waiver or extension of such applicable
statute of limitation.

     

    (b) Any claim
made with reasonable specificity (but only to the extent known at such time) by
the Party seeking to be indemnified within the time periods set forth in this
Section 10.4 shall not thereafter be barred by the expiration of the relevant
time representation or warranty and shall survive until such claim is finally
and fully resolved.

     

    (c) The time
limitations set forth in this Section 10.4 are expressly intended to shorten the
statute of limitations which would otherwise apply.

     

    10.5 Limitations on
Amount

     

    .  Neither
Seller nor any of its Affiliates will have any liability (for indemnification or
otherwise) with respect to the matters described in clause (a), or to the extent
relating to any failure to perform or comply prior to the Closing Date, clause
(b) of Section 10.2 until the total of all Damages with respect to such matters
exceeds $100,000 provided that when such amount is exceeded, Seller shall be
liable for all amounts including the first $100,000.  In addition, the
Buyer Indemnified Persons shall not have the right to indemnification for any
individual Breach with respect to the matters described in clause (a) of Section
10.2 resulting in Damages which are equal to or less than
$5,000.  Furthermore, other than in the case of fraud, any liability
of Seller or any of its Affiliates hereunder (for indemnification or otherwise)
with respect to the matters described in clause (a) or, to the extent relating
to any failure to perform or comply prior to the Closing Date, clause (b) of
Section 10.2 shall terminate at such time as the aggregate amount of Damages
paid to Buyer, from the Holdback Amount or otherwise, equals 15% of the Final
Purchase Price.

     

    10.6 Exclusive Remedy; Holdback
Amount.

     

    (a) After the
Closing, the indemnities provided in this Article X, and Section 11.14, shall
constitute the sole and exclusive remedy of any Indemnified Party for Damages
arising out of, resulting from or incurred in connection with, the breach of any
representation, warranty, covenant, agreement or obligation made by the parties
in this Agreement; provided, however, that nothing in this
Section 10.6 shall preclude a party from bringing an action for specific
performance or other equitable remedy, pursuant to Section 11.14 or otherwise,
in connection with any breach, or an alleged or threatened breach, by a party to
perform its obligations under this Agreement, whether before or following
Closing.  Without limiting the generality of the preceding sentence,
no legal action sounding in tort, statute or strict liability may be maintained
by any party.  Notwithstanding anything to the contrary in this
Section 10.6, in the event of a fraudulent breach of the representations,
warranties, covenants or agreements contained herein by Seller, the Buyer
Indemnified Persons shall have all remedies available at law or in equity
(including for tort) with respect thereto and the Damage sought with respect to
such fraudulent Breach shall not be subject to any of the limitations (including
as to amount and timing) set forth in this Article X.

     

    (b) Upon
written notice (a “Set-off Claim Notice”) to Seller specifying in reasonable
detail the basis for and Buyer’s reasonable good faith estimate of the amount
(the “Set-off Claim Amount”) of any indemnification claim by a Buyer Indemnified
Party under this Article X, Buyer may set-off against the Holdback Amount such
Set-off Claim Amount.  Notwithstanding the foregoing, if Buyer wishes
to set-off any amount to which a Buyer Indemnified Person may be entitled to
indemnification under this Article X against the Holdback Amount and Seller
notifies Buyer within twenty (20) Business Days of receiving the Set-off Claim
Notice that Seller disputes such claim, the amount disputed (the “Disputed
Amount”) will be placed in escrow by the Buyer with an independent third party
acceptable to Buyer and Seller until such dispute is resolved.  On the
eighteen (18) month anniversary of the Closing, Buyer agrees to deliver to
Seller by wire transfer of immediately available funds, in accordance with wire
instructions delivered by Seller to Buyer at least three (3) Business Days prior
thereto, the Holdback Amount less (i) any unresolved Disputed Amounts and (ii)
any Set-off Claim Amount for which a Set-off Claim Notice has been given to
Seller as provided above and which Seller and Buyer have agreed may be
set-off.  Until such time as the Holdback Amount is exhausted, the
sole and exclusive remedy of Buyer Indemnified Persons for indemnification shall
be to make a claim against the Holdback Amount.

