EMCORE CORP. FY'05 10-K EX-10.14 SVB NON-RECOURSE RECEIVABLES PURCHASE AGMT


    
      
        

      

    

    Exhibit
      10.14

     

     

    NON-RECOURSE
      RECEIVABLES PURCHASE AGREEMENT

     

    This
      NON-RECOURSE
      RECEIVABLES PURCHASE AGREEMENT (the
      “Agreement”), dated as of September 23, 2005, is between SILICON
      VALLEY BANK
      (“Buyer”) having a place of business at 3003 Tasman Drive, Santa Clara,
      California 95054 and
      EMCORE CORPORATION (“Seller”),
      a New Jersey corporation, with its chief executive office at 145 Belmont Drive,
      Somerset, New Jersey 08873.

     

    1 Definitions.
      

     

    When
      used
      herein, the following terms have the following meanings.

     

    1.1 “Account
      Debtor”
has
      the
      meaning set forth in the Massachusetts Uniform Commercial Code and shall include
      any person liable on any Purchased Receivable, including without limitation,
      any
      guarantor of the Purchased Receivable and any issuer of a letter of credit
      or
      banker’s acceptance.

     

    1.2 “Adjustments”
means
      all discounts, allowances, returns, disputes, counterclaims, offsets, defenses,
      rights of recoupment, rights of return, warranty claims, or short payments,
      asserted by or on behalf of any Account Debtor with respect to any Purchased
      Receivable other than by reason of an Insolvency Event.

     

    1.3 “Administrative
      Fee”
means
      for any Purchase the percentage of the Total Purchased Receivables Amount set
      forth in the Schedule for such Purchase.

     

    1.4 “Business
      Day”
means
      any day other than a Saturday, Sunday, or other day on which banks in California
      or Massachusetts are required or authorized by law to close.

     

    1.5 “Discount
      Rate”
means
      for any Purchase the “Discount Rate” set forth in the Schedule for such
      Purchase.

     

    1.6 “Due
      Date”
means
      for any Purchase the “Due Date” set forth in the Schedule for such
      Purchase.

     

    1.7 “Event
      of Default”
has
      the
      meaning set forth in Section
      10
      hereof.

     

    1.8 “Insolvency
      Event”
means,
      with respect to any Account Debtor, (a) the commencement of a case, action
      or
      proceeding with respect to such Account Debtor before any court or other
      governmental authority relating to bankruptcy, reorganization, insolvency,
      liquidation, receivership, dissolution, winding-up or relief of debtors, (b)
      such Account Debtor is generally not paying its debts when due, (c) the
      financial inability to make payment on a Purchased Receivable, or (d) the making
      or commencement of any general assignment for the benefit of creditors,
      composition, marshaling of assets for creditors, or other similar arrangement
      in
      respect of the creditors generally or any substantial portion of the creditors
      of such Account Debtor.

     

    1.9 “Invoice
      Amount”
      means
      for any Purchase, the “Invoice Amount” set forth in the Schedule for such
      Purchase.

     

    1.10 “Late
      Payment Settlement Fee”
has
      the
      meaning set forth in Section 2.2.

     

    1.11 “Open
      Amount”
means
      the portion of any Purchased Receivable which has been pre-paid to the
      Seller.

     

    1.12 “Payment
      in Full”
means
      the receipt by Buyer of one or more payments in respect of a Purchased
      Receivable equal to the Purchased Receivable Amount.

     

    1.13 “Prime
      Rate”
means
      per annum rate of interest from time to time announced and made effective by
      Buyer as its Prime Rate (which rate may or may not be the lowest rate available
      from Buyer at any given time).

     

    1.14 “Purchase”
means
      the purchase by Buyer from Seller of one or more Purchased Receivables on a
      Purchase Date as listed in the Schedule applicable to such
      Purchase.

     

    1.15 “Purchase
      Date”
means
      for any Purchase the date set forth as the “Purchase Date” in the Schedule for
      such Purchase.

     

    1.16 “Purchase
      Price”
means
      for any Purchase the “Purchase Price” set forth on the Schedule for such
      Purchase.

     

    1.17 “Purchased
      Receivable”
means
      for any Purchase a Receivable identified on the Schedule for such
      Purchase.

     

    1.18 “Purchased
      Receivable Amount”
means
      for any Purchased Receivable, the “Invoice Amount” set forth with respect to
      such Purchased Receivable on the applicable Schedule minus the Open
      Amount.

     

    1.19 “Receivable”
means
      an account, receivable, chattel paper, instrument, contract right, documents,
      general intangible, letter of credit, draft, bankers acceptances, and other
      right to payment, and all proceeds thereof.