     

    10.7 Procedure for
Indemnification–Third Party Claims.

     

    (a) Within
fifteen (15) Business Days of receipt by a Buyer Indemnified Person or a Seller
Indemnified Person (each an “Indemnified Party”) under Section 10.2 or 10.3 of
notice of a claim by a third party in respect of which the Indemnified Party
would be entitled to indemnification under this Article X (a “Third Party
Claim”), such Indemnified Party will give written notice to the party from which
indemnification may be sought under Sections 10.2 or 10.3 (an “Indemnifying
Party”) of the assertion of such Third Party Claim, but the failure to notify
the Indemnifying Party in accordance with this Section 10.7(a) will not relieve
the Indemnifying Party of any liability that it may have to any Indemnified
Party, nor result in the forfeit of any rights or claims to indemnification
under this Agreement with respect to such Third Party Claim or any subsequent
claim relating thereto or arising in connection therewith, unless, and then only
to the extent that, the defense of such action by the Indemnifying Party is
prejudiced by the Indemnified Party’s failure to so give such
notice.

     

    (b) If any
Third Party Claim is asserted against an Indemnified Party, other than a Third
Party Claim in respect of Tax matters, which shall be governed by Section
6.1(d), upon notice to the Indemnified Party within thirty (30) days (or less if
the nature of the Third Party Claim requires) from the date on which the
Indemnifying Party received notice of the Third Party Claim in accordance with
Section 10.7(a), the Indemnifying Party will be entitled to participate in such
Third Party Claim and, to the extent that it wishes (unless (i) the Indemnifying
Party is also a party to such Third Party Claim and the Indemnified Party
determines in good faith that joint representation would be inappropriate or
(ii) the Indemnifying Party fails to provide reasonable assurance to the
Indemnified Party of its financial capacity to investigate, contest, defend,
arbitrate or settle such Third Party Claim and provide indemnification with
respect to such Third Party Claim), to assume the investigation, contest,
defense, arbitration or settlement of such Third Party Claim with counsel
reasonably satisfactory to the Indemnified Party and, after notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
investigation, contest, defense, arbitration or settlement of such Third Party
Claim, the Indemnifying Party will not, as long as it actively and diligently
conducts such investigation, contest, defense, arbitration or settlement, be
liable to the Indemnified Party under this Article X for any fees of other
counsel or any other expenses with respect to the investigation, contest,
defense, arbitration or settlement of such Third Party Claim, in each case
subsequently incurred by the Indemnified Party in connection with the
investigation, contest, defense, arbitration or settlement of such Third Party
Claim.  If the Indemnifying Party assumes the investigation, contest,
defense, arbitration or settlement of a Third Party Claim, (i) it will be
conclusively established for purposes of this Agreement that the Third Party
Claim is within the scope of and subject to indemnification, (ii) no compromise
or settlement of such Third Party Claim may be effected by the Indemnifying
Party without the Indemnified Party’s written consent (such consent to not be
unreasonably withheld, delayed or conditioned) unless (A) the terms of the
proposed compromise or settlement include as an unconditional term thereof the
giving to the Indemnified Party by the third party of a release of the
Indemnified Party from all liability in respect of the Third Party Claim, (B)
there is no finding or admission of any violation of Legal Requirements or any
violation of the rights of any Person and no effect on any other claims that may
be made against the Indemnified Party and (C) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party and (iii) the
Indemnified Party will have no liability with respect to any compromise or
settlement of such claims effected without its consent.  If notice is
given to an Indemnifying Party of the assertion of any Third Party Claim and the
Indemnifying Party does not, within thirty (30) days (or less if the nature of
the Third Party Claim requires) after the Indemnified Party’s notice is given,
give notice to the Indemnified Party of its election to assume the defense of
such Third Party Claim, the Indemnifying Party will be bound by any
determination made in such Third Party Claim or any compromise or settlement
effected by the Indemnified Party, who shall have the right, with counsel of its
choice, to defend, conduct and control the Third Party Claim at the sole cost
and expense of the Indemnifying Party.  If having assumed the defense
of a Third Party Claim the Indemnifying Party fails to reasonably conduct the
defense or prosecution of the Third Party Claim in good faith, and the
Indemnified Party has provided the Indemnifying Party with reasonable notice in
writing of such failure, the Indemnified Party shall have the right to consent
to the entry of any Order or enter into any settlement with respect to the Third
Party Claim without prior written consent of the Indemnifying Party and the
Indemnifying Party shall reimburse the Indemnified Party for all Damages
incurred in connection with such Order or settlement.  If the
Indemnifying Party does not elect to assume the defense or prosecution of a
Third Party Claim which it has the right to assume hereunder, the Indemnified
Party shall have no obligation to do so.