     

    1.20 “Related
      Property”
has
      the
      meaning as set forth in Section
      9
      hereof.

     

    1.21 “Repurchase
      Amount”
has
      the
      meaning set forth in Section
      4.2
      hereof.

     

    1.22 “Schedule”
means
      for each Purchase a schedule executed by the parties in the form of Exhibit
      A
      hereto
      identifying each Purchased Receivable subject to such Purchase and setting
      forth
      financial and other details relating to such Purchase, all as contemplated
      by
Exhibit
      A.

     

    1.23 “Settlement
      Date”
has
      the
      meaning set forth in Section
      3.2
      hereof.

     

    1.24 “Total
      Purchased Receivables Amount”
means
      for any Purchase the total of the Purchased Receivable Amounts for all Purchased
      Receivables subject to such Purchase as set forth on the applicable
      Schedule.

     

    2 Purchase
      and Sale of Receivables.

     

    2.1 Sale
      and
      Purchase. Subject to the terms and conditions of this Agreement, with respect
      to
      each Purchase, effective on each applicable Purchase Date, Seller agrees to
      sell
      to Buyer and Buyer agrees to buy from Seller all right, title, and interest
      (but
      none of the obligations with respect to) of the Seller to the payment of all
      sums owing or to be owing from the Account Debtors under each Purchased
      Receivable to the extent of the Purchased Receivable Amount for such Purchased
      Receivable.

     

    Each
      purchase and sale hereunder shall be in the sole discretion of Buyer and Seller.
      In any event, Buyer will not (i) purchase any Receivables in excess of an
      aggregate outstanding amount of Twenty Million Dollars ($20,000,000.00), or
      (ii)
      purchase any Receivables under this Agreement after December 31, 2006, unless
      the term of this Agreement has been extended by mutual written agreement of
      the
      parties. The purchase of each Purchased Receivable may be evidenced by an
      assignment or bill of sale in a form acceptable to Buyer.

     

    2.2 Purchase
      Price and Related Matters.
      With
      respect to each Purchase:

     

    (a) Payment
      of Purchase Price. On
      the
      Purchase Date, the Purchase Price, less the Administrative Fee and legal fees
      and expenses of counsel related thereto, shall be paid by Buyer to
      Seller.

     

    (b) Late
      Payment Settlement Fee.
      In the
      event that Payment in Full of any Purchased Receivable is not received on or
      before the Due Date, Seller agrees to pay to Buyer an additional amount on
      any
      unpaid amount, calculated at the Discount Rate, through the earlier to occur
      of
      (i) such date that Buyer receives Payment in Full, and (ii) an additional ninety
      (90) days past the Due Date (“Late Payment Settlement Fee”) (subject to Section
      4.2 (Seller's Agreement to Repurchase) herein). In the event that such Purchased
      Receivable is uncollectible (due to an Account Debtor Insolvency Event), then
      the Late Payment Settlement Fee period shall be the lesser of forty-five (45)
      days, and the date on which such Purchased Receivable becomes uncollectible
      due
      to such Insolvency Event.

     

    2.3 Facility
      Fee.
      A fully
      earned, non-refundable facility fee of Seventy Thousand Dollars ($70,000.00)
      is
      earned by Buyer upon execution of this Agreement and is payable from Seller
      as
      follows: (i) Forty Thousand Dollars ($40,000.00)on the date hereof, and (ii)
      Thirty Thousand Dollars ($30,000.00) on the earlier to occur of (a) the
      termination of this Agreement by Seller, or (b) December 30, 2005. In addition,
      Seller shall pay to Buyer a facility fee of Seventy Thousand Dollars
      ($70,000.00) on December 30th
      of each
      year after December 30, 2005, provided that the term has been extended by mutual
      written agreement of the parties.

     

    2.4 Nature
      of Transaction.
      It is
      the intent of the parties hereto that each purchase and sale of Receivables
      hereunder is and shall be a true sale of such Receivables for all purposes
      (including, without limitation, accounting and tax treatment) and not a loan
      arrangement. Each such sale shall be, subject to the terms hereof, absolute
      and
      irrevocable, providing Buyer with the full risks and benefits of ownership
      of
      the Purchased Receivables (such that the Purchased Receivables would not be
      property of the Seller’s estate in the event of the Seller’s bankruptcy). The
      parties agree that appropriate UCC financing statements have been or shall
      promptly be filed to reflect that Seller is the seller and Buyer is the
      purchaser of Receivables hereunder.