     

    (c) Notwithstanding
the foregoing, if an Indemnified Party determines in good faith that there is a
reasonable probability that a Third Party Claim may adversely affect it or its
Affiliates other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the Indemnified Party may, by
notice to the Indemnifying Party, assume the exclusive right to defend,
compromise, or settle such Third Party Claim, but the Indemnifying Party will
not be bound by any determination of a Third Party Claim so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld, delayed or conditioned).

     

    (d) The
parties agree to render to each other such assistance as they may reasonably
require of each other in order to facilitate the proper and adequate defense of
a Third Party Claim.  Upon assuming the defense of a Third Party
Claim, the Indemnifying Party shall keep the Indemnified Party reasonably
informed as to such Third Party Claim, whether or not the Indemnified Party is
represented by its own counsel.

     

    (e) With
respect to a Third Party Claim, after a final Order or award, which is not
subject to appeal or with respect to which the time for appeal has expired,
shall have been issued by a court, arbitral tribunal or administrative agency of
competent jurisdiction, or a settlement shall have been consummated, or the
parties shall have arrived at a mutually binding agreement with respect to any
such Third Party Claim, the Indemnified Party shall give prompt notice to the
Indemnifying Party of the amounts due and owing by the Indemnifying Party with
respect to such matter and the Indemnifying Party shall pay all of the amounts
so owing, subject to the other provisions of this Article X.

     

    10.8 Procedure for
Indemnification–Other Claims

     

    .  A
claim for indemnification for any matter not involving a Third-Party Claim may
be asserted by written notice to the party from whom indemnification is
sought.

     

    10.9 Interpretation

     

    .  Damages
shall be quantified on an after-Tax basis and shall be otherwise determined net
of any Tax Benefit, insurance proceeds and indemnity payments actually received
by indemnified persons in connection with the facts giving rise to the right of
indemnification (but increased by any costs and expenses incurred in obtaining
such insurance proceeds including any increase in premium payable by the
indemnified persons under any such insurance) and other compensation to which
the party or its Affiliates is entitled from Persons other than Seller, in the
case of Buyer, or other than Buyer, in the case of Seller, in respect of such
matter.  The indemnified persons may not seek indemnification
hereunder in respect of any claim to the extent that such claim arises in
connection with any action taken by the indemnified person, the effect of which
is to induce a third party to take any action resulting in a claim which, but
for this clause, indemnification could be sought.  If any amount
related to Damages is subsequently recovered by a party, in whole or in part,
from any third party (including any insurer or taxing authority) after
indemnification by the other party, the amounts so recovered shall be promptly
reimbursed to the party who provided such indemnification.  The
indemnified persons shall use commercially reasonable efforts to obtain from any
applicable insurance company any insurance proceeds in respect of any claim for
which the indemnified persons seek indemnification under this Article
X.  Any liability for indemnification hereunder shall be determined
without duplication of recovery by reason of the state of facts giving rise to
such liability constituting a breach of more than one representation, warranty,
covenant or agreement.  For purposes of determining Damages for which
either Party or their respective indemnified persons are entitled to
indemnification hereunder only, the term “Damages” shall not include any
indirect, incidental or consequential damages, claims for lost profits or
punitive damages.