     

    2.5 Good
      Faith Deposit.
      Seller
      has paid to Buyer a good faith deposit of Fifteen Thousand Dollars ($15,000.00)
      (the “Good Faith Deposit”) to initiate the Buyer’s due diligence review process,
      which Good Faith Deposit shall be applied to the facility fee and/or other
      expenses (including attorneys’ fees) of the Buyer and closing
      costs;

     

    3 Collections,
      Charges and Remittances.

     

    3.1 Application
      of Payments.
      All
      payments in respect of any Purchased Receivable, whether received from an
      Account Debtor or any other source and whether received by Seller or Buyer,
      shall be the property of Buyer and Seller shall have no ownership interest
      therein.

     

    3.2 Collection
      by Seller.
      In
      order to facilitate the collection of the Purchased Receivables in the ordinary
      course of business, Seller agrees to act as Buyer’s agent for collection of the
      Purchased Receivables. Accordingly, Buyer hereby appoints the Seller its
      attorney-in-fact to ask for, demand, take, collect, sue for and receive all
      payments made in respect of the Purchased Receivables and to enforce all rights
      and remedies thereunder and designates Seller as Buyer’s assignee for
      collection; provided
      that
      such appointment of Seller as such attorney-in-fact or assignee for collection
      may be revoked by Buyer at any time following an Event of Default (and any
      applicable cure period) or the failure of a Purchased Receivable to be paid
      on
      the Due Date. Seller, as such attorney-in-fact, shall use due diligence and
      commercially reasonable lawful efforts in accordance with its usual policies
      and
      practices to collect all amounts owed by the Account Debtors on each Purchased
      Receivable when the same become due. In the enforcement or the collection of
      Purchased Receivables, Seller shall commence any legal proceedings only in
      its
      own name as an assignee for collection or on behalf of Buyer or, with Buyer’s
      prior written consent, in Buyer’s name. Seller shall have no obligation to
      commence any such legal proceedings unless Buyer has agreed to assume the legal
      fees and other expenses to be incurred in such proceedings. In no event shall
      Seller take any action which would make Buyer a party to any litigation or
      arbitration proceeding without Buyer’s prior written consent. Until Buyer has
      received Payment in Full as to any Purchase, Seller shall (i) hold in trust
      for
      Buyer and turn over to Buyer forthwith upon receipt all payments made to Seller
      by Account Debtors with respect to the Purchased Receivables subject to such
      Purchase and (ii) turn over to Buyer forthwith on receipt all instruments,
      chattel paper and other proceeds of the Purchased Receivables; provided
      that
      unless an Event of Default has occurred and is continuing, Seller shall remit
      amounts received by Seller and due to Buyer on a weekly basis on Friday of
      each
      week (each a “Settlement Date”), commencing on the last business day of the
      second week after the Purchase Date. On each Settlement Date, Seller shall
      deliver to Buyer a report, in form and substance acceptable to Buyer, of the
      account activity (including dates and amounts of payments) and changes in
      account status for each Purchased Receivable.

     

    3.3 No
      Obligation to Take Action.
      Buyer
      shall have no obligation to perform any of Seller’s obligations under any
      Purchased Receivables or to take any action or commence any proceedings to
      realize upon any Purchased Receivables (including without limitation any
      defaulted Purchased Receivables), or to enforce any of its rights or remedies
      with respect thereto.

     

    4 Non-Recourse;
      Repurchase Obligations.

     

    4.1 Non-Recourse.
      Except
      as otherwise set forth in this Agreement, Buyer’s acquisition of Purchased
      Receivables from Seller hereunder shall be without recourse against
      Seller.

     

    4.2 Seller’s
      Agreement to Repurchase.
      In the
      event that (A) with respect to any Purchased Receivable there has been any
      breach of warranty or representation set forth in Section
      6.1
      hereof
      (except for breaches of warranty or representations which are permitted to
      be,
      and have been, cured pursuant to Section
      7
      hereof)
      or any breach of any covenant contained in this Agreement with respect to such
      Purchased Receivable; or (B) with respect to such Purchased Receivable the
      Account Debtor asserts any Adjustment (except for such matters as are permitted
      to be, and have been, cured pursuant to Section
      7
      hereof),
      Seller shall, at its option, either (X) pay to Buyer on demand, the full face
      amount, or any unpaid portion, of such Purchased Receivable; together with,
      in
      the case of (A) or (B), all reasonable attorneys’ fees and expenses and all
      court costs incurred by Buyer in collecting such Purchased Receivable and/or
      enforcing its rights under, or collecting amounts owed by Seller in connection
      with this Agreement (collectively, the “Repurchase Amount”), (Y) shall
      substitute another Receivable acceptable to Buyer in its sole and absolute
      discretion that is equal in amount to such Purchased Receivable or, with respect
      to (B) above only, (Z) shall pay to Buyer the amount of any Adjustment in
      accordance with Section
      7
      hereof;
      provided, however, that Seller shall have no obligation to pay the Repurchase
      Amount, substitute another Receivable or, with respect to (B) above only, pay
      the amount of any Adjustment if there has been an Account Debtor Insolvency
      Event with respect to such Purchased Receivable. Upon payment of the Repurchase
      Amount or substitution of another Receivable, the Purchased Receivable subject
      to the preceding paragraph shall be deemed property of and owned solely by
      the
      Seller (and shall not be deemed to be a Purchased Receivable
      hereunder).