     

    10.10 Tax Purchase
Price

     

    .  Any
indemnification payments made hereunder shall be considered, to the extent
permissible under applicable law, as adjustments to the Purchase Price for all
Tax purposes.

     

    ARTICLE
XI                                

     

    GENERAL
PROVISIONS

     

    11.1 Expenses

     

    .  Except
as otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective costs and expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Ancillary
Agreements and the transactions contemplated herein, including all fees and
expenses of agents, representatives, counsel, and accountants.

     

    11.2 Public
Announcements

     

    .  Any
public announcement, news release, circular or similar publicity with respect to
this Agreement or the transactions contemplated herein will be issued, if at
all, at such time and in such manner as Buyer and Seller mutually determine in
writing, unless applicable Legal Requirements require
otherwise.  Seller and Buyer will consult with each other concerning
the means by which Seller’s employees, customers, and suppliers and others
having dealings with Seller will be informed of the transactions contemplated
herein.

     

    11.3 Confidentiality.

     

    (a) Buyer and
Seller will maintain in confidence, and will cause the directors, officers,
employees, agents, advisors and Affiliates of Buyer and Seller to maintain in
confidence, any written information obtained in confidence from another party in
connection with this Agreement, the Ancillary Agreements or the transactions
contemplated herein or therein, unless such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party (the “Confidential
Information”) and shall refrain from disclosing, in whole or in part to any
third party, any Confidential Information except (i) as required by Legal
Regulation or by any Governmental Body having applicable jurisdiction, including
in making any filing or obtaining any consent or approval required for the
consummation of the transactions contemplated herein or (ii) as required by or
necessary in connection with any Proceedings arising out of or in connection
with this Agreement (provided that in each such case, unless legally restricted
from doing so, the disclosing party shall give prior notice to the other party
of its intention to disclose such information, take into account, in so far as
practicable, the reasonable comments of the other party and use reasonable
efforts to assist the disclosing party in its attempts to obtaining confidential
treatment of such information).  Notwithstanding the foregoing, Buyer
acknowledges that Seller may disclose this Agreement and the transactions
contemplated herein in filings with the United States Securities and Exchange
Commission and the Nasdaq Stock Market without requiring any consent from
Buyer.

     

    (b) If the
transactions contemplated herein are not consummated, each party will (subject
to Legal Requirements and the rules and regulations of any body with applicable
jurisdiction) return or destroy as much of such written information as the other
party may reasonably request and the parties further acknowledge and agree to
remain bound by the terms and conditions set forth in that certain
Confidentiality Agreement dated August 14, 2009 between Buyer and Seller (the
“Confidentiality Agreement”).

     

    (c) Effective
upon the Closing Date, the parties acknowledge and agree that the terms of the
Confidentiality Agreement shall be of no further force and effect and are, for
all purposes, superseded by the terms of this Agreement, provided that the terms
of this Section 11.3(c) shall be without prejudice to any rights or liabilities
which may have accrued to any party to such Confidentiality Agreement prior to
the Closing Date.

     

    11.4 Notices

     

    .  All
notices, consents, requests, waivers, demands and other communications under
this Agreement must be in writing and will be deemed to have been duly given (a)
when delivered if delivered by hand (with written confirmation of receipt), (b)
when sent if sent by telecopier (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (return receipt requested), with postage prepaid, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties by like notice):

     

    
      	
              If
      to Seller:

            	
              EMCORE
      Corporation

              10420
      Research Road, S.E.

              Albuquerque,
      NM  87123

              Attention:  General
      Counsel

              Facsimile:  (505)
      323-3402

               

            
	
              With
      copy to:

            	
              O’Neil
      LLP

              19900
      MacArthur Blvd., Suite 1050

              Irvine,
      CA  92612

              Attention:  Paul
      A. Rowe

              Facsimile:  (949)
      798-0511

               

            
	
              If
      to Buyer:

            	
              Tangshan
      Caofeidian Investment Co., Ltd.