     

    4.3 Seller’s
      Payment of the Amounts Due Buyer.
      All
      amounts due from Seller to Buyer shall be paid by Seller to Buyer in immediately
      available funds by fedwire to the account listed in the attached
      Schedule.

     

    5 Power
      of Attorney. 

     

    Seller
      does hereby irrevocably appoint Buyer and its successors and assigns as Seller’s
      true and lawful attorney-in-fact, and hereby authorizes Buyer: (a) to sell,
      assign, transfer, pledge, compromise, or discharge the whole or any part of
      the
      Purchased Receivables; (b) to demand, collect, receive, sue, and give releases
      to any Account Debtor for the monies due or which may become due upon or with
      respect to the Purchased Receivables and to compromise, prosecute, or defend
      any
      action, claim, case or proceeding relating to the Purchased Receivables,
      including the filing of a claim or the voting of such claims in any bankruptcy
      case, all in Buyer’s name or Seller’s name, as Buyer may choose; (c) to prepare,
      file and sign Seller’s name on any notice, claim, assignment, demand, draft, or
      notice of or satisfaction of lien or mechanics’ lien or similar document with
      respect to Purchased Receivables; (d) to notify all Account Debtors with respect
      to the Purchased Receivables to pay Buyer directly; (e) to receive, open, and
      dispose of all mail addressed to Seller for the purpose of collecting the
      Purchased Receivables; (f) to endorse Seller’s name on any checks or other forms
      of payment on the Purchased Receivables; (g) to execute on behalf of Seller
      any
      and all instruments, documents, financing statements and the like to perfect
      Buyer’s interests in the Purchased Receivables; and (h) to do all acts and
      things necessary or expedient, in furtherance of any such purposes.

     

    6 Representations,
      Warranties and Covenants.

     

    6.1 Receivables’
      Warranties, Representations and Covenants.
      To
      induce Buyer to purchase the Purchased Receivables and to render its services
      to
      Seller, and with full knowledge that the truth and accuracy of the following
      are
      being relied upon by the Buyer in determining whether to accept receivables
      as
      Purchased Receivables, Seller represents, warrants, covenants and agrees, with
      respect to each Purchased Receivable, that, as of the date of the applicable
      Purchase pertaining to such Purchased Receivable:

     

    (a) Seller
      is
      the absolute owner of each of the Purchased Receivables and has full legal
      right
      to sell, transfer and assign such receivables;

     

    (b) The
      correct amount of each Purchased Receivable is as set forth on the applicable
      Schedule and is not in dispute;

     

    (c) The
      payment of each Purchased Receivable is not contingent upon the fulfillment
      of
      any obligation or contract, and any and all obligations required of the Seller
      have been fulfilled as of the applicable Purchase Date;

     

    (d) Such
      Purchased Receivable is based on an actual sale and delivery of goods and/or
      services actually rendered, is due no later than the applicable Due Date and
      is
      owing to Seller, is not past due or in default, has not been previously sold,
      assigned, transferred, or pledged, and is free of any and all liens, security
      interests and encumbrances other than liens, security interests or encumbrances
      in favor of Buyer or any other division or affiliate of Silicon Valley
      Bank;

     

    (e) There
      are
      no defenses, offsets, or counterclaims against such Purchased Receivable, and
      no
      agreement has been made under which the Account Debtor may claim any deduction
      or discount, except as otherwise stated on the applicable Schedule;

     

    (f) Seller
      is
      not insolvent as that term is defined in the United States Bankruptcy Code,
      and
      Seller has not filed or had filed against it a voluntary or involuntary petition
      for relief under the United States Bankruptcy Code; and

     

    (g) No
      Account Debtor set forth on the applicable Schedule with respect to such
      Purchased Receivable has objected to the payment for, or the quality or the
      quantity of the subject matter of, the Purchased Receivable, each such Account
      Debtor is liable for the amount set forth on such Schedule.

     

    6.2 Additional
      Warranties, Representations and Covenants.
      In
      addition to the foregoing warranties, representations and covenants, to induce
      Buyer to buy the Purchased Receivables, Seller hereby represents, warrants,
      covenants and agrees that:

     

    (a) Seller
      will not assign, transfer, sell, or grant, or permit any lien or security
      interest in any interest the Seller may have in any Purchased Receivables to
      or
      in favor of any other party, without Buyer’s prior written consent.

     

    (b) The
      Seller’s name, form of organization, chief executive office, and the place where
      the records concerning all Purchased Receivables are kept is set forth at the
      beginning of this Agreement or, if located at any additional location, as set
      forth on a schedule attached to this Agreement, and Seller will give Buyer
      at
      least five (5) Business Days prior written notice if such name, organization,
      chief executive office or records concerning Purchased Receivables is changed
      or
      added and shall execute any documents necessary to perfect Buyer’s interest in
      the Purchased Receivables.

     

    (c) If
      Payment in Full of any Purchased Receivable has not occurred by the applicable
      Due Date, then Seller shall within twenty (20) days of such date provide a
      written report to Buyer setting forth the reasons for such delay in
      payment.

     

    (d) So
      long
      as any Purchased Receivable is outstanding, to the extent not available online
      from the SEC EDGAR website, Seller shall deliver to Buyer:

     

    (i) within
      five (5) days of filing, copies or electronic notice of links to of all
      statements, reports and notices made available to Seller’s security holders and
      all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange
      Commission; and

     

    (ii) any
      other
      financial information reasonably requested by Buyer.

     

    7 Adjustments.
      

     

    In
      the
      event any Adjustment is asserted by any Account Debtor, Seller shall promptly
      advise Buyer and Seller shall, subject to the Buyer’s approval, resolve such
      disputes and advise Buyer of any Adjustments and promptly remit to Buyer the
      difference between the Invoice Amount on the Purchase Date and the Invoice
      Amount after such Adjustment. Subject to Section 9 and Section 4.2, Buyer shall
      remain the absolute owner of any Purchased Receivable which is subject to
      Adjustment, and, until the amount of such Adjustment (as set forth above) is
      paid by Seller to Buyer, any rejected, returned, or recovered personal property,
      with the right to take possession thereof at any time, and if such possession
      is
      not taken by Buyer, Seller agrees to resell it for Buyer’s account at Seller’s
      expense with the proceeds made payable to Buyer. While Seller retains possession
      of said returned goods and such goods are the property of Buyer, Seller shall
      segregate said goods and mark them “property of Silicon Valley
      Bank.”

     

    8 Indemnification.

     

    (a) Seller
      hereby agrees that in the event any Account Debtor is released from all or
      any
      part of its payment obligations with respect to any Purchased Receivable by
      reason of: (1) any act or omission of Seller not permitted by this Agreement
      or
      consented to in writing by Buyer; or (2) the operation of any of the provisions
      of the documentation pertaining to such Purchased Receivables, which result
      in
      the termination of the Account Debtor’s obligation to pay all or any part of the
      Purchased Receivables, then, upon the happening of any such event, Seller shall
      thereafter pay to Buyer on the date when the Account Debtor would otherwise
      have
      paid the Purchased Receivable to Buyer an amount equal to the lesser of (a)
      the
      amount of the Purchased Receivable not payable by the Account Debtor as a result
      of such event and (b) the unpaid portion of the Purchased Receivable Amount
      for
      such Purchased Receivable.

     

    (b) Seller
      hereby agrees to pay, and to indemnify and hold harmless Buyer from and against,
      any taxes which may at any time be asserted in respect of this transaction
      or
      the subject matter thereof (including, without limitation, any sales,
      occupational, excise, or gross receipts taxes, but not including taxes imposed
      upon the Buyer with respect to its income arising out of this transaction)
      and
      reasonable counsel fees in defending against the same, whether arising by reason
      of the acts to be performed by Seller hereunder or imposed against Buyer,
      Seller, the property involved or otherwise; provided
      that
      with respect to any of the foregoing for which Seller shall be liable, Seller
      shall receive prompt notice from Buyer of this assertion of any such taxes
      on
      Buyer of which Buyer has notice.