              2nd
      Floor, Business & Commercial Affairs Centre,

              Caofedian
      Industrial Zone,

              Tanghai
      County,

              Tangshan
      City, Hebei Province 063200,

              People’s
      Republic of China

              Attention:  General
      Manager

              Facsimile:  +86 0315 882
      0517

               

            


    

    11.5 Arbitration.

     

    (a) Any
dispute, claim or controversy arising out of or relating to, or in connection
with, this Agreement or the breach, termination, enforcement, interpretation or
validity thereof, including the determination of the scope and applicability of
this Agreement to arbitrate, but specifically excluding resolution of disputes
regarding adjustments to arrive at the Final Purchase Price addressed in Section
1.4, shall be referred to and finally resolved by arbitration in Singapore in
accordance with the Arbitration Rules of the Singapore International Arbitration
Center (“SIAC Rules”) at the time in force, which rules are deemed to be
incorporated herein by reference.  The SIAC tribunal (the “Tribunal”)
shall consist of three arbitrators to be appointed in accordance with the SIAC
Rules.  The language of the arbitration shall be English.

     

    (b) The
prevailing party shall be entitled to recover its reasonable costs and expenses,
including witness fees and expenses, arbitrators’ fees and expenses, and fees
and expenses of legal representation, incurred in the arbitration proceedings or
in any action to enforce this Agreement or any arbitral award in any judicial
proceeding.

     

    (c) The
arbitral award shall be delivered to the parties, shall be in writing, shall
state the reasons for the award, and shall be final and binding upon the
parties, and the parties agree to be bound thereby and to act
accordingly.  The Tribunal shall be empowered to grant either party
summary judgment (or its equivalent) based on documentary evidence alone or, if
a hearing shall be required, such hearing shall be held as soon as reasonably
practicable after the completion of the Memorandum of Issues.  The
Tribunal shall apply applicable
substantive laws. The Tribunal shall not
have power to award damages in connection with any dispute in excess of actual
compensatory damages and shall not multiply actual damages or award
consequential or punitive damages or award any other damages that are excluded
under the provisions of Article X of this Agreement.  Nothing in this
Section 11.5 shall prevent any party from seeking conservatory or interim
measures, including, but not limited to, temporary restraining orders or
preliminary injunctions or their equivalent, from any court of competent
jurisdiction before the Tribunal is constituted or, thereafter, upon the order
of the Tribunal.

     

    (d) Judgment
upon any award may be entered by any court having jurisdiction thereof or having
jurisdiction over the relevant party or its assets.  Each of the
parties knowingly, voluntarily, intentionally and expressly waives any and all
rights it may have to a trial by jury with respect to any litigation instituted
to compel arbitration pursuant to this Section 11.5 or to confirm, enforce,
vacate, modify or correct an award.  Each of the parties acknowledges
and agrees that any party may effect a valid service or process in any
arbitration or judicial proceedings by delivering any arbitral or judicial
process or notice by utilizing the provisions set out in Section
11.4.

     

    11.6 Further
Assurances

     

    .  The
parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this
Agreement.

     

    11.7 Waiver

     

    .  The
rights and remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of, or estoppel with
respect to, such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any other right,
power, or privilege.  To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party, (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement by the party against whom enforcement is
sought and such notice or demand expressly references the provision of this
Agreement that is waived.

     

    11.8 Entire Agreement and
Modification

     

    .  This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject
matter.  This Agreement may be amended, modified or supplemented in
whole or in part at any time only by an agreement in writing between Buyer and
Seller.