     

    9 Additional
      Rights. 

     

    To
      secure
      the obligations of Seller hereunder, Seller hereby grants to Buyer a continuing
      lien upon and security interest in all of Seller’s now existing or hereafter
      arising rights and interest in the following, whether now owned or existing
      or
      hereafter created, acquired, or arising, and wherever located (the “Related
      Property”): (A) Seller’s rights to any returned or rejected goods in respect of
      the Purchased Receivables, with respect to which Buyer has all the rights of
      any
      unpaid seller, including the rights of replevin, claim and delivery,
      reclamation, and stoppage in transit; (B) All books and records pertaining
      to
      the Purchased Receivables or the foregoing goods; and (C) All proceeds of the
      foregoing, whether due to voluntary or involuntary disposition, including
      insurance proceeds. Notwithstanding the security interest in favor of Buyer,
      unless there is an Event of Default (after expiration of any cure periods),
      Seller is authorized to sell, assign, transfer, dispose of, reuse components
      of,
      rework, or otherwise convey any interest in any Related Property without Buyer’s
      prior written consent. Seller agrees to sign UCC financing statements, in a
      form
      acceptable to Buyer, and any other instruments and documents requested by Buyer
      to evidence, perfect, or protect the interests of Buyer in the Purchased
      Receivables and the Related Property. Seller agrees to deliver to Buyer the
      originals of all instruments, chattel paper and documents evidencing or related
      to Purchased Receivables and Related Property. Buyer agrees that it shall only
      exercise its rights as a secured party upon an Event of Default (after
      expiration of any cure periods) and shall not attempt to exercise such rights
      if
      Seller has, prior to such Event of Default, sold, assigned, transferred,
      disposed of, reused components of, reworked or otherwise conveyed an interest
      in
      the Related Property. In addition, to the extent practicable, before taking
      any
      actions permitted by law as a secured party, including the rights of replevin,
      claim and delivery, reclamation, and stoppage in transit, Buyer shall give
      Seller five (5) Business Days notice during which period Seller may pay Buyer
      the full face amount, or any unpaid portion, of any Purchased Receivable plus
      any accrued and unpaid interest thereon. In the event that Seller makes Payment
      in Full with respect to the subject Purchased Receivable, Buyer shall not take
      any of the aforementioned actions with respect to the subject Purchased
      Receivable.

     

    10 Default.
      

     

    The
      occurrence of any one or more of the following shall constitute an Event of
      Default hereunder:

     

    (a) Seller
      fails to pay any amount owed to Buyer as and when due;

     

    (b) There
      shall be commenced by or against Seller any voluntary or involuntary case under
      the United States Bankruptcy Code and the petition is not controverted within
      twenty (20) days, or is not dismissed within sixty (60) days after commencement
      of the case; or Seller makes any assignment for the benefit of creditors, or
      suffers appointment of a receiver or custodian for any of its
      assets;

     

    (c) Seller
      shall become insolvent in that its assets do not have a fair value in excess
      of
      the amount required to pay its probable liabilities on its existing debts as
      they become absolute and mature (taking into account the timing of and amounts
      of cash to be received by it and the timing of and amounts of cash to be payable
      on or in respect of such liabilities), or Seller is generally not paying its
      debts as they become due;

     

    (d) Any
      involuntary lien, garnishment, attachment or the like is issued against or
      attaches to the Purchased Receivables or any Related Property (provided that
      Seller shall have ten (10) Business Days to have removed any involuntary lien,
      garnishment, attachment or the like against any of the Related
      Property);

     

    (e) Seller
      shall breach any covenant, agreement, warranty, or representation set forth
      herein, and the same is not cured (whether pursuant to the provisions of
Section
      6
      hereof,
      if applicable, or otherwise) to Buyer’s reasonable satisfaction within 10
      Business Days after Buyer has given Seller written notice thereof; provided,
      that if such breach is incapable of being cured it shall constitute an immediate
      default hereunder; or

     

    (f) Seller
      is
      not in compliance with, or otherwise is in default under, any term of any
      document, instrument or agreement evidencing a debt, obligation or liability
      of
      any kind or character of Seller, now or hereafter existing, in favor of Buyer
      or
      any division or affiliate of Silicon Valley Bank, regardless of whether such
      debt, obligation or liability is direct or indirect, primary or secondary,
      joint, several or joint and several, or fixed or contingent, together with
      any
      and all renewals and extensions of such debts, obligations and liabilities,
      or
      any part thereof.

     

    11 Remedies
      Upon Default. 

     

    Upon
      the
      occurrence of an Event of Default, Buyer has and may exercise all the rights
      and
      remedies under this Agreement and under applicable law, including the rights
      and
      remedies of a secured party under the Massachusetts Uniform Commercial Code,
      all
      the power of attorney rights described in Section 5 with respect to all
      Purchased Receivables and, subject to the restrictions in Section 9, Related
      Property, and the right to collect, dispose of, sell, lease, use, and realize
      upon all Purchased Receivables and, subject to the restrictions in Section
      9,
      all Related Property; PROVIDED THAT Buyer shall use due diligent and
      commercially lawful efforts in accordance with its usual policies and practices
      to collect all amounts owed by the Account Debtors on each Purchased Receivable
      when the same become due.
      An Event
      of Default shall not, by itself, give rise to an obligation of Seller to
      repurchase or substitute Receivables or
      make
      any Adjustment.

     

    12 TERM
      AND TERMINATION.

     

    The
      term
      of this Agreement shall be through December 31, 2006 unless terminated in
      writing by Buyer or Seller. Seller and Buyer may extend the term of this
      Agreement beyond December 31, 2006 by mutual written agreement in each of the
      parties’ sole and absolute discretion. Notwithstanding the foregoing, any
      termination of this Agreement shall not affect Buyer’s ownership of the
      Purchased Receivables, and this Agreement shall continue to be effective, and
      Buyer’s rights and remedies hereunder shall survive such termination until
      Payment in Full has been received on all Purchased Receivables other than those
      Purchased Receivables in respect of which the Account Debtor has experienced
      an
      Insolvency Event.

     

    13 Accrual
      of Interest. 

     

    If
      any
      amount owed by Seller to Buyer hereunder is not paid when due, such amount
      shall
      bear interest from such due date until paid at a per annum rate equal to the
      Discount Rate plus 2.0%.

     

    14 Fees,
      Costs and Expenses. 

     

    The
      Seller will pay to Buyer immediately upon demand all reasonable fees, costs
      and
      expenses (including reasonable fees of attorneys and their costs and expenses)
      that Buyer incurs with any of the following: (a) preparing and negotiating
      this
      Agreement, provided that without the prior written consent of Seller such fees
      shall not exceed Ten Thousand Dollars ($10,000.00), (b) enforcing this Agreement
      or any other agreement executed by Buyer and Seller in connection herewith,
      including any amendments, waivers or consents in connection with any of the
      foregoing, (c) enforcing Buyer’s rights under, or collecting amounts owed by
      Seller to Buyer in connection with this Agreement other than relating solely
      to
      an Account Debtor Insolvency Event, including, without limitation, to enforce
      (i) Seller’s agreement to repurchase as set forth in Section 4.2, (ii) Seller’s
      payment of any amounts owing by Seller pursuant to Section 7 hereof, or (iii)
      Seller’s payment of any amounts owing by Seller pursuant to Section 8 hereof,
      (d) enforcing any other rights against Seller hereunder, (e) protecting or
      enforcing its title to the Purchased Receivables or its security interest in
      the
      Related Property, and (f) the representation of Buyer in connection with any
      bankruptcy case or insolvency proceeding involving Seller or any guarantor.
      Seller shall indemnify and hold Buyer harmless from and against any and all
      claims, actions, damages, costs, expenses, and liabilities of any nature
      whatsoever arising in connection with any of the foregoing, except to the extent
      arising as a result of Buyer’s own gross negligence or willful
      misconduct.

     

    15 Severability,
      Waiver, and Choice of Law. 

     

    In
      the
      event that any provision of this Agreement is deemed invalid by reason of law,
      this Agreement will be construed as not containing such provision and the
      remainder of the Agreement shall remain in full force and effect. If Buyer
      waives a default it may enforce a later default. Any consent or waiver under,
      or
      amendment of, this Agreement must be in writing. Nothing contained herein,
      or
      any action taken or not taken by Buyer at any time, shall be construed at any
      time to be indicative of any obligation or willingness on the part of Buyer
      to
      amend this Agreement or to grant to Seller any waivers or consents. This
      Agreement has been transmitted by Seller to Buyer at Buyer’s office in the
      Commonwealth of Massachusetts and has been executed and accepted by Buyer in
      the
      Commonwealth of Massachusetts. This Agreement shall be governed by and
      interpreted in accordance with the internal laws of the Commonwealth of
      Massachusetts.

     

    16 Notices.
      

     

    All
      notices under this Agreement shall be deemed to have been delivered and
      received: (a) if mailed, three (3) Business Days after deposited in the United
      States mail, first class, postage pre-paid, (b) one (1) Business Day after
      deposit with an overnight mail or messenger service; or (c) on the same Business
      Day of confirmed transmission if sent by hand delivery or confirmed facsimile
      transmission, in each case addressed as follows:

     

    
    

    If
      to
      Seller, to:

     

    Emcore
      Corporation

    
    

    145
      Belmont Drive

    Somerset,
      New Jersey 08873 

    Telephone:
      (732) 302-4077

    Facsimile:
      (732) 302-9783

    Attn:
      Howard W. Brodie, Esq.