     

    11.9 Seller’s
Schedule

     

    .  The
disclosures in the Seller’s Schedule
relate to the representations and warranties in the Section of the Agreement to
which they expressly relate and to other representations or warranties in this
Agreement, to the extent that such other representation and warranty would
reasonably be expected to be pertinent to the disclosures made.

     

    11.10 Assignments, Successors, and
No Third-Party Rights

     

    .  No
party may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other party, which will not
be unreasonably withheld.  Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the
parties.  Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement, and their
respective successors and assigns, any legal or equitable right, remedy, or
claim under or with respect to this Agreement or any provision of this
Agreement.  This Agreement and all of its provisions and conditions
are for the sole and exclusive benefit of the parties to this Agreement and
their successors and assigns.

     

    11.11 Severability

     

    .  If
any provision of this Agreement, or the application of any such provision to any
Person or circumstance, is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect.  Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.

     

    11.12 Time of
Essence

     

    .  With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.

     

    11.13 Governing
Law

     

    .  This
Agreement and all the transactions contemplated hereby, and all disputes between
the parties under or related to this Agreement or the facts and circumstances
leading to its execution, whether in contract, tort or otherwise, will be
governed by and construed in accordance with the law of Hong Kong without giving effect to
its principles of conflict of laws requiring the substantive law of any other
jurisdiction.

     

    11.14 Equitable
Remedies

     

    .  In
addition to legal remedies, to the extent allowed pursuant to this Agreement or
by law, in recognition of the fact that remedies at law may not be sufficient,
the parties hereto (and their successors) shall be entitled to equitable
remedies including, without limitation, specific performance and
injunction.

     

    11.15 Execution

     

    .  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, or by e-mail delivery of a “.pdf” data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or e-mail signature page were an original thereof.

     

    11.16 Other Definitional and
Interpretive Matters.

     

    (a) The
parties have participated jointly in negotiating and drafting this
Agreement.  In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

     

    (b) Unless
otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply:

     

    (i) Calculation of Time
Period.  When calculating the period of time before which,
within which or following which, any act is to be done or step taken pursuant to
this Agreement, the date that is the reference date in calculating such period
shall be excluded.  If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business
Day.

     

    (ii) Agreement.  Any
definition of or reference in this Agreement to any agreement, contract,
document, instrument or other record shall be construed as referring to such
agreement, contract, document, instrument or other record as from time to time
amended, supplemented restated or otherwise modified (subject to any restriction
on such amendments, supplements or modifications set forth herein).

     

    (iii) Dollars.  Any
reference in this Agreement to “dollar” or “$” shall mean U.S.
dollars.

     

    (iv) Gender and
Number.  Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.

     

    (v) Headings.  The
provision of a Table of Contents, the division of this Agreement into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement.  All references in this Agreement to
any “Section” are to the corresponding Section of this Agreement unless
otherwise specified.

     

    (vi) Herein.  The
words such as “herein,” “hereby, “hereto”, “hereinafter,” “hereof,” “hereunder”
and derivative or similar words refer to this Agreement as a whole and not
merely to a subdivision in which such words appear unless the context otherwise
requires.

     

    (vii) Including.  The
word “including” or any variation thereof means (unless the context of its usage
requires otherwise) “including, but not limited to,” and shall not be construed
to limit any general statement that it follows to the specific or similar items
or matters immediately following it.

     

    [Signature
page follows]

     


    IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the date first written above.

     

    
      	 
      	
              “BUYER”

              TANGSHAN
      CAOFEIDIAN INVESTMENT CO., LTD., a PRC corporation

               

              By:     
      /s/ Yong Dong
      Liu       

              Name: Yong
      Dong Liu          

              Title:    General
      Manager       

               

            
	 
      	
              “SELLER”

               

              EMCORE
      CORPORATION, a New Jersey corporation

               

              By:       /s/ Hong Q.
      Hou    

              Name:  Hong
      Q.
      Hou                                                              

              Title:    Chief
      Executive Officer