     

    
    

    If
      to
      Buyer, to:

     

    Silicon
      Valley Bank

    One
      Newton Executive Park, Suite 200

    Newton,
      MA 02462

    Telephone:
      (617) 630-4161

    Facsimile:
      (617) 969-5965

    Attn:
      David Reich

    


    17 Jury
      Trial. 

     

    SELLER
      AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL ON
      ANY
      CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY RELATED
      AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY; (b)
      RECOGNIZE AND AGREE THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT
      FOR IT TO ENTER INTO THIS AGREEMENT; AND (c) REPRESENT AND WARRANT THAT IT
      HAS
      REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE
      SAME
      WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO
      A
      JURY TRIAL.

     

    18 Titles
      and Section Headings. 

     

    The
      titles and section headings used herein are for convenience only and shall
      not
      be used in interpreting this Agreement.


    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, Seller and Buyer have executed this Agreement under seal as
      of
      the date first written above.

     

    SELLER:

     

    EMCORE
      CORPORATION

     

    By    /s/
      Howard Brodie            

     

    Title       
      Executive Vice President        

     

    BUYER:

     

    SILICON
      VALLEY BANK

     

    
      By    /s/ David
        Reich                

       

      Title        SVP                    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    SCHEDULE

     

     

    SCHEDULE
      DATED __________________

     

    TO

     

    NON-RECOURSE
      RECEIVABLES PURCHASE AGREEMENT

     

    DATED
      AS OF _________________________, 2005

     

    Seller:    EMCORE
      Corporation

     

    Buyer:    Silicon
      Valley Bank

     

    Purchase
      Date:                                         

     

    Due
      Date:   _____
      days from Purchase Date (not less than 30 days or more than 180
      days)

     

    Total
      Purchased Receivables: $_____________
      (List of Receivables total)

     

    Discount
      Rate:   _________%
      (calculated as follows: (i) the Prime Rate plus 1.0% per annum for Receivables
      with Due Dates less than 90 days, or (ii) such other Discount Rate for invoices
      with Due Dates over 90 days or for which the Account Debtor is located outside
      of the United States, as determined by Buyer in its sole
      discretion).

     

    Purchase
      Price: $________________
      (is _________% of the Total Purchased Receivables Amount which is the straight
      discount of the Total Purchased Receivables Amount discounted from the Due
      Date
      to the Purchase Date at the Discount Rate). 

     

    Administrative
      Fee:  ___%
      multiplied by the Total Purchased Receivables Amount (calculated based upon
      the
      following: (i) with respect to Receivables owing from an Account Debtor located
      in the United States, 0.375% of the Total Purchased Receivables Amount set
      forth
      in the Schedule for such Purchase and (ii) with respect to Receivables owing
      from an Account Debtor located outside of the United States, 0.50% of the Total
      Purchased Receivables Amount set forth in the Schedule for such
      Purchase).

     

    Late
      Payment Settlement Fee.
      In the
      event that Payment in Full of any Purchased Receivable is not received on or
      before the Due Date, Seller agrees to pay to Buyer an additional amount on
      any
      unpaid amount, calculated at the Discount Rate, through the earlier to occur
      of
      (i) such date that Buyer receives Payment in Full, and (ii) an additional ninety
      (90) days past the Due Date (“Late Payment Settlement Fee”) (subject to Section
      4.2 (Seller's Agreement to Repurchase) herein). In the event that such Purchased
      Receivable is uncollectible (due to an Account Debtor Insolvency Event), then
      the Late Payment Settlement Fee period shall be the lesser of forty-five (45)
      days, and the date on which such Purchased Receivable becomes uncollectible
      due
      to such Insolvency Event.

     

    Buyer
      Wire Instructions:

     

    Seller
      Wire Instructions:

     

    Seller
      warrants and represents that (a) with respect to the Purchased Receivables
      that
      are the subject of this Schedule, its warranties and representations in the
      Agreement are true and correct as of the date of this Schedule and (b) no Event
      of Default has occurred under the Agreement.

     

     

    SELLER:
      EMCORE CORPORATION

     

    By:                                                                     

     

    Name:                                                               

     

    Title:                                                                  

     

    BUYER:
      SILICON VALLEY BANK

     

    By:                                                                     

     

    Name:                                                               

     

    Title: