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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

EMCORE CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

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Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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EMCORE CORPORATION
10420 Research Road, SE
Albuquerque, New Mexico, 87123
October 22, 2014

Dear Fellow Shareholder:

        A special meeting of the shareholders of EMCORE Corporation ("EMCORE") will be held on December 5, 2014 at 8:00 a.m., local time, at The Langham Hotel, 1401 South Oak Knoll Avenue, Pasadena, California 91106.

        At the Special Meeting, you will be asked to consider and vote upon the following proposals:

        After careful consideration, our board of directors determined that the Asset Sale and the terms and conditions of the Asset Purchase Agreement are desirable and in the best interests of EMCORE and its shareholders. Our board of directors unanimously recommends that you vote "FOR" the authorization of the Asset Sale Proposal and approval of the Golden Parachute Proposal.

        The enclosed Notice of Special Meeting and Proxy Statement explain the Proposals and provide specific information concerning the Special Meeting. Please read these materials (including the annexes) carefully.

        Your vote is very important, regardless of the number of shares you own. The approval of each of the proposals requires the affirmative vote of a majority of the votes cast, in person or by proxy, at the Special Meeting by the holders of shares entitled to vote thereon. Only shareholders who owned shares of EMCORE's common stock at the close of business on October 22, 2014, the record date for the Special Meeting, will be entitled to vote at the Special Meeting. To vote your shares, you may return your proxy card, submit a proxy via the Internet or by telephone or attend the Special Meeting and vote in person. Even if you plan to attend the Special Meeting, we urge you to promptly submit a proxy for your shares via the Internet, by telephone or by completing, signing, dating and returning the enclosed proxy card.

        On behalf of your board of directors, thank you for your continued support.

    Very truly yours,

 

 

/s/ HONG Q. HOU
Hong Q. Hou, Ph.D.
President and Chief Executive Officer

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EMCORE CORPORATION

10420 Research Road, SE
Albuquerque, New Mexico, 87123



NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 5, 2014



To the Shareholders of EMCORE Corporation:

        A Special Meeting of the shareholders of EMCORE Corporation, a New Jersey corporation ("EMCORE"), will be held on December 5, 2014 at 8:00 a.m., local time, at The Langham Hotel, 1401 South Oak Knoll Avenue, Pasadena, California 91106, to consider and vote upon the following proposals:

        After careful consideration, our board of directors determined that the Asset Sale and the terms and conditions of the Asset Purchase Agreement are desirable and in the best interests of EMCORE and its shareholders. Our board of directors unanimously recommends that you vote "FOR" the authorization of the Asset Sale Proposal and approval of the Golden Parachute Proposal.

        Our board of directors has fixed October 22, 2014 as the record date for determining the shareholders entitled to notice of and to vote at the meeting. The Asset Sale may constitute the sale of substantially all of the property and assets of EMCORE within the meaning of Section 14A:10-11 of the New Jersey Statutes Annotated (the "NJSA"). The Asset Sale does not constitute a "Business Combination" and Photon Acquisition Corporation is not an "Interested Stockholder," in each case as such terms are used in our restated certificate of incorporation (as amended, our "certificate of incorporation") and the NJSA. Consequently, pursuant to our certificate of incorporation and the NJSA, both of the Proposals require approval by the affirmative vote of a majority of the votes cast, in person or by proxy, at the Special Meeting by the holders of our common stock entitled to vote thereon.

        Please read the enclosed Proxy Statement carefully. Whether or not you plan to attend the Special Meeting, please submit your proxy as promptly as possible by Internet, telephone, or by completing, dating, signing and returning the enclosed proxy card in the accompanying reply envelope. If you have Internet access, we encourage you to vote via the Internet. If you attend the Special Meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

    By Order of the Board of Directors,

 

 

/s/ ALFREDO GOMEZ
Alfredo Gomez
Secretary

Albuquerque, New Mexico
October 22, 2014

 

 

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  Page  

INTRODUCTION

    1  

SUMMARY TERM SHEET

    3  

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE PROPOSALS

    7  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

    11  

RISK FACTORS

    12  

THE SPECIAL MEETING

    16  

Time, Date and Place

    16  

Proposals

    16  

Required Vote

    16  

Record Date

    16  

Ownership of Directors and Executive Officers

    17  

Quorum and Voting

    17  

Proxies; Revocation of Proxies

    17  

Adjournments

    18  

Broker Non-Votes

    18  

Solicitation of Proxies

    18  

Questions and Additional Information

    18  

PROPOSAL NO. 1: THE ASSET SALE

    19  

General Description of the Asset Sale

    19  

Parties to the Asset Sale

    19  

Background of the Asset Sale

    20  

Reasons for the Asset Sale

    27  

Recommendation of Our Board of Directors

    30  

Opinion of EMCORE's Financial Advisor

    30  

Prospective Financial Information

    38  

Activities of EMCORE Following the Asset Sale

    40  

U.S. Federal Income Tax Consequences of the Asset Sale

    40  

Accounting Treatment of the Asset Sale

    41  

Government Approvals

    41  

No Dissenters' Rights

    42  

Interests of Certain Persons in the Asset Sale

    42  

Impact on Equity Awards

    42  

Executive Officer Employment Agreements

    43  

Separation Agreement with our Chief Executive Officer

    43  

Executive Officer Retention Agreements

    43  

Quantification of Potential Payments to Named Executive Officers in Connection with the Asset Sale

    43  

Indemnification of Officers and Directors

    45  

The Asset Purchase Agreement

    45  

Intellectual Property Transfer and License Agreement

    68  

Transition Services Agreement

    69  

Supply Agreement

    69  

Voting Agreement

    69  

Financing

    70  

Equity Financing

    70  

Debt Financing

    71  

Limited Guarantee

    72  

Consummation of the Asset Sale

    72  

UNAUDITED CONDENSED FINANCIAL INFORMATION

    73  

PROPOSAL NO. 2: ADVISORY VOTE ON GOLDEN PARACHUTES

    96  

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  Page  

The Non-Binding Advisory Golden Parachute Proposal

    96  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    97  

SHAREHOLDER PROPOSALS AND NOMINATIONS

    101  

TRANSACTION OF OTHER BUSINESS

    101  

HOUSEHOLDING OF PROXY STATEMENT

    101  

WHERE YOU CAN FIND MORE INFORMATION

    101  

ANNEX A—ASSET PURCHASE AGREEMENT

       

ANNEX B—VOTING AGREEMENT

       

ANNEX C—OPINION OF RAYMOND JAMES & ASSOCIATES, INC.

     

ANNEX D—REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

       

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EMCORE CORPORATION
10420 Research Road, SE
Albuquerque, New Mexico, 87123



PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS



October 22, 2014


INTRODUCTION

        This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Directors of EMCORE Corporation (hereinafter "we," "us," "our," the "Company" or "EMCORE") for use at a Special Meeting of the shareholders of EMCORE ("Shareholders") to be held on December 5, 2014 (the "Special Meeting") at 8:00 a.m., local time, at The Langham Hotel, 1401 South Oak Knoll Avenue, Pasadena, California 91106, and any postponements or adjournments thereof. This Proxy Statement was first made available to shareholders on or about October 22, 2014.

        At the Special Meeting, our shareholders will consider and vote upon the following proposals:

        After careful consideration, our board of directors determined that the Asset Sale and the terms and conditions of the Asset Purchase Agreement are desirable and in the best interests of EMCORE and its shareholders. Our board of directors unanimously recommends that you vote "FOR" the authorization of the Asset Sale Proposal and approval of the Golden Parachute Proposal.

        Only shareholders of record as of October 22, 2014 (the "Record Date") will be entitled to vote at the Special Meeting and any postponements or adjournments thereof. As of October 22, 2014, 31,151,800 shares of our no par value common stock were outstanding and eligible to be voted. The holders of common stock are entitled to one vote per share on any proposal presented at the Special Meeting. Shareholders may vote in person or by proxy. Execution of a proxy will not in any way affect a shareholder's right to attend the Special Meeting and vote in person. Any proxy may be revoked by a shareholder at any time before it is exercised by delivery of a written revocation or a later executed proxy to the Secretary of the Company or by attending the Special Meeting and voting in person by written ballot.

        The costs of preparing, assembling and mailing this Proxy Statement and the other material enclosed and all clerical and other expenses of solicitation will be paid by EMCORE. In addition to the solicitation of proxies by mailing, directors, officers and employees of EMCORE, without receiving additional compensation, may solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. In addition, we have retained Morrow & Co., LLC to assist in the


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solicitation. We will pay Morrow & Co., LLC up to $10,000 plus reasonable out-of-pocket expenses for their assistance. EMCORE also will request brokerage houses and other custodians, nominees and fiduciaries to forward soliciting material to the beneficial owners of common stock held of record by such custodians and will reimburse such custodians for their expenses in forwarding soliciting materials.

These transactions have not been approved or disapproved by the SEC, and the SEC has not passed upon the fairness or merits of these transactions nor upon the accuracy or adequacy of the information contained in this Proxy Statement. Any representation to the contrary is unlawful.

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SUMMARY TERM SHEET

        This summary highlights information included elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider before voting on the Proposals presented in this Proxy Statement. You should read the entire Proxy Statement carefully, including the annexes attached hereto. For your convenience, we have included cross references to direct you to a more complete description of the topics described in this summary.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE PROPOSALS

        The following are some questions that you, as a shareholder of the Company, may have regarding the Special Meeting and the Proposals and brief answers to such questions. We urge you to carefully read this entire Proxy Statement, the annexes to this Proxy Statement and the documents referred to or incorporated by reference in this Proxy Statement because the information in this section does not provide all the information that may be important to you as a shareholder of the Company with respect to the Proposals. See "Where You Can Find More Information."


THE SPECIAL MEETING

Q.
When and where will the Special Meeting take place?

A.
The Special Meeting will be held on December 5, 2014 at the The Langham Hotel, 1401 South Oak Knoll Avenue, Pasadena, California 91106 at 8:00 a.m., local time.

Q.
What is the purpose of the Special Meeting?

A.
At the Special Meeting, you will be asked to vote upon: (1) the Asset Sale Proposal, (2) the Golden Parachute Proposal and (3) such other matters as may properly come before the Special Meeting and any postponements or adjournments thereof.

Q.
What is the Record Date for the Special Meeting?

A.
Holders of our common stock as of the close of business on October 22, 2014, the Record Date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting and any postponements or adjournments of the Special Meeting.

Q.
What is the quorum required for the Special Meeting?

A.
The representation in person or by proxy of holders of at least a majority of the issued and outstanding shares of our common stock entitled to vote at the Special Meeting is necessary to constitute a quorum for the transaction of business at the Special Meeting.

Q.
What vote is required to approve the Proposals to be voted upon at the Special Meeting?

A.
The approval of each of the proposals requires the affirmative vote of a majority of the votes cast, in person or by proxy, at the Special Meeting by the holders of shares entitled to vote thereon. Certain of our shareholders who control in the aggregate approximately 11% of the voting power of our common stock outstanding as of October 22, 2014 have entered into a voting agreement with Purchaser pursuant to which, subject to certain exceptions, they have agreed to vote such shares in favor of the Asset Sale Proposal. The voting agreement is attached to this Proxy Statement as Annex B.

Q.
What are the effects of not voting or abstaining? What are the effects of broker non-votes?

A.
If you do not vote by virtue of not being present in person or by proxy at the Special Meeting, your shares will not be counted for purposes of determining the existence of a quorum. Abstentions and broker non-votes will be counted for the purpose of determining the existence of a quorum, however, will not be considered in determining the number of votes cast on the Proposals.

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Q.
What does it mean if I received more than one proxy card?

A.
If your shares are registered differently or in more than one account, you will receive more than one proxy card. Sign and return all proxy cards to ensure that all of your shares are voted.

Q.
Who can help answer my other questions?

A.
If you have more questions about the Proposals or how to submit your proxy, or if you need additional copies of this Proxy Statement or the enclosed proxy card or voting instructions, please contact Investor Relations, EMCORE Corporation, Attn: Corporate Secretary, 10420 Research Road, SE, Albuquerque, New Mexico, 87123, telephone number (505) 332-5000, or Morrow & Co., LLC at 800-662-5200 or 203-658-9400, or by email at emcore@morrowco.com.


PROPOSAL NO. 1: ASSET SALE

Q.
Why did the Company enter into the Asset Purchase Agreement?

A.
The decision by the Board to approve the entry into the Asset Purchase Agreement was based on a careful evaluation of the Company's strategic alternatives following an extensive strategic review process with the assistance of our financial and legal advisors. After considering the Company's strategic alternatives, the opportunities for our Other Businesses and the advice of the Company's financial and legal advisors, the Board determined that the sale of the Photovoltaics Business pursuant to the Asset Purchase Agreement was desirable and in the best interests of the Company. See "Proposal No. 1: The Asset Sale—Reasons for the Asset Sale."

Q.
What will happen if the Asset Sale is authorized by our shareholders?

A.
If the Asset Sale is authorized by the requisite shareholder vote and the other conditions to the consummation of the Asset Sale are satisfied or waived, we will sell substantially all of our assets, and transfer substantially all of the liabilities, primarily related to or used in the Photovoltaics Business to Purchaser for $150 million in cash, subject to a working capital adjustment pursuant to the Asset Purchase Agreement. We would retain all other debts and liabilities of the Company, including expenses related to our Other Businesses, corporate functions, our remaining senior executives, certain corporate vendors and professional advisors.

Q.
What will happen if the Asset Sale is not authorized?

A.
Pursuant to the terms of the Asset Purchase Agreement, if we fail to obtain a shareholder vote in favor of the Asset Sale Proposal, the Asset Purchase Agreement may be terminated, and, in the event of such termination, the Asset Sale will not occur. See "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement—Termination of the Asset Purchase Agreement."

Q.
What is the purchase price to be received by the Company?

A.
The consideration to be received by the Company in the Asset Sale is $150 million in cash, subject to a working capital adjustment, and the assumption by Purchaser of substantially all of the liabilities primarily related to the Photovoltaics Business. See "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement—General Description of the Asset Sale" and "—Consideration to be Received by EMCORE."

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Q.
What are the material terms of the Asset Purchase Agreement?

A.
In addition to the cash consideration we will receive at the closing of the Asset Sale, the Asset Purchase Agreement contains other important terms and provisions, including:

from and after the closing of the Asset Sale, we will indemnify, hold harmless and reimburse Purchaser and certain of its related parties for any damages arising out of or related to (i) any failure by us to perform any of its covenants, (ii) the excluded liabilities and (iii) any breach of our representations and warranties concerning organization, authority and qualification, tax matters, title to the acquired assets or brokers;

we have agreed to conduct our business in the ordinary course and are subject to certain other restrictions on the conduct of the Photovoltaics Business prior to the completion of the Asset Sale;

the obligations of Purchaser and the Company to close the Asset Sale are subject to several closing conditions, including (1) the approval of our shareholders, (2) the expiration or termination of the applicable waiting period under the HSR Act, (3) obtaining certain third party consents and (4) completion of other customary closing conditions in the Asset Purchase Agreement;

the Asset Purchase Agreement may be terminated by us or Purchaser in certain circumstances, in which case the Asset Sale will not be completed;

If the Asset Purchase Agreement is terminated due to a failure of our shareholders to approve the Asset Purchase Agreement and an Alternative Transaction Proposal was announced or otherwise communicated to our board of directors, we will be required to reimburse Purchaser for certain fees and expenses not to exceed $2,000,000, which, in the event of a termination fee, is credited against the termination fee. If we or Purchaser terminate the Asset Purchase Agreement after the Special Meeting has been held because we failed to obtain the required vote of our shareholders in favor of the Asset Sale Proposal (or additionally, in the case of a termination by Purchaser, because of a material uncured breach of the Asset Purchase Agreement by us) and (i) prior to the termination, there has either been announced or otherwise communicated to our board of directors an Alternative Transaction Proposal and (ii) we enter into a definitive agreement with respect to, or consummate a transaction regarding, any Alternative Transaction Proposal within 12 months of the date of such termination, then we must pay Purchaser a $5,330,000 termination fee no later than the date the transaction contemplated by the Alternative Transaction Proposal is consummated. In addition, if Purchaser terminates the Asset Purchase Agreement because, prior to obtaining shareholder approval of the Asset Purchase Agreement, we knowingly and intentionally materially breach the no solicitation provisions of the Asset Purchase Agreement or our board of directors makes a Seller Adverse Recommendation Change or fails to recommend against acceptance of a tender or exchange offer constituting an Alternative Transaction Proposal or that is not conditioned on the sale of the Photovoltaics Business pursuant to the Asset Purchase Agreement within ten business days after commencement of such offer, then we must pay Purchaser a $5,330,000 termination fee within three business days of the termination of the Asset Purchase Agreement. If we terminate the Asset Purchase Agreement in order to enter into a Superior Proposal, then we must pay Purchaser a $5,330,000 termination fee prior to or contemporaneously with the termination of the Asset Purchase Agreement.

Q.
How would the proceeds from the Asset Sale be used?

A.
The proceeds from the Asset Sale will be received by the Company, not our shareholders. The Company will use a portion of the proceeds to pay for transaction costs associated with the Asset

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Q.
What does the Board recommend regarding the Asset Sale Proposal?

A.
Our board of directors has determined that the terms and conditions of the Asset Purchase Agreement and the transactions contemplated thereby, including the Asset Sale, are desirable to and in the best interests of the Company and its shareholders. This determination was made by a unanimous vote of the members of the Board present at the meeting. Our board of directors unanimously recommends that you vote "FOR" the Asset Sale Proposal.

Q.
Do I have dissenters' rights in connection with the Asset Sale?

A.
Shareholders may vote against the authorization of the Asset Sale Proposal, but under New Jersey law dissenters' rights are not provided to shareholders in connection with the Asset Sale because our common stock was listed on a national securities exchange as of the Record Date for the Special Meeting.

Q.
Are there any risks to the Asset Sale?

A.
Yes. You should carefully read the section entitled "Risk Factors."

Q.
What are the U.S. federal income tax consequences of the Asset Sale to U.S. shareholders?

A.
Our U.S. shareholders will not realize any gain or loss for U.S. federal income tax purposes as a result of the Asset Sale. See "Proposal No. 1: The Asset Sale—U.S. Federal Income Tax Consequences of the Asset Sale."

Q.
When is the closing of the Asset Sale expected to occur?

A.
If the Asset Sale is authorized by our shareholders and all conditions to completing the Asset Sale are satisfied or waived prior to such authorization, the closing of the Asset Sale is expected to occur shortly after the Special Meeting.


PROPOSAL NO. 2: THE GOLDEN PARACHUTE PROPOSAL

Q.
Why am I being asked to cast a non-binding, advisory vote to approve the Golden Parachute Proposal?

A.
In accordance with the rules promulgated under Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are providing our shareholders with the opportunity to cast a non-binding, advisory vote on the compensation that will or may be payable to our named executive officers in connection with the Asset Sale.

Q.
What will happen if shareholders do not approve the Golden Parachute Proposal at the Special Meeting?

A.
Approval of the Golden Parachute Proposal is not a condition to the consummation of the Asset Sale. The vote with respect to the Golden Parachute Proposal is an advisory vote and will not be binding on us or Purchaser. Further, the underlying plans and arrangements are contractual in nature and are not, by their terms, subject to shareholder approval. Accordingly, regardless of the outcome of the non-binding, advisory vote, if the Asset Sale is authorized by our shareholders and completed and the other terms and conditions of the applicable plans and arrangements are satisfied, our named executive officers will receive the golden parachute payments as disclosed in this Proxy Statement.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        THIS PROXY STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS REPRESENT EMCORE'S EXPECTATIONS OR BELIEFS CONCERNING FUTURE EVENTS, INCLUDING ANY STATEMENTS REGARDING: THE SATISFACTION OF CERTAIN CLOSING CONDITIONS SPECIFIED IN THE ASSET PURCHASE AGREEMENT, EMCORE'S ABILITY TO SUCCESSFULLY CLOSE THE ASSET SALE AND THE TIMING OF SUCH CLOSING, THE DIVERSION OF MANAGEMENT'S FOCUS AND ATTENTION PENDING THE COMPLETION OF THE ASSET SALE, THE IMPACT OF THE ANNOUNCEMENT OF THE ASSET SALE ON THE TRADING PRICE OF EMCORE'S COMMON STOCK, EMCORE'S BUSINESS AND ON EMCORE'S RELATIONSHIPS WITH EMCORE'S CUSTOMERS, SUPPLIERS AND EMPLOYEES, THE RECEIPT AND USE OF THE CASH CONSIDERATION TO BE RECEIVED BY EMCORE UNDER THE ASSET PURCHASE AGREEMENT, THE RESULTS OF OPERATIONS OF EMCORE'S OTHER BUSINESSES, THE SUFFICIENCY OF EMCORE'S CASH BALANCES AND CASH USED IN OPERATIONS, FINANCING AND/OR INVESTING ACTIVITIES FOR EMCORE'S FUTURE LIQUIDITY AND CAPITAL RESOURCE NEEDS. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "INTENDS," "PROJECTS," "PLANS," "EXPECTS," "ANTICIPATES" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THESE PROJECTIONS. INFORMATION REGARDING THE RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THE RESULTS IN THESE FORWARD-LOOKING STATEMENTS ARE DISCUSSED UNDER THE SECTION "RISK FACTORS" IN THIS PROXY STATEMENT. PLEASE CAREFULLY CONSIDER THESE FACTORS, AS WELL AS OTHER INFORMATION CONTAINED HEREIN AND IN EMCORE'S PERIODIC REPORTS AND DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROXY STATEMENT ARE MADE ONLY AS OF THE DATE OF THIS PROXY STATEMENT. WE DO NOT UNDERTAKE ANY OBLIGATION TO UPDATE OR SUPPLEMENT ANY FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES, EXCEPT AS REQUIRED BY LAW.

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RISK FACTORS

        In addition to the other information contained in this Proxy Statement, you should carefully consider the following risk factors when deciding whether to vote to approve the Proposals. You should also consider the information in our other reports on file with the Securities and Exchange Commission (the "SEC") that are incorporated by reference into this Proxy Statement. See "Where You Can Find More Information."

The announcement and pendency of the Asset Sale, whether or not consummated, may adversely affect our business.

        The announcement and pendency of the Asset Sale, whether or not consummated, may adversely affect the trading price of our common stock, our business or our relationships with customers, suppliers and employees. In addition, while the completion of the Asset Sale is pending we may be unable to attract and retain key personnel and our management's focus and attention and employee resources may be diverted from operational matters.

        In the event that the Asset Sale is not completed, the announcement of the termination of the Asset Purchase Agreement may also adversely affect the trading price of our common stock, our business or our relationships with customers, suppliers and employees.

We cannot be sure if or when the Asset Sale will be completed.

        The consummation of the Asset Sale is subject to the satisfaction or waiver of various conditions, including the authorization of the Asset Sale by our shareholders. We cannot guarantee that the closing conditions set forth in the Asset Purchase Agreement will be satisfied. If we are unable to satisfy the closing conditions in Purchaser's favor or if other mutual closing conditions are not satisfied, Purchaser will not be obligated to complete the Asset Sale.

        If the Asset Sale is not completed, our board of directors, in discharging its fiduciary obligations to our shareholders, may evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to our shareholders as the Asset Sale. These may include retaining and operating the Photovoltaics Business or pursuing an alternate sale transaction that would yield reduced consideration or involve significant delays. Any future sale of substantially all of the assets of the Company or other transactions may be subject to further shareholder approval.

We cannot predict the timing, amount or nature of any distributions to our shareholders.

        Our credit and security agreement, as amended, with Wells Fargo Bank, National Association, currently prohibits distributions to our shareholders (other than distributions payable solely in our stock), and our board of directors is unable to predict the timing, amount or nature of, or the record dates for distributions, if any, to be made to our shareholders. If we are unable to make a distribution of Asset Sale proceeds to our shareholders or our board of directors determines not to make such a distribution, you will only benefit from the Asset Sale if we are able to successfully implement our strategy for our Other Businesses and your stock appreciates in value or we subsequently sell EMCORE at a price that represents a premium over your basis in our common stock. See "Proposal No. 1: The Asset Sale—Activities of EMCORE Following the Asset Sale."

We may undergo an "ownership change" within the meaning of Section 382 of the Code, which could affect our ability to offset gains, if any, realized in the Asset Sale against our net operating losses and certain of our tax credit carryovers.

        Section 382 of the Internal Revenue Code, as amended (the "Code") contains rules that limit the ability of a company that undergoes an ownership change to utilize its net operating losses and tax

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credits existing as of the date of such ownership change. Under the rules, such an ownership change is generally any change in ownership of more than 50% of a company's stock within a rolling three-year period. The rules generally operate by focusing on changes in ownership among shareholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company and any change in ownership arising from new issuances of stock by the company.

        If we were to undergo one or more "ownership changes" within the meaning of Section 382 of the Code, our net operating losses and certain of our tax credits existing as of the date of each ownership change may be unavailable, in whole or in part, to offset gains, if any, from the Asset Sale. If we are unable to offset fully for U.S. federal income tax purposes gains, if any, realized in respect of the Asset Sale with our tax loss carry-forwards, we may incur U.S. federal income tax liability.

Our executive officers and directors may have interests in the Asset Sale other than, or in addition to, the interests of our shareholders generally.

        Members of our board of directors and our executive officers may have interests in the Asset Sale that are different from, or are in addition to, the interests of our shareholders generally. Our board of directors was aware of these interests and considered them, among other matters, in approving the Asset Purchase Agreement.

        Certain of our executive officers have employment agreements or separation agreements that provide for payments and the vesting of equity awards in connection with a "change of control." Certain of our directors and officers have received equity awards that provide for full vesting of all unvested equity awards upon a "change of control." The consummation of the Asset Sale would constitute a "change of control" under these agreements and equity awards.

        Also, certain of our executive officers have retention agreements that provide for cash payments in connection with the closing of the Asset Sale. See "Proposal No. 1—Interests of Certain Persons in the Asset Sale."

Because the Photovoltaics Business represented approximately 42% of our total revenues for fiscal year 2013, our business following the Asset Sale will be substantially different.

        The Photovoltaics Business represented approximately 42% of our total revenues for the fiscal year 2013. Following the consummation of the Asset Sale, our results of operations and financial condition may be materially adversely affected if we fail to effectively reduce our overhead costs to reflect the reduced scale of our operations or we fail to grow our Other Businesses. Our smaller size may result in the recognition of less revenues from the operations of our Other Businesses, which may negatively affect our overall net earnings.

If the Asset Sale disrupts our business operations and prevents us from realizing intended benefits, our business may be harmed.

        The Asset Sale may disrupt the operation of our business and prevent us from realizing the intended benefits of the Asset Sale as a result of a number of obstacles, such as the loss of key employees, customers or business partners, the failure to adjust or implement our business strategies, additional expenditures required to facilitate the Asset Sale transaction, and the diversion of management's attention from our day-to-day operations.

The Asset Sale may not be completed or may be delayed if the conditions to closing are not satisfied or waived.

        The Asset Sale may not be completed or may be delayed because the conditions to closing, including approval of the transaction by our shareholders and consents from certain third parties, may

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not be satisfied or waived. If the Asset Sale is not completed, we may have difficulty recouping the costs incurred in connection with negotiating the Asset Sale, our relationships with our customers, suppliers and employees may be damaged, and our business may be harmed.

If we fail to complete the Asset Sale, our business may be harmed.

        As a result of our announcement of the Asset Sale, third parties may be unwilling to enter into material agreements with respect to the Photovoltaics Business or our Other Businesses. New or existing customers and business partners may prefer to enter into agreements with our competitors who have not expressed an intention to sell their business because customers and business partners may perceive that such new relationships are likely to be more stable. Employees working in the Photovoltaics Business may become concerned about the future of the business and lose focus or seek other employment. If we fail to complete the Asset Sale, the failure to maintain existing business relationships or enter into new ones could adversely affect our business, results of operations, and financial condition. If we fail to complete the Asset Sale, we will also retain and continue to operate the Photovoltaics Business. The potential for loss or disaffection of employees or customers of the Photovoltaics Business following a failure to consummate the Asset Sale could have a material, negative impact on the value of our business.

        In addition, if the Asset Sale is not consummated, our directors, executive officers and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the transaction, and we will have incurred significant third party transaction costs, in each case, without any commensurate benefit, which may have a material and adverse effect on our stock price and results of operations.

The Asset Purchase Agreement limits our ability to pursue alternatives to the Asset Sale.

        The Asset Purchase Agreement contains provisions that make it more difficult for us to sell the Photovoltaics Business to any party other than Purchaser. These provisions include the prohibition on our ability to solicit competing proposals and the requirement that we pay a termination fee of $5,330,000 if the Asset Purchase Agreement is terminated in specified circumstances. See "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement—No Solicitation" and "—Purchaser Expenses; Termination Fees." These provisions could make it less advantageous for a third party that might have an interest in acquiring EMCORE or all of or a significant part of the Photovoltaics Business to consider or propose an alternative transaction, even if that party were prepared to pay consideration with a higher value than the consideration to be paid by Purchaser.

We may not participate in a superior offer for the Photovoltaics Business unless we pay a termination fee to Purchaser.

        The Asset Purchase Agreement requires us to pay Purchaser a termination fee equal to $5,330,000 if we terminate the Asset Purchase Agreement prior to closing as a result of our determining to accept an Alternative Transaction Proposal (as defined herein) that we determine to be a Superior Proposal (as defined herein). See "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement—No Solicitation."

Our operating losses are currently projected to be greater on a pro forma basis following the Asset Sale until the full implementation of the Company's restructuring plans for the Other Businesses.

        On a pro forma basis, giving effect to the Asset Sale as of the beginning of each respective period, the Company incurred net losses of approximately $41.9 million, $2.4 million and $18.5 million for the fiscal years ended September 30, 2012 and 2013 and the nine months ended June 30, 2014, respectively, as compared to our actual net loss of approximately $39.2 million, net income of approximately

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$5.0 million and net loss of approximately $10.6 million in the respective periods. There can be no assurance that we will achieve profitability thereafter or that profitability, if achieved, will be sustained. We expect to incur expenses to implement our restructuring plans for the Other Businesses. There can be no assurance that we will succeed in fully implementing such restructuring plans. See "Unaudited Condensed Consolidated Financial Information."

Because our business will be smaller following the sale of the Photovoltaics Business, there is a possibility that our common stock may be delisted from The NASDAQ Global Market if we fail to satisfy the continued listing standards of that market.

        Even though we currently satisfy the continued listing standards for The NASDAQ Global Market, following the sale of the Photovoltaics Business our business will be smaller and, therefore, we may fail to satisfy the continued listing standards of The NASDAQ Global Market. In the event that we are unable to satisfy the continued listing standards of The NASDAQ Global Market, our common stock may be delisted from that market. Any delisting of our common stock from the NASDAQ Global Market could adversely affect our ability to attract new investors, decrease the liquidity of our outstanding shares of common stock, reduce our flexibility to raise additional capital, reduce the price at which our common stock trades and increase the transaction costs inherent in trading such shares with overall negative effects for our shareholders. In addition, delisting of our common stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, and might deter certain institutions and persons from investing in our securities at all. For these reasons and others, delisting could adversely affect the price of our common stock and our business, financial condition and results of operations.

We will continue to incur the expenses of complying with public company reporting requirements following the closing of the Asset Sale.

        After the Asset Sale, we will continue to be required to comply with the applicable reporting requirements of the Exchange Act, even though compliance with such reporting requirements is economically burdensome.

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THE SPECIAL MEETING

Time, Date and Place

        The Special Meeting will be held on December 5, 2014 at The Langham Hotel, 1401 South Oak Knoll Avenue, Pasadena, California 91106 at 8:00 a.m, local time.


Proposals

        At the Special Meeting, holders of shares of our common stock as of the Record Date will consider and vote upon:

        Descriptions of the Proposals are included in this Proxy Statement. A copy of the Asset Purchase Agreement is attached as Annex A to this Proxy Statement.


Required Vote

        The authorization of the Asset Sale Proposal requires the affirmative vote of a majority of the votes cast, in person or by proxy, at the Special Meeting by the holders of shares entitled to vote thereon. You may vote "FOR," "AGAINST" or "ABSTAIN." Failures to vote, abstentions and broker non-votes will not be counted as votes "FOR" or "AGAINST" the Asset Sale Proposal. Certain of our shareholders who control in the aggregate approximately 11% of the voting power of our common stock outstanding as of October 22, 2014 have entered into a voting agreement with Purchaser pursuant to which, subject to certain exceptions, they have agreed to vote such shares in favor of the Asset Sale Proposal. The voting agreement is attached to this Proxy Statement as Annex B.

        The non-binding, advisory approval of the Golden Parachute Proposal requires the affirmative vote of a majority of the votes cast, in person or by proxy, at the Special Meeting by the holders of shares entitled to vote thereon. You may vote "FOR," "AGAINST" or "ABSTAIN." Failures to vote, abstentions and broker non-votes will not be counted as votes "FOR" or "AGAINST" the Golden Parachute Proposal.


Recommendation of the Board

        After careful consideration, our board of directors determined that the Asset Sale and the terms and conditions of the Asset Purchase Agreement are desirable and in the best interests of EMCORE and its shareholders. Our board of directors unanimously recommends that you vote "FOR" the authorization of the Asset Sale Proposal and approval of the Golden Parachute Proposal.


Record Date

        Holders of our common stock as of the close of business on October 22, 2014, the Record Date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting and any postponements or adjournments of the Special Meeting. On October 22, 2014, there were 31,151,800 shares of common stock outstanding and entitled to vote at the Special Meeting and any

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postponements or adjournments of the Special Meeting; no other shares of capital stock were outstanding on such date.


Ownership of Directors and Executive Officers

        As of October 22, 2014, our directors and executive officers beneficially held approximately 14% in the aggregate of our shares of common stock entitled to vote at the Special Meeting, excluding options to purchase shares of our common stock which were out-of-the-money as of such date. Certain of our shareholders who control in the aggregate approximately 11% of the voting power of our common stock outstanding as of October 22, 2014 have entered into a voting agreement with Purchaser pursuant to which, subject to certain exceptions, they have agreed to vote such shares in favor of the Asset Sale Proposal. The voting agreement is attached to this Proxy Statement as Annex B.


Quorum and Voting

        The presence at a meeting in person or by proxy of the holders of shares entitled to cast a majority of the votes at the Special Meeting is necessary to constitute a quorum for the transaction of business at the Special Meeting. For purposes of determining the presence of a quorum, abstentions and broker non-votes will be counted as present at the Special Meeting. Each share of common stock issued and outstanding on the Record Date is entitled to one vote.


Proxies; Revocation of Proxies

        If you are unable to attend the Special Meeting, we urge you to submit your proxy by completing and returning the enclosed proxy card or vote your proxy via the Internet or by telephone. If your shares of common stock are held in "street name" (i.e., through a bank, broker or other nominee), you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares voted. If you elect to vote in person at the Special Meeting and your shares are held by a broker, bank or other nominee, you must bring to the Special Meeting a legal proxy from the broker, bank or other nominee authorizing you to vote your shares of common stock.

        Unless contrary instructions are indicated on the proxy card, all shares of common stock represented by valid proxies will be voted "FOR" the Asset Sale Proposal and "FOR" the Golden Parachute Proposal and will be voted at the discretion of the persons named as proxies in respect of such other business as may properly be brought before the Special Meeting. As of the date of this Proxy Statement, our board of directors knows of no other business that will be presented for consideration at the Special Meeting other than the Proposals.

        You may revoke your proxy and change your vote at any time before the polls close at the Special Meeting by:

        Simply attending the Special Meeting will not constitute a revocation of your proxy.

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Adjournments

        The Special Meeting may be adjourned by the affirmative vote of a majority of the votes cast, in person or by proxy, at the Special Meeting by the holders of shares entitled to vote. The Special Meeting may be adjourned for any purpose, including for the purpose of obtaining a quorum or soliciting additional proxies if there are insufficient votes to authorize the Asset Sale, including, without limitation, adjourning the Special Meeting for the sole purpose of soliciting additional votes as to one proposal while closing the polls and registering the approval of the other proposal. Any adjournment may be made without notice (if a new record date is not fixed for the adjourned meeting), other than by an announcement made at the Special Meeting of the time, date and place of the adjourned meeting. Any adjournment will allow our shareholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned.


Broker Non-Votes

        Broker non-votes occur when a broker holding stock in "street name" does not vote the shares on some or all matters. Brokers are permitted to vote on routine, non-controversial proposals in instances where they have not received voting instructions from the beneficial owner of the stock but are not permitted to vote on non-routine matters. Uncast votes on non-routine matters are referred to as "broker non-votes." Because each proposal being considered at the Special Meeting is a non-routine matter, shares of our common stock as to which brokers have not received any voting instructions will not be permitted to vote on any of the Proposals.

        The inspector of elections will treat broker non-votes as shares that are present for purposes of determining the existence of a quorum. Broker non-votes will not be considered in determining the number of votes cast for either of the Proposals.


Solicitation of Proxies

        This proxy solicitation is being made and paid for by EMCORE on behalf of its board of directors. In addition, we have retained Morrow & Co., LLC to assist in the solicitation. We will pay Morrow & Co., LLC up to $10,000 plus reasonable out-of-pocket expenses for their assistance. Our directors, officers and employees may also solicit proxies by personal interview, mail, e-mail, telephone, facsimile or other means of communication. These persons will not be paid any additional compensation for their efforts. We will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of our common stock that the brokers and fiduciaries hold of record. Upon request, we will reimburse them for their reasonable out-of-pocket expenses. In addition, we will indemnify our proxy solicitor against any losses arising out of that firm's proxy soliciting services on our behalf.


Questions and Additional Information

        If you have more questions about the Proposals or how to submit your proxy, or if you need additional copies of this Proxy Statement or the enclosed proxy card or voting instructions, please contact Investor Relations, EMCORE Corporation, Attn: Alfredo Gomez, Secretary, 10420 Research Road, SE, Albuquerque, New Mexico, 87123, telephone number (505) 332-5000, or please contact Morrow & Co., LLC at 800-662-5200 or 203-658-9400, or by email at emcore@morrowco.com.

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PROPOSAL NO. 1: THE ASSET SALE

        The following discussion is a summary of the material terms of the Asset Sale. We encourage you to read carefully and in its entirety the Asset Purchase Agreement, which is attached to this Proxy Statement as Annex A, as it is the legal document that governs the Asset Sale.


General Description of the Asset Sale

        If the Asset Sale is completed, Purchaser would purchase substantially all of the assets, and assume substantially all of the liabilities, primarily related to or used in the Photovoltaics Business for $150 million in cash, subject to a working capital adjustment. The Asset Sale may constitute the sale of substantially all of our assets under New Jersey law.


Parties to the Asset Sale

EMCORE Corporation
10420 Research Road, SE
Albuquerque, New Mexico, 87123
(505) 332-5000

        EMCORE Corporation offers a broad portfolio of compound semiconductor-based products for the fiber optics and space solar power industries. EMCORE's Fiber Optics business segment provides optical components, subsystems and systems for high-speed telecommunications, Cable Television (CATV) and Fiber-To-The-Premise (FTTP) networks, as well as products for satellite communications, video transport and specialty photonics technologies for defense and homeland security applications. EMCORE's Space Photovoltaics business segment provides products for space-power applications including high-efficiency multi-junction solar cells, Coverglass Interconnected Cells (CICs) and complete satellite solar panels.

        EMCORE was founded as a New Jersey corporation in 1984. We completed our initial public offering in March 1997. Our principal executive offices are located at 10420 Research Road, SE, Albuquerque, New Mexico, 87123. Our telephone number is (505) 332-5000, and our website address is www.EMCORE.com.

        EMCORE's common stock is traded on the NASDAQ Stock Market under the symbol "EMKR." We file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC. These reports, any amendments to these reports, proxy and information statements and certain other documents we file with the SEC are available through the SEC's website at www.sec.gov or free of charge on our website as soon as reasonably practicable after we file the documents with the SEC. The public may also read and copy these reports and any other materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Photon Acquisition Corporation
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, NY 10022

        Purchaser is a Delaware corporation and an affiliate of the Veritas Fund, a private equity investment fund organized and managed by Veritas Capital. Founded in 1992 and headquartered in New York, Veritas Capital is a leading private equity investment firm that invests in companies that provide critical products and services to government and commercial customers worldwide.

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        Purchaser was formed solely for the purpose of entering into, and completing the transactions contemplated by, the Asset Purchase Agreement. Purchaser has not conducted any business to date, except for activities incidental to its formation and as contemplated by the Asset Purchase Agreement. Upon completion of the Asset Sale, Purchaser will acquire substantially all of the assets and assume substantially all of the liabilities of the Photovoltaics Business.

        The principal executive offices of Purchaser and the Veritas Fund are located at c/o Veritas Capital Fund Management, L.L.C., 590 Madison Avenue, New York, New York 10022, and their telephone number is (212) 415-6700.


Background of the Asset Sale

        The Board and the Company's senior management have from time to time evaluated and considered a variety of strategic alternatives as part of a long-term strategy to increase shareholder value.

        Starting in August 2013, members of senior management and the Board held discussions with representatives of Raymond James regarding a strategic review process for the Company.

        On October 15, 2013, Steven R. Becker, Matthew A. Drapkin, Becker Drapkin Management, L.P., Becker Drapkin Partners (QP), L.P., Becker Drapkin Partners, L.P. and BC Advisors, LLC (collectively, "Becker Drapkin") filed a Schedule 13D with the SEC stating that Becker Drapkin had beneficial ownership of 7.1% of the Company's outstanding common stock and intended to nominate three directors to the Board at the Company's 2014 annual meeting of shareholders. During the late fall of 2013, Becker Drapkin increased its beneficial ownership to 11.9% of the Company's outstanding common stock.

        On December 4, 2013, the Company and Becker Drapkin entered into an agreement pursuant to which, among other things, the Board appointed three new directors to the Board designated by Becker Drapkin and formed a committee (the "Strategy Committee"), chaired by Steven Becker, to evaluate strategic alternatives available to the Company in order to create shareholder value, including potential mergers, acquisitions, divestitures and other key strategic transactions outside of the ordinary course of the Company's business.

        On December 10, 2013, at a regularly scheduled Board meeting, representatives of Raymond James discussed possible strategic alternatives for the Company, including the potential sale of the entire Company or one or more of the Company's businesses, including the Photovoltaics Business. The Board directed representatives of Raymond James to work with members of senior management and the Strategy Committee to conduct a marketing process to gauge the interest of third parties in acquiring the Company or one or more of the Company's businesses, including the Photovoltaics Business.

        In connection with the review of strategic alternatives by the Board and the Strategy Committee, on December 19, 2013, the Company engaged Raymond James as its sole financial advisor and, subsequently, the Company engaged Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden") as its outside legal advisor. The Company retained Raymond James based on its qualifications and experience in providing financial advice, on its reputation as a nationally recognized investment banking firm and its experience in the aerospace and defense sector.

        After an initial review of the Company's strategic alternatives and initial discussions with representatives of Raymond James and members of senior management, the Strategy Committee believed that the best values that could be realized by the Company in a potential sale process would likely be achieved by the sale of individual divisions rather than a sale of the entire Company. The members of the Strategy Committee discussed the prospects of each of the Company's businesses and came to the view that each of the Company's businesses should each be marketed to prospective

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bidders and that the Company should explore various potential transaction structures that would enable the Company to realize the highest value available in a transaction for one or more of the Company's businesses.

        During the months of January and February 2014, the Strategy Committee met and discussed with representatives of Raymond James and members of senior management, among other things, the list of prospective bidders, financial forecasts and draft confidential information memoranda that would be shared with the prospective bidders for the Company's businesses. On February 7, 2014, the Board approved a list of prospective bidders and financial forecasts (the "February Forecasts") and directed representatives of Raymond James to initiate contact with each of the approved prospective bidders.

        Between February and April 2014, representatives of Raymond James contacted 25 prospective bidders for the Photovoltaics Business and the Company executed confidentiality agreements with 15 of the prospective bidders. Representatives of Raymond James and members of senior management held meetings with seven of the prospective bidders who had expressed interest in obtaining additional information regarding the Photovoltaics Business, including with Veritas Capital and Party A.

        On March 5, 2014, in connection with the evaluation of strategic alternatives for the Company's businesses, members of senior management presented a plan to the Board for restructuring the Company's telecommunications business (the "Telecom Restructuring Plan"). The Board discussed the Telecom Restructuring Plan and directed management to begin its implementation.

        Between March 20 and March 31, 2014, at the direction of the Strategy Committee, representatives of Raymond James sent a bid process letter to 12 prospective bidders with instructions to, among other things, provide an indication of interest of the cash purchase price for 100% of the Photovoltaics Business.

        On April 9, 2014, representatives of Raymond James received written indications of interest for the Photovoltaics Business from Veritas Capital, Party A, Party B and Party C and a verbal indication of interest from Party D (the "Initial Bids"), each of which contemplated an all-cash transaction.

        On April 11, 2014, at a meeting of the Strategy Committee, a representative of Raymond James discussed the Initial Bids. The representative of Raymond James summarized that 25 prospective bidders had been contacted, consisting of 14 strategic bidders and 11 private equity bidders, seven of whom had attended management presentations and five of whom had submitted Initial Bids. At the meeting, a representative of Raymond James reported that Party D's bid was for $80 million, Party B's bid range was $95 million to $105 million, Party C's bid range was $100 million to $120 million, Party A's bid range was $125 million to $135 million and Veritas Capital's bid range was $125 million to $140 million. After discussing the Initial Bids, the Strategy Committee directed representatives of Raymond James and members of senior management to continue non-exclusive negotiations with all bidders who had submitted Initial Bids with a purchase price at or above $100 million. In addition, the Strategy Committee directed representatives of Raymond James to inform each of Party B, Party C and Party D that they would need to increase their bids in order to remain competitive in the process.

        On April 15, 2014, representatives of Raymond James received a revised initial bid from Party B, which increased its bid range from $95 million to $105 million to $100 million to $120 million. Party C and Party D decided not to increase their initial bids and discussions with Party D were terminated.

        On April 16, 2014, Party E contacted Raymond James regarding submitting a bid for the Photovoltaics Business. On April 18, 2014, at the Strategy Committee meeting, the members of the Strategy Committee discussed the Party E inquiry and directed representatives of Raymond James and members of senior management to provide Party E with the necessary information to allow it to submit a proposal, subject to receipt by the Company of an executed confidentiality agreement from Party E.

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        During its review, members of the Strategy Committee discussed whether the potential sale of the Photovoltaics Business should be structured as an asset sale or a cash-out merger of the Company contingent on the sale of the Other Businesses, so that the only remaining operating business in the Company at the time of the merger would be the Photovoltaics Business. Among other things, the members of the Strategy Committee discussed whether a cash-out merger transaction could provide the Company's shareholders with more immediate liquidity and whether, at the current stage in the process, it was in the best interests of the Company and its shareholders to explore multiple potential transaction structures. After further deliberation, the Strategy Committee directed representatives of Raymond James to inquire whether the bidders would consider a merger transaction structure contingent on the sale of the Other Businesses.

        On April 25, 2014, at the Strategy Committee meeting, representatives of Raymond James reported that each of Veritas Capital, Party A, Party B, Party C and Party E had expressed a willingness to consider a cash-out merger transaction contingent on the sale of the Other Businesses.

        On April 29, 2014, representatives of Raymond James received a proposal from Party E in which Party E proposed a merger between Party E and the Company following the sale of the assets of the Other Businesses, whereby Party E would obtain a portion of the equity interests in and would make certain appointments to the board of directors and the management of the surviving entity (the "Party E Proposal").

        On May 2, 2014, the members of the Strategy Committee discussed the Party E Proposal, after which the members of the Strategy Committee directed representatives of Raymond James to assist the Strategy Committee in further evaluating the Party E Proposal.

        During May 2014, members of senior management and representatives of Raymond James held management meetings with each of Veritas Capital, Party A, Party B, Party C and Party E.

        On May 20, 2014, at a Board meeting, members of senior management presented an update on the Telecom Restructuring Plan and presented a plan for restructuring the Company's broadband business (the "Broadband Restructuring Plan" and, together with the Telecom Restructuring Plan, the "Restructuring Plans"). Among other things, the directors discussed the implementation of the Restructuring Plans. The Board received a further update on the Restructuring Plans from members of senior management at the June 18, 2014 Board meeting.

        On May 30, 2014, at a Strategy Committee meeting, representatives of Raymond James reported that Veritas Capital had submitted a letter to representatives of Raymond James that day, which stated its willingness to pay $150 million in cash for the Photovoltaics Business in an asset sale transaction. After further discussion, the Strategy Committee determined that the letter should be fully evaluated once final bids had been received from all of the bidders.

        The members of the Strategy Committee then discussed the terms of the final bid instruction letter for the Photovoltaics Business. Among other things, the Strategy Committee members expressed their views that an asset sale transaction could generate greater value for the Company due to a higher purchase price and the availability of federal net operating losses to offset substantially all of the federal tax liability resulting from the taxable gain from the Asset Sale and that a cash-out merger transaction conditioned on the sale of the Other Businesses could provide a more immediate path to liquidity for the Company's shareholders, however, was also subject to the additional risk that closing could be delayed by the timing of the sales of the Other Businesses.

        Following further discussion, the members of the Strategy Committee directed representatives of Raymond James to deliver final bid instruction letters that would permit bids based on a cash-out merger structure, an asset sale structure, or both and indicate that, at such time, a cash-out merger transaction was preferred by the Company. The Strategy Committee members further directed representatives of Raymond James to not send the final bid instruction letter to Party E because, at

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that time, the Party E Proposal was not sufficiently developed to warrant receipt of a final bid instruction letter.

        On June 2, 2014, Party A provided a verbal indication of its willingness to pay $140 million to $150 million in cash for the Photovoltaics Business in an asset sale transaction. The next day, representatives of Raymond James delivered final bid instruction letters to Veritas Capital, Party A, Party B and Party C and, on June 11, 2014, delivered a draft merger agreement.

        In June 2014, members of senior management updated the financial forecasts for the Photovoltaics Business, which, among other things, showed an increase in fiscal year 2014 adjusted EBITDA (the "June Forecasts") as compared to the February Forecasts. The June Forecasts were then shared with Veritas Capital, Party A, Party B and Party C.

        In the last week of June 2014, Party B and Party C informed representatives of Raymond James that they would not be submitting final bids for the Photovoltaics Business.

        On June 30, 2014, representatives of Raymond James received a final non-binding proposal from Party A, which proposed to pay $150 million in cash to acquire the Photovoltaics Business in an asset sale transaction, excluded all pre-closing liabilities other than liabilities of the Photovoltaics Business incurred in the ordinary course, and noted that due diligence was still ongoing (the "June Party A Bid"). The June Party A Bid also noted that, if the acquisition was structured as a cash-out merger transaction, Party A's purchase price and ability to execute a merger transaction would be influenced by a number of additional factors, including, among other things, additional diligence regarding liabilities relating to the Company's corporate entity and the Other Businesses and the right to terminate the merger transaction in the event that the asset purchase agreements for the Other Businesses were not satisfactory to Party A.

        On July 1, 2014, representatives of Raymond James received a final non-binding proposal from Veritas Capital, which proposed to pay $145 million in cash to acquire the Photovoltaics Business in a cash-out merger transaction, noted that primary business diligence was completed, indicated that debt financing would be a combination of senior secured term loans and mezzanine notes without a financing condition, and provided a mark-up of the draft merger agreement, which contemplated entry into a voting agreement with certain of the Company's significant shareholders (the "June Veritas Capital Bid").

        On July 8, 2014, at a Board meeting, a representative of Raymond James summarized the June Party A Bid and the June Veritas Capital Bid, including that Veritas Capital had verbally indicated that its willingness to increase the purchase price to $150 million if the transaction was structured as an asset sale instead of a cash-out merger. The directors then discussed whether the Photovoltaics Business transaction should be structured as an asset sale or cash-out merger, including, among other things, that an asset sale transaction could generate greater value for the Company through a higher purchase price and the availability of federal net operating losses to offset substantially all of the federal tax liability resulting from the taxable gain from the Asset Sale, a cash-out merger transaction involving the Photovoltaics Business could be delayed due to being contingent on the sale of the Other Businesses and that both Veritas Capital and Party A had expressed concern regarding acquiring liabilities related to the Company's corporate functions and the Other Businesses in a cash-out merger transaction. See "Proposal No. 1: The Asset Sale—Reasons for the Asset Sale."

        The directors then discussed the current and projected financial performance of the Other Businesses, including management's previous presentations regarding the Restructuring Plans. After further discussion, the Board determined that the Restructuring Plans related to the Other Businesses would continue to be implemented and that the Board would continue to evaluate strategic alternatives for the Other Businesses, including possible sales of all or a part of the businesses. See "Proposal No. 1: The Asset Sale—Reasons for the Asset Sale." Based in part on the Board's assessment of the

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financial prospects of the Other Businesses as well as the purchase price indications received to date, the Board instructed representatives of Raymond James to continue non-exclusive negotiations with Veritas Capital and Party A regarding an asset sale transaction for the Photovoltaics Business.

        On July 9, 2014, representatives of Raymond James held separate calls with Veritas Capital and Party A, during which representatives of Raymond James informed each of them of the Company's willingness to proceed with an asset sale transaction structure with limited post-closing obligations and, at the Board's direction, instructed each of them to submit an updated purchase price and term sheet summarizing the key terms for an asset sale transaction. That same day Party A requested to receive a draft asset purchase agreement for its review and comment, which was provided to Party A by a representative of Raymond James on July 18, 2014.

        On July 17, 2014 Veritas Capital submitted a term sheet to representatives of Raymond James summarizing the principal terms for an asset sale transaction (the "Veritas Capital Term Sheet"), which, among other things, provided for a $145 million cash purchase price, the assumption of all liabilities primarily related to the Photovoltaics Business, no escrow or holdback, and the termination of all representations and warranties at closing, other than fundamental representations and warranties and representations and warranties related to taxes and title to the assets to be acquired pursuant to the asset purchase agreement. The Veritas Capital Term Sheet also stated that the transaction would require financing, but that it would provide financing commitments prior to signing and that any definitive agreement would not contain a financing condition.

        On July 18, 2014, at a Strategy Committee meeting, the members of the Strategy Committee discussed the Veritas Capital Term Sheet, including, among other things, whether the $145 million purchase price could be increased. The members of the Strategy Committee then discussed the instructions that should be given to Party A. After further discussion, the Strategy Committee directed representatives of Raymond James to inform Party A that their final bid would be evaluated based on, among others, the purchase price and certain post-closing terms, including any potential escrow or holdback and the terms of post-closing indemnification for breach of representations and warranties.

        On July 30, 2014, Party A submitted a preliminary issues list regarding the draft asset purchase agreement (the "Party A Issues List"), which noted that Party A would not assume any pre-closing liabilities associated with the Photovoltaics Business, other than those incurred in the ordinary course, and required that an undisclosed amount of the purchase price be deposited into escrow to secure post-closing indemnification claims. In addition, Party A noted that additional due diligence was required and that Party A had not yet received corporate approval for the transaction.

        On August 1, 2014, at a Board meeting, representatives of Raymond James summarized the terms of the proposals received from Veritas Capital and Party A, including that Veritas Capital had indicated a willingness to increase its purchase price in order to receive exclusivity. After further discussion regarding the Veritas Capital and Party A proposals, the Board authorized members of senior management to enter into a limited exclusivity period with Veritas Capital, subject to Veritas Capital increasing its cash purchase price to $155 million and Party A failing to both match the increased price and improve its terms to provide for the assumption of substantially all pre-closing liabilities, a more limited indemnity structure and no escrow or holdback.

        On August 1, 2014, representatives of Raymond James called Veritas Capital and informed them that they would need to increase their cash purchase price to $155 million in order to obtain limited exclusivity. On the same day, representatives of Raymond James informed Party A that their proposed terms for the asset purchase agreement and the purchase price would need to improve in order for Party A to obtain exclusivity and that the Company was considering entering into exclusivity with another bidder.

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        On August 5, 2014, representatives of Raymond James received a revised final proposal from Veritas Capital, which, among other things, increased the cash purchase price to $155 million, affirmed the terms of the Veritas Capital Term Sheet, and requested a 21-day exclusivity period.

        That same day, representatives of Raymond James received a call from Party A, during which Party A indicated that they did not anticipate increasing the purchase price above $150 million.

        Later that day, the Company and Veritas Capital executed an exclusivity letter agreement (the "Veritas Capital Exclusivity Letter"), which, among other things, provided for the Company to engage in exclusive negotiations with Veritas Capital regarding the sale of the Photovoltaics Business until August 26, 2014.

        Between August 8, 2014 and August 26, 2014, the Company and representatives of Skadden negotiated the terms of the asset purchase agreement with Veritas Capital and its counsel.

        On August 15, 2014, at a Board meeting, members of senior management presented an update regarding the Restructuring Plans, including financial forecasts that showed the Other Businesses achieving break-even adjusted EBITDA by the end of fiscal year 2015.

        On August 27, 2014, the Company and Veritas Capital executed an amendment to the Veritas Capital Exclusivity Letter, which, among other things, extended the duration of exclusivity through September 7, 2014, required Veritas Capital to affirm that it was still willing to pay $155 million in cash to acquire the Photovoltaics Business based on the terms in the Veritas Capital Term Sheet, and provided for automatic termination of the exclusivity period in the event that Veritas Capital informed the Company that it was no longer willing to pay $155 million to acquire the Photovoltaics Business.

        Between August 27 and September 7, 2014, the Company and representatives of Skadden continued to negotiate the terms of the asset purchase agreement with Veritas Capital and its counsel.

        On September 7, 2014, the Board held a meeting to discuss the proposed transaction with Veritas Capital. To facilitate discussions regarding the Asset Sale, copies of the draft asset purchase agreement, along with a summary of the material terms of the asset purchase agreement and certain ancillary agreements thereto, were distributed to the Board prior to the meeting. At the meeting, representatives of Skadden reviewed with the Board its fiduciary duties in connection with the proposed transactions and presented a summary of the material terms and open points regarding the draft asset purchase agreement. The Board, among other things, reviewed and discussed the draft asset purchase agreement, including the timing of the automatic termination of the asset purchase agreement (the "Outside Date"), which Veritas Capital had proposed to be four months after the agreement was signed. After further discussion, including the potential need for additional time to obtain regulatory and/or shareholder approval of the transaction, the Board determined that the Outside Date should include an automatic two-month extension in the event that all closing conditions, other than obtaining shareholder approval or antitrust approval, were completed within four months after the date the asset purchase agreement was signed.

        Representatives of Raymond James reviewed for the Board the marketing process that Raymond James had undertaken on behalf of the Company to identify and engage prospective bidders of the Photovoltaics Business, including that representatives of Raymond James had communicated with 26 prospective bidders, the Company had executed 16 confidentiality agreements, representatives of Raymond James and members of senior management had held meetings with eight prospective bidders and the Company had received six initial indications of interest. A representative of Raymond James then reviewed and discussed its analysis with respect to the Company and the proposed sale of the Photovoltaics Business, including a summary of the financial analysis supporting Raymond James's opinion. See "Proposal No. 1: The Asset Sale—Prospective Financial Information." A representative of Raymond James also discussed the financing commitments received by Veritas Capital and commented favorably on the ability of Veritas Capital to complete the financing. At the request of the Board, a representative of Raymond James rendered Raymond James's oral opinion, as of September 7, 2014, and based upon and subject to the qualifications, assumptions, limitations and other matters considered set forth in Raymond James's written opinion, as to the fairness, from a financial point of view, to the Company of the consideration of $155 million in cash to be received by the Company pursuant to the draft asset purchase agreement.

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        The Board also discussed the ongoing operations of the Company following the sale of the Photovoltaics Business, as well as possible uses of the proceeds from the Asset Sale. In that regard, the Board considered, among other things, a potential special dividend to the Company's shareholders of some of the net proceeds from the sale, a potential repurchasing of a portion of the Company's outstanding shares of common stock, reinvesting a portion of the net proceeds into the Other Businesses, or a combination of the foregoing.

        After further discussion, the Board unanimously approved the Asset Sale, subject to finalization of the asset purchase agreement and the transactions contemplated thereby, including the extension of the Outside Date, under certain circumstances, to six months after the execution of the asset purchase agreement.

        When representatives of Raymond James informed Veritas Capital of the required Outside Date extension, Veritas Capital informed representatives of Raymond James that its lenders would not be able to approve the six-month Outside Date without obtaining additional lender committee approval.

        Between September 8 and September 10, 2014, members of senior management determined that the financial projections for the Photovoltaics Business would need to be reforecast to account for the increased risk of loss of revenue from a customer tied to information received by the Company following the September 7 Board meeting.

        On September 10, 2014, Veritas Capital informed representatives of Raymond James that all of its lenders had obtained committee approval for the six-month Outside Date.

        Between September 10 and September 13, 2014, Veritas Capital was orally advised that management would be adjusting the forecasts for the Photovoltaics Business and Veritas Capital orally informed representatives of Raymond James and members of senior management that it would be reducing the purchase price from $155 million to $145 million, but that otherwise Veritas Capital did not expect to change the terms of the asset purchase agreement and the transactions contemplated thereby. In addition, members of senior management prepared and shared the revised forecasts with Veritas Capital, including updated quarterly financial projections for fiscal year 2015, and, together with representatives of Raymond James, negotiated with Veritas Capital regarding the purchase price.

        On September 15, 2014, Veritas Capital orally informed representatives of Raymond James that it would increase the purchase price to $150 million in cash to acquire the Photovoltaics Business in part due to the fact that while the revised projections showed lower revenue for calendar year 2015, EBITDA for the period was substantially consistent with the prior forecast. At the same time, Veritas Capital confirmed the Asset Sale would otherwise be on the same terms as had been previously negotiated.

        On September 16, 2014, the Board convened a special meeting, at which representatives of Skadden provided a summary of the changes to the asset purchase agreement since the September 7, 2014 Board meeting. Representatives of Raymond James reviewed and discussed the changes to its analysis with respect to the Company since the September 7, 2014 Board meeting. See "Proposal No. 1: The Asset Sale—Prospective Financial Information." At the request of the Board, a representative of Raymond James then rendered Raymond James's oral opinion, which was subsequently confirmed by delivery of a written opinion to the Board, dated September 16, 2014, to the effect that, as of such date, and based upon and subject to the qualifications, assumptions, limitations and other matters set forth in Raymond James's written opinion, the consideration of $150 million in cash to be received by the Company pursuant to the draft asset purchase agreement was fair, from a financial point of view, to the Company. See "Proposal No. 1: The Asset Sale—Opinion of EMCORE's Financial Advisor."

        During the course of the meeting, the directors discussed whether, because of the reduction in the purchase price from $155 million to $150 million, the Board should remarket the Photovoltaics Business. At the request of the Board, a representative of Skadden again reviewed the directors'

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fiduciary duties. The directors then discussed the potential remarketing process, including, among other things, that the purchase price reduction by Veritas Capital had resulted from a change in the Photovoltaics Business, which could also impact the purchase price received if the Photovoltaics Business was remarketed, the fact that Veritas Capital was prepared to promptly sign the Asset Purchase Agreement at the $150 million cash purchase price, the favorable indemnification terms of the draft asset purchase agreement with Veritas Capital as compared to the terms previously proposed by Party A, and the risks associated with engaging in a remarketing process, including that Veritas Capital may not remain a bidder upon the conclusion of the remarketing process. See "Proposal No. 1: The Asset Sale—Reasons for the Asset Sale."

        After discussion and the receipt of advice from members of senior management and representatives of each of Skadden and Raymond James, the Board approved the Asset Sale by unanimous vote of the directors present at the meeting, subject to finalization of the asset purchase agreement and the transactions contemplated thereby.

        On September 17, 2014, the Company and Veritas Capital executed and delivered the Asset Purchase Agreement, substantially in the form approved by the Board. See "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement." Immediately after, Veritas Capital executed a voting agreement with certain shareholders of the Company. See "Proposal No. 1: The Asset Sale—Voting Agreement." That evening, the Company issued a press release announcing the execution of the Asset Purchase Agreement.


Reasons for the Asset Sale

        After careful consideration, the Board, at a meeting held on September 16, 2014, approved the Asset Purchase Agreement and the transactions contemplated thereby by a unanimous vote of the directors present at the meeting. In the course of reaching its decision to approve the Asset Purchase Agreement and recommend approval by the Company's shareholders of the Asset Sale, the Board consulted with senior management of the Company, the Company's financial and legal advisors and considered a number of factors that the Board believed supported its decision, including, but not limited to, the following factors:

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        The Board also considered a variety of risks and other potentially negative factors concerning the Asset Purchase Agreement and the transactions contemplated thereby, including, among others, the following:

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        In addition to considering the factors described above, the Board considered the fact that some of the Company's executive officers have interests in the Asset Sale that are different from, or in addition to, the interests of the Company's shareholders generally, as discussed under "Interests of the Certain Persons in the Asset Sale."

        The above discussion of the factors considered by the Board is not intended to be exhaustive, but does set forth certain material factors considered by the Board. In view of the wide variety of factors considered in connection with its evaluation of the Asset Sale and the complexity of these matters, the Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors, and individual directors may have held varied views of the relative importance of the factors considered. The Board viewed its position and recommendation as being based on an overall review of the totality of the information available to it, including discussions with the Company's senior management and legal and financial advisors, and overall considered these factors to be favorable to, and to support, its determination regarding the Asset Sale.

        This explanation of the Board's reasons for the Asset Sale and other information presented in this section is forward-looking in nature and should be read in light of the "Cautionary Statement Concerning Forward-Looking Statements."


Recommendation of Our Board of Directors

        The Board has determined that the terms and conditions of the Asset Purchase Agreement and the transactions contemplated thereby, including the Asset Sale, are desirable and in the best interests of EMCORE and its shareholders. This determination was made by a unanimous vote of the members of the Board. The Board unanimously recommends that our shareholders vote "FOR" the authorization of the Asset Sale Proposal.


Opinion of EMCORE's Financial Advisor

        EMCORE retained Raymond James as financial advisor on December 19, 2013. EMCORE retained Raymond James based on its qualifications and experience in providing financial advice, on its reputation as a nationally recognized investment banking firm and its experience in the aerospace and defense sector. As part of its investment banking business, Raymond James regularly engages in the valuation of assets, securities and companies in connection with various of asset and securities transactions, including mergers, acquisitions, going-private transactions, private placements and valuations for various other purposes, and in the determination of the adequacy of consideration in such transactions. Pursuant to that engagement, the Board requested that Raymond James evaluate the

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fairness, from a financial point of view, to EMCORE of the Consideration to be received by EMCORE in the Asset Sale pursuant to the Asset Purchase Agreement.

        At the September 16, 2014 meeting of the Board, representatives of Raymond James rendered its oral opinion, which was subsequently confirmed by delivery of a written opinion to the Board, dated September 16, 2014, as to the fairness, as of such date, from a financial point of view, to EMCORE of the Consideration to be received by EMCORE in the Asset Sale pursuant to the Asset Purchase Agreement, based upon and subject to the qualifications, assumptions, limitations and other matters considered in connection with the preparation of its opinion.

        The full text of the written opinion of Raymond James is attached as Annex C to this Proxy Statement. The summary of the opinion of Raymond James set forth in this document is qualified in its entirety by reference to the full text of such written opinion. Holders of EMCORE common stock are urged to read this opinion in its entirety.

        Raymond James provided its opinion for the information of the Board (solely in its capacity as such) in connection with, and for purposes of, its consideration of the Asset Sale and its opinion only addresses whether the Consideration to be received by EMCORE in the Asset Sale pursuant to the Asset Purchase Agreement was fair, from a financial point of view, to EMCORE. The opinion of Raymond James does not address any other term or aspect of the Asset Purchase Agreement or the Asset Sale. The Raymond James opinion does not constitute a recommendation to the Board or to any holder of EMCORE common stock as to how the Board, such shareholder or any other person should vote or otherwise act with respect to the Asset Sale or any other matter.

        In connection with its review of the proposed Asset Sale and the preparation of its opinion, Raymond James, among other things:

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        With EMCORE's consent, Raymond James assumed and relied upon the accuracy and completeness of all information supplied by or on behalf of EMCORE, or otherwise reviewed by or discussed with Raymond James, and Raymond James did not undertake any duty or responsibility to, nor did Raymond James, independently verify any of such information. Raymond James did not make or obtain an independent appraisal of the assets or liabilities (contingent or otherwise) of the Photovoltaics Business. With respect to the Projections and any other information and data provided to or otherwise reviewed by or discussed with Raymond James, Raymond James, with EMCORE's consent, assumed that the Projections and such other information and data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of EMCORE and Raymond James relied upon EMCORE to advise Raymond James promptly if any information previously provided became inaccurate or was required to be updated during the period of its review. Raymond James expressed no opinion with respect to the Projections or the assumptions on which they were based. Raymond James relied upon and assumed, without independent verification, that the final form of the Asset Purchase Agreement would be substantially similar to the Draft Agreement reviewed by Raymond James in all respects material to its analysis, and that the Asset Sale would be consummated in accordance with the terms of the Asset Purchase Agreement without waiver of or amendment to any of the conditions thereto. Furthermore, Raymond James assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the Asset Purchase Agreement were true and correct and that each party would perform all of the covenants and agreements required to be performed by it under the Asset Purchase Agreement without being waived. Raymond James also relied upon and assumed, without independent verification, that (i) the Asset Sale would be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory or other consents and approvals necessary for the consummation of the Asset Sale would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would have an effect on the Asset Sale, the Photovoltaics Business or EMCORE that would be material to its analysis or opinion. Raymond James was advised by EMCORE that there were no audited financial statements for the Photovoltaics Business and, accordingly, Raymond James relied upon and assumed, without independent verification and with EMCORE's consent, that there would be no information contained in any such financial statements not otherwise discussed with or reviewed by Raymond James that would have been material to its analyses or its opinion.

        Raymond James expressed no opinion as to the underlying business decision to affect the Asset Sale, the structure or tax consequences of the Asset Sale, or the availability or advisability of any alternatives to the Asset Sale. The Raymond James opinion is limited to the fairness, from a financial point of view, of the Consideration to be received by EMCORE. Raymond James expressed no opinion with respect to any other reasons (legal, business, or otherwise) that may support the decision of the Board to approve or consummate the Asset Sale. Furthermore, no opinion, counsel or interpretation was intended by Raymond James on matters that require legal, accounting or tax advice. Raymond James assumed that such opinions, counsel or interpretations had been or would be obtained from appropriate professional sources. Furthermore, Raymond James relied, with the consent of EMCORE, on the fact that EMCORE was assisted by legal, accounting and tax advisors, and, with the consent of EMCORE relied upon and assumed the accuracy and completeness of the assessments by EMCORE and its advisors, as to all legal, accounting and tax matters with respect to the Photovoltaics Business, EMCORE and the Asset Sale.

        In formulating its opinion, Raymond James considered only the Consideration to be received by EMCORE, and Raymond James did not consider, and its opinion did not address, the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or

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employees of EMCORE, or such class of persons, in connection with the Asset Sale whether relative to the Consideration or otherwise. Raymond James was not requested to opine as to, and its opinion did not express an opinion as to or otherwise address, among other things: (1) the fairness of the Asset Sale to the holders of any class of securities, creditors or other constituencies of EMCORE, or to any other party, except and only to the extent expressly set forth in the last sentence of its opinion or (2) the fairness of the Asset Sale to any one class or group of EMCORE's or any other party's security holders or other constituents vis-à-vis any other class or group of EMCORE's or such other party's security holders or other constituents (including, without limitation, the allocation of any consideration to be received in the Asset Sale amongst or within such classes or groups of security holders or other constituents). Raymond James expressed no opinion as to the impact of the Asset Sale on the solvency or viability of EMCORE or Purchaser or the ability of EMCORE or Purchaser to pay their respective obligations when they come due.

        The following summarizes the material financial analyses reviewed by Raymond James with the Board at its meeting on September 16, 2014, which material was considered by Raymond James in rendering its opinion. No company or transaction used in the analyses described below is identical or directly comparable to the Photovoltaics Business, EMCORE, or the contemplated Asset Sale.

        For purposes of its analysis, Raymond James reviewed a number of financial metrics, including the following (which were provided by EMCORE management):

        Fully Burdened Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")—EMCORE allocates approximately $5.5 million of annual corporate expenses to the Photovoltaics Business, which is the basis on which EMCORE measures the Photovoltaics Business' performance internally. Fully Burdened EBITDA represents the EBITDA of the Photovoltaics Business under EMCORE's ownership with the full allocation of corporate-level expenses.

        Pro Forma EBITDA—Management of EMCORE estimated that annual costs of only approximately $700,000 would be required to operate the Photovoltaics Business on a stand-alone basis. Therefore, Pro Forma EBITDA represents the EBITDA of the Photovoltaics Business without the allocation of any corporate-level expenses from EMCORE but rather with the $700,000 of expenses estimated by EMCORE management to operate the Photovoltaics Business on a stand-alone basis. With respect to these estimated costs, Raymond James, with EMCORE's consent, assumed that they were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of EMCORE and Raymond James relied upon EMCORE to advise Raymond James promptly if any information previously provided became inaccurate or was required to be updated during the period of its review. Raymond James expressed no opinion with respect to these estimated costs or the assumptions on which they were based.


        Selected Companies Analysis.     Raymond James analyzed the relative valuation multiples of nine selected publicly-traded companies in the aerospace and defense industry that it deemed relevant based on a comparison of overall company profiles and for which future financial estimates were publicly available, including:

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        Raymond James calculated various financial multiples for each company, including enterprise value (market value plus debt, plus minority interests, less cash and equivalents) compared to both revenue and EBITDA for the most recent actual twelve month results, referred to as TTM, as well as to Wall Street research analysts' projected revenue and EBITDA for the selected companies for calendar years ending December 31, 2014 and 2015, referred to as CY14 and CY15. The estimates published by Wall Street research analysts were not prepared in connection with the Asset Sale or at the request of Raymond James and may or may not prove to be accurate. Raymond James reviewed the mean, median, minimum and maximum relative valuation multiples of the selected public companies and compared them to corresponding valuation multiples for the Photovoltaics Business implied by the Consideration of $150 million in cash. The results of the selected public companies analysis are summarized below:

 
  Enterprise Value /
Revenue
  Enterprise Value /
EBITDA
 
 
  TTM   CY14E   CY15E   TTM   CY14E   CY15E  

Mean

    1.20x     1.20x     1.15x     8.5x     9.0x     8.1x  

Median

    1.15x     1.16x     1.17x     8.3x     8.8x     7.9x  

Minimum

    0.50x     0.57x     0.59x     5.6x     6.7x     6.3x  

Maximum

    1.82x     1.79x     1.68x     10.9x     11.0x     10.1x  

Consideration—Fully Burdened EBITDA

   
1.92x
   
2.07x
   
1.93x
   
12.0x
   
13.5x
   
11.0x
 

Consideration—Pro Forma EBITDA

    1.92x     2.07x     1.93x     8.8x     9.6x     8.3x  

        Furthermore, Raymond James applied the mean, median, minimum and maximum relative valuation multiples for each of the metrics to the actual and projected financial results of the Photovoltaics Business and then compared those implied enterprise values to the Consideration of $150 million in cash. The results of this are summarized below ($ in millions):

 
  Enterprise Value / Revenue   Enterprise Value / Fully
Burdened EBITDA
  Enterprise Value / Pro Forma
EBITDA
 
 
  TTM   CY14E   CY15E   TTM   CY14E   CY15E   TTM   CY14E   CY15E  

Mean

  $ 94.0   $ 86.5   $ 89.6   $ 105.6   $ 100.3   $ 110.1   $ 144.2   $ 140.5   $ 147.0  

Median

    90.1     83.8     91.5     104.0     97.9     107.4     141.9     137.1     143.4  

Minimum

    39.3     40.9     45.7     69.7     75.0     85.7     95.1     105.0     114.4  

Maximum

    142.6     129.3     130.9     136.4     122.2     137.4     186.2     171.2     183.5  


        Selected Transaction Analysis.     Raymond James analyzed publicly available information relating to selected acquisitions of aerospace and defense companies announced since January 1, 2011 and prepared a summary of the relative valuation multiples paid in these transactions. The acquisitions considered included asset sales, mergers and other transaction structures involving seller companies selected based on a comparison of overall company profiles, with acquirors including both strategic and financial acquirors. The announcement dates, target companies and acquirors in the selected transactions used in the analysis included:

        19-May-2014 Aeroflex Holding Corp.—Cobham PLC

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        02-Dec-2013 Airborne Systems Inc.—TransDigm Group Incorporated

        04-Nov-2013 Anaren, Inc.—Veritas Capital

        22-Oct-2013 Symmetricom, Inc.—Microsemi Corporation

        01-Oct-2013 Parvus Corporation—Curtiss-Wright Corporation

        12-Sep-2013 Lucix Corporation—HEICO Corporation

        28-May-2013 PECO, Inc.—Astronics Corporation

        15-May-2013 Arkwin Industries, Inc.—TransDigm Group Incorporated

        23-Apr-2013 RAE Systems Inc.—Honeywell International Inc.

        18-Mar-2013 EDAC Technologies Corp.—Greenbriar Equity Group LLC

        02-Jan-2013 Broad Reach Engineering Company—Moog, Inc.

        6-Dec-2012 Valent Aerostructures, LLC—LMI Aerospace, Inc.

        1-Oct-2012 Ceradyne, Inc.—3M Company

        23-Jul-2012 Pratt & Whitney Rocketdyne—GenCorp Inc.

        23-Jul-2012 GeoEye, Inc.—DigitalGlobe, Inc.

        26-Jun-2012 Space Systems / Loral, Inc.—Macdonald, Dettwiler & Associates Ltd.

        11-Jun-2012 Micronetics, Inc.—Mercury Computer Systems, Inc.

        29-May-2012 LeCroy Corporation—Teledyne Technologies Incorporated

        8-May-2012 Composite Engineering, Inc.—Kratos Defense & Security Solutions, Inc.

        10-Apr-2012 Thrane & Thrane A/S—Cobham PLC

        23-Mar-2012 C-MAC Aerospace Ltd.—API Technologies Corp.

        23-Dec-2011 KOR Electronics—Mercury Computer Systems, Inc.

        13-Dec-2011 Kollmorgen Electro-Optical—L-3 Communications Holdings, Inc.

        30-Sep-2011 Haigh-Farr Inc.—The Vitec Group plc

        15-Sep-2011 Trivec-Avant Corporation—Cobham plc

        13-Jun-2011 EMS Technologies, Inc.—Honeywell International Inc.

        17-May-2011 Integral Systems, Inc.—Kratos Defense & Security Solutions, Inc.

        04-May-2011 Souriau Group—Esterline Technologies Corporation

        20-Apr-2011 General Dynamics Corporation (Detection Systems)—Chemring Group PLC

        11-Apr-2011 AML Communications, Inc.—Microsemi Corporation

        04-Apr-2011 LaBarge, Inc.—Ducommun Incorporated

        28-Mar-2011 Spectrum Control, Inc.—API Technologies Corp.

        07-Feb-2011 Herley Industries, Inc.—Kratos Defense & Security Solutions, Inc.

        12-Jan-2011 LNX Corporation—Mercury Computer Systems, Inc.

        10-Jan-2011 FUNA International GmbH—L-3 Communications Holdings, Inc.

        10-Jan-2011 SenDEC Corporation—API Technologies Corp.

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        Raymond James examined valuation multiples of transaction enterprise value compared to the target companies' TTM revenue and EBITDA, in each case, where such information was publicly available. Raymond James reviewed the mean, median, minimum and maximum relative valuation multiples of the selected transactions and compared them to corresponding valuation multiples for the Photovoltaics Business implied by the Consideration. Furthermore, Raymond James applied the mean, median, minimum and maximum relative valuation multiples to the actual trailing twelve months revenue, Fully Burdened EBITDA and Pro Forma EBITDA of the Photovoltaics Business to determine the implied enterprise value and then compared those implied enterprise values to the Consideration of $150 million in cash. The results of the selected transactions analysis are summarized below:

 
  Enterprise
Value/TTM
Revenue
  Enterprise
Value/TTM
EBITDA
 

Mean

    1.52x     9.1x  

Median

    1.52x     9.0x  

Minimum

    0.51x     4.1  

Maximum

    2.50x     16.2x  

Consideration—Fully Burdened EBITDA

   
1.92x
   
12.0x
 

Consideration—Pro Forma EBITDA

    1.92x     8.8x  

Furthermore, Raymond James applied the mean, median, minimum and maximum relative valuation multiples for each of the metrics to the actual and projected financial results of the Photovoltaics Business and then compared those implied enterprise values to the Consideration of $150 million in cash. The results of this are summarized below ($ in millions):

 
  Enterprise Value /
Revenue
  Enterprise Value / Fully
Burdened EBITDA
  Enterprise Value / Pro
Forma EBITDA
 
 
 
TTM
 
TTM
 
TTM
 

Mean

  $ 119.0   $ 113.4   $ 154.8  

Median

    119.0     112.7     153.9  

Minimum

    40.2     50.8     69.4  

Maximum

    195.6     202.0     275.7  


        Discounted Cash Flow Analysis.     Raymond James analyzed the discounted present value of the projected free cash flows of the Photovoltaics Business for the twelve months ending September 30, 2014 through September 30, 2018 using both Fully Burdened EBITDA and Pro Forma EBITDA. Raymond James used unleveraged free cash flows, defined as earnings before interest, after taxes, plus depreciation and amortization, less capital expenditures, less investment in working capital. Based upon EMCORE's net operating losses being carried forward, management of EMCORE informed Raymond James that it did not expect EMCORE to pay corporate taxes during the period of the Projections.

        The discounted cash flow analysis was based on the Projections. Consistent with the periods included in the Projections, Raymond James used trailing twelve months September 30, 2018 as the final year for the analysis and applied multiples, ranging from 7.5x to 9.5x, to trailing twelve months September 30, 2018 Fully Burdened and Pro Forma EBITDA in order to derive a range of terminal values for the Photovoltaics Business in 2018.

        The projected unleveraged free cash flows and terminal values were discounted using rates ranging from 13.0% to 15.0%, which reflected the weighted average after-tax cost of debt and equity capital associated with executing EMCORE's business plan for the Photovoltaics Business. Raymond James reviewed the range of enterprise values derived in the discounted cash flow analysis and compared

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them to the Consideration of $150 million in cash. The results of the discounted cash flow analysis are summarized below ($ in millions):

 
  Enterprise Value
based on Fully Burdened EBITDA
  Enterprise Value
based on Pro Forma EBITDA
 

Minimum

  $ 104.3   $ 140.8  

Maximum

  $ 130.8   $ 175.2  


        Additional Considerations.     The preparation of a fairness opinion is a complex process and is not susceptible to a partial analysis or summary description. Raymond James believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering the analyses taken as a whole, would create an incomplete view of the process underlying its opinion. In addition, Raymond James considered the results of all such analyses and did not assign relative weights to any of the analyses, but rather made qualitative judgments as to significance and relevance of each analysis and factor, so the ranges of valuations resulting from any particular analysis described above should not be taken to be the view of Raymond James as to the actual value of the Photovoltaics Business.

        In performing its analyses, Raymond James made numerous assumptions with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond the control of EMCORE. The analyses performed by Raymond James are not necessarily indicative of actual values, trading values or actual future results which might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. Such analyses were provided to the Board (solely in its capacity as such) and were prepared solely as part of the analysis of Raymond James of the fairness, from a financial point of view, to EMCORE of the Consideration to be received by EMCORE in connection with the proposed Asset Sale pursuant to the Asset Purchase Agreement. The analyses do not purport to be appraisals or to reflect the prices at which companies may actually be sold, and such estimates are inherently subject to uncertainty. The opinion of Raymond James was one of many factors taken into account by the Board in making its determination to approve the Asset Sale. Neither Raymond James's opinion nor the analyses described above should be viewed as determinative of the Board's or EMCORE management's views with respect to the Photovoltaics Business, EMCORE, or the Asset Sale. Raymond James provided advice to EMCORE with respect to the proposed Asset Sale. Raymond James did not, however, recommend any specific amount of consideration to the Board or that the Consideration constituted the only appropriate consideration for the Asset Sale. EMCORE placed no limits on the scope of the analysis performed, or opinion expressed, by Raymond James.

        The Raymond James opinion was necessarily based upon market, economic, financial and other circumstances and conditions existing and disclosed to it on September 15, 2014, and any material change in such circumstances and conditions may affect the opinion of Raymond James, but Raymond James does not have any obligation to update, revise or reaffirm that opinion. Raymond James relied upon and assumed, without independent verification, that there had been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Photovoltaics Business since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Raymond James that would be material to its analyses or its opinion, and that there was no information or any facts that would make any of the information reviewed by Raymond James incomplete or misleading in any material respect. Raymond James also relied upon and assumed, without independent verification, at the direction of EMCORE, that any adjustments to the Consideration pursuant to the Asset Purchase Agreement will not be material to its analyses or its opinion.

        During the two years preceding the date of Raymond James's written opinion, Raymond James has not been engaged by, performed services for or received any compensation from the Company (other

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than any amounts that were paid or may be paid to Raymond James under the engagement letter described in this proxy statement pursuant to which Raymond James was retained as a financial advisor to the Company to assist in reviewing strategic alternatives). Raymond James's engagement pursuant to the engagement letter covers additional services unrelated to the Asset Sale which Raymond James has performed concurrently with its services related to the Asset Sale and for which Raymond James expects to receive customary compensation in accordance with the terms of the engagement letter, none of which is contingent upon the closing of the Asset Sale. During the two years preceding the date of Raymond James's written opinion, Raymond James has not been engaged by, performed services for or received any compensation from the Veritas Fund or Purchaser.

        EMCORE will pay Raymond James a fee of $2.4 million for advisory services in connection with the Asset Sale, against which $400,000 of the opinion fees of $550,000 and a previously paid retainer of $50,000 will be credited and the remaining $1.8 million of which is contingent upon the closing of the Asset Sale. EMCORE also agreed to reimburse Raymond James for its expenses incurred in connection with its services, including the fees and expenses of its counsel, and will indemnify Raymond James against certain liabilities arising out of its engagement.

        Raymond James is actively involved in the investment banking business and regularly undertakes the valuation of investment securities in connection with public offerings, private placements, business combinations and similar transactions. In the ordinary course of business, Raymond James may trade in the securities of EMCORE for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. Raymond James may provide investment banking, financial advisory and other financial services to EMCORE and/or Veritas Capital and its affiliates, certain of its portfolio companies, or other participants in the Asset Sale in the future, for which Raymond James may receive compensation.


Prospective Financial Information

        EMCORE does not as a matter of course make public projections as to future revenues, gross margins, operating income or other results due to, among other reasons, business volatility and the uncertainty of the underlying assumptions and estimates. However, EMCORE is including selected prospective financial information for the Photovoltaics Business in this Proxy Statement to provide our shareholders with access to certain non-public unaudited projected financial information that was made available to our board of directors and Raymond James in connection with the Asset Sale.

        The unaudited prospective financial information was not prepared with a view toward public disclosure, and the inclusion of this information should not be regarded as an indication that either EMCORE or Raymond James or any other recipient of this information considered, or now considers, to be predictive of actual future results. EMCORE does not assume any responsibility for the accuracy of this information. The selected prospective financial information is not being included in this Proxy Statement to influence an EMCORE shareholder's decision whether to vote in favor of Asset Sale Proposal, but because it represents prospective financial information prepared by management of EMCORE that was used for purposes of the financial analyses performed by our financial advisor.

        The unaudited prospective financial information was not prepared with a view toward complying with U.S. generally accepted accounting principles ("GAAP"), the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In particular, the unaudited prospective financial information excludes non-cash stock-based compensation and any severance costs. Accordingly, the unaudited prospective financial information is not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. This non-GAAP financial data should be considered in addition to, not as a substitute for or a more appropriate indicator of, operating results, cash flows, or other measures of financial performance

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prepared in accordance with GAAP. Neither EMCORE's independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. EMCORE's Annual Report on Form 10-K for the fiscal year ended September 30, 2013, which is incorporated by reference into this Proxy Statement and includes the report of EMCORE's independent registered public accounting firm, relates to EMCORE's historical financial information. Such report does not extend to the unaudited prospective financial information and should not be read to do so.

        The unaudited prospective financial information relied upon by Raymond James in connection with its opinion rendered to the Board on September 16, 2014 does not take into account any circumstances or events occurring after September 13, 2014, the date such information was prepared. The unaudited prospective financial information relied upon by Raymond James in connection with its opinion rendered to the Board on September 7, 2014, which is presented here for informational purposes only and was not relied upon in preparation of its opinion rendered to the Board by Raymond James on September 16, 2014, does not take into account any circumstances or events occurring after August 26, 2014, the date such information was prepared. EMCORE has made publicly available its actual results of operations for its fiscal year ended September 30, 2013 and its fiscal quarters ended December 31, 2013, March 31, 2014 and June 30, 2014. Shareholders are urged to read EMCORE's Annual Report on Form 10-K for the fiscal year ended September 30, 2013 and Quarterly Reports on Form 10-Q for the quarters ended December 31, 2013, March 31, 2014 and June 30, 2014, which are incorporated by reference into this Proxy Statement, to obtain this information. The unaudited prospective financial information does not give effect to the Asset Sale.

        The following table presents selected unaudited prospective financial information prepared by EMCORE as of August 26, 2014 for the fiscal years ending 2014 through 2018 provided to Raymond James in connection with the opinion rendered to the Board on September 7, 2014:

 
  Fiscal Year Ended September 30  
 
  2014E   2015E   2016E   2017E   2018E  
 
  (in $ millions)
 

Revenue

  $ 74.1   $ 78.0   $ 82.4   $ 86.5   $ 90.9  

EBITDA (fully burdened)

    12.9     13.2     13.8     15.3     16.5  

EBITDA (pro forma)

    17.9     17.9     18.9     20.3     21.4  

Unlevered Free Cash Flow (fully burdened)

    15.7     8.7     11.0     11.7     12.9  

Unlevered Free Cash Flow (pro forma)

    20.7     13.5     16.1     16.6     17.8  

        The following table presents selected unaudited prospective financial information prepared by EMCORE as of September 13, 2014 for the fiscal years ending 2014 through 2018 provided to Raymond James in connection with its opinion rendered to the Board on September 16, 2014:

 
  Fiscal Year Ended September 30  
 
  2014E   2015E   2016E   2017E   2018E  
 
  (in $ millions)
 

Revenue

  $ 74.1   $ 76.5   $ 82.4   $ 86.5   $ 90.9  

EBITDA (fully burdened)

    13.3     13.3     13.8     15.3     16.5  

EBITDA (pro forma)

    17.9     18.0     18.9     20.3     21.4  

Unlevered Free Cash Flow (fully burdened)

    16.0     8.8     11.0     11.7     12.9  

Unlevered Free Cash Flow (pro forma)

    20.7     13.5     16.1     16.6     17.8  

See "Proposal No. 1: The Asset Sale—Opinion of EMCORE's Financial Advisor—Discounted Cash Flow Analysis" for a summary of how fully burdened and pro forma EBITDA were derived. Unlevered

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free cash flow is a non-GAAP financial performance measure that represents EBITDA less investments in working capital, capital expenditures and taxes. The fully burdened unlevered free cash flow prospective financial information was derived from the fully burdened EBITDA prospective financial information and the pro forma unlevered free cash flow prospective financial information was derived from the pro forma EBITDA prospective financial information.

        Although presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions with respect to the markets in which the Company operates, the opportunities for revenue growth, economic conditions both generally and specifically within our industries, the demand for EMCORE's products and services, and matters specific to EMCORE's business, all of which are difficult to predict and many of which are beyond EMCORE's control. The unaudited prospective financial information was prepared solely for internal use and is subjective in many respects. As a result, although this information was prepared by management of EMCORE based on estimates and assumptions that management believed were reasonable at the time, there can be no assurance that the prospective results would be realized or that actual results would not be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple years, such information by its nature becomes less predictive with each successive year.

        Readers of this Proxy Statement are cautioned not to place undue reliance on the unaudited prospective financial information set forth above. Shareholders are urged to review EMCORE's Annual Report on Form 10-K for the fiscal year ended September 30, 2013, Quarterly Reports on Form 10-Q for the quarters ended December 31, 2013, March 31, 2014 and June 30, 2014 and future SEC filings for a description of risk factors with respect to EMCORE's business. See "Cautionary Statement Regarding Forward-Looking Statements" and "Where You Can Find More Information." No representation is made by EMCORE, Purchaser or any other person to any shareholder regarding the ultimate performance of EMCORE compared to the unaudited prospective financial information. No representation was made by EMCORE to Purchaser in the Asset Purchase Agreement concerning this information.

        Except as required by applicable securities laws, EMCORE does not intend to update or otherwise revise the prospective financial information to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such prospective financial information are no longer appropriate.


Activities of EMCORE Following the Asset Sale

        Among its reasons for approving the Asset Sale, the Board believes the proceeds from the Asset Sale will better capitalize the Company and enable consideration of a broader range of options to provide value to the Company's shareholders, including, among other things, the possible distribution of cash to the Company's shareholders through one or more special dividends, the repurchase of outstanding shares of the Company's common stock, investing the net proceeds in our Other Businesses, or a combination thereof. The Board (and the Strategy Committee) will continue to review the Company's ongoing strategy, business plan and long-term forecasts for our Other Businesses, as well as the Company's strategic alternatives prior to and following the consummation of the Asset Sale. Following the Asset Sale, the Company will continue to be a public company operating under the name EMCORE Corporation, and the Other Businesses will account for all of the Company's revenues.


U.S. Federal Income Tax Consequences of the Asset Sale

        The following discussion is a general summary of the anticipated U.S. federal income tax consequences of the Asset Sale. This summary is based upon existing United States federal tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has

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been sought from the Internal Revenue Service (the "IRS") with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. In addition, this summary does not discuss any non-United States, alternative minimum tax, state, or local tax considerations.

        The proposed Asset Sale by us is entirely a corporate action. Our U.S. shareholders will not realize any gain or loss for U.S. federal income tax purposes as a result of the Asset Sale.

        The proposed Asset Sale will be treated as a sale of corporate assets in exchange for cash and the assumption of certain liabilities. The proposed Asset Sale is a taxable transaction for U.S. federal income tax purposes, and we anticipate that we will realize a gain for U.S. federal income tax purposes as a result of the Asset Sale. However, if we realize any gain as a result of the Asset Sale, we anticipate that our tax attributes, including our net operating loss carry forwards, will be available to offset all or a portion of our U.S. federal income tax liability resulting from such gain. The determination of whether we will realize gain or loss on the Asset Sale and whether and to what extent our tax attributes will be available is highly complex and is based in part upon facts that will not be known until the completion of the Asset Sale. See "Risk Factors—we may undergo, or may already have undergone, an 'ownership change' within the meaning of Section 382 of the Code, which could affect our ability to offset gains, if any, realized in the Asset Sale against our net operating losses and certain of our tax credit carryovers." Therefore, it is possible that we will incur a U.S. federal income tax liability as a result of the proposed Asset Sale.


Accounting Treatment of the Asset Sale

        The Asset Sale will be accounted for as a "sale" by EMCORE, as that term is used under generally accepted accounting principles, for accounting and financial reporting purposes.


Government Approvals

        Under the HSR Act and the rules and regulations promulgated thereunder, Purchaser and EMCORE are required to make certain filings with the Antitrust Division of the U.S. Department of Justice (the "DOJ"), and the U.S. Federal Trade Commission (the "FTC"). The Asset Sale may not be consummated until the applicable waiting periods under the HSR Act have expired or have been terminated. Purchaser and EMCORE each filed their respective notification and report forms with the DOJ and the FTC under the HSR Act on October 1, 2014 and early termination of the waiting period under the HSR Act was granted on October 15, 2014.

        During or after the statutory waiting periods and clearance of the Asset Sale, and even after completion of the Asset Sale, either the DOJ, the FTC or other U.S. governmental authorities could take action under the antitrust laws with respect to the Asset Sale as they deem necessary or desirable in the public interest, including seeking to enjoin the completion of the Asset Sale, to rescind the Asset Sale or to conditionally approve the Asset Sale upon the divestiture of assets of Purchaser's or EMCORE's or to impose restrictions on the operation of the combined company post-closing. Moreover, in some jurisdictions, a competitor, customer, state Attorney General or other third party could initiate a private action under the antitrust laws challenging or seeking to enjoin the Asset Sale, before or after it is completed.

        We believe we are not required to make any other material filings or obtain any material governmental consents or approvals before the consummation of the Asset Sale. If any approvals, consents or filings are required to consummate the Asset Sale, we will seek or make such consents, approvals or filings as promptly as possible.

        There can be no guarantee that the Asset Sale will not be challenged on antitrust grounds or, if such challenge is made, that the challenge will not be successful. Similarly, there can be no assurance

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that Purchaser or EMCORE will obtain the regulatory approvals necessary to consummate the Asset Sale or that the granting of these approvals will not involve the imposition of conditions to the consummation of the Asset Sale or require changes to the terms of the Asset Sale. These conditions or changes could result in the conditions to the Asset Sale not being satisfied prior to the Outside Date, as defined under the Asset Purchase Agreement, which would allow Purchaser to terminate the Asset Purchase Agreement. See "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement—Termination of the Asset Purchase Agreement."


No Dissenters' Rights

        Shareholders may vote against the authorization of the Asset Sale Proposal, but under New Jersey law dissenters' rights are not provided to shareholders in connection with the Asset Sale because our common stock was listed on a national securities exchange as of the Record Date.


Interests of Certain Persons in the Asset Sale

        As described below, our executive officers may have interests in the Asset Sale that are different from, or are in addition to, the interests of our shareholders generally. Our board of directors was aware of these interests and considered them, among other matters, in approving the Asset Purchase Agreement.

        Our executive officers will become fully vested in the restricted stock units held by them upon consummation of the Asset Sale (or as described below, upon an earlier qualifying termination of their employment). Each restricted stock unit ("RSU") represents the right to receive one share of our common stock. The following table sets forth, for each of our executive officers, the number of restricted stock units credited to them as of September 30, 2014:

Executive Officer
  Number of RSUs  

Hong Q. Hou, Ph.D. 

    110,936  

Mark B. Weinswig

    81,333  

Monica Van Berkel

    52,256  

Alfredo Gomez

    52,000  

For each of the executive officers, the following number of units will vest before the January 31, 2015 in the ordinary course—even if the Asset Sale has not yet occurred—provided the executive's employment has not yet terminated: Dr. Hou 44,270; Mr. Weinswig 31,333; Ms. Van Berkel 20,590; and Mr. Gomez 20,334.

        In addition, as of October 11, 2014, Mr. Weinswig held unvested stock options to purchase 15,000 shares of our common stock at a per-share price of $3.80. The vesting of those options will accelerate upon consummation of the Asset Sale.

        All other equity incentive compensation awards held by our executive officers are fully vested.

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        Other than Dr. Hou, our executive officers are party to employment agreements with us that provide them with certain severance benefits. If the executive's employment is terminated by us without cause or by the executive for good reason within three years following the consummation of the Asset Sale, the executive will receive the following benefits, provided that he or she executes and does not revoke a general release of claims against the Company and complies with the confidentiality, nondisclosure, nonsolicitation and other restrictive covenants set out in the employment agreement: (i) continued payment of base salary for a period of one year plus two weeks, plus an additional two weeks for each whole year that the executive was employed by us; (ii) continued payment of the employer portion of medical benefits for up to 18 months; (iii) payment of outplacement services with a value up to $15,000; and (iv) immediate vesting of outstanding equity awards (excluding performance-based awards, although no currently outstanding equity awards are performance-based).

        The Company is party to a Separation Agreement and General Release with Dr. Hou pursuant to which, as of January 2, 2015 or, if later, fifteen days following the date on which the Company hires a successor Chief Executive Officer, Dr. Hou will cease to serve as a director of the Company and as an officer or employee with the Company and its affiliates. During the period preceding the separation date, Dr. Hou will continue to receive his existing compensation and benefits. Pursuant to his separation agreement and as contemplated by a prior employment agreement between the Company and Dr. Hou, upon his termination Dr. Hou will receive continued base pay for 86 weeks, continued payment of the employer portion of medical benefits for up to 18 months, payment of outplacement services with a value up to $15,000 and immediate vesting of outstanding equity awards. In consideration for such benefits, Dr. Hou must enter into a release of claims against the Company and comply with the confidentiality, nondisclosure, nonsolicitation and other restrictive covenants set out in his employment agreement.

        The Company is party to retention award letter agreements with each of its executive officers. Pursuant to the agreements, the executives will be entitled to the following payments if the Asset Sale closes before September 17, 2015: Dr. Hou $921,500; Mr. Weinswig $526,500; Ms. Van Berkel $330,000; and Mr. Gomez $330,000. One-half of the applicable amount is payable upon the closing of the Asset Sale and the remainder is paid six months after closing, in each case generally subject to continued employment. If an executive (other than Dr. Hou) is terminated without cause or, subject to the waiver described below, terminates for good reason or if Dr. Hou is terminated under circumstances entitling him to payment under his separation agreement described above, any unpaid retention attributable to a prior closing of the Asset Sale is immediately payable in full and any retention attributable to a closing that is consummated within 60 days after termination is immediately payable in full. The executives (other than Dr. Hou) agree not to assert that any changes in their position, duties or responsibilities or other terms and conditions of employment attributable to the disposition of only the Company's telecommunications or broadband businesses individually constitute good reason. If the executive subsequently successfully asserts good reason in connection with the Asset Sale by reason of a diminution in position, duties or responsibilities or other terms and conditions of employment, the severance otherwise payable to the executive will be reduced by any retention already paid.


Quantification of Potential Payments to Named Executive Officers in Connection with the Asset Sale

        In accordance with Item 402(t) of Regulation S-K, the table below sets forth the estimated amounts of compensation that are based on or otherwise relate to the Asset Sale and that may be payable to those individuals who were listed in the "Summary Compensation Table" that was

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incorporated into our Annual Report on Form 10-K for the fiscal year ended September 30, 2013, or our "named executive officers." These amounts have been calculated assuming the Asset Sale is consummated on September 30, 2014, and, where applicable, assuming each named executive officer experiences a qualifying termination of employment as of that date. To the extent applicable, calculations of cash severance are based on the named executive officer's current base salary. See the beginning of this section for further information about the compensation disclosed in the table below. The amounts indicated below are estimates of amounts that would be payable to the named executive officers and the estimates are based on multiple assumptions that may or may not actually occur, including assumptions described in this Proxy Statement. Some of the assumptions are based on information not currently available and as a result the actual amounts, if any, received by a named executive officer may differ in material respects from the amounts set forth below.


Golden Parachute Compensation

Name
  Cash(2)   Equity(3)   Pension /
Non-Qualified
Deferred
Compensation
  Perquisites /
Benefits(4)
  Tax
Reimbursement
  Other   Total(5)  

Hong Q. Hou, Ph.D. 

  $ 1,666,466   $ 642,319     0   $ 32,687     0     0   $ 2,341,472  

Mark B. Weinswig

    826,500     500,768     0     28,148     0     0     1,355,416  

Monica Van Berkel

    664,424     302,562     0     32,687     0     0     999,673  

Alfredo Gomez

    617,692     301,080     0     6,453     0     0     925,225  

Christopher Larocca(1)

    0     0     0     0     0     0     0  

(1)
Mr. Larocca resigned from his position as Chief Operating Officer of the Company effective November 30, 2013. He is not entitled to any type of compensation that is based on or otherwise relates to the Asset Sale.

(2)
Cash. Represents the value of cash severance payments payable under the applicable named executive officer's employment or separation agreement (Dr. Hou $744,966 (payable over 86 weeks); Mr. Weinswig $300,000 (payable over 60 weeks); Ms. Van Berkel $334,424 (payable over 74 weeks); and Mr. Gomez $287,692 (payable over 68 weeks)) and amounts payable under the applicable named executive officer's retention award letter agreement (Dr. Hou $921,500; Mr. Weinswig $526,500; Ms. Van Berkel $330,000; and Mr. Gomez $330,000) one half of which is payable upon consummation of the Asset Sale and the remainder of which generally is payable six months after closing, in each case as more fully described in "Proposal No. 1: The Asset Sale—Interests of Certain Persons in the Asset Sale." The severance payments are subject to execution and nonrevocation of a general release of claims against the Company and compliance with certain confidentiality, nondisclosure, nonsolicitation and other restrictive covenants.

(3)
Equity. Represents the value of accelerated vesting of the applicable named executive officer's equity awards that will occur by reason of consummation of the Asset Sale. The values shown are based on a per-share value of $5.79, the average closing price of a share of our common stock over the first five business days following the first public announcement of the proposed Asset Sale transaction on September 17, 2014, which is the amount that Regulation S-K requires that we use for purposes of this table. If the Asset Sale were consummated on January 31, 2015, additional equity award vesting would have occurred in the ordinary course subject to the continued employment of the respective named executive officer and the amounts shown in the table instead would be as follows: Dr. Hou $385,996; Mr. Weinswig $319,350; Ms. Van Berkel $183,346; and Mr. Gomez $183,346.

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(4)
Perquisites/Benefits. Represents the value of continued medical insurance coverage costs payable by the Company upon a qualifying termination of employment under the applicable named executive officer's employment or separation agreement.

(5)
Total. The following table shows, for each named executive officer, the amounts of golden parachute compensation which are single trigger or double trigger in nature. Single trigger amounts include the amounts shown in the "Equity" column and the amount in the "Cash" column that is attributable to the portion of the retention award that will be payable immediately upon consummation of the Asset Sale. Double trigger amounts include the amounts shown in the "Perquisites/Benefits" column and the amount in the "Cash" column that is attributable to the portion of the retention award that is payable subject to continued employment or a qualifying termination of employment following the Asset Sale.

Named Executive Officer
  Single Trigger   Double Trigger  

Dr. Hou

  $ 1,103,069   $ 1,228,524  

Mr. Weinswig

    764,018     581,623  

Ms. Van Berkel

    467,562     522,232  

Mr. Gomez

    466,080     459,112  

Indemnification of Officers and Directors

        We have also entered into our standard form of indemnification agreement with each of our directors and executive officers, which is in addition to the indemnification provided for in our restated certificate of incorporation, as amended. These agreements, among other things, provide for indemnification of our directors and executive officers for a number of expenses, including attorneys' fees and other related expenses, as well as certain judgments, fines, penalties and settlement amounts incurred by any such person in any action, suit or proceeding, including any action by or in the right of the Company, arising out of such person's services as a director or executive officer of the Company or any other company or enterprise to which the person provided services at our request.

        Following the Asset Sale, EMCORE will continue to indemnify each of our current and former directors and executive officers to the extent permitted under New Jersey law, our restated certificate of incorporation, as amended, and the indemnification agreements.


The Asset Purchase Agreement

        Below and elsewhere in this Proxy Statement is a summary of the material terms of the Asset Purchase Agreement, a copy of which is attached to this Proxy Statement as Annex A and which we incorporate by reference into this Proxy Statement. We encourage you to carefully read the Asset Purchase Agreement in its entirety as the summaries contained herein may not contain all of the information about the Asset Purchase Agreement that is important to you.

        The Asset Purchase Agreement has been included to provide you with information regarding its terms, and we recommend that you carefully read the Asset Purchase Agreement in its entirety. Except for its status as a contractual document that establishes and governs the legal relations among the parties thereto with respect to the Asset Sale, we do not intend for its text to be a source of factual, business or operational information about us. The Asset Purchase Agreement contains representations, warranties and covenants that are qualified and limited, including by information in the disclosure schedule referenced in the Asset Purchase Agreement that the parties delivered in connection with the execution of the Asset Purchase Agreement. Representations and warranties may be used as a tool to allocate risks between the respective parties to the Asset Purchase Agreement, including where the parties do not have complete knowledge of all facts, instead of establishing such matters as facts. Furthermore, the representations and warranties may be subject to different standards of materiality applicable to the contracting parties, which may differ from what

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may be viewed as material to shareholders. These representations may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this Proxy Statement. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the Asset Purchase Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this Proxy Statement. You should not rely on its representations, warranties or covenants as characterizations of the actual state of facts or condition of EMCORE or any of our affiliates.

The Asset Sale

        Upon the terms and subject to the conditions of the Asset Purchase Agreement, including the satisfaction of the closing conditions, Purchaser will purchase substantially all of the assets of EMCORE's Photovoltaics Business.

        The assets of EMCORE to be purchased by Purchaser, referred to in this Proxy Statement as the "acquired assets," include:

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        Purchaser will not purchase, and EMCORE will retain, certain excluded assets, including:

        At the closing of the Asset Sale, Purchaser will assume and indemnify and hold EMCORE harmless from and against any and all losses attributable to, any and all liabilities of EMCORE and EMCORE's affiliates to the extent they primarily relate to or arise out of the Photovoltaics Business,

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the acquired assets or the Photovoltaics Business employees who accept offers of employment with Purchaser or one of its affiliates effective as of the closing of the Asset Sale, collectively referred to in this Proxy Statement as the "transferred employees," whenever such losses or liabilities arise, exist or occur, other than the excluded liabilities discussed below.

        At the closing of the Asset Sale, we will retain, and Purchaser will not assume or have any responsibility for, the following liabilities:

Consideration to be Received by EMCORE

        The consideration for the Asset Sale will be $150 million in cash (subject to adjustment for fluctuations from a target net working capital and reimbursement to EMCORE of the Transferred Employee Accrual) and the assumption by Purchaser of the assumed liabilities of EMCORE.

Indemnification by Purchaser

        From and after the closing of the Asset Sale, Purchaser will indemnify, hold harmless and reimburse EMCORE and its affiliates, officers, directors, agents, successors and assigns from and against and in respect of any and all losses, damages, costs, expenses (including any reasonable and documented attorneys' fees), fines, penalties, disbursements and amounts paid in settlement, collectively

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referred to herein as "losses," which any such indemnified party may actually suffer or incur to the extent arising out of or related to:

Indemnification by EMCORE

        From and after the closing of the Asset Sale, EMCORE will indemnify, hold harmless and reimburse Purchaser and its affiliates, officers, directors, agents, successors and assigns, collectively referred to in this Proxy Statement as the "Purchaser indemnified parties," from and against and in respect of any and all losses which any such indemnified party may actually suffer or incur to the extent arising out of or related to:

        EMCORE's maximum aggregate liability for claims made pursuant to (i) and (ii) above in this section is limited to the purchase price under the Asset Purchase Agreement. Except for fraud and intentional misrepresentation, (a) indemnification pursuant to the Asset Purchase Agreement is the sole and exclusive remedy of Purchaser for any indemnifiable losses and (b) indemnification pursuant to the representations and warranties insurance policy purchased by and issued to Purchaser in respect of the Asset Purchase Agreement is the sole and exclusive remedy of Purchaser for any and all losses sustained or incurred by any Purchaser indemnified party by reason of, resulting from or arising out of any breach or inaccuracy in any of EMCORE's representations or warranties in the Asset Purchase Agreement (other than the Fundamental Representations).

Representations and Warranties

        The Asset Purchase Agreement contains certain representations and warranties made by EMCORE regarding, among other things:

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        In addition, Purchaser made certain representations and warranties to us regarding, among other things:

        Many of our representations and warranties contained in the Asset Purchase Agreement are qualified by materiality or possess a Material Adverse Effect standard. For purposes of our representations and warranties in the Asset Purchase Agreement, "Material Adverse Effect" is defined to mean any change, event, occurrence or effect that:

provided, however, that, solely for the purposes of the first bullet above, none of the following will constitute (either alone or in combination), or be taken into account in determining whether there has been, a Material Adverse Effect:

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provided, further, however, that any matter described in the second, fourth and fifth bullets above that disproportionately adversely impacts the Photovoltaics Business, taken as a whole, relative to other similarly situated companies in the industries and geographic locations in which the Photovoltaics Business participates may be considered and taken into account in determining whether there has been a Material Adverse Effect.

Covenants Relating to the Conduct of the Photovoltaics Business

        We have agreed in the Asset Purchase Agreement that we, between signing and closing of the Asset Purchase Agreement, will, and will cause our affiliates, to:

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No Solicitation/Change in Board Recommendation

        The Asset Purchase Agreement requires EMCORE and its subsidiaries to, and to direct their representatives to, cease and cause to be terminated any discussions or negotiations regarding any Alternative Transaction Proposal, and requires that EMCORE and its subsidiaries will not, and will use their reasonable best efforts to cause their representatives not to, directly or indirectly:

        At any time prior to obtaining the requisite approval of EMCORE's shareholders, EMCORE may, in response to an unsolicited, written bona fide Alternative Transaction Proposal by a third party received after the date of the Asset Purchase Agreement (that did not result from EMCORE's breach of the no solicitation/change in Board recommendation provisions of the Asset Purchase Agreement) (i) furnish pursuant to an Acceptable Confidentiality Agreement any information with respect to EMCORE and its subsidiaries to such third party making such Alternative Transaction Proposal, provided that any such information must be provided to Purchaser simultaneously with or promptly following its provision to such third party to the extent reasonably practicable and not previously made available to Purchaser, and (ii) participate in discussions and negotiations with such Person regarding an Alternative Transaction Proposal if:

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        EMCORE must notify Purchaser promptly (and in any event within one business day) after receipt of any Alternative Transaction Proposal or any inquiries relating to an Alternative Transaction Proposal or any request for information from, or any negotiations sought to be initiated or continued with, either EMCORE or its representatives concerning an Alternative Transaction Proposal, including (i) a copy of any written Alternative Transaction Proposal and any other documents provided or (ii) in respect of the Alternative Transaction Proposal, inquiry or request not made in writing, a written summary of the material terms of such Alternative Transaction Proposal, inquiry or request, including the identity of the person or persons making the Alternative Transaction Proposal, inquiry or request. EMCORE must keep Purchaser reasonably informed on a prompt basis (and in any event within one business day) of the status or developments regarding any Alternative Transaction Proposal, inquiry or request, including any discussions with respect to or amendments or proposed amendments thereto.

        Except as described below, EMCORE's board of directors (or a committee thereof) may not (i) change, qualify, withdraw, modify or fail to make, or propose to change, qualify, withdraw or modify (publicly or otherwise), the Board's recommendation of the Asset Purchase Agreement and the Asset Sale in a manner adverse to Purchaser, (ii) make any public statement or take any public action inconsistent with such recommendation, (iii) approve or recommend, or publicly propose to approve or recommend to EMCORE's shareholders any Alternative Transaction Proposal or (iv) take formal action or make any recommendation or public statement in connection with a tender offer or exchange offer not conditioned on the sale of the Photovoltaics Business pursuant to the Asset Purchase Agreement other than (1) a recommendation, in a Solicitation/Recommendation Statement on Schedule 14D-9, against such offer within ten business days after the commencement of such offer and at least two business days prior to the Special Meeting or (2) a "stop, look and listen" communication pursuant to Rule 14d-9(f) of the Exchange Act (any of the foregoing actions, a "Seller Adverse Recommendation Change"), except that any public statement other than a "stop, look and listen" statement of the type contemplated by Rule 14d-9(f) under the Exchange Act or a recommendation against acceptance of such tender or exchange offer will be deemed to be a Seller Adverse Recommendation Change or (v) authorize EMCORE or any of its subsidiaries to enter into any Seller Acquisition Agreement.

        Notwithstanding the foregoing, but subject to the provisions set forth in the following paragraph, at any time prior to obtaining the approval of EMCORE's shareholders, the Board (or a committee thereof) may make a Seller Adverse Recommendation Change (i) if the Board receives an unsolicited, written bona fide Alternative Transaction Proposal by a third party (that did not result from EMCORE's breach of the no solicitation/change in Board recommendation provisions of the Asset Purchase Agreement and that has not been withdrawn) that the Board (or a committee thereof), after receiving the advice of outside legal counsel, determines in good faith (A) after also receiving the advice of independent financial advisors of nationally recognized reputation, constitutes a Superior Proposal and (B) that the failure to take such action would be inconsistent with its fiduciary duties under applicable law, except that EMCORE may not enter into a Seller Acquisition Agreement unless the Asset Purchase Agreement is terminated by EMCORE in accordance with the terms of the Asset Purchase Agreement and the $5,330,000 termination fee has been paid to Purchaser or (ii) if an

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Intervening Event (as defined below) has occurred, if the Board (or a committee thereof), after receiving the advice of outside legal counsel, determines in good faith that, in light of such Intervening Event, the failure to take such action would be inconsistent with its fiduciary duties under applicable law.

        The Board may not effect a Seller Adverse Recommendation Change, terminate the Asset Purchase Agreement in connection with a Superior Proposal or enter into a Seller Acquisition Agreement unless (i) EMCORE has complied in all material respects with the no solicitation/change in Board recommendation provisions of the Asset Purchase Agreement, (ii) EMCORE has provided written notice to Purchaser that EMCORE intends to take such action and describing the material terms and conditions of (and attaching a complete copy of) the Superior Proposal or the event constituting the Intervening Event that is the basis of such action, (iii) has provided Purchaser with four business days to make a revised proposal and (iv) has subsequently determined in good faith, after consultation with its financial and legal advisors, that the Superior Proposal giving rise to the notice continues to constitute a Superior Proposal, taking into account any changes to the terms of any revised proposal, or if such action is in response to an Intervening Event, that failure to make a Seller Adverse Recommendation Change would be inconsistent with its fiduciary duties under applicable law. Any substantive amendment to the terms of any such Superior Proposal requires EMCORE to provide a new written notice to Purchaser of such amendment and comply with the foregoing requires (except that EMCORE must provide Purchaser with three business days to make a revised proposal).

        Nothing in the Asset Purchase Agreement prohibits the Board (or a committee thereof) from taking and disclosing to EMCORE's shareholders a position on any tender or exchange offer, if the Board (or a committee thereof) determines, after consultation with outside legal counsel, that failure to so disclose such position would constitute a violation of applicable law, except that EMCORE's board of directors (or a committee thereof) may not recommend that EMCORE's shareholders tender their shares in connection with any tender or exchange offer (or otherwise approve or recommend any Alternative Transaction Proposal) or effect a Seller Adverse Recommendation Change, unless in each case the applicable requirements set forth in the preceding paragraph have been satisfied. Additionally, a factually accurate public statement by EMCORE that describes EMCORE's receipt of an Alternative Transaction Proposal and the operation of the Asset Purchase Agreement with respect thereto, or any "stop, look and listen" communication or any similar communication to EMCORE's shareholders, will not, in and of itself, constitute a Seller Adverse Recommendation Change or an approval or recommendation with respect to any Alternative Transaction Proposal.

        An "Alternative Transaction Proposal" means any bona fide proposal or offer from any person or group (other than Purchaser and its affiliates) relating to, in a single transaction or series of related transactions, any (i) acquisition of 20% or more of the acquired assets or acquired assets to which 20% or more of EMCORE's revenues or earnings associated with the Photovoltaics Business are attributable, (ii) acquisition of 20% or more of any class of common stock or other equity securities of EMCORE, (iii) tender offer or exchange offer that, if consummated, would result in any person or group beneficially owning 20% or more of any class of common stock or other equity securities of EMCORE, or (iv) merger, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving EMCORE.

        A "Superior Proposal" means any unsolicited, written bona fide Alternative Transaction Proposal on terms which the Board determines in good faith, after having received the advice of its outside legal counsel and independent financial advisors of nationally recognized reputation, to be more favorable, from a financial point of view, to the holders of EMCORE's common stock than the sale of the acquired assets pursuant to the Asset Purchase Agreement, taking into account all of the terms and conditions of such proposal (including all legal and regulatory aspects of such proposal, including the likelihood and timing of consummation thereof) and the Asset Purchase Agreement (including any

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revised proposal), except that for purposes of the definition of "Superior Proposal," the references to "20%" in the definition of Alternative Transaction Proposal will be deemed to be references to "50%."

        An "Intervening Event" means any event, change, effect, development, condition or occurrence that (a) does not relate to an Alternative Transaction Proposal or Purchaser or any of its affiliates, and (b) is not known and was not reasonably foreseeable to the Board as of the date of the Asset Purchase Agreement.

        Subject to EMCORE's compliance in all material respects with the other no solicitation/change in Board recommendation provisions of the Asset Purchase Agreement, upon receipt by EMCORE of an Alternative Transaction Proposal from a third party, EMCORE and its representatives may contact such third party solely in order to clarify and understand the terms and conditions of such Alternative Transaction Proposal to determine whether such Alternative Transaction Proposal constitutes or would reasonably be expected to result in a Superior Proposal.

        The no solicitation/change in Board recommendation provisions of the Asset Purchase Agreement do not apply to (i) the sale or disposition by means of asset sale (including a sale of equity securities of any subsidiary of EMCORE) of any part, or all, of the Other Businesses so long as such transaction does not constitute an acquisition of 20% or more of the acquired assets of the Photovoltaics Business or the acquired assets to which 20% or more of EMCORE's revenues or earnings associated with the Photovoltaics Business are attributable or (ii) any transaction conditioned on the consummation of the Asset Sale, including any investment in or tender offer for EMCORE's common stock or other equity securities or any merger, consolidation or other business combination involving EMCORE or any of its subsidiaries or any sale of all or substantially all of the assets of EMCORE and its subsidiaries.

Shareholders Meeting

        EMCORE has agreed to establish a record date for, duly call, give notice of, convene and hold the Special Meeting as promptly as practicable following the execution of the Asset Purchase Agreement to vote on a proposal to authorize the Asset Sale. Subject to the no solicitation/change in Board recommendation provisions of the Asset Purchase Agreement, we have agreed to include a recommendation of the Board that our shareholders approve the Asset Purchase Agreement and the Asset Sale.

        Even if the Board has withdrawn or modified its approval or recommendation of the Asset Purchase Agreement or the Asset Sale, we have agreed to submit the approval of the Asset Sale pursuant to the Asset Purchase Agreement and the transactions contemplated thereby to our shareholders at the Special Meeting whether or not there is a disclosure or communication (publicly or otherwise) to us of any Alternative Transaction Proposal. If a Seller Adverse Recommendation Change occurs and thereafter the Board recommends the Asset Purchase Agreement and Asset Sale, we are prohibited from holding (or are required to adjourn) the Special Meeting until not less than ten days after the date of such reinstated recommendation.

Filings, Consents and Regulatory Approvals

        EMCORE and Purchaser will each use its reasonable best efforts to obtain promptly all governmental consents necessary for the consummation of the Asset Sale, including consents required under the HSR Act or any other antitrust law and, if any objections are asserted with respect to the Asset Sale under the HSR Act or any other antitrust law, EMCORE and Purchaser will each use its reasonable best efforts to promptly resolve any such objection; provided, that, except as otherwise mutually agreed between the parties, Purchaser and its affiliates will not be obligated or otherwise be required to, and EMCORE will not, and will not permit its subsidiaries to, sell, divest, dispose of, license, hold separate, or take or commit to take any action that limits in any respect its freedom of

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action after the closing of the Asset Sale with respect to any businesses, products, rights, services, licenses or assets of Purchaser, EMCORE or any of their respective affiliates.

        EMCORE has agreed to assist in any transfer or reissuance of permits required to operate the Photovoltaics Business held by EMCORE or the procurement of any other such permits when so requested by Purchaser and use its commercially reasonable efforts to ensure that all such permits are available to Purchaser without a disruption to the Photovoltaics Business, including, without limitation, all export and import licenses that are required for the ongoing operation of the Photovoltaics Business. EMCORE's commercially reasonable efforts will include providing copies of all such permits to Purchaser, providing Purchaser with all information it requires about unshipped balances and other terms and conditions of and compliance with such permits, and engaging with governmental authorities with or as required by Purchaser to secure the transfer or reissuance of such permits to Purchaser.

        For purposes of the Asset Purchase Agreement, "reasonable best efforts," "commercially reasonable efforts" or any substantially similar undertakings will not (i) require EMCORE to pay any fees for obtaining any consents other than as specifically set forth in the Asset Purchase Agreement or (ii) require Purchaser to (A) pay more for the debt financing or the mezzanine financing than the terms set forth in the debt commitment letter or the mezzanine commitment letter, as applicable, and any fee letter entered into by Purchaser in connection therewith, (B) seek more equity capital than is committed in the equity commitment letter or (C) waive any condition or agree to any changes to the debt commitment letter, mezzanine commitment letter or equity commitment letter.

Non-Compete

        EMCORE has agreed that for a period of three years following the closing date of the Asset Sale, EMCORE and its affiliates will not compete, directly or indirectly, with the Photovoltaic Business as conducted as of the closing date of the Asset Sale, provided that it will not be a violation for EMCORE to (i) invest in or own any non-voting or non-convertible debt securities or other debt obligations of any person, (ii) make any equity investments in publicly-traded companies that may compete with the Photovoltaic Business (provided that such investments are passive in nature and do not exceed 5% of the outstanding voting power of such public companies) or (iii) own any interests in any person through any employee benefit plan. EMCORE will not be in breach of the non-compete provisions of the Asset Purchase Agreement solely as a result of EMCORE continuing to engage in its Other Businesses as conducted as of the closing date of the Asset Sale.

Financing

        The Asset Purchase Agreement requires Purchaser to use its commercially reasonable efforts to obtain the debt and equity financing contemplated by the debt and equity commitment letters described herein under "Proposal No. 1: The Asset Sale—Financing" and any fee letters or ancillary agreements related thereto (such commitment letters and any related fee letters or ancillary agreements are collectively referred to herein as the "Financing Commitments"), on the terms and conditions described in such Financing Commitments, including using commercially reasonable efforts to maintain in effect the Financing Commitments, entering into definitive agreements with respect to the debt and equity financing contemplated by the Financing Commitments, satisfying the conditions set forth in the Financing Commitments and/or definitive agreements related thereto, complying in all material respects with the obligations pursuant to the Financing Commitments, and consummating the debt and equity financing at or prior to the closing of the Asset Sale upon satisfaction of the conditions set forth in the Financing Commitments and the Asset Purchase Agreement. The Asset Purchase Agreement provides that under no circumstances will Purchaser or any of its affiliates be required to commence or sustain a legal proceeding against any of the debt financing sources in connection with the Asset Purchase Agreement or the other transactions contemplated therein or the Debt Commitment (as defined below)

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or any of the mezzanine financing sources in connection with the Asset Purchase Agreement or the other transactions contemplated therein or by the Mezzanine Commitment (as defined below).

        In the event any portion of the debt financing contemplated in the debt commitment letter and any fee letters or ancillary agreements related thereto (collectively, the "Debt Commitment") or any portion of the mezzanine financing contemplated in the mezzanine commitment letter and any fee letters or ancillary agreements related thereto (collectively, the "Mezzanine Commitment") becomes unavailable on the terms and conditions contemplated in the Debt Commitment or the Mezzanine Commitment, as applicable, Purchaser will, as promptly as practicable, use its commercially reasonable efforts to arrange to obtain alternative debt financing (the "Alternative Financing") from alternative sources in an amount sufficient to consummate the transactions contemplated by the Asset Purchase Agreement and on terms and conditions no less favorable, in the aggregate, to Purchaser than those in the Debt Commitment or the Mezzanine Commitment, as applicable.

        Under the Asset Purchase Agreement and subject to certain exceptions, Purchaser is not allowed to permit any amendment or modification to be made to, or any waiver of any provision or remedy pursuant to, the Financing Commitments without the prior written consent of EMCORE if such amendment, modification or waiver would or would reasonable be expected to (i) reduce the aggregate amount of the debt financing or the mezzanine financing, as applicable, unless the equity financing is increased by an equivalent amount or Purchaser obtains commitments for Alternative Financing for such increase, (ii) impose new or additional conditions or otherwise expand, amend or modify any of the conditions to the receipt of the debt and equity financing in a manner that would reasonably be expected to delay or prevent in any material respect the ability of Purchaser to consummate the transactions contemplated by the Asset Purchase Agreement, or (iii) adversely impact the ability of Purchaser to enforce its rights against the other parties to the Financing Commitments. However, assignments consummated pursuant to the terms of the Financing Commitments are permitted.

Financing Cooperation

        EMCORE has agreed to use commercially reasonable efforts, and to cause its subsidiaries and its and their representatives to use commercially reasonable efforts, to provide Purchaser with all cooperation reasonably requested by Purchaser to assist it in causing the conditions in the debt commitment letter and the mezzanine commitment letter to be satisfied or as is otherwise necessary or reasonably requested by Purchaser in connection with the debt financing and the mezzanine financing, including:

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        Purchaser will, promptly upon request by EMCORE, reimburse EMCORE (or pay in advance) for any reasonable and documented out-of-pocket costs and expenses incurred by EMCORE in connection with such cooperation.

Tax Clearance

        EMCORE and Purchaser have acknowledged that the transactions contemplated by the Asset Purchase Agreement may be considered a bulk sale by EMCORE under New Jersey law and, therefore, Purchaser will file with the Director of the Division of Taxation in the Department of the Treasury of the State of New Jersey (the "NJ Division") at least ten business days prior to closing of the Asset Sale, a Notification of Sale, Transfer, or Assignment in Bulk (Form C-9600) and an executed copy of the Asset Purchase Agreement as required by law and as necessary to obtain a letter of clearance from the NJ Division. EMCORE has agreed to cooperate in good faith with Purchaser with filing the above documents and obtaining a letter of clearance from the NJ Division.

        Furthermore, Purchaser and EMCORE have agreed that Purchaser will pay into escrow that portion of the preliminary purchase price under the Asset Purchase Agreement equal to the amount which is required by the NJ Division, which amount (together with interest accrued thereon, if any, the "NJ Division Escrow") will be held in escrow by EMCORE's New Jersey counsel, Connell Foley LLP (the "Escrow Agent"), in its attorney trust account pursuant to a customary escrow agreement to be entered into by Purchaser, EMCORE and the Escrow Agent at or prior to closing of the Asset Sale. The Escrow Agent will hold the NJ Division Escrow in accordance with the Asset Purchase Agreement. Purchaser and EMCORE have agreed to be bound by the escrow requirements imposed by the NJ Division, including any adjustment of the NJ Division Escrow. Upon Purchaser's receipt of a letter from the NJ Division (a "Demand Letter") demanding payment to the NJ Division of all or a portion of the NJ Division Escrow, Purchaser will promptly direct the Escrow Agent to disburse to the NJ Division that portion of the NJ Division Escrow demanded in the Demand Letter, and Purchaser will simultaneously deliver to EMCORE a copy of any such notice to the Escrow Agent, together with a copy of the Demand Letter.

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        EMCORE has agreed to pay in a timely manner any and all amounts of its outstanding tax obligations owed to the NJ Division, provided that EMCORE reserves the right to dispute any such amounts claimed to be owed to the NJ Division in accordance with applicable law.

Subsequent Transaction

        If at any time during the three years following the closing of the Asset Sale, all or substantially all of the remaining assets of EMCORE are sold, transferred or otherwise disposed of (a "Subsequent Transaction"), EMCORE will be required to deposit $15,000,000 in immediately available funds into an escrow account pursuant to an escrow agreement (which escrow will expire on the third anniversary of the closing date of the Asset Sale) prior to or concurrently with such Subsequent Transaction. If EMCORE has delivered to Purchaser at least fifteen business days prior to the consummation of such Subsequent Transaction evidence reasonably acceptable to Purchaser that such subsequent transferee has a net worth, after giving effect to such Subsequent Transaction, equal to or in excess of EMCORE's net worth immediately prior to the consummation of such Subsequent Transaction, but in no event less than $50 million, then such subsequent transferee may assume all of EMCORE's obligations under the Asset Purchase Agreement pursuant to an assumption agreement among such subsequent transferee, EMCORE and Purchaser in lieu of EMCORE's obligation to deposit any amounts into an escrow account. However, so long as EMCORE maintains a net worth equal to or in excess of $50 million, neither EMCORE nor any subsequent transferee will have any obligations described in this paragraph.

Employee Matters

        Purchaser has agreed to make offers of employment to all of the employees of EMCORE that primarily perform services for, or with respect to, the Photovoltaics Business as of the closing date of the Asset Sale and are listed on a schedule to the Asset Purchase Agreement and, for a period of one year following the closing of the Asset Sale, Purchaser will cause (i) each transferred employee who remains in the employment of Purchaser or any of its affiliates to receive base salary or wage rates, incentive compensation opportunity (excluding any equity-based compensation), and other cash compensation that, in the aggregate, are substantially similar to those in effect for such transferred employee, immediately prior to the closing of the Asset Sale and (ii) the transferred employees who remain in the employment of Purchaser to receive employee benefits (excluding deferred compensation, severance benefits and supplemental executive retirement plans) that, in the aggregate, are substantially similar to those in effect for such transferred employees, in the aggregate, immediately prior to the closing of the Asset Sale. Purchaser will recognize the prior service and seniority of each transferred employee as if such service had been performed with, and such seniority has been earned with, Purchaser for purposes of eligibility, vesting, service related level of benefits and benefit accrual under the employee benefit plans and policies (if any) provided by Purchaser to the transferred employees following the closing of the Asset Sale, to the same extent such service and seniority is recognized by EMCORE immediately prior to the closing of the Asset Sale. Paid time off accrued by transferred employees will carry over and be credited to such employees in connection with their employment with Purchaser.

        EMCORE may not, without the prior written consent of Purchaser, for a period of one year following the closing of the Asset Sale, solicit to employ any transferred employee of the Photovoltaics Business other than those employees (i) whose employment with Purchaser or any of its affiliates is terminated at any time after the six-month anniversary of such termination or (ii) who respond to a general advertisement not targeted at employees of Purchaser without any solicitation in violation of this provision. Purchaser may not, for a period of one year following the closing of the Asset Sale, solicit to employ (i) any person who was employed by EMCORE in the Photovoltaics Business but who is not a transferred employee and who is employed by EMCORE, (ii) any person who is employed by

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EMCORE in EMCORE's other businesses or (iii) any other employee of EMCORE with whom Purchaser came into contact in connection with the negotiation of the Asset Purchase Agreement; provided that Purchaser may (A) solicit and hire such person whose employment or other relationship with EMCORE is terminated by EMCORE at any time after the six-month anniversary of such termination or (B) hire such person who responds to a general advertisement not targeted at employees of EMCORE without any solicitation in violation of this provision.

Conditions to the Asset Sale

        EMCORE and Purchaser will not be obligated to complete the Asset Sale unless a number of conditions are satisfied or waived. These joint closing conditions include:

        In addition, the obligation of EMCORE to effect the Asset Sale is subject to the satisfaction or waiver of additional closing conditions, including:

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        In addition, the obligation of Purchaser to effect the Asset Sale is subject to the satisfaction or waiver of additional closing conditions, including:

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Termination of the Asset Purchase Agreement

        The Asset Purchase Agreement may be terminated at any time prior to the closing of the Asset Sale as follows:

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Purchaser Expenses; Termination Fees

        EMCORE will be required to pay Purchaser up to $2,000,000 of all reasonable out-of-pocket fees and expenses incurred by Purchaser in connection with the Asset Purchase Agreement and the Asset Sale, including the debt, mezzanine and equity financing ("Purchaser Expenses") if:

        Additionally, EMCORE will be required to pay Purchaser a termination fee equal to $5,330,000 (the "Seller Termination Fee") if:

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        Any previous payment of Purchaser Expenses by EMCORE will be credited toward the payment of the Seller Termination Fee.

        In the event the Asset Purchase Agreement is terminated and the Seller Termination Fee is payable and paid to Purchaser, receipt of the Seller Termination Fee will be the sole and exclusive remedy of Purchaser against EMCORE for any loss, damage, liability, claim, obligation or action (whether in law or in equity) based upon, arising out of or relating to the Asset Purchase Agreement (including any breach or alleged breach hereof), the negotiation, execution or performance thereof or the transactions contemplated by the Asset Purchase Agreement.

        Purchaser will pay EMCORE a termination fee equal to $8,000,000 (the "Purchaser Termination Fee") if EMCORE has terminated the Asset Purchase Agreement due to:

        The sole and exclusive remedies of EMCORE for any loss, damage, liability, claim, obligation or action (whether in law or in equity) based upon, arising out of or relating to the Asset Purchase Agreement, the limited guarantee, the debt or equity financing or the Financing Commitments (including any breach or alleged breach thereof), the negotiation, execution or performance thereof or the transactions contemplated thereby are (i) receipt of the Purchaser Termination Fee, (ii) receipt of any monetary amounts due and payable under, and subject to the terms and conditions of, the limited guarantee delivered to EMCORE by the Veritas Fund with respect to certain of Purchaser's payment obligations under the Asset Purchase Agreement and (iii) receipt of whatever remedies EMCORE may have under the confidentiality agreement entered into between EMCORE and Purchaser.

General Expense Provisions

        Whether or not the Asset Sale is completed, each party will be required to pay its own costs and expenses (including legal fees and expenses) incurred by it in connection with the Asset Purchase Agreement and the Asset Sale, except as provided above under "Financing Cooperation" and "Purchaser Expenses; Termination Fees."

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Amendment and Waiver

        EMCORE and Purchaser may mutually amend any provision of the Asset Purchase Agreement at any time, provided that certain provisions thereof may not be amended in any manner that adversely impacts or is adverse in any respect to any lender that has committed to provide debt financing or mezzanine financing in connection with the transactions contemplated by the Asset Purchase Agreement without the prior written consent of any such lender, as applicable. No amendment of any provision of the Asset Purchase Agreement will be valid unless it is in writing and signed by each of EMCORE and Purchaser. The failure of any party to enforce any condition or part of the Asset Purchase Agreement at any time will not be construed as a waiver of that condition or part, nor will it forfeit any rights to future enforcement thereof. Any waiver under the Asset Purchase Agreement will be effective only if delivered to the other party in writing by the party making such waiver.

Specific Performance

        EMCORE and Purchaser are each entitled to an injunction to prevent breaches or violations of the Asset Purchase Agreement and to enforce specifically the terms and provisions of the Asset Purchase Agreement, in addition to any other legal or equitable remedy which may be available.

        Notwithstanding the foregoing, the right of EMCORE to seek specific performance, injunctive relief or other equitable remedies in connection with enforcing Purchaser's obligation:

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        Notwithstanding the foregoing, the Asset Purchase Agreement provides that under no circumstances will Purchaser or any of its affiliates be required to commence or sustain a legal proceeding against any of the debt financing sources in connection with the Asset Purchase Agreement or the other transactions contemplated therein or the Debt Commitment or any of the mezzanine financing sources in connection with the Asset Purchase Agreement or the other transactions contemplated therein or by the Mezzanine Commitment.


Intellectual Property Transfer and License Agreement

        In connection with the closing of the Asset Sale, EMCORE will also enter into an intellectual property transfer and license agreement with Purchaser pursuant to which EMCORE will transfer certain intellectual property rights owned by EMCORE to Purchaser and grant Purchaser a non-exclusive, royalty-free, fully paid-up, perpetual, irrevocable, worldwide license under the intellectual property of EMCORE used in the Photovoltaics Business that is not being transferred to Purchaser as part of the Asset Sale. This license is limited in scope to the operation of the Photovoltaics Business, including its natural expansion or evolution over time. Similarly, Purchaser will grant EMCORE a non-exclusive, royalty-free, fully paid-up, perpetual, irrevocable, worldwide license-back under the intellectual property that Purchaser will acquires through the Asset Sale for use in EMCORE's other businesses, including their natural expansion or evolution over time.

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Transition Services Agreement

        In connection with the closing of the Asset Sale, EMCORE will also enter into a transition services agreement with Purchaser at the time of the closing pursuant to which EMCORE and Purchaser will each provide certain services to the other for a period of up to twelve months following the date of the closing of the Asset Sale.


Supply Agreement

        In connection with the closing of the Asset Sale, EMCORE will also enter into a supply agreement with Purchaser at the time of closing, pursuant to which Purchaser will manufacture and supply certain predetermined components used in EMCORE's telecommunications business (the "Supplied Products") that, prior to the closing, were manufactured and supplied by the Photovoltaics Business. Under the supply agreement, EMCORE may, at any time, transfer the manufacturing of any or all of the Supplied Products to a third party or its own facility (the "Manufacturing Transfer"). In support of the Manufacturing Transfer, EMCORE will receive a license under the know-how and other intellectual property rights of Purchaser as used or incorporated in the manufacture, fabrication, assembly or testing of any Supplied Product. The supply agreement has an initial term of eighteen months, during which EMCORE must purchase no less than seventy-five percent (75%) of its total requirements for the Supplied Products which have not been transferred pursuant to the Manufacturing Transfer.


Voting Agreement

        Certain of our shareholders who control in the aggregate approximately 11% of the voting power of our common stock outstanding as of October 22, 2014 have entered into a voting agreement with Purchaser pursuant to which, subject to certain exceptions, they have agreed to vote such shares (i) in favor of the Asset Sale Proposal and (ii) against (A) any action or agreement that would reasonably be expected to result in any of the conditions to EMCORE's obligations to consummate the transactions contemplated by the Asset Purchase Agreement not being fulfilled, (B) any Alternative Transaction Proposal, and (C) any other action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, materially delay, materially postpone or materially adversely affect consummation of the Asset Sale (except that the foregoing clauses (A) and (C) will not apply to the sale or disposition by way of asset sale of any part or all of the Other Businesses so long as clause (i) of the definition of Alternative Transaction Proposal is not satisfied, any transaction conditioned on the consummation of the Asset Sale or, solely with respect to certain of our shareholders, any election of directors nominated by the Board). The voting agreement includes restrictions on the ability of the shareholders that are parties thereto to, (x) transfer the record or beneficial ownership of the shares of EMCORE common stock held by such shareholders, (y) enter into any voting or similar agreement with respect to shares of EMCORE common stock held by such shareholders or (z) take any actions which could reasonably be expected to have the effect of preventing or adversely affecting the consummation of the Asset Sale or such shareholder's ability to perform its obligations under the voting agreement.

        The voting agreement terminates upon the earliest of (i) the closing of the Asset Sale; (ii) the termination of the Asset Purchase Agreement in accordance with its terms; (iii) any change to the terms of the Asset Purchase Agreement without the prior written consent of the shareholders that are party to the voting agreement and which reduces the Final Purchase Price (as defined in the Asset Purchase Agreement) or changes the form of consideration provided for under the Asset Purchase Agreement; or (iv) the mutual written consent of the parties thereto. The voting agreement is attached to this Proxy Statement as Annex B.

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Financing

        The obligations of Purchaser to complete the Asset Sale under the Asset Purchase Agreement are not subject to a condition of Purchaser obtaining funds to consummate the Asset Sale and the other transactions contemplated by the Asset Purchase Agreement. However, see "Proposal No. 1: The Asset Sale—The Asset Purchase Agreement—Specific Performance" for a discussion on the limited specific performance rights available to us. Purchaser has obtained equity commitments and debt financing commitments for the transactions contemplated by the Asset Purchase Agreement, the proceeds of which, together with cash on hand at Purchaser and assuming the financing commitments are funded in accordance with their terms, will be used by Purchaser to pay the aggregate consideration and all related fees and expenses and to pay any other amounts required to be paid at the closing of the Asset Sale in connection with the consummation of the transactions contemplated by the Asset Purchase Agreement.

Equity Financing

        The Veritas Fund has committed to provide equity financing of $72 million to Purchaser on or prior to the closing of the Asset Sale to purchase, or cause the purchase of, equity securities of Purchaser in order to provide financing for the transactions contemplated by the Asset Purchase Agreement, which amount may be reduced to the extent that Purchaser does not require the full amount of such equity commitment to consummate the transactions contemplated by the Asset Purchase Agreement, on the terms and subject to the conditions set forth in the equity commitment letter entered into by the Veritas Fund and Purchaser in connection with the Asset Sale. The equity commitment of the Veritas Fund is subject to the following conditions:

        Subject to the terms and conditions of the Asset Purchase Agreement, EMCORE is an express third party beneficiary of the equity commitment letter and is entitled to an injunction, specific performance or other equitable relief to cause the Veritas Fund to draw down the full proceeds of the equity financing commitment pursuant to, and to specifically enforce the other provisions of, the equity commitment letter.

        The Veritas Fund's obligation to fund such equity financing commitment will terminate automatically and immediately upon the earliest to occur of:

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Debt Financing

        In connection with the Asset Sale, Citizens Bank, National Association (individually or collectively with one or more of its affiliates) (the "Senior Lenders"), has committed to provide senior secured financing facilities in an aggregate amount of $77.5 million (the "senior debt facilities") on the terms and conditions set forth in the debt commitment letter. The senior debt facilities will consist of a $57.5 million term loan facility and a $20.0 million revolving credit facility. In addition, Hancock Capital Management, LLC (directly or through one or more of its affiliates or accounts or funds managed by Hancock Capital Management, LLC or an affiliate and/or one or more limited partners of such an account or fund) (the "Mezzanine Investors") have committed to purchase senior unsecured subordinated notes of Purchaser in an aggregate principal amount of $36.5 million (the "mezzanine facility") on the terms and conditions set forth in the mezzanine commitment letter.

        The commitments by the Senior Lenders to provide the senior debt facilities and the Mezzanine Investors to provide the mezzanine facility will terminate, if the respective facilities have not closed prior thereto, on the earliest to occur of: the closing of the Asset Sale, termination of the Asset Purchase Agreement, the Outside Date, and 5:00 p.m. (New York City time) on March 17, 2015. The obligations of the Senior Lenders to provide debt financing under the debt commitment letter and of the Mezzanine Investors to provide debt financing under the mezzanine commitment letter are subject solely to the conditions contained in the debt commitment letter or the mezzanine commitment letter, respectively, including, without limitation:

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Limited Guarantee

        In connection with the Asset Purchase Agreement, the Veritas Fund has executed a limited guarantee in favor of EMCORE to guarantee, subject to the limitations described therein, certain obligations of Purchaser pursuant to the Asset Purchase Agreement. Under the limited guarantee, the Veritas Fund has guaranteed 100% of the payment of the Purchaser Termination Fee, if and when payable under the Asset Purchase Agreement by EMCORE in specified circumstances, subject to an overall cap of $8,000,000. EMCORE is contractually entitled to require the Veritas Fund to perform under the limited guarantee.

        The limited guarantee will terminate on the earliest of (i) the closing of the Asset Sale and (ii) 180 days after the termination of the Asset Purchase Agreement in accordance with its terms, if EMCORE has not presented a claim for payment thereunder to the Veritas Fund by the 180th day.

        In addition, the limited guarantee will terminate, and the Veritas Fund will be entitled to a refund of any payments it previously made thereunder, in the event that EMCORE asserts in any litigation or other proceeding (i) that the overall cap or any other provisions of the limited guarantee are illegal, invalid or unenforceable or (ii) any theory of liability against the Veritas Fund, Purchaser, or any of their affiliates with respect to the transactions contemplated by the Asset Purchase Agreement or the limited guarantee, other than liability against the Veritas Fund under the limited guarantee.


Consummation of the Asset Sale

        We expect to complete the Asset Sale as promptly as practicable after our shareholders authorize the Asset Sale Proposal, assuming the satisfaction or waiver of all other conditions prior to such time.


RECOMMENDATION

        OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 1 TO AUTHORIZE THE ASSET SALE.

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UNAUDITED CONDENSED FINANCIAL INFORMATION

Unaudited Pro Forma Condensed Consolidated Financial Information

        EMCORE has prepared unaudited pro forma condensed consolidated financial statements to assist readers in understanding the nature and effects of the Asset Sale. The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended June 30, 2014, and for the fiscal years ended September 30, 2013 and 2012 have been prepared with the assumption that the Asset Sale was completed as of the beginning of the applicable period. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2014 has been prepared with the assumption that the Asset Sale was completed as of the balance sheet date.

        The unaudited pro forma condensed consolidated financial statements do not purport to be indicative of the results of operations or the financial position which would have actually resulted if the Asset Sale had been completed on the dates indicated, or which may result in the future.

        The unaudited pro forma financial information has been prepared by the Company based upon assumptions deemed appropriate by the Company's management. An explanation of certain assumptions is set forth under the Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

        The unaudited pro forma financial information should be read in conjunction with the Company's historical Consolidated Financial Statements and Notes thereto contained in the 2013 Annual Report on Form 10-K and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, as filed with the Securities and Exchange Commission ("SEC"), each of which is incorporated herein by reference.

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EMCORE CORPORATION

Unaudited Pro Forma Condensed Consolidated Statements of Operations

For the Nine Months Ended June 30, 2014

(in thousands, except per share data)

 
  EMCORE
Corporation
  Sale of
Photovoltaics
Business(a)
  Pro
Forma
 

Revenue

  $ 131,040   $ (57,754 ) $ 73,286  

Cost of revenue

    104,646     (40,345 )   64,301  
               

Gross profit

    26,394     (17,409 )   8,985  

Operating expense:

                   

Selling, general, and administrative

    22,726     (7,988 )   14,738  

Research and development

    14,288     (1,314 )   12,974  
               

Total operating expense

    37,014     (9,302 )   27,712  
               

Operating loss

    (10,620 )   (8,107 )   (18,727 )

Other income (expense):

   
 
   
 
   
 
 

Interest expense, net

    (377 )   146 (b)   (231 )

Foreign exchange gain

    15         15  

Gain on sale of investment

    307         307  

Change in fair value of financial instruments

    39         39  
               

Total other expense

    (16 )   146     130  
               

Loss before income tax expense

    (10,636 )   (7,961 )   (18,597 )

Income tax expense

        (c)    
               

Net loss

  $ (10,636 ) $ (7,961 ) $ (18,597 )
               
               

Per share data:

                   

Net loss per basic share

  $ (0.35 )       $ (0.60 )
                 
                 

Net loss per diluted share

  $ (0.35 )       $ (0.60 )
                 
                 

Weighted-average number of basic shares outstanding

    30,327     500 (d)   30,827  
               
               

Weighted-average number of diluted shares outstanding

    30,327     500 (d)   30,827  
               
               

   

See the accompanying notes which are an integral part of these unaudited pro forma condensed consolidated financial statements.

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EMCORE CORPORATION

Unaudited Pro Forma Condensed Consolidated Statements of Operations

For the Year Ended September 30, 2013

(in thousands, except per share data)

 
  EMCORE
Corporation
  Sale of
Photovoltaics
Business(a)
  Pro
Forma
 

Revenue

  $ 168,147   $ (70,498 ) $ 97,649  

Cost of revenue

    139,949     (52,628 )   87,321  
               

Gross profit

    28,198     (17,870 )   10,328  

Operating expense (income):

                   

Selling, general, and administrative

    27,419     (9,564 )   17,855  

Research and development

    19,972     (528 )   19,444  

Flood-related insurance proceeds

    (19,000 )       (19,000 )

Gain on sale of assets

    (413 )       (413 )
               

Total operating expense

    27,978     (10,092 )   17,886  
               

Operating income (loss)

    220     (7,778 )   (7,558 )

Other income (expense):

   
 
   
 
   
 
 

Interest expense, net

    (800 )   496 (b)   (304 )

Foreign exchange gain

    356         356  

Gain on sale of equity method investment

    4,800           4,800  

Change in fair value of financial instruments

    515         515  

Other expense

    17         17  
               

Total other income

    4,888     496     5,384  
               

Income (loss) before income tax expense

    5,108     (7,282 )   (2,174 )

Income tax expense

    (120 )   (c)   (120 )
               

Net income (loss)

  $ 4,988   $ (7,282 ) $ (2,294 )
               
               

Per share data:

                   

Net income (loss) per basic share

  $ 0.19         $ (0.08 )
                 
                 

Net income (loss) per diluted share

  $ 0.19         $ (0.08 )
                 
                 

Weighted-average number of basic shares outstanding

    26,531     500 (d)   27,031  
               
               

Weighted-average number of diluted shares outstanding

    26,812     500 (d)   27,312  
               
               

   

See the accompanying notes which are an integral part of these unaudited pro forma condensed consolidated financial statements.

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EMCORE CORPORATION

Unaudited Pro Forma Condensed Consolidated Statements of Operations

For the Year Ended September 30, 2012

(in thousands, except per share data)

 
  EMCORE
Corporation
  Sale of
Photovoltaics
Business(a)
  Pro
Forma
 

Revenue

  $ 163,781   $ (66,562 ) $ 97,219  

Cost of revenue

    145,955     (50,563 )   95,392  
               

Gross profit

    17,826     (15,999 )   1,827  

Operating expense (income):

                   

Selling, general and administrative

    34,861     (10,274 )   24,587  

Research and development

    22,338     (2,924 )   19,414  

Impairment

    1,425         1,425  

Litigation settlements, net

    1,050         1,050  

Flood-related loss

    5,519         5,519  

Flood-related insurance proceeds

    (9,000 )       (9,000 )

Gain on sale of assets

    (2,742 )       (2,742 )
               

Total operating expense

    53,451     (13,198 )   40,253  

Operating loss

    (35,625 )   (2,801 )   (38,426 )

Other income (expense):

   
 
   
 
   
 
 

Interest expense, net

    (677 )   254 (b)   (423 )

Foreign exchange gain

    45     (214 )   (169 )

Loss from equity method investment

    (1,201 )       (1,201 )

Change in fair value of financial instruments

    (69 )       (69 )
               

Total other expense

    (1,902 )   40     (1,862 )
               

Loss before income tax expense

    (37,527 )   (2,761 )   (40,288 )

Income tax expense

    (1,644 )   (c)   (1,644 )
               

Net loss

  $ (39,171 ) $ (2,761 ) $ (41,932 )
               
               

Per share data:

                   

Net loss per basic share

  $ (1.66 )       $ (1.74 )
                 
                 

Net loss per diluted share

  $ (1.66 )       $ (1.74 )
                 
                 

Weighted-average number of basic shares outstanding

    23,559     500 (d)   24,059  
               
               

Weighted-average number of diluted shares outstanding

    23,559     500 (d)   24,059  
               
               

   

See the accompanying notes which are an integral part of these unaudited pro forma condensed consolidated financial statements.

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EMCORE CORPORATION

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of June 30, 2014

(in thousands)

 
  EMCORE
Corporation
  Assets and
Liabilities of
the
Photovoltaics
Business(e)(f)
  Other
Adjustments
  Pro
Forma
 

ASSETS

                         

Current assets:

                         

Cash and cash equivalents

  $ 18,165   $   $ 121,313 (g) $ 139,478  

Restricted cash

    806             806  

Accounts receivable, net of allowance of $96, $0, $0 and $96, respectively

    43,196     (18,287 )       24,909  

Inventory

    27,549     (5,774 )       21,775  

Prepaid expenses and other current assets

    7,633     (1,403 )       6,230  
                   

Total current assets

    97,349     (25,464 )   121,313     193,198  

Property, plant, and equipment, net

    46,048     (26,491 )       19,557  

Goodwill

    20,384     (20,384 )        

Other intangible assets, net

    1,396     (48 )       1,348  

Other non-current assets, net of allowance of $3,561, $0, $0 and $3,561, respectively

    835     (273 )       562  
                   

Total assets

  $ 166,012   $ (72,660 ) $ 121,313   $ 214,665  

LIABILITIES and SHAREHOLDERS' EQUITY

   
 
   
 
   
 
   
 
 

Current liabilities:

                         

Borrowings from credit facility

  $ 20,937   $   $ (20,937) (g) $  

Accounts payable

    21,185     (3,875 )       17,310  

Deferred gain associated with sale of assets

    3,400             3,400  

Warrant liability

    116             116  

Accrued expenses and other current liabilities

    19,846     (5,932 )       13,914  
                   

Total current liabilities

    65,484     (9,807 )   (20,937 )   34,740  

Asset retirement obligations

    5,209     (709 )       4,500  

Other long-term liabilities

    806             806  
                   

Total liabilities

    71,499     (10,516 )   (20,937 )   40,046  

Commitments and contingencies

                         

Shareholders' equity:

                         

Common stock

    753,236         1,043 (h)   754,279  

Treasury stock

    (2,071 )           (2,071 )

Accumulated other comprehensive income

    1,623             1,623  

Accumulated deficit

    (658,275 )   (62,144 )   141,207 (i)   (579,212 )
                   

Total shareholders' equity(j)

    94,513     (62,144 )   142,250     174,619  
                   

Total liabilities and shareholders' equity

  $ 166,012   $ (72,660 ) $ 121,313   $ 214,665  
                   
                   

   

See the accompanying notes which are an integral part of these unaudited pro forma condensed consolidated financial statements.

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EMCORE CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

1. PLANNED ASSET SALE TRANSACTION TO VERITAS CAPITAL.

        On September 17, 2014, EMCORE Corporation, a New Jersey corporation ("EMCORE" or the "Company"), entered into an Asset Purchase Agreement (the "Agreement") with Photon Acquisition Corporation ("Purchaser"), a Delaware corporation and an affiliate of private equity firm Veritas Capital, pursuant to which Purchaser will acquire substantially all of the assets, and assume substantially all of the liabilities, primarily related to or used in connection with the Company's photovoltaics business, including EMCORE's subsidiaries EMCORE Solar Power, Inc. and EMCORE IRB Company, LLC (collectively, the "Photovoltaics Business" and, the sale of the Photovoltaics Business, the "Asset Sale") for $150 million in cash (the "Purchase Price"), subject to a working capital adjustment pursuant to the Agreement, which is attached to this proxy statement as Annex A. The Agreement has been approved by the Board of Directors of the Company (the "Board"). The Asset Sale may constitute the sale of substantially all of the assets of the Company under New Jersey law. The Asset Sale is subject to closing conditions, including the receipt of approval by EMCORE's shareholders and other closing conditions.

        Following the closing of the Asset Sale, EMCORE will continue to operate its fiber optics division which provides optical components, subsystems and systems for high-speed telecommunications, Cable Television (CATV) and Fiber-To-The-Premise (FTTP) networks, as well as products for satellite communications, video transport and specialty photonics technologies for defense and homeland security applications.

2. UNAUDITED PRO FORMA ADJUSTMENTS (in thousands)

        The following notes describe the basis for and/or assumptions regarding certain of the pro forma adjustments included in EMCORE's unaudited pro forma condensed consolidated financial statements:

        (a)   The amounts being eliminated represent the revenues, cost of revenues, and operating and other expenses that are attributable to the sale of the Photovoltaics Business. The adjustments do not include the revenues, cost of revenues, and operating and other expenses attributable to the terrestrial solar module applications, which product lines were sold in fiscal year 2012.

        (b)   Amount represents the interest expense associated with the credit and security agreement, dated November 11, 2010, by and between EMCORE Corporation and Wells Fargo Bank, National Association (as amended, the "Credit Facility"), that would not have been incurred assuming a portion of the net proceeds from the Assets Sale was used to repay outstanding borrowings under the Credit Facility as of the beginning of the period presented. The remaining amount of interest expense primarily represents fixed commitment fees and facility costs associated with the Credit Facility.

        (c)   Due to the existence of significant net operating loss carryforwards for EMCORE, any income tax expense resulting from the Asset Sale would be offset. Therefore, no pro forma adjustment for income tax expense has been presented in connection with the Asset Sale.

        (d)   Weighted average shares outstanding has been adjusted as of June 30, 2014 to reflect the accelerated vesting of shares by named executive officers and employees of the Photovoltaics Business upon the completion of the Asset Sale.

        (e)   Recording of the disposition of the Photovoltaics Business. The amounts include the assets and liabilities that historically have been reported as part of the Company's photovoltaics reporting segment as well as assets and liabilities primarily related to the Company's photovoltaics business that

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EMCORE CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. UNAUDITED PRO FORMA ADJUSTMENTS (in thousands) (Continued)

are being transferred in the Asset Sale that historically have been reported as part of the Company's unallocated corporate division.

        (f)    Net book value of Photovoltaics Business:

Photovoltaics Business assets to be sold

  $ 72,660  

Photovoltaics Business liabilities to be assumed

    (10,516 )
       

Net book value of the Photovoltaics Business

  $ 62,144  
       
       

        (g)   Recording of sale proceeds, net of estimated closing costs, for the sale of the assets and liabilities of the Photovoltaics Business, less the assumed repayment of outstanding borrowings under the Credit Facility:

Purchase price

  $ 150,000  

Transaction costs to be incurred at closing (legal, investment banking, bonuses)

    (7,750 )
       

Sale proceeds at closing, net

  $ 142,250  

Less repayment of outstanding borrowings under the Credit Facility

    (20,937 )
       

Net cash

  $ 121,313  
       
       

        (h)   Shareholders' equity includes estimated adjustments for accelerated vesting upon the completion of the Asset Sale of selected stock grants held by named executive officers and employees of the Photovoltaics Business.

Increase to additional paid-in-capital

  $ 1,043  

Change in accumulated deficit associated with stock compensation expense due to accelerated vesting

    (1,043 )
       

Net change to shareholders' equity

  $  
       
       

        (i)    Adjustments to the accumulated deficit are comprised of the following:

Sale proceeds net of transaction costs and assumed Credit Facility repayment (Note (g))

  $ 121,313  

Assumed repayment of Credit Facility (Note (g))

    20,937  

Change in accumulated deficit associated with stock compensation expense due to accelerated vesting (Note (h))

    (1,043 )
       

Net adjustment to accumulated deficit

  $ 141,207  
       
       

        (j)    The gain on sale of the Photovoltaics Business to be recorded as adjustments to shareholders' equity:

Sale proceeds at closing, net (Note (g))

  $ 142,250  

Assets and liabilities included in Asset Sale (Note (f))

    (62,144 )
       

Gain on Asset Sale

  $ 80,106  
       
       

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Unaudited Condensed Combined Financial Statements for the Photovoltaics Business

        EMCORE has prepared unaudited condensed combined financial statements for the Photovoltaics Business. The Unaudited Condensed Combined Statements of Operations and the Unaudited Condensed Combined Statements of Cash Flows were prepared for the nine months ended June 30, 2014 and 2013, and for the fiscal years ended September 30, 2013 and 2012. The Unaudited Condensed Combined Balance Sheet was prepared as of June 30, 2014, September 30, 2013 and September 30, 2012.

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PHOTOVOLTAICS BUSINESS

Unaudited Condensed Combined Statements of Operations

(in thousands)

 
  Nine Months Ended
June 30,
  Fiscal Years Ended
September 30
 
 
  2014   2013   2013   2012  

Revenue

  $ 57,754   $ 50,016   $ 70,498   $ 66,562  

Cost of revenue

    40,345     34,829     52,628     50,563  
                   

Gross profit

    17,409     15,187     17,870     15,999  

Operating expense:

                         

Selling, general, and administrative

    7,988     6,954     9,564     10,274  

Research and development

    1,314     (180 )   528     2,924  
                   

Total operating expense

    9,302     6,774     10,092     13,198  
                   

Operating income

    8,107     8,413     7,778     2,801  

Other income

                  214  
                   

Income before income tax expense

    8,107     8,413     7,778     3,015  

Income tax expense

   
(3,166

)
 
(3,284

)
 
(3,044

)
 
(1,205

)
                   

Net income

  $ 4,941   $ 5,129   $ 4,734   $ 1,810  
                   
                   

   

See the accompanying notes which are an integral part of these unaudited condensed combined financial statements for the Photovoltaics Business.

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PHOTOVOLTAICS BUSINESS

Unaudited Condensed Combined Balance Sheets

(in thousands)

 
  June 30,
2014
  September 30,
2013
  September 30,
2012
 

ASSETS

                   

Current assets:

                   

Accounts receivable, net of allowance of $0, $2,961, and $2,961, respectively

    18,287     19,641     12,344  

Inventory

    5,774     8,935     8,041  

Deferred tax asset

    1,612     3,085     3,031  

Prepaid expenses and other current assets

    1,403     952     550  
               

Total current assets

    27,076     32,613     23,966  

Property, plant, and equipment, net

   
26,491
   
27,113
   
25,957
 

Goodwill

    20,384     20,384     20,384  

Other intangible assets, net

    48     191     383  

Other non-current assets, net

    273     353     1,119  
               

Total assets

  $ 74,272   $ 80,654   $ 71,809  
               
               

LIABILITIES and NET PARENT INVESTMENT

                   

Current liabilities:

                   

Accounts payable

    3,875     4,696     7,547  

Accrued expenses and other current liabilities

    5,932     7,236     10,086  
               

Total current liabilities

    9,807     11,932     17,633  

Deferred tax liabilities

    1,449     1,080     63  

Asset retirement obligations

    709     681     509  
               

Total liabilities

    11,965     13,693     18,205  

Commitments and contingencies (Note 12)

   
 
   
 
   
 
 

Net parent investment

    62,307     66,961     53,604  
               

Total liabilities and net parent investment

  $ 74,272   $ 80,654   $ 71,809  
               
               

   

See the accompanying notes which are an integral part of these unaudited condensed combined financial statements for the Photovoltaics Business.

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Unaudited Condensed Combined Statements of Cash Flows

(in thousands)

 
  For the nine months
ended June 30,
  For the Fiscal Years
Ended September 30,
 
 
  2014   2013   2013   2012  

Cash flows from operating activities:

                         

Net income

  $ 4,941   $ 5,129   $ 4,734   $ 1,810  

Adjustments to reconcile net income to net cash used in operating activities:

                         

Depreciation, amortization, and accretion expense

    1,874     2,113     3,047     3,719  

Stock-based compensation expense

    1,066     1,088     1,447     2,176  

Provision adjustments related to doubtful accounts

        37          

Provision adjustments related to product warranty

    569     24     425     85  

Deferred income taxes

    1,842     938     963     (2,900 )

Net loss on disposal of equipment

              84     208  
                   

Total non-cash adjustments

    5,351     4,200     5,966     3,288  

Changes in operating assets and liabilities:

                         

Accounts receivable

    1,354     (6,244 )   (7,296 )   (1,475 )

Inventory

    3,161     (4,109 )   (894 )   (3,168 )

Other assets

    (292 )   (1,039 )   (480 )   560  

Accounts payable

    (821 )   (1,440 )   (2,851 )   2,989  

Accrued expenses and other current liabilities

    (1,872 )   (887 )   (3,142 )   4,197  
                   

Total change in operating assets and liabilities

    1,530     (13,719 )   (14,663 )   3,103  
                   

Net cash provided by (used in) operating activities

    11,822     (4,390 )   (3,963 )   8,201  

Cash flows from investing activities:

                         

Purchase of equipment

    (1,224 )   (2,368 )   (3,367 )   (2,257 )

Deposits on equipment orders

        (3 )   (3 )   (847 )
                   

Net cash used in investing activities

    (1,224 )   (2,371 )   (3,370 )   (3,104 )

Cash flows from financing activities:

                         

Intercompany activity and transfers, net

    (10,598 )   6,761     7,333     (5,097 )
                   

Net cash (used in) provided by financing activities

    (10,598 )   6,761     7,333     (5,097 )
                   

Net change in cash and cash equivalents

                 

Cash and cash equivalents at beginning of period

                   
                   

Cash and cash equivalents at end of period

  $   $   $   $  
                   
                   

   

See the accompanying notes which are an integral part of these unaudited condensed combined financial statements for the Photovoltaics Business.

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS

NOTE 1. Photovoltaics Business

Business Overview

        EMCORE Corporation and its subsidiaries are collectively hereinafter referred to as "EMCORE" or the "Company". The business to be sold consists of substantially all of the assets and liabilities primarily related to or used in connection with the Company's photovoltaics business, including EMCORE's subsidiaries EMCORE Solar Power, Inc. and EMCORE IRB Company, LLC (the "Photovoltaics Business"). The Photovoltaics Business provides products for space power applications including high-efficiency multi-junction solar cells, Covered Interconnect Cells (CICs) and completed satellite solar panels, and terrestrial applications, including high-efficiency GaAs solar cells for concentration photovoltaics (CPV) power systems.

NOTE 2. Basis of Presentation

        The Unaudited Condensed Combined Financial Statements for the Photovoltaics Business (the "Unaudited Financial Statements") include only the assets, liabilities, and operating activity of the Photovoltaics Business. As described in Note 15 herein, the Company entered into an Asset Purchase Agreement with an affiliate of Veritas Capital on September 17, 2014 to sell substantially all of the assets and liabilities primarily related to or used in the Photovoltaics Business (the "Asset Sale"). The Unaudited Financial Statements have been prepared pursuant to the SEC requirement that the Company provide unaudited historical financial statements for the Photovoltaics Business in its proxy statement seeking shareholder approval of the Asset Sale.

        The Photovoltaics Business operates through EMCORE's U.S.-based operations. Due to existing functions and facilities shared among EMCORE's two operating segments photovoltaics and fiber optics, certain working capital and property and equipment have been attributed to the Photovoltaics Business and certain operating expenses, including general corporate overhead, have been allocated to the Photovoltaics Business. The Company used underlying activity drivers as a basis of allocation, including management estimates of the proportion of shared employees' time spent supporting each segment and the corresponding application of such percentages to compensation and other applicable shared costs. Management believes such allocations are reasonable; however, they may not be indicative of the actual results of the Photovoltaics Business had it been operating as an independent company for the periods presented or the amounts that will be incurred in the future. See Note 3 for further information regarding general corporate overhead allocations.

        The accompanying Unaudited Financial Statements have been derived from the consolidated financial statements of the Company, and include the revenue, costs of revenue, operating and other expenses associated with the Asset Sale. For the nine months ended June 30, 2014 and 2013 and the fiscal years ended September 30, 2013 and 2012, the revenues, cost of revenues, operating and other expenses did not include amounts attributable to the terrestrial solar module applications, which product lines were sold in fiscal year 2012.

        The assets and liabilities included in the accompanying balance sheets are substantially all of the assets and liabilities primarily related to or used in the Photovoltaics Business. The amounts include the assets and liabilities that historically have been reported as part of the Company's photovoltaics reporting segment plus assets and liabilities that are being transferred in the Asset Sale that were reported as part of the Company's unallocated corporate division. The carrying value of those assets less the carrying value of those liabilities on each of the balance sheet dates represents the Company's net investment in the Photovoltaics Business at that balance sheet date.

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 2. Basis of Presentation (Continued)

        Operating results for the nine month periods ended June 30, 2014 and 2013 and the years ended September, 2013 and 2012 are not necessarily indicative of the results that may be expected for any future period. The Unaudited Financial Statements for the nine-month periods ended June 30, 2014 and 2013 should be read in conjunction with EMCORE's Annual Report on Form 10- K for the year ended September 30, 2013 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, as filed with the SEC. In the opinion of management, the Unaudited Financial Statements include all adjustments necessary to present fairly the financial position and operating results of the Asset Sale for the periods presented. The Asset Sale is subject to shareholder approval by EMCORE'S shareholders and other closing conditions.

NOTE 3. Related Party Funding and Expense Allocation

        EMCORE has a centralized corporate cash management function which funds its operations as needed. The Photovoltaics Business has generally generated cash from its operating activities and has contributed to the cash flows of the Company.

        The Photovoltaics Business was allocated corporate overhead expenses from EMCORE for shared corporate-related functions based on the Photovoltaics Business relative proportion of assets, revenue and compensation. Corporate overhead expenses are primarily related to centralized corporate functions, including corporate executive management, accounting and finance, information technology, human resources and legal. The Photovoltaics Business was allocated $4.3 million and $3.4 million for the nine month periods ended June 30, 2014 and 2013, respectively, of general corporate expenses incurred by EMCORE which are included within selling, general and administrative expenses in the Unaudited Condensed Combined Statements of Operations. During the years ended September 30, 2013 and 2012, the Photovoltaics Business was allocated general corporate expenses of $4.7 million and $6.1 million, respectively.

NOTE 4. Summary of Significant Accounting Policies

        The Company's management has assumed that the Photovoltaics Business has adopted all of the Company's significant accounting policies—see Note 1 in the Notes to Consolidated Financial Statements in the Company's Form 10-K for the year ended September 30, 2013, for additional information. The following is intended to provide further information concerning how certain of the significant accounting policies would apply to the Photovoltaics Business as a stand-alone business.

Revenue Recognition.

        The Photovoltaics Business earns revenues primarily through the sale of products and providing of services. Revenue is recognized upon shipment, provided persuasive evidence of a contract exists, the price is fixed, the product meets the customer's specifications, title and ownership have transferred to the customer, and there is reasonable assurance of collection of the sales proceeds. Revenue from time and material contracts is recognized at contractual rates as labor hours and direct expenses are incurred.

        The Photovoltaics Business records revenue on long-term solar panel contracts using either the percentage-of-completion method or the completed contract method. In general, the performance of these types of contracts involves the design, development, and manufacture of complex aerospace or electronic equipment to our customer's specifications. The percentage-of-completion method recognizes

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 4. Summary of Significant Accounting Policies (Continued)

estimates for contract revenue and costs in progress as work on the contract continues. Estimates are revised as additional information becomes available.

        The Photovoltaics Business uses the completed contract method if reasonably dependable estimates cannot be made or for which inherent hazards make estimates doubtful. Under the completed contract method, contract revenue and costs in progress are deferred as work on the contract continues. Total contract revenue and related costs are recognized upon the completion of the contract.

        The Photovoltaics Business also recognizes revenue from research and development contracts, which represents reimbursement by various U.S. government entities, or their contractors, to aid in the development of new technology. The research and development contract funding may be based on a cost-plus, cost reimbursement, or a firm fixed price arrangement.

        The Photovoltaics Business also participates in cost-sharing research and development arrangements. Under such arrangements in which the actual costs of performance are split between the U.S. government and the Photovoltaics business on a best efforts basis, no revenue is recorded and our research and development expense is reduced for the amount of the cost-sharing receipts.

Income Taxes

        For purposes of the stand-alone financial statements of the Photovoltaics Business, income tax was calculated at statutory rates adjusted for applicable permanent differences, as if the Photovoltaics Business was a separate taxpayer utilizing the "Separate Return Method", even though it has been included in the consolidated tax return of EMCORE. Deferred tax assets and liabilities for the future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases are recognized and included in the accompanying Unaudited Condensed Combined Balance Sheets for the Photovoltaics Business. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled.

        Historically, since the Photovoltaics Business has been included in the consolidated tax return of EMCORE, it has not determined its net operating loss carryforward balances in the past. Therefore, the net operating loss carryforward balance (and corresponding deferred tax assets) at June 30, 2014 and September 30, 2013 and 2012, cannot be reasonably determined for the Photovoltaics Business and, as a result, are not included in deferred tax assets.

        The Photovoltaics Business has not determined the actual amount of net operating losses as this information is not readily available on a stand-alone basis. The Company's management believes a net operating loss exists for the Photovoltaics Business based on the cumulative financial reporting losses generated prior to 2009 that are greater than the financial reporting income generated between 2009 and June 30, 2014. The Company's management also believes that it would have been more likely than not as of September 30, 2011, that the net operating losses for the Photovoltaics Business would be utilized in the future, therefore, the valuation allowance associated with the pre-2009 net operating losses would have been released.

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 5. Accounts Receivable

        The components of accounts receivable consisted of the following:

(in thousands)
  As of
June 30,
2014
  As of
September 30,
2013
  As of
September 30,
2012
 

Accounts receivable

  $ 14,116   $ 18,890   $ 10,335  

Accounts receivable—unbilled

    4,171     3,712     4,970  
               

Accounts receivable, gross

    18,287     22,602     15,305  

Allowance for doubtful accounts

   
   
(2,961

)
 
(2,961

)
               

Accounts receivable, net

  $ 18,287   $ 19,641   $ 12,344  
               

        Unbilled accounts receivable represents revenue recognized but not yet billed as of the period ended. Billings on contracts using the percentage-of-completion method usually occur upon completion of predetermined contract milestones or other contract terms, such as customer approval. The allowance for doubtful accounts is based on the age of receivables and a specific identification of receivables considered at risk of collection.

        As of June 30, 2014, September 30, 2013 and September 30, 2012, the Photovoltaics Business had $6.7 million, $6.8 million and $5.6 million, respectively, of accounts receivable recorded using the percentage of completion method. Of these amounts, $3.5 million was invoiced and $3.2 million was unbilled as of June 30, 2014, $3.9 million was invoiced and $2.9 million was unbilled as of September 30, 2013 and $1.5 million was invoiced and $4.1 million was unbilled as of September 30, 2012.

NOTE 6. Inventory

        The components of inventory consisted of the following:

(in thousands)
  As of
June 30,
2014
  As of
September 30,
2013
  As of
September 30,
2012
 

Raw materials

  $ 2,588   $ 1,975   $ 2,158  

Work in-process

    1,368     958     995  

Finished goods

    1,818     6,002     4,888  
               

Inventory

  $ 5,774   $ 8,935   $ 8,041  
               
               

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NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 7. Property, Plant, and Equipment, net

        The components of property, plant, and equipment, net consisted of the following:

(in thousands)
  As of
June 30,
2014
  As of
September 30,
2013
  As of
September 30,
2012
 

Land

  $ 1,502   $ 1,502   $ 1,502  

Building and improvements

    17,939     18,423     19,070  

Equipment

    6,379     5,919     3,792  

Furniture and fixtures

    28     37     49  

Computer hardware and software

    8     12     16  

Construction in progress

    635     1,220     1,528  
               

Property, plant, and equipment, net

  $ 26,491   $ 27,113   $ 25,957  
               
               

        As of June 30, 2014, September 30, 2013 and September 30, 2012, accumulated depreciation was approximately $58.8 million, $57.1 million and $54.5 million, respectively.

NOTE 8. Goodwill

Impairment Testing—Fiscal 2012:

        As of September 30, 2012, the Photovoltaics Business performed an annual goodwill impairment test and reviewed the qualitative factors as described in ASU No. 2011-08. The Company's management determined that it was not more likely than not that the fair value of our Photovoltaics Business was less than its carrying amount.

Impairment Testing—Fiscal 2013:

        As of September 30, 2013, the Photovoltaics Business performed an annual goodwill impairment test and reviewed the qualitative factors as described in ASU No. 2011-08. Due to the length of time that had elapsed and changes in the underlying assumptions used in the prior quantitative impairment test, the Company's management determined to skip the qualitative assessment and perform a quantitative, step one, assessment of possible impairment based on the estimated fair value of the Photovoltaics Business. The Company's management determined based on that analysis that goodwill related to the Photovoltaics Business unit was not impaired.

NOTE 9. Intangible Assets

        The following table sets forth the carrying value of intangible assets:

 
  As of June 30, 2014   As of September 30, 2013   As of September 30, 2012  
(in thousands)
  Gross
Assets
  Accumulated
Amortization
  Net
Assets
  Gross
Assets
  Accumulated
Amortization
  Net
Assets
  Gross
Assets
  Accumulated
Amortization
  Net
Assets
 

Photovoltaics Patents

  $ 1,528   $ (1,480 ) $ 48   $ 1,528   $ (1,337 ) $ 191   $ 1,528   $ (1,145 ) $ 383  
                                       

        Amortization expense related to intangible assets is included in selling, general, and administrative expense on our statement of operations. The carrying amount of our intangible assets as of June 30, 2014 of $48,000 is estimated to be fully amortized during the three months ended September 30, 2014.

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NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 10. Accrued Expenses and Other Current Liabilities

        The components of accrued expenses and other current liabilities consisted of the following:

(in thousands)
  As of
June 30,
2014
  As of
September 30,
2013
  As of
September 30,
2012
 

Compensation

  $ 2,115   $ 1,833   $ 1,102  

Warranty

    929     680     1,000  

Royalty

    696     1,061     1,445  

Deferred revenue

    507     2,217     5,557  

Self insurance

    671     545     517  

Income and other taxes

    171     124     37  

Loss on sale contracts

    438     287      

Other

    405     489     428  
               

Accrued expenses and other current liabilities

 
$

5,932
 
$

7,236
 
$

10,086
 
               
               


        Warranty:     The Photovoltaics Business generally provides product and other warranties on its solar cells, components and power systems. The Photovoltaics Business reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information.

        The following table summarizes the changes in our product warranty accrual accounts:

 
  For the Nine
Months Ended
June 30,
  Fiscal Years Ended
September 30,
 
Product Warranty Accruals
  2014   2013   2012  
(in thousands)
 

Balance at beginning of period

  $ 681   $ 1,000   $ 861  

Provision for product warranty expense

    568     425     85  

Adjustments and utilization of warranty accrual

    (320 )   (745 )   54  
               

Balance at end of period

  $ 929   $ 680   $ 1,000  
               
               

NOTE 11. Income Taxes

        Deferred tax assets and liabilities for the future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis are recognized and included in the accompanying Unaudited Condensed Combined Balance Sheets for the Photovoltaics Business. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The Photovoltaics Business has not determined the actual amount of net operating losses or associated carryforwards as this information is not readily available on a stand-alone basis. Therefore, the current and deferred income tax expense had not been adjusted to reflect the income tax benefit that would be expected if a net operating loss was utilized. The Company's management believes a net operating loss exists for the Photovoltaics Business based on the cumulative financial reporting losses generated prior to 2009 that are greater than the financial reporting income generated

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NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 11. Income Taxes (Continued)

between 2009 and the current period. The Company's management also believes that it would have been more likely than not as of September 30, 2011, that the net operating losses of the Photovoltaics Business would be utilized in the future, therefore, the valuation allowance associated with the pre-2009 net operating losses would have been released.

        The provision for income tax expense (benefit) consists of the following:

 
  For the Nine
Months Ended
June 30,
  For the Fiscal
Year Ended
September 30,
 
Income tax expense (benefit)
  2014   2013   2013   2012  
(in thousands)
 

Current:

                         

U.S. Federal

  $ 1,075   $ 1,905   $ 1,689   $ 3,333  

State

    249     441     392     772  
                   

Total current expense (benefit)

    1,324     2,346     2,081     4,105  
                   

Deferred:

                         

US. Federal

    1,613     822     843     (2,540 )

State

    229     116     120     (360 )
                   

Total deferred tax expense

    1,842     938     963     (2,900 )
                   

Total income tax expense

  $ 3,166   $ 3,284   $ 3,044   $ 1,205  
                   
                   

        The income tax expense differs from the expected income tax expense computed by applying the federal statutory rate of 34% as follows:

 
  For the Nine
Months Ended
June 30,
  For the Fiscal
Year Ended
September 30,
 
Provision for Income Taxes
  2014   2013   2013   2012  
(in thousands)
 

Income tax expense computed at U.S. federal statutory rate

  $ 2,756   $ 2,860   $ 2,645   $ 1,025  

State tax expense, net of U.S. federal effect

    393     407     378     150  

Other

    17     17     21     30  
                   

Income tax expense

  $ 3,166   $ 3,284   $ 3,044   $ 1,205  
                   

Effective tax rate

    39%     39%     39%     40%  
                   
                   

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NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 11. Income Taxes (Continued)

        Significant components of our deferred tax assets are as follows:

 
  As of
June 30,
2014
  As of
September 30,
2013
  As of
September 30,
2012
 
Deferred Tax Assets
 
(in thousands)
 

Deferred tax assets:

                   

Fixed assets

  $ 4,368   $ 4,330   $ 4,806  

Accounts receivable reserves

        1,150     1,150  

Inventory write-downs

    413     567     500  

Accrued vacation

    261     276     253  

Accrued severance

            22  

Accrued bonus

    190     243      

Legal reserves

    4     1     3  

Accrued royalties

    270     412     561  

Accrued warranty reserve

    361     264     388  

Inventory capitalization

    113     172     154  

Asset retirement obligation accretion

    273     264     251  
               

Total deferred tax assets

    6,253     7,679     8,088  

Deferred tax liabilities:

                   

Intangible assets

    (6,090 )   (5,674 )   (5,120 )
               

Total net deferred tax assets

  $ 163   $ 2,005   $ 2,968  
               
               

        The Company's management believes that it is more likely than not that the future results of the operations of the Photovoltaics Business would generate sufficient taxable income to realize the tax benefits related to its deferred tax assets. Therefore, the Photovoltaics Business does not have a valuation allowance to offset the expected benefits from realization of the net deferred tax assets. Current income taxes payable amounts are treated as an intercompany equity transaction and included as part of the net parent investment in the accompanying Unaudited Condensed Combined Balance Sheets.

        The Company's management has not identified any uncertain tax positions for the Photovoltaics Business. In addition, the Photovoltaics Business has not recorded interest or penalties in the financial statements.

        The Company has concluded that an ownership shift of greater than 50% was triggered in prior periods. Thus, there are limitations under Internal Revenue Code 382 that may limit the ability to realize the income tax benefit associated with net operating losses.

        As part of EMCORE's consolidated federal tax filings the Photovoltaics Business is under examination by the Internal Revenue Service in connection with the September 30, 2012 federal return. The Photovoltaics Business is not under examination in any states.

        EMCORE is subject to income tax returns in the U.S. federal jurisdiction and several state jurisdictions. EMCORE is not subject to U.S. federal income tax examinations for tax years before 2010. The statute of limitations associated with the state examinations varies by jurisdiction.

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 12. Commitments and Contingencies

        Operating Lease Obligations:     The Photovoltaics business leases certain land, facilities, and equipment under non-cancelable operating leases. Operating lease amounts exclude renewal option periods, property taxes, insurance, and maintenance expenses on leased properties. Facility leases typically provide for rental adjustments for increases in base rent (up to specific limits), property taxes, insurance, and general property maintenance that would be recorded as rent expense. Rent expense was approximately $0.2 million for both of the nine months ended June 30, 2014 and 2013, respectively, and $0.3 million for both of the fiscal years ended September 30, 2013 and September 30, 2012, respectively. There are no off-balance sheet arrangements other than our operating leases.


        Asset Retirement Obligations:     The Photovoltaics Business has known conditional asset retirement conditions, such as certain asset decommissioning and restoration of rented facilities to be performed in the future. In future periods, the asset retirement obligation is accreted for the change in its present value and capitalized costs are depreciated over the useful life of the related assets. If the fair value of the estimated asset retirement obligation changes, an adjustment will be recorded to both the asset retirement obligation and the asset retirement capitalized cost. Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations. The fair value of the asset retirement obligations were estimated by discounting projected cash flows over the estimated life of the related assets using credit adjusted risk-free rates. There were no asset retirement obligations settled during the nine months ended June 30, 2014 and 2013, and the fiscal years ended September 30, 2013 and September 30, 2012. Accretion expense of $29 thousand and $28 thousand was recorded during the nine months ended June 30, 2014 and 2013, respectively, and $38 thousand and $23 thousand for the fiscal years ended September 30, 2013 and 2012, respectively.


        Indemnifications:     The Photovoltaics Business has agreed to indemnify certain customers against claims of infringement of the intellectual property rights of others in our sales contracts with these customers. Historically, the Photovoltaics Business has not paid any claims under these indemnification obligations.


        Legal Proceedings:     The Photovoltaics Business may be subject to various legal proceedings, claims, and litigation, either asserted or unasserted that arise in the ordinary course of business. While the outcome of these matters is currently not determinable, the Photovoltaics Business does not expect the resolution of these matters will have a material adverse effect on the Photovoltaics Business or its financial position, results of operations, or cash flows. However, the results of these matters cannot be predicted with certainty. Professional legal fees are expensed when incurred. The Photovoltaics Business accrues for contingent losses when such losses are probable and reasonably estimable. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information. Should the Photovoltaics Business fail to prevail in any legal matter or should several legal matters be resolved against the Photovoltaics Business in the same reporting period, then the financial results of that particular reporting period could be materially affected.


Intellectual Property Lawsuits

        The Photovoltaics Business protects its proprietary technology by applying for patents where appropriate and, in other cases, by preserving the technology, related know-how and information as

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 12. Commitments and Contingencies (Continued)

trade secrets. The success and competitive position of its product lines are impacted by its ability to obtain intellectual property protection for its research and development efforts.

Contractual Obligations and Commitments

        The Photovoltaics Business contractual obligations and commitments for the remainder of fiscal 2014 and over the next five fiscal years are summarized in the table below:

 
   
  For the Fiscal Years
Ended September 30,
 
(in thousands)
  Total   2014   2015 to
2016
  2017 to
2018
  2019 and
later
 

Purchase obligations

  $ 14,687   $ 6,315   $ 890   $ 876   $ 6,606  

Asset retirement obligations

    2,475                 2,475  
                       

Total contractual obligations and commitments

  $ 17,162   $ 6,315   $ 890   $ 876   $ 9,081  
                       

        Interest payments are not included in the contractual obligations and commitments table above since they are insignificant to our consolidated results of operations.

        Purchase obligations represent agreements to purchase goods or services that are enforceable and legally binding, that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transactions.

        The Photovoltaics Business has known conditional asset retirement conditions, such as certain asset decommissioning and restoration of rented facilities to be performed in the future. Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations.

NOTE 13. Stock-Based Compensation

        EMCORE sponsors three equity incentive compensation plans, under which it issues equity-based awards to employees. The stock-based compensation expense included in the Unaudited Financial Statements represents the portion of EMCORE's total stock-based compensation expense attributed to employees directly supporting the Photovoltaics business and also an allocation of indirect expense attributed to shared employees performing corporate functions.

        See Note 15 under the Notes to Consolidated Financial Statements in the Company's Form 10-K for the year ended September 30, 2013, incorporated herein by reference, for additional information regarding stock-based compensation.

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 13. Stock-Based Compensation (Continued)

Stock-based compensation

        The effect of recording stock-based compensation expense was as follows:

 
  For the Nine
Months Ended
June 30,
  For the Fiscal
Years Ended
September 30,
 
Stock-based Compensation Expense—by expense type
 
  2014   2013   2013   2012  
(in thousands)
 

Cost of revenue

  $ 287   $ 320   $ 416   $ 510  

Selling, general, and administrative

    534     526     704     1,301  

Research and development

    245     242     327     365  
                   

Total stock-based compensation expense

  $ 1,066   $ 1,088   $ 1,447   $ 2,176  
                   
                   

NOTE 14. Segment Data and Related Information

        The Photovoltaics Business has one reporting segment:

 
  For the Nine Months
Ended June 30,
  For the Fiscal Year
Ended September 30,
 
Revenue by Geographic Region
  2014   2013   2013   2012  
(in thousands)
 

United States

  $ 45,384   $ 34,488   $ 43,973   $ 52,661  

Asia

    9,464     9,135     20,108     5,886  

Europe

    2,906     6,065     6,089     8,015  

Other

        328     328      
                   

Total revenue

  $ 57,754   $ 50,016   $ 70,498   $ 66,562  
                   

Significant Customers:

        Revenue from four customers each represented greater than 10% of our revenue for the nine months ended June 30, 2014 and in total these customers represented 57% of our revenue. Revenue from four customers each represented greater than 10% of revenue for the nine months ended June 30, 2013 and in total these customers represented 59% of our revenue. Revenue from three customers each represented greater than 10% of our revenue for the fiscal year ended September 30, 2013 and in total these customers represented 49% of our revenue. Revenue from three customers each represented greater than 10% of our revenue for the fiscal year ended September 30, 2012 and in total these customers represented 46% of our revenue.

NOTE 15. Subsequent Event

        On September 17, 2014, EMCORE entered into an Asset Purchase Agreement (the "Agreement") with Photon Acquisition Corporation ("Purchaser"), a Delaware corporation and an affiliate of private

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PHOTOVOLTAICS BUSINESS

NOTES TO UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

NOTE 15. Subsequent Event (Continued)

equity firm Veritas Capital, pursuant to which Purchaser will acquire substantially all of the assets, and assume substantially all of the liabilities, primarily related to or used in connection with the Photovoltaics Business. The Asset Sale is subject to closing conditions, including the receipt of approval by EMCORE's shareholders and other closing conditions.

        The purchase price for the acquired assets will be $150 million in cash, subject to certain working capital adjustments pursuant to the Agreement, which is attached to this proxy statement as Annex A. Following the closing of the Asset Sale, EMCORE will operate its fiber optics division which provides optical components, subsystems and systems for high-speed telecommunications, Cable Television (CATV) and Fiber-To-The-Premise (FTTP) networks, as well as products for satellite communications, video transport and specialty photonics technologies for defense and homeland security applications.

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PROPOSAL NO. 2: ADVISORY VOTE ON GOLDEN PARACHUTES

The Non-Binding Advisory Golden Parachute Proposal

        Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that we provide our shareholders with the opportunity to vote to approve, on an advisory, non-binding basis, the "golden parachute" compensation arrangements for our named executive officers, as disclosed in the table entitled "Golden Parachute Compensation" in the section of this Proxy Statement entitled "Quantification of Potential Payments to Named Executive Officers in Connection with the Asset Sale."

        We are asking our shareholders to indicate their approval of the various change of control payments which our named executive officers will or may be eligible to receive in connection with the Asset Sale. These payments are set forth in the table entitled "Golden Parachute Compensation" on page 44 of this Proxy Statement and the accompanying footnotes. Accordingly we are seeking approval of the following resolution at the Special Meeting:

        "RESOLVED, that the shareholders of EMCORE approve, solely on an advisory, non-binding basis, the golden parachute compensation which may be paid to EMCORE's named executive officers in connection with the Asset Sale, as disclosed pursuant to Item 402(t) of Regulation S-K in the table entitled "Golden Parachute Compensation" in the section entitled "Quantification of Potential Payments to Named Executive Officers in Connection with the Asset Sale" in EMCORE's proxy statement for the Special Meeting."

        Shareholders should note that this non-binding proposal regarding certain Asset Sale-related executive compensation arrangements is merely an advisory vote which will not be binding on EMCORE, our board of directors or Purchaser. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to shareholder approval. Accordingly, regardless of the outcome of the advisory vote, if the Asset Sale is consummated, our named executive officers will be eligible to receive the various change of control payments in accordance with the terms of conditions applicable to those payments.

        OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE NON-BINDING PROPOSAL REGARDING CERTAIN ASSET SALE-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth as of September 23, 2014 certain information regarding the beneficial ownership of our common stock by: (i) each of our named executive officer, (ii) each of our directors, (iii) all of our directors and named executive officers as a group (13 persons), and (iv) each person or "group" (as that term is defined in Section 13(d)(3) of the Exchange Act) known by us to be the beneficial owner of more than 5% of our common stock. Except as otherwise indicated, we believe, based on information furnished by such persons, that each person listed below has the sole voting and investment power over the shares of our common stock shown as beneficially owned, subject to common property laws, where applicable. Shares beneficially owned include shares of our common stock and warrants and options to acquire shares of our common stock that are exercisable within sixty (60) days of September 23, 2014 and phantom share credits representing shares of our common stock earned by our directors for services on the Board that such directors have elected to defer and which will be settled in our common stock upon a change of control or after such directors' termination of service as a director. Unless otherwise indicated, the address of each of the beneficial owners is c/o EMCORE Corporation, 10420 Research Road, SE, Albuquerque, New Mexico 87123.

Name
  Shares Beneficially
Owned(1)
  Percent of
Common Stock
 

Robert L. Bogomolny

    79,080 (2)   *  

Steven Becker

    3,197,105 (3)(4)(5)   10.28 %

Gerald J. Fine, Ph.D. 

        *  

Hong Q. Hou, Ph.D. 

    381,718 (5)(6)   1.22 %

Charles T. Scott

    73,617 (7)   *  

Sherman McCorkle

    22,510 (8)   *  

Reuben F. Richards, Jr. 

    441,886 (9)   1.41 %

James A. Tegnelia, Ph.D. 

    18,231 (10)   *  

Stephen L. Domenik

        *  

Mark Weinswig

    107,156 (11)   *  

Monica Van Berkel

    115,119 (12)   *  

Alfredo Gomez

    32,667 (13)   *  

Christopher Larocca

    42,584 (14)   *  

All directors and executive officers as a group (15 persons)

    4,511,673 (15)   14.18 %

Becker Drapkin Management, L.P. 

    3,197,105 (3)(4)(5)   10.28 %

Kopp Investment Advisors, LLC

    2,073,975 (16)   6.67 %

Thomas J. Russell, Ph.D. 

    1,719,717 (17)   5.53 %

Photon Acquisition Corporation

    3,578,413 (18)   11.51 %

c/o Veritas Capital Fund Management L.L.C.
590 Madison Avenue, New York, NY 10022

             

*
Less than 1.0%

(1)
As of September 23, 2014, 31,094,921 shares of Common Stock were outstanding.

(2)
Includes 7,921 phantom share credits, representing shares of Common Stock earned by Mr. Bogomolny for services rendered as a director, which he elected to defer.

(3)
This formation is based on information contained in a Schedule 13 D/A filed with the SEC on December 6, 2013 and in a Form 4 filed on December 10, 2013. According to the Schedule 13D/A, and Form 4, Becker Drapkin Partners (QP), L.P. ("Becker Drapkin QP") owns 2,077,849 shares of Common Stock (the "Becker Drapkin QP Shares"), and Becker Drapkin Partners, L.P. ("Becker Drapkin, L.P.") owns 292,742 shares of Common Stock (the "Becker Drapkin, L.P. Shares"). The Becker Drapkin QP Shares and Becker Drapkin, L.P. Shares are collectively referred to herein as

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(4)
Pursuant to the terms of the Settlement Agreement between the Company and Mr. Drapkin, Stephen Becker, BCA, BD Management, Becker Drapkin QP, and Becker Drapkin L.P. (collectively with Messrs. Becker and Drapkin, the "Shareholder Group"), the Shareholder Group has agreed that, through the conclusion of the 2015 Annual Meeting (the "Standstill Period"), each member of the Shareholder Group shall cause all shares of Common Stock owned of record or beneficially owned by it or its respective affiliates or associates to be present for quorum purposes and to be voted in favor of all directors nominated by our Board of Directors for election at any shareholder meeting where such matters will be voted on; provided, that such nominees were not nominated in contravention of the Settlement Agreement. In addition, the Settlement Agreement imposes certain restrictions and requirements on each member of the Shareholder Group (and their respective affiliates, associates, agents and other persons acting on his or its behalf), relating to actions with respect to the Company and its common stock during the Standstill Period, including limits on the acquisition of beneficial ownership in excess of 15% of the outstanding shares of our Common Stock; limits on submitting shareholder proposals and Board nominations for a vote by our shareholders; limits on the ability to solicit proxies or written consents from our shareholders; limits on the ability to call a special meeting of our shareholders; limits on actions with respect to sale transactions involving the Company; limits on public statements regarding the Company, the Board, and management; and limits on engaging in certain securities transactions relating to the Company and the securities of the Company.

(5)
Becker Drapkin Management, L.P., Becker Drapkin Partners (QP), L.P., Becker Drapkin Partners, L.P., BC Advisors, LLC, and Mr. Hong Q. Hou (the "Covered Shareholders") entered into a voting agreement with Photon Acquisition Corporation on September 17, 2014, pursuant to which, subject to certain exceptions, the Covered Shareholders have agreed to vote such shares (i) in favor of the Asset Sale Proposal and (ii) against (A) any action or agreement that would reasonably be expected to result in any of the conditions to EMCORE's obligation to consummate the transactions contemplated by the Asset Purchase Agreement not being fulfilled, (B) any Alternative Transaction Proposal, and (C) any other action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, materially delay, materially postpone or materially adversely affect consummation of the Asset Sale (except that the foregoing clauses (A) and (C) will not apply to the sale or disposition by way of asset sale of any part or all of the Other Businesses so long as clause (i) of the definition of Alternative Transaction Proposal is not

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(6)
Includes options to purchase 276,720 shares of Common Stock exercisable within 60 days of September 23, 2014, and 10,705 shares of Common Stock held in the Company's 401(k) Plan as of June 30, 2014.

(7)
Includes 14,689 phantom share credits, representing shares of Common Stock earned by Mr. Scott for services rendered as a director, which he elected to defer, and 34,125 shares of Common Stock owned by Kircal, Ltd.

(8)
Includes 8,000 shares of Common Stock held in Mr. McCorkle's 401(k) Plan as of December 31, 2013.

(9)
Includes options to purchase 256,250 shares of Common Stock exercisable within 60 days of September 23, 2014, 43,750 shares of Common Stock held by his spouse, 2,500 shares of Common Stock held by his spouse in a pension fund and 2,500 shares of Common Stock held in trust for the benefit of Mr. Richards' daughter.

(10)
Includes 13,251 phantom share credits, representing shares of Common Stock earned by Mr. Tegnelia for services rendered as a director, which he elected to defer.

(11)
Includes options to purchase 60,000 shares of Common Stock exercisable within 60 days of September 23, 2014, 5,000 restricted stock units vesting within 60 days of September 23, 2014, and 5,485 shares of Common Stock held in the Company's 401(k) Plan as of June 30, 2014.

(12)
Includes options to purchase 78,932 shares of Common Stock exercisable within 60 days of September 23, 2014 and 9,014 shares of Common Stock held in the Company's 401(k) Plan as of June 30, 2014.

(13)
Includes options to purchase 13,250 shares of Common Stock exercisable within 60 days of September 23, 2014 and 4,709 shares of Common Stock held in the Company's 401(k) Plan as of June 30, 2014.

(14)
Includes options to purchase 42,584 shares of Common Stock exercisable within 60 days of September 23, 2014. On January 14, 2014, all of Mr. Larocca's outstanding equity awards vested pursuant to the terms of a separation agreement, which he entered into with the Company in connection with his resignation as Chief Operating Officer.

(15)
Includes 5,000 restricted stock units vesting within 60 days of September 23, 2014, and options to purchase 727,736 shares of Common Stock exercisable within 60 days of September 23, 2014.

(16)
This information is based solely on information contained in a Schedule 13D filed with the SEC on October 8, 2010, by Kopp Investment Advisors, LLC ("KIA"), a wholly-owned subsidiary of Kopp Holding Company, LLC ("KHC"), which is controlled by Mr. LeRoy C. Kopp ("Kopp") (collectively, the "Kopp Parties"). KIA reports beneficially owning a total of 2,073,975 shares of Common Stock including having sole voting power over 0 shares of Common Stock and shared dispositive power over 735,225 shares of Common Stock. KHC reports beneficially owning 2,073,975 shares of Common Stock including having sole voting power over 0 shares of Common Stock and shared dispositive power over 735,225 shares of Common Stock. Kopp reports

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(17)
Includes 856,016 shares of Common Stock held by The Morning Star Trust for the benefit of Dr. Russell's daughter.

(18)
On September 26, 2014, Photon Acquisition Corporation, Photon Holdings Corporation, Photon Holding LLC, the Veritas Capital Fund IV, L.P., Veritas Capital Partners IV, L.L.C. (collectively, the "Veritas Entities"), Ramzi M. Musallam, Hugh D. Evans and Benjamin M. Polk jointly filed a Schedule 13D with the SEC in respect of 3,578,413 shares of Common Stock that are the subject of the Voting Agreement. As a result of the terms of the Voting Agreement, the Veritas Entities and Messrs. Musallam, Evans and Polk may be deemed to have certain shared power to vote the 3,578,413 shares of Common Stock that are the subject of the Voting Agreement. Veritas Capital Partners IV, L.L.C is the general partner of The Veritas Capital Fund IV, L.P., and Mr. Musallam is the managing member of such general partner. The Veritas Capital Fund IV, L.P. holds 100% of the equity of Photon Holding LLC and indirectly holds 100% of the equity of Photon Acquisition Corporation and Photon Holdings Corporation. Share ownership and other information contained herein concerning these reporting persons is based solely on the Schedule 13D filed by them. Each of the filers of the Schedule 13D disclaims any beneficial ownership of shares of Common Stock, and nothing herein or in the Schedule 13D shall be deemed to be an admission by the filers as to the beneficial ownership of such shares. The address of the Veritas Entities is c/o Veritas Capital Fund Management L.L.C. 590 Madison Avenue, New York, NY 10022.

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SHAREHOLDER PROPOSALS AND NOMINATIONS

        Shareholder proposals intended to be included in our proxy materials to be distributed in connection with the 2015 Annual Meeting of Shareholders, including nominations for the Company's Board of Directors, were required to be received by the Company no later than September 26, 2014.

        Shareholder proposals intended to be presented at the 2015 Annual Meeting of Shareholders that are not to be included in our proxy materials must comply with the requirements of our amended and restated by-laws and must be received by the Company no later than December 10, 2014. Proposals should be mailed to the Company, to the attention of Alfredo Gomez, Secretary, 10420 Research Road, SE, Albuquerque, New Mexico 87123. Proposals must comply with all applicable SEC rules.

        In accordance with our amended and restated by-laws, in the event that the date of our 2015 Annual Meeting of Shareholders is scheduled more than 70 days following the anniversary date of the 2014 Annual Meeting of Shareholders, proposals of shareholders intended for presentation at our 2015 Annual Meeting of Shareholders (but not intended to be included in the proxy statement for that meeting), as well as any shareholder recommendations for nominees to serve as directors of the Company, must be received no earlier than the ninetieth day prior to such annual meeting and not later than the close of business on the later of the seventieth day prior to such annual meeting or the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs.


TRANSACTION OF OTHER BUSINESS

        At the date of this Proxy Statement, the only business which the Board intends to present or knows that others will present at the Special Meeting is as set forth above. If any other matter or matters are properly brought before the Special Meeting, or an adjournment or postponement thereof, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their best judgment.


HOUSEHOLDING OF PROXY STATEMENT

        The rules promulgated by the SEC permit companies, brokers, banks or other intermediaries to deliver a single copy of our proxy materials to households at which two or more shareholders reside ("Householding"). Shareholders sharing an address who have been previously notified by their broker, bank or other intermediary and have consented to Householding, either affirmatively or implicitly by not objecting to Householding, received only one copy of our proxy materials. A shareholder who wishes to participate in Householding in the future must contact his or her broker, bank or other intermediary directly to make such request. Alternatively, a shareholder who wishes to revoke his or her consent to Householding and receive separate proxy materials for each shareholder sharing the same address must contact his or her broker, bank or other intermediary to revoke such consent. Shareholders may also obtain a separate Proxy Statement or may receive a printed or an e-mail copy of this Proxy Statement without charge by sending a written request to EMCORE Corporation, 10420 Research Road, SE, Albuquerque, New Mexico, 87123, Attention: Investor Relations, or by calling us at (505) 332-5000. We will promptly deliver a copy of this Proxy Statement upon request. Householding does not apply to shareholders with shares registered directly in their name.


WHERE YOU CAN FIND MORE INFORMATION

        EMCORE files annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act. You may read and copy this information at, or obtain copies of this information by mail from, the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call the SEC at (800) SEC-0330 for further information about the public reference room. EMCORE's filings with the SEC are also available to the public from

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commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov.

        The SEC allows us to "incorporate by reference" into this Proxy Statement documents that we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this Proxy Statement, and later information that we file with the SEC will update and supersede that information. We incorporate by reference the documents listed below and any documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy Statement and before the date of the Special Meeting:

        Notwithstanding the foregoing, information furnished under Items 2.02, 7.01 and 8.01 of any Current Report on Form 8-K, including the related exhibits, is not incorporated by reference in this Proxy Statement. In addition, statements contained in this Proxy Statement, or in any document incorporated in this Proxy Statement by reference, regarding the contents of any contract or other document, are only summaries of the material terms and as such we encourage you to carefully read in its entirety that contract or other document filed as an exhibit with the SEC.

        Any person, including any beneficial owner, to whom this Proxy Statement is delivered may request copies of proxy statements and any of the documents incorporated by reference in this document or other information concerning us, without charge, by written request directed to EMCORE Corporation, 10420 Research Road, SE, Albuquerque, New Mexico, 87123, Attention: Investor Relations, or by calling us at (505) 332-5000. Documents incorporated by reference are available without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference into those documents.

        THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED OCTOBER 22, 2014. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO SHAREHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

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Annex A

        ASSET PURCHASE AGREEMENT

dated as of September 17, 2014

by and between

EMCORE CORPORATION

and

PHOTON ACQUISITION CORPORATION


Table of Contents


TABLE OF CONTENTS

 
   
  Page  

ARTICLE 1 DEFINITIONS

    A-1  

1.1

 

Definitions

    A-1  

1.2

 

Glossary of Defined Terms

    A-10  

1.3

 

Interpretation

    A-12  

ARTICLE 2 PURCHASE AND SALE

   
A-13
 

2.1

 

Purchase and Sale of the Purchased Assets

    A-13  

2.2

 

Excluded Assets

    A-15  

2.3

 

Assumed Liabilities

    A-15  

2.4

 

Excluded Liabilities

    A-15  

ARTICLE 3 PURCHASE PRICE

   
A-16
 

3.1

 

Purchase Price

    A-16  

3.2

 

Working Capital Adjustment

    A-16  

3.3

 

Transferred Employee Accrual

    A-18  

3.4

 

Purchase Price Adjustment

    A-19  

3.5

 

Purchase Price Allocation

    A-19  

ARTICLE 4 CLOSING

   
A-19
 

4.1

 

Closing Date

    A-19  

4.2

 

Closing Deliveries by Seller

    A-20  

4.3

 

Closing Deliveries by Purchaser

    A-20  

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER

   
A-20
 

5.1

 

Organization, Authority and Qualification

    A-20  

5.2

 

No Conflict

    A-22  

5.3

 

Governmental Consents and Approvals

    A-22  

5.4

 

Financial Statements

    A-22  

5.5

 

Litigation

    A-23  

5.6

 

Title to and Sufficiency of Assets

    A-23  

5.7

 

Compliance with Laws

    A-23  

5.8

 

Real Property

    A-23  

5.9

 

Material Contracts

    A-24  

5.10

 

Government Contracts; Government Bids

    A-26  

5.11

 

Environmental Matters

    A-27  

5.12

 

Insurance

    A-28  

5.13

 

Employee Benefits

    A-28  

5.14

 

Tax Matters

    A-29  

5.15

 

Intellectual Property

    A-30  

5.16

 

Labor Matters

    A-31  

5.17

 

Absence of Certain Changes

    A-32  

5.18

 

Affiliate Transactions

    A-32  

5.19

 

Customers

    A-32  

5.20

 

Suppliers

    A-32  

5.21

 

Export Controls; Economic Sanctions and Customs Matters

    A-32  

5.22

 

Anti-Corruption

    A-33  

5.23

 

Opinion of Financial Advisor

    A-33  

5.24

 

Anti-Takeover Laws

    A-33  

5.25

 

Brokers

    A-34  

5.26

 

Solvency

    A-34  

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  Page  

5.27

 

Disclaimer

    A-34  

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER

   
A-34
 

6.1

 

Organization and Authority of Purchaser

    A-34  

6.2

 

No Conflict

    A-34  

6.3

 

Governmental Consents and Approvals

    A-35  

6.4

 

Litigation

    A-35  

6.5

 

Compliance with Laws

    A-35  

6.6

 

Debarment

    A-35  

6.7

 

Financing; Sufficiency of Funds

    A-35  

6.8

 

Brokers

    A-36  

6.9

 

Investigation by Purchaser

    A-36  

6.10

 

Guarantee

    A-36  

ARTICLE 7 ADDITIONAL COVENANTS AND AGREEMENTS

   
A-37
 

7.1

 

Seller Shareholder Meeting

    A-37  

7.2

 

Proxy Statement

    A-37  

7.3

 

Conduct of the Business

    A-38  

7.4

 

No Solicitation; Change in Recommendation

    A-40  

7.5

 

Access to Information; Confidentiality

    A-44  

7.6

 

Regulatory and Other Authorizations; Notices and Consents

    A-45  

7.7

 

Notifications

    A-47  

7.8

 

Release of Indemnity Obligations

    A-47  

7.9

 

Intellectual Property Matters

    A-47  

7.10

 

Transition Services

    A-48  

7.11

 

Further Action

    A-48  

7.12

 

Affiliate Transactions; Intercompany Arrangements

    A-50  

7.13

 

Release

    A-50  

7.14

 

Books, Records and Files

    A-50  

7.15

 

Non-Compete

    A-51  

7.16

 

Insurance Cooperation

    A-51  

7.17

 

Interim Financial Statements

    A-52  

7.18

 

Financing

    A-52  

7.19

 

Financing Cooperation

    A-54  

7.20

 

Estoppel Certificate

    A-56  

7.21

 

Code Section 338 Election

    A-56  

7.22

 

Wells Fargo Facility

    A-56  

7.23

 

Tax Clearance

    A-56  

7.24

 

Future Dividends

    A-57  

7.25

 

Subsequent Transaction

    A-57  

7.26

 

Medical Claims Reimbursement

    A-58  

ARTICLE 8 EMPLOYEE MATTERS

   
A-58
 

8.1

 

Transferred Employees

    A-58  

8.2

 

Compensation and Employee Benefits

    A-59  

8.3

 

Defined Contribution Plans

    A-60  

8.4

 

Mutual Non-Solicitation

    A-61  

8.5

 

No Third Party Beneficiaries

    A-61  

8.6

 

Business Employee Equity Awards

    A-61  

8.7

 

Employee Handbook Amendment

    A-61  

8.8

 

Business Employee Incentive Compensation

    A-61  

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  Page  

ARTICLE 9 TAXES

    A-62  

9.1

 

Periodic Taxes

    A-62  

9.2

 

Refunds

    A-62  

9.3

 

Resolution of Tax Controversies

    A-62  

9.4

 

Tax Cooperation

    A-63  

9.5

 

Conveyance Taxes

    A-63  

9.6

 

New Mexico Tax Claims

    A-63  

ARTICLE 10 CONDITIONS

   
A-64
 

10.1

 

Joint Conditions to Obligations

    A-64  

10.2

 

Conditions to Obligations of Seller

    A-64  

10.3

 

Conditions to Obligations of Purchaser

    A-65  

ARTICLE 11 TERMINATION

   
A-66
 

11.1

 

Termination

    A-66  

11.2

 

Effect of Termination

    A-67  

11.3

 

Termination Fees

    A-67  

ARTICLE 12 INDEMNIFICATION AND SURVIVAL

   
A-70
 

12.1

 

Survival of Representations and Warranties

    A-70  

12.2

 

Indemnification by Purchaser

    A-70  

12.3

 

Indemnification by Seller

    A-71  

12.4

 

R&W Insurance Policy

    A-71  

12.5

 

Limitations on Indemnification

    A-71  

12.6

 

Claims for Indemnification

    A-71  

12.7

 

Tax Effect

    A-72  

12.8

 

Insurance Offset

    A-73  

12.9

 

Exclusive Remedy

    A-73  

12.10

 

Treatment of Indemnification Payments

    A-73  

ARTICLE 13 MISCELLANEOUS

   
A-73
 

13.1

 

Assignment

    A-73  

13.2

 

Public Announcements

    A-73  

13.3

 

Expenses

    A-74  

13.4

 

Severability

    A-74  

13.5

 

No Third-Party Beneficiaries

    A-74  

13.6

 

Financing Sources

    A-74  

13.7

 

Waiver

    A-74  

13.8

 

Governing Law

    A-74  

13.9

 

Jurisdiction

    A-75  

13.10

 

Waiver of Jury Trial

    A-75  

13.11

 

Specific Performance

    A-75  

13.12

 

Headings

    A-77  

13.13

 

Counterparts

    A-77  

13.14

 

Further Documents

    A-77  

13.15

 

Notices

    A-77  

13.16

 

Performance of Obligations by Affiliates

    A-78  

13.17

 

Entire Agreement

    A-78  

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SCHEDULES

       

1.1(a)

 

Seller Knowledge Persons

       

1.1(b)

 

Repaid or Discharged Encumbrances

       

2.1(a)

 

Inventory

       

2.1(b)

 

Assigned Contracts

       

2.1(c)

 

Accounts Receivable

       

2.1(d)

 

Purchased Business Intellectual Property; Purchased Business Technology

       

2.1(e)

 

Tangible Personal Property

       

2.1(f)

 

Permits

       

2.1(g)

 

Certain Prepaid Expenses

       

2.1(h)

 

Purchased Subsidiaries

       

2.1(i)

 

Warranties, Indemnities and Similar Rights

       

2.2(e)

 

Additional Excluded Assets

       

2.4(i)

 

Additional Excluded Liabilities

       

5

 

Representations and Warranties of Seller

       

6

 

Representations and Warranties of Purchaser

       

7.3

 

Conduct of the Business

       

8.1(a)(i)

 

Certain Business Employees

       

10.3(c)

 

Closing Consents

       

EXHIBITS

   
 
 

A

 

Form of Bill of Sale and Assignment and Assumption Agreement

       

B

 

Statement of Net Working Capital

       

C

 

Form of Intellectual Property Transfer and License Agreement

       

D

 

Form of Pre-Novation Agreement

       

E

 

Form of Supply Agreement

       

F

 

Form of Transition Services Agreement

       

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ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT, dated as of September 17, 2014, is entered into by and between EMCORE Corporation, a New Jersey corporation ("Seller"), and Photon Acquisition Corporation, a Delaware corporation ("Purchaser"). Seller and Purchaser are each referred to individually as a "Party" and collectively as the "Parties." Capitalized terms used but not otherwise defined herein have the meanings set forth in Section 1.1 herein.

        WHEREAS, Seller is engaged in, among other things, the Business;

        WHEREAS, Seller wishes to sell or cause to be sold to Purchaser, and Purchaser wishes to purchase from Seller, all right, title and interest in and to the Purchased Assets, and in connection therewith Purchaser is willing to assume the Assumed Liabilities, all upon the terms and subject to the conditions set forth herein;

        WHEREAS, Seller and its Affiliates also conduct the Seller's Other Businesses at numerous locations both within and outside the United States, which businesses and operations are being retained by Seller and its Affiliates or transferred to other third parties and are not being transferred to, or acquired by, Purchaser;

        WHEREAS, in connection with the purchase of the Purchased Assets, Purchaser is willing to employ the Business Employees;

        WHEREAS, Seller's board of directors has (a) determined that it is in the best interests of Seller and its shareholders to enter into this Agreement, (b) unanimously approved the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby, (c) resolved to recommend that the shareholders of Seller vote in favor of the transactions contemplated hereby, and (d) directed that such matters be submitted to Seller's shareholders for their approval;

        WHEREAS, as an inducement to Seller to enter into this Agreement, concurrently with the execution of this Agreement, The Veritas Capital Fund IV, L.P. (the "Guarantor") has delivered to Seller a limited guarantee (the "Guarantee") in favor of Seller and, pursuant to which, upon the terms and subject to the conditions contained therein, the Guarantor is guaranteeing certain payment obligations of Purchaser in connection with this Agreement; and

        WHEREAS, as an inducement to Purchaser to enter into this Agreement, concurrently with the execution of this Agreement, certain holders of Common Stock have entered into voting agreements with Purchaser pursuant to which such persons agree, subject to the terms and conditions therein, to vote their shares of Common Stock to authorize and adopt this Agreement and the transactions contemplated herein (the "Voting Agreement").

        NOW, THEREFORE, in consideration of the premises and mutual covenants, agreements and provisions herein contained, and intending to be legally bound, the parties hereto agree as follows:


ARTICLE 1

DEFINITIONS

        1.1    Definitions.     The following terms have the following meanings when used herein:

        "Action" means any claim, action, lawsuit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

        "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, a Person shall be deemed to control another Person if it possesses the power to direct or cause the direction of the management policies of a Person, by contract or otherwise.

        "Agreement" means this Asset Purchase Agreement, including all schedules and exhibits hereto, as it may be amended from time to time in accordance with its terms.


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        "Ancillary Agreements" means each of (a) the Bill of Sale and Assignment and Assumption Agreement; (b) the Intellectual Property Transfer and License Agreement; (c) the Pre-Novation Agreement; (d) the Supply Agreement; and (e) the Transition Services Agreement.

        "Applicable Laws" shall mean all Laws that are applicable to Seller or any of its Subsidiaries.

        "Bill of Sale and Assignment and Assumption Agreement" means a bill of sale and assignment and assumption agreement, with respect to certain assets and liabilities of Seller, in substantially the form attached hereto as Exhibit A.

        "Books, Records and Files" means any studies, reports, records (including shipping and personnel records), books of account, invoices, Contracts, instruments, surveys, data (including financial, sales, purchasing and operating data), computer data, disks, tapes, marketing plans, customer lists, supplier lists, correspondence and other documents.

        "Building 2" means that certain building currently located at 1600 Eubank Blvd. SE, Albuquerque, NM 87123.

        "Business" means the Photovoltaics business unit of Seller, which consists of the development, manufacture and sale of the Products, as such business is currently conducted by Seller (subject to any changes permitted in accordance with Section 7.3).

        "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the City of New York.

        "Claim Notice" means written notification of a Third-Party Claim, specifying the nature of and basis for such Third-Party Claim, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Loss arising from such Third-Party Claim, and such other information as the Indemnifying Party shall reasonably request.

        "Clevenger Retention Agreement" means the Retention Award letter agreement between Brad Clevenger and Seller, dated as of September 17, 2014.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Collar Amount" means an amount equal to $1,000,000.

        "Compensation and Benefit Plans" means "employee benefit plan" (within the meaning of Section 3(3) of ERISA), including multiemployer plans within the meaning of Section 3(37) of ERISA and each bonus, incentive, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock, restricted stock unit, stock option, employment, termination, severance, stay bonus, change-in-control, transaction bonus, fringe benefit, retention, employee loan, compensation, welfare, medical, health or other plan, agreement, policy or arrangement, other than those maintained exclusively pursuant to applicable Law.

        "Competition Law" means any Law that prohibits, restricts or regulates actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

        "Confidential Information" means all trade secrets and other confidential and/or proprietary information of a Person, including information contained in or derived from reports, investigations, research, work in progress, codes, marketing and sales programs, financial projections, cost summaries, pricing formulas, contract analyses, financial information, projections, confidential filings with any state or federal agency, and all other confidential concepts, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of such Person by its employees, officers, directors, agents, representatives, or consultants.

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        "Consent" means any consent, approval, authorization, waiver, permit, grant, agreement, certificate, exemption, order, registration, declaration, filing, notice of, with or to any Person or under any Law, in each case required to permit the consummation of the transactions contemplated by this Agreement.

        "Contract" means any loan or credit agreement, bond, debenture, note, mortgage, indenture, lease, supply agreement, license agreement, development agreement or other contract, agreement, obligation, commitment or instrument that is legally binding, including all amendments thereto, in each case, whether written or oral.

        "Credit and Security Agreement" means that certain Credit and Security Agreement, dated November 11, 2010, as amended, by and between Seller and Wells Fargo.

        "Current Assets" means all Purchased Assets that would be reflected as current assets on a consolidated balance sheet of Seller determined in accordance with Seller's accounting practices, applied on a basis consistent with the preparation of the Statement of Net Working Capital attached hereto as Exhibit B, which shall exclude the Sumitomo TSA Pre-Closing Accounts Receivable.

        "Current Liabilities" means all Assumed Liabilities that would be reflected as current liabilities on a consolidated balance sheet of Seller determined in accordance with Seller's accounting practices, applied on a basis consistent with the preparation of the Statement of Net Working Capital attached hereto as Exhibit B, which shall (i) exclude the Transferred Employee Accrual, (ii) include any accrued and unpaid paid time off in respect of Transferred Employees, and (iii) include all compensation due under Seller's Fiscal Year 2014 Bonus Plan to the extent not paid as of the Closing.

        "Customs Laws" means all applicable U.S. and non-U.S. customs Laws and regulations.

        "Debt Financing Sources" means those agents, arrangers, lenders and other Persons that have committed to provide or otherwise entered into agreements in connection with the Debt Financing in connection with the transactions contemplated hereby (including the lead arranger or arranger or any of the Lenders) and any joinder agreements or credit agreements (or other definitive documentation) relating thereto, together with their respective Affiliates and their and their respective Affiliates' officers, directors, partners, members, employees, controlling persons, agents, trustees, administrators, managers, advisors and representatives and their respective successors and assigns.

        "Encumbrance" means any lien, pledge, hypothecation, charge, mortgage, security interest or other encumbrance.

        "Environmental Claim" means any complaint, accusation, allegation, notice of violation, Action, claim, lien, demand, abatement, judgment or other Order or directive (conditional or otherwise) by any Governmental Authority or any other Person arising out of, based on or resulting from: (a) the presence, management, manufacture, use, labelling, containment, storage, transportation, processing, production, disposal, recycling, Release or threatened Release of, or exposure to, any Hazardous Substances; or (b) any non-compliance with any Environmental Law or term or condition of any Environmental Permit.

        "Environmental Law" means any Law, common law, directive, judgments, orders (judicial or administrative), decrees, injunction, arbitral decisions or determinations or writs of any Governmental Authority related to (i) human health and safety (as such matters relate to Hazardous Substances) and the protection, investigation or restoration of the environment or natural resources; or (ii) the handling, use, storage, recycling, treatment, generation, transportation, processing, labeling, production , disposal, Release or threatened Release of any Hazardous Substances.

        "Environmental Liabilities" means all Liabilities (including Liabilities for the costs of any enforcement proceeding, Remedial Action, governmental response, natural resource damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising or resulting from or based upon (a) the presence, use, handling, storage, disposal,

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Release or threatened Release of, or exposure to, any Hazardous Substance or (b) the compliance or alleged non-compliance with or violation of any Environmental Law or term or condition of any Environmental Permit.

        "Environmental Permit" means any Permit required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the applicable rules and regulations promulgated thereunder.

        "Export Controls and Economic Sanctions Laws" shall mean laws, regulations and orders regulating the export, reexport, transfer, disclosure or provision of commodities, software, technology, defense articles or defense services, or imposing trade control sanctions or restrictions on countries, individuals or entities including, without limitation: the Export Administration Act of 1979 (Public Law 96-72, as amended); the Export Administration Regulations ("EAR," 15 C.F.R. Parts 730-774); the International Emergency Economic Powers Act ("IEEPA," Public Law 95-223); the Trading with the Enemy Act ("TWEA," 50 U.S.C. App. §§ 1-44); the Arms Export Control Act ("AECA," Public Law 90-629); the International Traffic in Arms Regulations ("ITAR," 22 C.F.R. Parts 120-130); export and import laws and regulations administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives (27 C.F.R. Chapter II); the Foreign Trade Regulations ("FTR," 15 C.F.R. Part 30); regulations, orders and restrictions administered by the U.S. Department of the Treasury, Office of Foreign Assets Control ("OFAC," 31 C.F.R. Part 500 et seq.); and any other export controls and economic sanctions laws, regulations and orders administered by an agency of the U.S. Government, or by any other jurisdictions to the extent applicable and to the extent compliance with such laws and regulations is not prohibited or penalized by applicable U.S. law.

        "FAR" shall mean the Federal Acquisition Regulation, as issued under the authority of the Officer of Federal Procurement Policy Act, 41 U.S.C. § 1101 et seq.

        "Financial Support Arrangements" means any liabilities or obligations, contingent or otherwise, of a Person in respect of any indebtedness, obligation or liability (including assumed indebtedness, obligations or liabilities) of another Person, including remaining obligations or liabilities associated with indebtedness, obligations or liabilities that are assigned, transferred or otherwise delegated to another Person, if any, letters of credit and standby letters of credit (including any related reimbursement or indemnity agreements), direct or indirect guarantees, endorsements (except for collection or deposit in the ordinary course of business), notes co-made or discounted, recourse agreements, take-or-pay agreements, keep-well agreements, agreements to purchase or repurchase such indebtedness, obligation or liability or any security therefor or to provide funds for the payment or discharge thereof, agreements to maintain solvency, assets, level of income or other financial condition, agreements to make payment other than for value received and any other financial accommodations.

        "GAAP" means United States generally accepted accounting principles as in effect from time to time.

        "Governmental Authority" means any United States federal, state or local or any non-United States governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body.

        "Government Bid" means any quotation, bid or proposal which, if accepted or awarded, would lead to a Government Contract.

        "Government Contract" means any prime contract, subcontract, teaming agreement or arrangement, joint venture, basic ordering agreement, letter contract, purchase order, delivery order, task order, change order, option or other contractual arrangement between Seller or any of its Subsidiaries, on the one hand, and either (a) any Governmental Authority, (b) any prime contractor of any Governmental

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Authority or (c) any subcontractor with respect to any contract described in clauses (a) or (b) of this definition, where the ultimate customer is a Governmental Authority, on the other hand, that has not been closed by the Governmental Authority, such prime contractor or such subcontractor, as appropriate, and/or remains subject to audit; provided, that the term "Government Contract" shall not include any Contract that primarily relates to Seller's Other Businesses.

        "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

        "Hazardous Substances" means any hazardous or toxic substance, material or waste which is regulated, listed or identified by any Governmental Authority as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous substance," "restricted hazardous waste," "contaminant," "pollutant," "toxic waste" or "toxic substance" under any provision of Environmental Law, and includes, but is not limited to, petroleum, petroleum products (including, without limitation, crude oil and any fraction thereof, any petrochemical or petroleum distillates or by-products), asbestos, asbestos-containing materials, ionizing and non-iodizing radioactive materials and substances (including naturally occurring radioactive materials), and polychlorinated biphenyls.

        "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

        "Indemnified Party" means any Person asserting a claim for indemnification under any provision of Article 12.

        "Indemnifying Party" means any Person against whom a claim for indemnification is being asserted under any provision of Article 12.

        "Indemnity Notice" means written notification pursuant to Section 12.6(b) of a claim for indemnity under Article 12 by an Indemnified Party, specifying the nature of and basis for such claim, together with the amount or, if not then reasonably determinable, the estimated amount, determined in good faith, of the Losses arising from such claim.

        "Intellectual Property" means all intellectual property rights, whether protected, created or arising under the laws of the United States or any other jurisdiction or under any international convention, including all (i) patents and patent applications, including all continuations, divisionals, continuations-in-part, and provisionals and patents issuing on any of the foregoing, and all reissues, reexaminations, substitutions, renewals, extensions and related priority rights of any of the foregoing (collectively, "Patents"), (ii) trademarks, service marks, trade names, trade dress, logos, corporate names and other source or business identifiers, together with the goodwill associated with any of the foregoing, and all applications, registrations, renewals and extensions of any of the foregoing (collectively, "Trademarks"), (iii) Internet domain names, (iv) copyrights, works of authorship (including, without limitation, software) and moral rights, and all registrations, applications, renewals, extensions and reversions of any of the foregoing, (v) mask works and mask sets, and all applications and registrations of any of the foregoing, and (vi) confidential and proprietary information, trade secrets, technology, know-how, databases, inventions, formulas, processes, developments and research, in each case excluding any rights in respect of any of the foregoing that comprise or are protected by Patents.

        "Intellectual Property Transfer and License Agreement" means the intellectual property transfer and license agreement entered into between Seller and Purchaser to, among other things, transfer the Purchased Business Intellectual Property and Purchased Business Technology to Purchaser, in substantially the form attached hereto as Exhibit C.

        "Intervening Event" shall mean any event, change, effect, development, condition or occurrence that (a) does not relate to an Alternative Transaction Proposal or Purchaser or any of its Affiliates, and

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(b) is not known and was not reasonably foreseeable to the board of directors of Seller as of the date hereof.

        "IRS" means the United States Internal Revenue Service.

        "IT Systems" means all electronic data processing, information, recordkeeping, communications, telecommunications, account management, inventory management and other computer systems, servers, network equipment and other hardware and Internet websites (but not the content of any Internet websites) used and controlled by or on behalf of Seller.

        "Knowledge" means, when used in connection with Seller with respect to any matter in question, the actual knowledge, after due inquiry, of those Persons listed on Schedule 1.1(a) of the Seller Disclosure Schedule and, when used in connection with Purchaser with respect to any matter in question, the actual knowledge, after due inquiry, of Jeffrey P. Kelly and Hugh D. Evans.

        "Law" means any United States federal, state, local or foreign statute, law, ordinance, regulation, rule, code, decree, order, injunction, other requirement or rule of law of any Governmental Authority.

        "Leased Business Real Property" means all the Real Property that (a) is used in the Business and (b) is leased by Seller or any Affiliate of Seller as tenant or ground lessee.

        "Liabilities" means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, Action or Governmental Order and those arising under any Contract (but excluding any future performance obligations under any such Contracts).

        "Marketing Period" means the period of sixty (60) consecutive days beginning on the date hereof.

        "Material Adverse Effect" means any change, event, occurrence or effect that (a) is materially adverse to the Purchased Assets or the business, condition (financial or otherwise) or results of operations of the Business, taken as a whole or (b) would have a material adverse effect on the consummation of the transactions contemplated hereby; provided, however, that, solely for the purposes of clause (a), none of the following shall be deemed (either alone or in combination) to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect: (i) any adverse change attributable to the execution of this Agreement, the disclosure or consummation of the transactions contemplated by this Agreement or any of the Ancillary Agreements or the business or activities in which Purchaser or its Affiliates are, or are proposed to be, engaged, or the identity of Purchaser or its Affiliates as Purchaser of the Business, including the loss or departure of Business Employees, or other service providers of the Business, or the termination, reduction (or potential reduction) or any other adverse development (or potential adverse development) in the Business's relationship with any of its customers, suppliers, distributors or other business partners, in each case, solely to the extent proximately caused by the announcement or pendency of this Agreement (provided that this clause (i) shall not apply for purposes of Section 5.2); (ii) any change, effect, event, occurrence, state of facts or development (x) in the domestic or international financial, credit, securities or commodities markets, or domestic or international economic, regulatory or political conditions in general (including embargoes and other similar trade sanctions or penalties) or (y) in the industries and markets in which the Business operates in general; (iii) fluctuations in sales and earnings or failure of the Business to meet internal or published sales, earnings or other financial or non-financial projections and estimates (but with respect to any such fluctuation or failure, not the underlying causes thereof); (iv) acts of war or terrorism (or the escalation of the foregoing) or natural disasters or other force majeure events; (v) changes in any Law applicable to the Business or applicable accounting regulations or principles or the interpretation thereof; or (vi) any action expressly required to be taken by Seller or its Subsidiaries pursuant to this Agreement or any Ancillary Agreement or that is consented to in writing by Purchaser; provided, that any change, event, occurrence, development, effect, condition, circumstance or matter described in clauses (ii),

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(iv) or (v) above that disproportionately adversely impacts the Business, taken as a whole, relative to other similarly situated companies in the industries and geographic locations in which the Business participates may be considered and taken into account in determining whether there has been a Material Adverse Effect.

        "Mezzanine Financing Sources" means those agents, arrangers, lenders, financial institutions, funds and other Persons that have committed to provide or have otherwise entered into agreements in connection with the Mezzanine Financing in connection with the transactions contemplated hereby (including the lead arranger or arranger or the Mezzanine Lender) and any joinder agreements or purchase agreements (or other definitive documents) relating thereto, together with their respective Affiliates and their and their respective Affiliates' officers, directors, partners, members, employees, controlling persons, agents, trustees, administrators, managers, advisors and representatives and their respective successors and assigns.

        "Net Working Capital" means, as of any date of determination, Current Assets minus Current Liabilities.

        "Owned Business Real Property" means all the Real Property that (a) is used primarily in the Business and (b) is owned by Seller and its Affiliates.

        "Permits" means all permits, licenses, clearances, franchises, approvals, waivers, letters, exemptions, consents, decisions, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from any Governmental Authority.

        "Permitted Encumbrances" means (a) statutory Encumbrances for Taxes not yet due and payable or the amount or validity of which are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP; (b) mechanics', materialmen's, architects', carriers', workers', repairers', warehousemen's, landlords' and other like statutory Encumbrances arising or incurred in the ordinary course of business, either securing payments not yet due or that are being contested in good faith by appropriate proceedings; (c) restrictions under leases, subleases, licenses or occupancy agreements that are Purchased Assets; (d) easements, licenses, covenants, rights-of-way and other similar restrictions of record, which, in each case, would be disclosed by a current survey, title report or title commitment, or inspection and do not materially impair the use of the applicable property in the ordinary course of business or the value of the applicable property; (e) (i) zoning, building codes and other land use laws and (ii) Encumbrances that have been placed by any developer, landlord or other third party on property over which Seller has easement rights and subordination or similar agreements relating thereto; (f) deposits or pledges made in connection with, or to secure payment of, worker's compensation, unemployment insurance, old age pension programs mandated under applicable Law or other social security; (g) restrictions on the transfer of securities arising under federal and state securities Law; (h) Encumbrances arising under equipment leases with third parties entered into in the ordinary course of business and any obligations under any Business Contracts; (i) Encumbrances securing or created by or in respect of any of the Assumed Liabilities; (j) Encumbrances affecting the fee interest of the real property located at Lots 1-2, Block 4 in the Sandia Research Park Subdivision solely relating to the Indenture dated as of June 1, 1998, entered into by and among the City of Albuquerque, New Mexico, Emcore IRB Company, Inc. and Norwest Bank New Mexico, National Association; (k) such Encumbrances as do not, individually and in the aggregate, materially detract from the value of the Purchased Assets (taken as a whole) or materially impair the present use of the Purchased Assets (taken as a whole); (l) outbound licenses and other agreements related to Intellectual Property that are not intended to secure an obligation; (m) obligations to accept inventory returns in the ordinary course; and (n) Encumbrances securing indebtedness of Seller that will be repaid or otherwise discharged at Closing as identified on Schedule 1.1(b) of the Seller Disclosure Schedule.

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        "Person" means any individual, corporation, partnership, limited partnership, joint venture, limited liability company, trust or unincorporated organization or Governmental Authority or any other entity.

        "Post-Closing Tax Period" means any taxable period (or portion thereof) commencing after the Closing Date, including such portion of any Straddle Period commencing after the Closing Date.

        "Pre-Closing Tax Period" means any taxable period (or portion thereof) ending on or prior to the Closing Date, including such portion of any Straddle Period ending on or prior to the Closing Date.

        "Pre-Novation Agreement" means the agreement entered into between Seller and Purchaser in substantially the form attached hereto as Exhibit D.

        "Products" means (1) solar cells, Coverglass Interconnected Cells (CICs), complete solar panels and various derivatives, components and sub-components thereof for satellite and spacecraft power applications; (2) solar cells and various integrated products for terrestrial, military mobile and unmanned aerial vehicle power applications; and (3) research, development, engineering and design services for photovoltaic power applications.

        "R&W Insurance Policy" means the representations and warranties insurance policy purchased by and issued to Purchaser in respect of this Agreement.

        "Real Property" means all land, buildings and other structures, facilities or improvements located thereon and all easements, licenses, rights and appurtenances relating to the foregoing.

        "Reference Net Working Capital" means $16,500,000.

        "Registered IP" means all issued Patents, pending Patent applications, registered Trademarks, pending applications for registration of Trademarks, registered copyrights, pending applications for registration of copyrights, registered mask works, pending applications for registration of mask works and Internet domain names owned, filed or applied for by Seller and used primarily in the Business.

        "Release" means the spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, storing, escaping, leaching, dumping, discarding, burying, abandoning or disposing (including the abandonment or discarding of barrels, containers and other closed receptacles) into the indoor or outdoor environment.

        "Remedial Action" means all actions, including, without limitation, any capital expenditures, required or voluntarily taken to (i) clean up remove, treat, or in any other way address any Hazardous Substance; (ii) prevent the Release or threatened Release, or minimize the further Release, of any Hazardous Substance so it does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care; or (iv) correct or otherwise address any noncompliance with Environmental Law and Environmental Permit.

        "Representative" means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such person.

        "Schedules" means the schedules attached hereto.

        "SEC" means the Securities and Exchange Commission.

        "Seller Disclosure Schedule" means the Schedules of Seller delivered to Purchaser as of the date hereof.

        "Seller ERISA Affiliate" means any trade or business that together with Seller, would be treated as a single employer for purposes of Section 4001(b) of ERISA.

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        "Seller's Other Businesses" means all businesses conducted prior to the Closing by Seller and its Affiliates, in each case that are not included in the Business. Seller's Other Businesses also includes the activities of Seller's corporate department, administrative departments and other support functions.

        "Solvent" means, when used with respect to any Person, that, as of any date of determination (i) the sum of such Person's debts is not greater than the Person's property, at a fair valuation, (ii) the present fair salable value of the Person's assets will not be less than the amount required to pay its probable liabilities on its existing debts (including contingent liabilities) as such debts become absolute and matured, (iii) such Person will not have unreasonably small capital with which to conduct any business or transaction in which it is engaged or is proposed to be engaged, and (iv) such Person does not intend to, and does not believe it will, incur debts beyond its ability to pay as such debts mature. For purposes of this definition, "not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged" and "pay its probable liabilities on its existing debts (including contingent liabilities) as such debts become absolute and matured" means that such Person will be able to generate enough cash from operations, asset dispositions or financing, or a combination thereof, to meet its probable obligations as they become due.

        "Straddle Period" means any taxable period beginning before the Closing Date and ending after the Closing Date.

        "Subsidiary" when used with respect to any party, means any corporation, limited liability company, partnership, association, trust or other entity of which securities or other ownership interests representing fifty percent (50%) or more of the equity or fifty percent (50%) or more of the ordinary voting power (or, in the case of a partnership, fifty percent (50%) or more of the general partnership interests) are, as of such date, owned by such party or one or more Subsidiaries of such party or by such party and one or more Subsidiaries of such party; provided, however, that for the purposes of Section 7.4, the references to "fifty percent (50%) or more" shall be deemed to be references to "more than fifty percent (50%)."

        "Sumitomo TSA Pre-Closing Accounts Receivable" means the accounts receivable payable to Seller pursuant to the Sumitomo TSA accruing for services provided prior to Closing.

        "Supply Agreement" means the supply agreement entered into between Seller and Purchaser in substantially the form attached hereto as Exhibit E.

        "Tangible Personal Property" means all office equipment, machinery, equipment, supplies, vehicles, tools, spare parts, production supplies, furniture and fixtures and other items of tangible personal property (other than Inventory) owned by Seller and used primarily in connection with the ownership, maintenance or operation of the Business.

        "Tax" or "Taxes" means any federal, state, local or foreign taxes, charges, fees, duties, tariffs, levies, or other assessments imposed by any Governmental Authority, including income, gross receipts, net proceeds, ad valorem, turnover, real property, personal property, sales, use, franchise, excise, value added, goods and services, license, payroll, unemployment, environmental, customs duties, capital stock, disability, stamp, user, transfer, fuel, excess profits, occupational and interest equalization, windfall profits, alternative or add-on minimum, estimated, registration, withholding, social security (or similar), or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not.

        "Tax Return" means any return, report, declaration, election, estimate, information statement, claim for refund and return, or other document (including any related or supporting information and any amendment to any of the foregoing) filed or required to be filed with any taxing authority with respect to Taxes.

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        "Technology" means all software, information, designs, circuit block libraries, formulae, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, programs, subroutines, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of any of the foregoing, in any form whether or not specifically listed herein.

        "Transferred Employee Accrual" means all unpaid gross salaries and wages (the "Outstanding Base Pay") and Seller's 401(k) plan matching obligations with respect to the Outstanding Base Pay (whether accrued on or following the Closing Date) incurred in the ordinary course of business and amounts in respect of Seller's employee stock purchase plan that will be refunded to Transferred Employees in accordance with the terms of Seller's employee stock purchase plan, in each case, that are accrued as of the Closing in respect of Transferred Employees and paid by Seller immediately prior to, at or following the Closing.

        "United States" means the United States of America and its territories and possessions (other than Puerto Rico).


        1.2
    Glossary of Defined Terms.     The following terms have the meanings set forth in the Sections set forth below:

Definition
  Section

$

  1.3(e)

Acceptable Confidentiality Agreement

  7.4(b)

Accounting Firm

  3.2(a)(ii)

Accounts Receivable

  2.1(c)

Allocation

  3.5(a)

Alternative Financing

  7.18(c)

Alternative Transaction Proposal

  7.4(h)

Anti-Corruption Laws

  5.22(a)

Assets Lists

  2.1(k)

Assigned Contracts

  2.1(b)

Assumed Liabilities

  2.3

Bulk Sale Notice

  7.23(a)

Business Employee

  8.1(a)(i)

Business Employee Equity Awards

  8.6

Business Proprietary Information

  7.5(d)

Closing

  4.1

Closing Date

  4.1

Closing Transferred Employee Accrual

  3.3(a)

Closing Working Capital

  3.2(a)(i)

Code Section 338(h)(10) Election

  7.21

Common Stock

  5.1(c)

Competitive Activity

  7.15

Confidentiality Agreement

  7.5(b)

Conveyance Taxes

  9.5

day

  1.3(d)

DC Employees

  8.3(a)

DDTC

  7.6(f)

Debt Financing

  6.7

Debt Financing Commitment

  6.7

Demand Letter

  7.23(b)

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Definition
  Section

Dispute Notice

  3.2(a)(ii)

Division

  7.23(a)

Division Escrow

  7.23(b)

dollars

  1.3(e)

Employee Benefit Plans

  5.13(a)

Equity Financing

  6.7

Equity Financing Commitments

  6.7

Escrow Account

  7.25

Escrow Agreement

  7.23(b)

Excluded Assets

  2.2

Excluded Contracts

  2.2(b)

Excluded Liabilities

  2.4

Final Net Working Capital

  3.2(a)(ii)

Final Purchase Price

  3.4

Final Transferred Employee Accrual

  3.3(b)

Financial Statements

  5.4

Financing

  6.7

Financing Commitments

  6.7

Government Official

  5.22(a)(i)

Guarantee

  Recitals

Guarantor

  Recitals

Interim Financial Statements

  7.17

Items

  5.21(a)

Key Customers

  5.19

Key Suppliers

  5.20

Lenders

  6.7

Losses

  12.2

Material Contracts

  5.9(a)

Medical Claims Amount

  7.26

Mezzanine Financing

  6.7

Mezzanine Financing Commitment

  6.7

Mezzanine Lender

  6.7

month

  1.3(d)

Notice of Seller Adverse Recommendation Change

  7.4(f)

Outside Date

  11.1(b)

Outstanding Base Pay

  1.1

Parties

  Preamble

Party

  Preamble

Periodic Taxes

  9.1

Plan Account Transfer

  8.3(b)

Post-Closing Periodic Tax Period

  9.1

Pre-Closing New Mexico Tax Claims

  9.6

Pre-Closing Periodic Tax Period

  9.1

Preliminary Purchase Price

  3.1

Proposed Net Working Capital Statement

  3.2(a)(i)

Proposed Transferred Employee Accrual Statement

  3.3(a)

Proxy Statement

  7.2

Purchased Assets

  2.1

Purchased Business Intellectual Property

  2.1(d)

Purchased Business Technology

  2.1(d)

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Definition
  Section

Purchased Subsidiaries

  2.1(h)

Purchased Subsidiaries Equity Interests

  5.1(d)

Purchaser

  Preamble

Purchaser Claims

  7.16(a)

Purchaser DC Plans

  8.3(a)

Purchaser Expenses

  11.3(a)

Purchaser FSA Plan

  8.2(e)

Purchaser Indemnified Party

  12.3

Purchaser Party

  11.3(a)(iii)

Purchaser Termination Fee

  11.3(b)

Recent Balance Sheet Date

  5.4

Reinstated Recommendation

  7.1

Retained Marks

  7.9

Review Period

  3.2(a)(ii)

Revised Transaction Proposal

  7.4(f)

Section 338 Forms

  7.21

Seller

  Preamble

Seller Acquisition Agreement

  7.4(d)

Seller Adverse Recommendation Change

  7.4(d)

Seller Board Recommendation

  5.1(b)

Seller DC Plans

  8.3(a)

Seller FSA Plan

  8.2(e)

Seller Indemnified Parties

  12.2

Seller Insurance Policies

  7.16(a)

Seller Party

  11.3(a)(iii)

Seller Shareholder Approval

  5.1(c)

Seller Shareholder Meeting

  5.1(c)

Seller Surviving Reps

  12.1

Seller Termination Fee

  11.3(a)(iii)

Subsequent Transaction

  7.25

Sumitomo TSA

  2.2(k)

Superior Proposal

  7.4(i)

Survival Date

  12.1

Surviving Reps

  12.1

Third-Party Claim

  12.6(a)

Transferred Employee

  8.1(a)(ii)

Transferred Employee Accrual Dispute Notice

  3.3(b)

Transferred Employee Accrual Review Period

  3.3(b)

Transition Services Agreement

  7.10

Voting Agreement

  Recitals

week

  1.3(d)

Wells Fargo

  10.1(d)

        1.3    Interpretation.    Unless otherwise required by the context in which any term appears:

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ARTICLE 2

PURCHASE AND SALE

        2.1    Purchase and Sale of the Purchased Assets.     Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase from Seller, free and clear of any Encumbrances other than the Permitted Encumbrances, all of Seller's right, title and interest in, to and under all of the assets, properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including goodwill), wherever located and whether now existing or hereafter acquired (other than the Excluded

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Assets), which primarily relate to, or are used or held for use primarily in connection with, the Business (collectively, the "Purchased Assets"), consisting of the following:

provided that, notwithstanding anything in this Agreement to the contrary, the Purchased Assets shall include Seller's leasehold interest in Building 2. Seller and Purchaser shall review, update as necessary and use reasonable best efforts to finalize each section of the Seller Disclosure Schedule referred to in this Section 2.1 (collectively, the "Assets Lists") at least three (3) but no more than five (5) Business Days prior to the Closing.

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        2.2
    Excluded Assets.     Notwithstanding the foregoing, the Purchased Assets shall not include the following assets (collectively, the "Excluded Assets"):


        2.3
    Assumed Liabilities.     At the Closing, Purchaser shall assume and agree to pay, perform and discharge when due, and indemnify and hold Seller harmless from and against any and all Losses attributable to, any and all Liabilities of Seller and Seller's Affiliates to the extent primarily relating to or arising out of the Business, the Purchased Assets or the Transferred Employees, whenever arising, existing or occurring, other than the Excluded Liabilities set forth in Section 2.4 below, and including the Liabilities assumed pursuant to Article 8 and Article 9 (collectively, together with all other obligations and Liabilities of Seller and Seller's Affiliates assumed by Purchaser, the Ancillary Agreements and the Schedules hereto and thereto, the "Assumed Liabilities").


        2.4
    Excluded Liabilities.     At the Closing, Seller or its Affiliates shall retain (or, if necessary, expressly assume), and shall be responsible for paying, performing and discharging when due, and Purchaser shall not assume or have any responsibility for, any of the following Liabilities (collectively, the "Excluded Liabilities"):

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ARTICLE 3

PURCHASE PRICE

        3.1    Purchase Price.     On the terms and subject to the conditions set forth in this Agreement, in consideration of the sale of the Purchased Assets and the assumption of the Assumed Liabilities, at the Closing Purchaser shall pay to Seller by wire transfer in immediately available funds to a bank account designated by Seller in writing not fewer than two (2) Business Days prior to the Closing Date an amount in cash equal to $150,000,000 (the "Preliminary Purchase Price"). The Final Purchase Price is the Preliminary Purchase Price, as it may be adjusted in accordance with Section 3.2.


        3.2
    Working Capital Adjustment.     

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        3.3
    Transferred Employee Accrual.     

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        3.4
    Purchase Price Adjustment.     The Preliminary Purchase Price shall be adjusted in accordance with the aggregate amount paid (i) to Seller pursuant to Section 3.2(b)(ii)(A) and/or Section 3.3(b), which amount shall increase the Preliminary Purchase Price, or (ii) to Purchaser pursuant to Section 3.2(b)(ii)(B), which amount shall reduce the Preliminary Purchase Price. The Preliminary Purchase Price as it may be adjusted pursuant to this Section 3.4 is referred to herein as the "Final Purchase Price."


        3.5
    Purchase Price Allocation.     


ARTICLE 4

CLOSING

        4.1    Closing Date.     Subject to the terms and conditions of this Agreement, the sale and purchase of the Purchased Assets and the assumption of the Assumed Liabilities contemplated by this Agreement shall take place at a closing (the "Closing") to be held at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022, at 10:00 a.m. local time, on the third (3rd) Business Day following the satisfaction or waiver of each of the conditions set forth in Article 10 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at the Closing) or at such other place, time or date as Seller and Purchaser may mutually agree in writing; provided, however, that if the Marketing Period has not ended at the time of the satisfaction or waiver (to the extent permitted hereunder) of the last to be satisfied or waived of the conditions set forth in Article 10 (other than those conditions that by their terms are to be satisfied at the Closing), the Closing shall occur on the earlier of (i) a Business Day before or during the Marketing Period specified by Purchaser on three (3) Business Days prior written notice to Seller, and (ii) the first Business Day following the final day of the Marketing Period (subject, in each case, to the satisfaction or waiver (to the extent permitted hereunder) of all of the conditions set forth in Article 10 (other than those conditions that by their terms are to be satisfied at the Closing,

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but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions)). (the day on which the Closing takes place, the "Closing Date").


        4.2
    Closing Deliveries by Seller.     At the Closing, Seller shall deliver to Purchaser:


        4.3
    Closing Deliveries by Purchaser.     At the Closing, Purchaser shall deliver to Seller:


ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

        Except as set forth in the Seller Disclosure Schedule (it being understood and agreed by the Parties that disclosure of any item in any section or subsection of the Seller Disclosure Schedule pertaining to representations and warranties shall be deemed disclosure with respect to any other section or subsection of the Seller Disclosure Schedule pertaining to representations and warranties to which the relevance of such item is reasonably apparent), Seller hereby represents and warrants to Purchaser as follows:


        5.1
    Organization, Authority and Qualification.     

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        5.2
    No Conflict.     Assuming that the Seller Shareholder Approval is obtained and that all Consents and other actions described in Section 5.3 and Section 5.10(a) have been obtained and except as may result from any facts or circumstances relating solely to Purchaser, the execution, delivery and performance of this Agreement by Seller does not and shall not (a) violate, conflict with or result in the breach of the certificate of incorporation or bylaws of Seller, (b) result in a violation or breach of, or cause acceleration, constitute (with or without due notice or lapse of time or both) a default or result in the loss of a material benefit (or give rise to any right of consent, termination, cancellation or acceleration or require notice) under any of the terms, conditions or provisions of any Material Contract, Government Contract or Government Bid, or (c) conflict with or violate any Law or Governmental Order applicable to Seller or its assets, properties or businesses, except, in the case of clause (b) or (c) above, have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


        5.3
    Governmental Consents and Approvals.     The execution, delivery and performance of this Agreement by Seller does not and shall not require any Consent of, action by, filing with or notification to, any Governmental Authority, except (a) filings required under, and compliance with other applicable requirements of, the HSR Act, (b) notifications and filings required in order to comply with Export Controls and Economic Sanctions Laws, (c) novation approval of the Government Contracts with a Governmental Authority of the United States Government, as listed on Schedule 5.3 of the Seller Disclosure Schedule, (d) as may be necessary as a result of any facts or circumstances relating solely to Purchaser or any of its Affiliates or (e) to the extent that the failure to obtain any such Consent or to take such action, make such filing or make such notification has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.


        5.4
    Financial Statements.     

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        5.5
    Litigation.     No Action by or against Seller is pending or, to the Knowledge of Seller, threatened against Seller or any of its Affiliates by or before any Governmental Authority or by any third party that (a) relates to or arose out of the Purchased Assets, the Assumed Liabilities or the Business or (b) questions the validity of this Agreement or any of the Ancillary Agreements, or any action taken or to be taken by Seller in connection with this Agreement or any of the Ancillary Agreements, which, in the case of each of clauses (a) and (b), would reasonably be expect to result in (i) injunctive or declaratory relief or Losses exceeding $150,000 to the Business; or (ii) individually or in the aggregate, a Material Adverse Effect.


        5.6
    Title to and Sufficiency of Assets.     


        5.7
    Compliance with Laws.     Seller is not, nor since October 1, 2012 has been, in violation of any Law applicable to Seller with respect to the Business or the Purchased Assets, except for violations that would not, individually or in the aggregate, have a Material Adverse Effect.


        5.8
    Real Property.     

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        5.9
    Material Contracts.     

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        5.10    Government Contracts; Government Bids.     

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        5.11
    Environmental Matters.     

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        5.12
    Insurance.     Schedule 5.12 of the Seller Disclosure Schedule contains a true, correct and complete list of all insurance policies currently in effect (by policy number, insurer, policy holder, policy period, type, and amount of coverage) held for the benefit of the Business and the Purchased Assets (the "Insurance Policies"). The Insurance Policies are sufficient for compliance with applicable Law and Contracts. Seller is in compliance in all material respects with the terms and provisions of the Insurance Policies and all premiums due and payable with respect thereto have been paid. Seller has not received a written notice of cancellation or termination of any Insurance Policy. The limits of the Insurance Policies have not been materially eroded. There is no material claim relating to the Business or the Purchased Assets pending under any of the Insurance Policies as to which coverage has been denied or disputed by the underwriters of such policy.


        5.13
    Employee Benefits.     

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        5.14
    Tax Matters.     

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        5.15
    Intellectual Property.     

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        5.16
    Labor Matters.     

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        5.17
    Absence of Certain Changes.     Except as contemplated by this Agreement, (a) since the Recent Balance Sheet Date, there has not been any state of facts, change, development, event, effect, condition or circumstance that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (b) between the Recent Balance Sheet Date and the date hereof, Seller has not taken any action that, if taken after the date of this Agreement without the written consent of Purchaser, would constitute a breach of subsections (d) through (e) of Section 7.3.


        5.18
    Affiliate Transactions.     No director or officer (other than in their capacity as such) or Affiliate of Seller is a party to any Contract or material transaction with Seller relating to the Business, including any Contract for any loans, advances, enterprise-level buying or sharing-of-discounts or no-cost-use arrangements, or otherwise requiring payments to or from, any such Person.


        5.19
    Customers.     Schedule 5.19 of the Seller Disclosure Schedule sets forth a list of the 10 most significant customers of Seller and its Subsidiaries pertaining to the Business, taken as a whole (the "Key Customers"), based on dollar sales volumes during the 12-month period ended June 30, 2014. Since October 1, 2013, none of Seller nor any of its Subsidiaries has received any written notice from a Key Customer that such Key Customer will (or has threatened to) cancel, terminate, materially limit or materially and adversely modify its current (or currently proposed) business relationship with Seller or any of its Subsidiaries other than with respect to requests by Key Customers to delay shipment of products of Seller or any of its Subsidiaries in the ordinary course.


        5.20
    Suppliers.     Schedule 5.20 of the Seller Disclosure Schedule sets forth a list of the 10 most significant suppliers of Seller and its Subsidiaries pertaining to the Business (the "Key Suppliers"), taken as a whole, based on amounts invoiced during the 12-month period ended June 30, 2014. Since October 1, 2013, none of Seller nor any of its Subsidiaries has received any written notice from a Key Supplier indicating that such Key Supplier has ceased, or will (or has threatened to) cancel, terminate, materially limit or materially and adversely modify its current (or currently proposed) business relationship with Seller or any of its Subsidiaries.


        5.21
    Export Controls; Economic Sanctions and Customs Matters.     

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        5.22
    Anti-Corruption.     


        5.23
    Opinion of Financial Advisor.     The board of directors of Seller has received an oral opinion (to be confirmed in writing) from Raymond James & Associates, Inc., dated as of September 16, 2014, to the effect that, based upon and subject to the assumptions, disclaimers, limitations, qualifications and other matters set forth in the written opinion, the Preliminary Purchase Price to be received by Seller pursuant to this Agreement is fair, from a financial point of view, to Seller. A non-reliance copy of such opinion will be provided to Purchaser promptly for information purposes following receipt thereof by Seller.


        5.24
    Anti-Takeover Laws.     There are no "fair price," "moratorium," "control share acquisition" or other anti-takeover Laws applicable to this Agreement or the transactions contemplated herein.

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        5.25
    Brokers.     Seller shall be solely responsible for the fees and expenses of any broker, finder or investment banker entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.


        5.26
    Solvency.     Assuming satisfaction of the conditions to this Agreement, and after giving effect to the transactions contemplated hereby, the assumption or retention (as applicable) of the Excluded Liabilities by Seller and its Affiliates, payment of all amounts required to be paid in connection with the consummation of the transactions contemplated hereby, and payment of all related fees and expenses, Seller and its Subsidiaries (on a consolidated basis) will be Solvent as of the Closing Date and immediately after the consummation of the transactions contemplated hereby.


        5.27
    Disclaimer.     EXCEPT AS SET FORTH IN THIS ARTICLE 5, NONE OF SELLER, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF SELLER, ITS AFFILIATES OR THE BUSINESS. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED.


ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF PURCHASER

        Purchaser hereby represents and warrants to Seller as follows:


        6.1
    Organization and Authority of Purchaser.     Purchaser is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware and has all necessary corporate power and authority to enter into, execute and deliver this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Purchaser, the performance by Purchaser of its obligations hereunder and the consummation by Purchaser of the transactions contemplated hereby have been duly authorized by all requisite corporate or similar action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser, and, assuming due authorization, execution and delivery by Seller, this Agreement is a legal, valid and binding obligation of Purchaser enforceable against it in accordance with its terms, subject in each case to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent conveyance, preferential transfer or similar Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law).


        6.2
    No Conflict.     Assuming that all Consents and other actions described in Section 6.3 have been obtained, and except as may result from any facts or circumstances relating solely to Seller, the execution, delivery and performance by Purchaser of this Agreement do not and shall not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or bylaws (or similar organizational documents) of Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to Purchaser or its assets, properties or businesses or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, result in the loss of a material benefit under any of the terms, conditions or provisions of, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, Contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which Purchaser is a party or pursuant to which its property or assets are bound, except, in the case of clauses (b) and (c), as would not materially and adversely affect the ability of Purchaser to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement.

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        6.3    Governmental Consents and Approvals.     The execution, delivery and performance by Purchaser of this Agreement do not and shall not require any Consent of, action by, filing with, or notification to, any Governmental Authority, except (a) filings required under, and compliance with other applicable requirements of, the HSR Act, (b) notifications and filings required in order to comply with Export Controls and Economic Sanctions Laws, (c) novation approval of the Government Contracts with a Governmental Authority of the United States Government, as listed on Schedule 5.3 of the Seller Disclosure Schedule, or (d) to the extent that the failure to obtain any such Consent or to take such action, make such filing or make such notification, would not prevent or materially delay the consummation by Purchaser of the transactions contemplated by this Agreement.


        6.4
    Litigation.     As of the date hereof, no Action by or against Purchaser is pending or, to the Knowledge of Purchaser, threatened, challenging the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby.


        6.5
    Compliance with Laws.     To the Knowledge of Purchaser, Purchaser is not in violation of any Law applicable to Purchaser, except for violations that would not, individually or in the aggregate, have a material adverse effect on the ability of Purchaser to perform its obligations under this Agreement and consummate the transactions contemplated hereby.


        6.6
    Debarment.     Neither Purchaser nor its Subsidiaries nor, to the Knowledge of Purchaser, any of its respective affiliates, directors, managers, officers or employees is (or at any time during the last four (4) years) has been suspended, debarred, proposed for suspension or proposed for debarment from doing business with a Governmental Authority.


        6.7
    Financing; Sufficiency of Funds.     Purchaser has delivered to Seller true, accurate and complete copies of (i) the commitment letter and any fee letter and any other ancillary agreements related thereto, subject only to redactions to exclude any pricing, fees, expenses and other amounts, including pricing and other economic terms included in the flex provisions set forth in the fee letter (collectively, the "Debt Financing Commitment"), dated as of the date hereof, between Purchaser and Citizens Bank, National Association and Citizens Bank of Pennsylvania (collectively, the "Lenders"), pursuant to which the Lenders have committed, subject to the terms and conditions thereof, to provide debt financing in connection with the transactions contemplated hereby (the "Debt Financing"), (ii) the mezzanine commitment letter and any fee letter and any other ancillary agreements related thereto, subject only to redactions to exclude any pricing, fees, expenses and other amounts, including pricing and other economic terms included in the "market flex" provisions set forth in the fee letter (collectively, the "Mezzanine Financing Commitment"), dated as of the date hereof, between Purchaser and Hancock Capital Management, LLC (collectively, the "Mezzanine Lender"), pursuant to which the Mezzanine Lender has committed, subject to the terms and conditions thereof, to provide mezzanine financing in connection with the transactions contemplated hereby (the "Mezzanine Financing"), and (iii) the equity commitment letter, dated as of the date hereof, between Purchaser and the Guarantor (such equity commitment letter, the "Equity Financing Commitments" and, together with the Debt Financing Commitment and the Mezzanine Financing Commitment, the "Financing Commitments"), pursuant to which the Guarantor has committed, subject to the terms and conditions thereof, to provide equity financing in connection with the transactions contemplated hereby (the "Equity Financing" and, together with the Debt Financing and the Mezzanine Financing, the "Financing"). As of the date hereof, each of the Financing Commitments is in full force and effect, subject in each case to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent conveyance, preferential transfer or similar Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject to the effect of general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law), and the respective commitments contained in the Financing Commitments have not been modified, withdrawn or rescinded in any respect and Purchaser is not in breach of any of the terms or conditions set forth therein and, assuming the satisfaction of the conditions set forth in Sections 10.1 and

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10.3(a)(i), no event has occurred which, with or without notice, lapse of time or both, could reasonably be expected to constitute a breach or failure to satisfy a condition precedent set forth therein. As of the date hereof, the Financing Commitments constitute the legal, valid and binding obligations of Purchaser and, to Purchaser's actual knowledge, the other parties thereto, subject in each case to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent conveyance, preferential transfer or similar Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject to the effect of general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law). Purchaser has fully paid any and all commitment fees, costs and expenses or other fees, costs and expenses required to be paid prior to the date of this Agreement pursuant to the Financing Commitments, and Purchaser will fully pay, after the date hereof, any and all such commitment or other fees, costs and expenses as they become due.

As of the date hereof, there are no side letters or other agreements or arrangements relating to the Financing to which Purchaser or any of its Affiliates is a party, the Debt Financing Commitment contains all of the conditions precedent to the obligations of the funding parties thereunder to make the Debt Financing available to Purchaser on the terms therein, the Mezzanine Financing Commitment contains all of the conditions precedent to the obligations of the funding parties thereunder to make the Mezzanine Financing available to Purchaser on the terms therein, and the Equity Financing Commitments contain all of the conditions precedent to the obligations of the funding parties thereunder to make the Equity Financing available to Purchaser on the terms therein. As of the date hereof, assuming the satisfaction of the conditions set forth in Sections 10.1 and 10.3(a)(i), Purchaser does not believe that any of the conditions to the Financing will not be satisfied or that the Financing will not be available to Purchaser on the Closing Date.


        6.8
    Brokers.     Purchaser shall be solely responsible for the fees and expenses of any broker, finder or investment banker entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser.


        6.9
    Investigation by Purchaser.     Purchaser has conducted its own independent review and analysis of the Business and the Purchased Assets and acknowledges that Purchaser has been provided access to the personnel, properties, assets, premises, books and records, and other documents and data of Seller and its Affiliates for this purpose. In entering into this Agreement, Purchaser has relied solely upon its own investigation and analysis, and Purchaser acknowledges that, except for the representations and warranties of Seller expressly set forth in Article 5, neither Seller nor any of its directors, officers, employees, agents or advisors or any other Person makes any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information provided or made available to Purchaser or any of its directors, officers, employees, agents or advisors in connection with the transactions contemplated hereby, except for the representations and warranties of Seller expressly set forth in Article 5. Without limiting the generality of the foregoing, neither Seller nor any of its directors, officers, employees, agents or advisors or any other Person makes any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information provided or made available to Purchaser or any of its directors, officers, employees, agents or advisors. Without limiting the generality of the foregoing, neither Seller nor any of its directors, officers, employees, agents or advisors or any other Person has made a representation or warranty to Purchaser with respect to any material, documents or information relating to the Purchased Assets made available to Purchaser or its directors, officers, employees, agents or advisors in any "data room," confidential memorandum, other offering materials or otherwise, except as expressly and specifically covered by a representation or warranty set forth in Article 5.


        6.10
    Guarantee.     Concurrently with the execution of this Agreement, Purchaser has delivered to Seller the Guarantee, duly executed by the Guarantor, with respect to certain matters, including

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guaranteeing certain payment obligations of Purchaser in connection with the Agreement and subject to the terms and conditions set forth therein. As of the date of this Agreement, the Guarantee is in full force and effect and constitutes the legal, valid and binding obligation of the Guarantor enforceable against it in accordance with its terms, subject in each case to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent conveyance, preferential transfer or similar Laws now or hereafter in effect relating to or affecting creditors' rights and remedies generally and subject, as to enforceability, to the effect of general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law).


ARTICLE 7

ADDITIONAL COVENANTS AND AGREEMENTS

        7.1    Seller Shareholder Meeting.     Seller shall, as promptly as practicable following the execution of this Agreement, establish a record date for, duly call, give notice of, convene and hold the Seller Shareholder Meeting. Subject to Section 7.4, Seller shall, through its board of directors, recommend to its shareholders approval of this Agreement and the sale of the Purchased Assets and shall include such recommendation in the Proxy Statement. Without limiting the generality of the foregoing, Seller's obligations pursuant to the first sentence of this Section 7.1 shall not be affected by (i) the disclosure or communication (publicly or otherwise) to Seller of any Alternative Transaction Proposal or (ii) the withdrawal or modification by the board of directors of Seller or any committee thereof of such board of directors' or such committee's approval or recommendation of this Agreement or the sale of the Purchased Assets. If a Seller Adverse Recommendation Change shall have occurred and thereafter the board of directors shall recommend this Agreement and the sale of the Purchased Assets (a "Reinstated Recommendation"), Seller shall not hold or shall adjourn the Seller Shareholder Meeting until not less than ten (10) calendar days after the date of such Reinstated Recommendation. Notwithstanding anything to the contrary in this Agreement, Seller may postpone or adjourn the Seller Shareholder Meeting (a) with the prior written consent of Purchaser, (b) for the absence of a quorum, (c) with Purchaser's prior written consent, to allow reasonable additional time for any supplemental or amended disclosure which Seller has determined in good faith (after consultation with outside counsel) is reasonably necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by Seller's shareholders prior to the Seller Shareholder Meeting or (d) with Purchaser's prior written consent, to allow additional solicitation of votes in order to obtain the Seller Shareholder Approval.


        7.2
    Proxy Statement.     As promptly as reasonably practicable after the execution of this Agreement (and, in any case, within twenty (20) Business Days), Seller shall prepare and file with the SEC a proxy statement relating to the approval by the shareholders of Seller of this Agreement and the transactions contemplated hereby (the "Proxy Statement") and Seller and Purchaser shall use their respective commercially reasonable efforts to cooperate with each other in connection with the preparation of the Proxy Statement. Seller and Purchaser shall use commercially reasonable efforts to respond as promptly as reasonably practicable to any comments received from the SEC or its staff concerning the Proxy Statement and Seller shall cause the Proxy Statement to be mailed to the shareholders of Seller as promptly as practicable after the resolution of any such comments. Purchaser shall furnish all information as may be reasonably requested by Seller in connection with the preparation, filing and distribution of the Proxy Statement, and no filing of, or amendment or supplement to, the Proxy Statement, or any response to any comments of the SEC with respect thereto, will be made by Seller, in each case without providing Purchaser a reasonable opportunity to review and comment thereon. If at any time prior to the Closing any information relating to Purchaser, or any of its Affiliates, directors or officers, should be discovered by Seller which should be set forth in an amendment or supplement to the Proxy Statement, so that such document would not include any misstatement of material fact or omit to state any material fact necessary to make the statements

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therein, in light of the circumstances under which they are made, not misleading, Seller shall promptly notify Purchaser and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Applicable Law or the SEC, disseminated to the shareholders of Seller. Seller shall notify Purchaser promptly of the receipt of any comments from the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement or for additional information and shall supply Purchaser with copies of all correspondence between it or any of its Representatives, on the one hand, and the SEC or staff of the SEC, on the other hand, with respect to the Proxy Statement or the sale of the Purchased Assets.


        7.3
    Conduct of the Business.     From the date of this Agreement until the Closing (or until the earlier termination of this Agreement in accordance with Section 11.1), except as expressly required by applicable Law, as set forth on Schedule 7.3 of the Seller Disclosure Schedule, as expressly required by this Agreement or any Ancillary Agreement or as otherwise waived or consented to in writing by Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall and shall cause its Affiliates to:

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provided, however, except as expressly provided in this Section 7.3, nothing in this Section 7.3 shall (A) prohibit Seller or its Affiliates from conducting their businesses, including the Business, in their

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reasonable discretion or (B) give Purchaser, directly or indirectly, the right to control or direct the operations of Seller prior to Closing.


        7.4
    No Solicitation; Change in Recommendation.     

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        7.5    Access to Information; Confidentiality.     

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        7.6
    Regulatory and Other Authorizations; Notices and Consents.     

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        7.7
    Notifications.     Prior to the Closing Date, Seller shall give prompt notice to Purchaser, and Purchaser shall give prompt notice to Seller, of (a) any notice or other communication received by such party from any Governmental Authority in connection with the transactions contemplated hereby or from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated hereby, (b) any actions, suits, claims, investigations or proceedings commenced or, to the Knowledge of such party, threatened against, relating to or involving or otherwise affecting such party or any of its Subsidiaries which relate to the transactions contemplated hereby, (c) in the case of Seller, the occurrence of any event that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (d) the occurrence of any event or the existence of any circumstance that would reasonably be expected to result in the failure of the notifying Party to satisfy a condition specified in Article 10 hereof and (e) any notice or other communication received by such party relating to any default under or breach of any Material Contract to which Seller or any of its Subsidiaries is a party; provided that the delivery of any notice pursuant to this Section 7.7 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.


        7.8
    Release of Indemnity Obligations.     


        7.9
    Intellectual Property Matters.     

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        7.10
    Transition Services.     Seller shall enter into a transition services agreement with Purchaser and, to the extent applicable, its Affiliates, in substantially the form attached hereto as Exhibit F and on such other terms and provisions as the Parties shall mutually agree in writing (the "Transition Services Agreement").


        7.11
    Further Action.     

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        7.12
    Affiliate Transactions; Intercompany Arrangements.     No later than immediately prior to the Closing, Seller shall, and shall cause its Affiliates to, terminate all agreements or arrangements, written or unwritten, of any kind (other than any Ancillary Agreements), between Seller or any of its Affiliates, on the one hand, and the Business, on the other hand, without liability or cost to Purchaser or any of its Affiliates.

        7.13    Release.    


        7.14
    Books, Records and Files.     Purchaser and Seller agree that Seller may maintain copies of any Books, Records and Files that are included in the Purchased Assets and that are delivered to Purchaser hereunder and Seller may prepare a comprehensive index and file plan of such Books, Records and Files. Purchaser agrees to retain and maintain such Books, Records and Files for a period of at least seven (7) years after the Closing (plus any additional time as required by Law or during which Purchaser has been advised by Seller that (i) there is an ongoing Tax audit with respect to periods prior to the Closing or (ii) any such period is otherwise open to assessment; provided that only such Books, Records and Files reasonably related to the appropriate Tax audit or period as advised by Seller shall be subject to such time extension). During such period, Purchaser agrees to give Seller and its representatives reasonable cooperation, access (including copies) and staff assistance, as needed, during normal business hours and upon reasonable notice, with respect to the Books, Records and Files delivered to Purchaser hereunder, and Seller agrees to give Purchaser and its representatives reasonable cooperation, access and staff assistance, as needed, during normal business hours and upon

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reasonable notice, with respect to the Books, Records and Files relating to the Business and retained by Seller, in each case as may be necessary for general business purposes, including the defense of litigation, the preparation of Tax returns and financial statements and the management and handling of Tax audits; provided that such cooperation, access and assistance does not unreasonably disrupt the normal operations of Purchaser or Seller or their respective Affiliates. Notwithstanding anything to the contrary contained in this Agreement, neither Seller nor any of its respective Affiliates shall be required to provide access to or copies of any income Tax Returns of Seller or any such Affiliate.


        7.15
    Non-Compete.     Subject to the provisions of this Section 7.15, Seller agrees that for a period of three (3) years from and after the Closing Date, none of Seller or any of its Affiliates shall compete, directly or indirectly, with the Business as conducted as of the Closing Date (a "Competitive Activity"); provided, however, that it shall not be deemed to be a violation of this Section 7.15 for Seller to, directly or indirectly: (i) invest in or own any non-voting or non-convertible debt securities or other debt obligations of any Person; (ii) make any equity investments in publicly-traded companies that may compete with the Business, (provided that such investments are passive in nature and do not exceed 5% of the outstanding voting power of such public companies); or (iii) own any interests in any Person through any Employee Benefit Plan. Purchaser acknowledges that Seller engages in Seller's Other Businesses and, notwithstanding anything herein to the contrary, Purchaser agrees that Seller shall not be in breach of any provision of this Section 7.15 solely as a result of Seller continuing to engage in Seller's Other Businesses as conducted as of the Closing Date following the Closing Date. The Parties recognize that the Laws and public policies of the various states of the United States and other jurisdictions may differ as to the validity and enforceability of covenants similar to those set forth in this Section 7.15. It is the intention of the Parties that the provisions of this Section 7.15 shall not render unenforceable, or impair, the remainder of the provisions of this Section 7.15. Accordingly, if any provision of this Section 7.15 shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall be deemed to apply only with respect to the operation of such provision in the particular jurisdiction in which such determination is made and not with respect to any other provision or jurisdiction, and Section 13.4 shall apply to substitute a valid and enforceable provision thereof. Notwithstanding anything in this Section 7.15 to the contrary, in the event of an acquisition of the stock, business or assets of Seller and/or any of its Affiliates (by asset purchase, stock purchase, merger, consolidation or otherwise) by any Person who is not a current Affiliate of the Seller, this Section 7.15 shall neither prohibit nor apply to the business of such Person as conducted prior to such acquisition.


        7.16
    Insurance Cooperation.     

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        7.17
    Interim Financial Statements.     From the date hereof to the Closing, Seller will make available to Purchaser, within 45 days of the end of the applicable quarterly accounting period for each of the four fiscal quarters of the Business, quarterly unaudited balance sheets and related statements of income of the Business for such quarterly accounting periods and, within 75 days of the end of the annual accounting period of the Business, annual unaudited balance sheets and related statements of income of the Business for such annual accounting period (collectively, the "Interim Financial Statements"). The Interim Financial Statements shall be prepared in a manner consistent in all material respects with the Financial Statements previously provided to Purchaser.

        7.18    Financing.    

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        7.19
    Financing Cooperation.     

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        7.20    Estoppel Certificate.     Seller shall use commercially reasonable efforts to obtain, prior to the Closing, an estoppel certificate from each landlord, lessor, sublessor or licensor of the Leased Business Real Property or lessee, sublessee or licensee of the Owned Business Real Property, confirming, among other things, that no defaults exist thereunder and the status of all payments associated therewith.


        7.21
    Code Section 338 Election.     Purchaser and Seller shall make an election under Section 338(h)(10) of the Code (and, to the extent requested by Purchaser, any corresponding elections under state or other Tax Laws) (each, a "Code Section 338(h)(10) Election") with respect to the purchase and sale of the stock of any Purchased Subsidiary that is treated as a corporation for U.S. federal income tax purposes pursuant to this Agreement. Purchaser, at its expense, shall prepare, or cause to be prepared, the forms and schedules (including IRS Form 8023) and take such other steps that are necessary to effect the Code Section 338(h)(10) Election. Seller shall execute all forms and schedules (including, without limitation, IRS Form 8023) required to make any Code Section 338(h)(10) Election (the "Section 338 Forms") and return the same to Purchaser prior to the Closing Date, to the extent that the Section 338 Forms have been provided to Seller at least five (5) days prior to the Closing Date and otherwise no more than ten (10) days from the receipt of the same from Purchaser or its agent. Purchaser will compute the adjusted grossed up basis of the assets of such applicable Purchased Subsidiaries in accordance with Code Sections 338 and 1060 (and any similar provision of state or other Tax Laws, as appropriate) and will prepare a draft schedule, allocating such basis among such applicable Purchased Subsidiaries' assets and shall provide such draft schedule to Seller. Seller shall, for ten (10) Business Days thereafter, be entitled to review and comment on such schedule and Purchaser shall consider such comments in good faith. Thereafter, Purchaser shall provide to Seller a final allocation schedule. Purchaser and Seller shall report and file all Tax Returns in all respects and for all purposes consistent with Purchaser's final allocation schedule. Neither Purchaser nor Seller shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with Purchaser's final allocation schedule. The allocation schedule shall be amended to take into account any adjustment to Purchase Price under Section 3.2 in a manner consistent with the procedures set forth in this Section 7.21. Seller shall include any income, gain, loss or deduction of the Tax items resulting from each Code Section 338(h)(10) Election on its Tax Returns to the extent required by applicable Law.


        7.22
    Wells Fargo Facility.     In the event that Seller has not delivered to Purchaser at least five (5) Business Days prior to the anticipated Closing Date an executed copy of either the consent of Wells Fargo as described in clause (i) of Section 10.1(d) or an amendment to the Credit and Security Agreement as described in clause (ii) of Section 10.1(d), Seller shall deliver to Purchaser promptly thereafter, but in any event at least three (3) Business Days prior to the anticipated Closing Date, (i) a payoff letter executed by Seller (in accordance with Section 2.6 of the Credit and Security Agreement and otherwise in form and substance reasonably acceptable to Purchaser) in respect of such indebtedness under the Credit and Security Agreement and (ii) wire instructions for Purchaser to pay at Closing a portion of the Preliminary Purchase Price to Wells Fargo (on behalf of Seller) to pay off any amounts outstanding under the Credit and Security Agreement as of the Closing.


        7.23
    Tax Clearance.     

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        7.24
    Future Dividends.     Seller covenants that any dividends it makes in respect of the Preliminary Purchase Price or Final Purchase Price shall be made in compliance with applicable Law.


        7.25
    Subsequent Transaction.     In the event that, at any time during the three (3) years following the Closing, all or substantially all of the remaining assets of Seller are sold, transferred or otherwise

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disposed of (a "Subsequent Transaction"), prior to or concurrently with the consummation of such Subsequent Transaction, Seller shall deposit immediately available funds in an amount equal to $15,000,000 into an escrow account (the "Escrow Account") with an escrow agent who shall be selected by Purchaser and reasonably acceptable to Seller, pursuant to an escrow agreement in form and substance reasonably agreed to by Purchaser (which escrow shall expire on the third anniversary of the Closing Date); provided that, if Seller shall have delivered to Purchaser at least fifteen (15) Business Days prior to the consummation of such Subsequent Transaction evidence reasonably acceptable to Purchaser that such subsequent transferee has a net worth, pro forma for such Subsequent Transaction, equal to or in excess of Seller's net worth immediately prior to the consummation of such Subsequent Transaction, but in no event less than $50 million, then such subsequent transferee may assume all of Seller's obligations under this Agreement pursuant to an assumption agreement among such subsequent transferee, Seller and Purchaser in a form and substance reasonably acceptable to Purchaser in lieu of Seller's obligation to deposit any amounts into the Escrow Account pursuant hereto. Notwithstanding anything in this Agreement to the contrary, so long as Seller maintains a net worth equal to or in excess of $50 million, neither Seller nor any subsequent transferee shall have any obligations pursuant to this Section 7.25.


        7.26
    Medical Claims Reimbursement.     On a periodic basis following the Closing but not more frequently than once per month, Seller shall provide Purchaser an invoice which shall specify the Medical Claims Amount and which shall include reasonable and appropriate documentation (on a redacted basis, as necessary, to comply with regulations pursuant to the Health Insurance Portability and Accountability Act of 1996) evidencing the aggregate amount paid by Seller during the applicable invoice period in respect of Transferred Employees for claims made under Seller's medical, health, dental or similar welfare benefit plans by such Transferred Employees at any time prior to the Closing, which invoice shall be paid by Purchaser within thirty (30) days of the date of receipt of such invoice. Invoices unpaid as of such due date shall accrue interest at 10% per annum. Payment by Purchaser of invoices with respect to such Medical Claims Amount shall be made by wire transfer of immediately available funds to one or more accounts designated by Seller. For purposes hereof, "Medical Claims Amount" means the amount actually paid by Seller during the applicable invoice period for claims made under Seller's medical, health or similar welfare benefit plans by Transferred Employees at any time prior to the Closing.


ARTICLE 8

EMPLOYEE MATTERS

        8.1    Transferred Employees.     

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        8.2
    Compensation and Employee Benefits.     

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        8.3
    Defined Contribution Plans.     

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        8.4
    Mutual Non-Solicitation.     Without the prior written consent of Purchaser, neither Seller nor any of its Subsidiaries shall, for a period of one (1) year following the Closing, solicit to employ any person who is a Transferred Employee or who is primarily employed by the Business (whether as an employee or independent contractor); provided that Seller and its Affiliates (i) may solicit and hire any such Transferred Employee whose employment or other relationship with Purchaser or any of its Affiliates is terminated by Purchaser or any of its Affiliates at any time after the six-month anniversary of such termination or (ii) hire such Transferred Employee who responds to a general advertisement not targeted at employees or independent contractors of Purchaser or any of its Subsidiaries without any solicitation in violation of this Section 8.4. Without the prior written consent of Seller, neither Purchaser nor any of its Subsidiaries shall, for a period of one (1) year following the Closing, solicit to employ (i) any person who was employed by Seller or any of its Affiliates (whether as an employee or independent contractor) in the Business but who is not a Transferred Employee and who is employed by Seller or any of its Affiliates, (ii) any person who is employed by Seller or any of its Affiliates in Seller's Other Businesses or (iii) any other employee of Seller or any Affiliate of Seller with whom Purchaser came into contact in connection with the negotiation of this Agreement; provided that Purchaser and its Subsidiaries (A) may solicit and hire such person whose employment or other relationship with Seller or any of its Affiliates is terminated by Seller or any of its Affiliates at any time after the six-month anniversary of such termination or (B) hire such person who responds to a general advertisement not targeted at employees or independent contractors of Seller or any of its Affiliates without any solicitation in violation of this Section 8.4. This Section 8.4 shall also apply to any Affiliate of a Party if such Party is using such Affiliate to avoid the purpose and intent of this Section.


        8.5
    No Third Party Beneficiaries.     Without limiting the generality of Section 13.5, the provisions of this Article 8 are solely for the benefit of the Parties, and no current or former employee of Seller or its Affiliates shall be regarded for any purpose as a third-party beneficiary of this Agreement. Nothing in this Agreement shall be construed as an amendment to any Employee Benefit Plan or other employee benefit plan for any purpose.


        8.6
    Business Employee Equity Awards.     Not later than immediately prior to the Closing, Seller shall take all necessary actions to accelerate the vesting of and fully vest as of Closing each equity award, including, for the avoidance of doubt, each restricted stock unit and stock option, granted to the Transferred Employees, that is issued and outstanding immediately prior to the Closing (the "Business Employee Equity Awards") under each of the EMCORE Corporation 2012 Equity Incentive Plan, EMCORE Corporation 2010 Equity Incentive Plan and EMCORE Corporation 2000 Stock Option Plan, each as may be amended or restated, and each such Business Employee Equity Award that is a restricted stock unit shall be canceled in exchange for delivery of the number of shares of Common Stock subject thereto, subject to required tax withholdings. For the avoidance of doubt, each stock option outstanding as of the Closing that is a Business Employee Equity Award shall remain outstanding for a period of not less than ninety (90) days following the Closing Date (or, if earlier, until the expiration of its term), unless the applicable award agreement provides that such stock option shall be cashed out upon a change in control, in which case such stock option shall be treated in accordance with its terms.


        8.7
    Employee Handbook Amendment.     Prior to the Closing, Seller shall take all necessary actions to amend policy "04. Time Off" of the EMCORE Corporation Employee Handbook to explicitly provide that the transactions contemplated by this Agreement shall not constitute a termination of employment for purposes of accrued but unused paid time off and Transferred Employees shall not be entitled to any payment by Seller with respect to such accrued but unused paid time off. Seller shall deliver a draft amendment to Purchaser at least ten (10) days prior to the anticipated Closing for Purchaser's review and comment and Seller shall consider such comments in good faith.


        8.8
    Business Employee Incentive Compensation.     Seller shall pay to each Transferred Employee, in the ordinary course of business consistent with past practice, all cash incentive compensation due to

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such Transferred Employee with respect to Seller's 2014 fiscal year, including all compensation due under Seller's Fiscal Year 2014 Bonus Plan; provided that such compensation under Seller's Fiscal Year 2014 Bonus Plan shall be paid by Seller no later than January 31, 2015 to the extent Closing occurs subsequent to such date; and, provided, further, that such compensation under Seller's Fiscal Year 2014 Bonus Plan shall be paid by Purchaser no later than January 31, 2015 to the extent that Closing occurs prior to such date.


ARTICLE 9

TAXES

        9.1    Periodic Taxes.     All personal property Taxes, real property Taxes and similar ad valorem obligations levied with respect to the Purchased Assets or the Business for a Straddle Period ("Periodic Taxes") shall be apportioned between Seller and Purchaser as of the Closing Date based on the number of days of such Straddle Period prior to and including the Closing Date (with respect to any such taxable period, the "Pre-Closing Periodic Tax Period"), and the number of days of such Straddle Period beginning after the Closing Date (with respect to any such taxable period, the "Post-Closing Periodic Tax Period"), respectively. Seller shall be liable for the proportionate amount of such Periodic Taxes that is attributable to the Pre-Closing Periodic Tax Period to the extent not taken into account as a current liability in the calculation of Final Net Working Capital, and Purchaser shall be liable for the proportionate amount of such Periodic Taxes that is attributable to the Post-Closing Periodic Tax Period. Purchaser shall be responsible for preparing and filing all Tax Returns for Periodic Taxes required to be filed after the Closing; provided, however, that (i) Purchaser shall deliver drafts of all such Tax Returns to Seller at least 30 days prior to the due date thereof for Seller's review; (ii) Seller shall notify Purchaser in writing of any objection to any such Tax Return within 10 days of receipt and (iii) Seller and Purchaser agree to consult and resolve in good faith any issue arising as a result of the review of such Periodic Tax Returns and to mutually consent to the filing of such returns; provided, further, however, if Purchaser and Seller are unable to resolve any disputed item then such disputed item shall be resolved by the Accounting Firm. The fees and expenses of such Accounting Firm shall be borne equally by Seller, on the one hand, and Purchaser, on the other hand. Seller shall remit its share of such Periodic Taxes to Purchaser no later than ten (10) days before the due date for such Taxes.


        9.2
    Refunds.     Seller shall be entitled to retain or, to the extent actually received by Purchaser or its Affiliates, receive prompt payment from Purchaser or any of its Affiliates of, any refund or credit with respect to Taxes (including without limitation refunds arising by reason of amended Tax Returns filed after the Closing or otherwise) with respect to any Pre-Closing Tax Period relating to the Purchased Assets or the Business. Purchaser shall be entitled to retain or, to the extent actually received by Seller or its Affiliates, receive prompt payment from Seller or any of its Affiliates of, any refund or credit with respect to Taxes (including without limitation refunds arising by reason of amended Tax Returns filed after the Closing or otherwise) with respect to any Post-Closing Tax Period relating to the Purchased Assets or the Business.


        9.3
    Resolution of Tax Controversies.     If a written claim shall be made by any Governmental Authority or taxing authority that might result in an indemnity payment to Purchaser or any of its Affiliates pursuant to Section 12.3, Purchaser shall promptly notify Seller of such claim. Seller shall have the right to control and defend any such claims. In the event that a Governmental Authority or a taxing authority determines a deficiency in any Tax relating to a Straddle Period, Purchaser shall have authority to determine whether to dispute such deficiency determination and to control the prosecution or settlement of such dispute and Seller shall have the right to participate in any such dispute; provided, however, that if Purchaser shall determine not to dispute such deficiency, Seller shall be permitted to do so. In any such case, Purchaser and Seller may not settle or compromise such dispute without first giving written notice to the other party of the terms of such settlement or compromise and receiving the written consent of such other party to such settlement or compromise; provided, however, that consent to such settlement or compromise shall not be unreasonably withheld, conditioned or delayed by such party.

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        9.4    Tax Cooperation.     Seller and Purchaser agree to furnish or cause to be furnished to the other Party, upon request, as promptly as practical, such information, records and assistance (including, but not limited to, making such of their respective officers, directors, employees and agents available as may reasonably be requested by such other Party) in connection with the preparation of any Tax Return, audit or other proceeding that relates to the Purchased Assets or the Business, provided, that in no event shall any Party or any of its respective Affiliates be required to provide access to or copies of any income Tax Returns of such Party or any such Affiliate. Any reasonable out-of-pocket expense incurred in providing such information or assistance shall be borne by the Party requesting it.


        9.5
    Conveyance Taxes.     Notwithstanding any other provision of this Agreement to the contrary, all transfer, documentary, value added recording, sales, use, registration, stamp, enterprise and other similar Taxes (including all applicable real estate transfer Taxes, but excluding any Taxes based on or attributable to income or capital gains) together with any conveyance fees, notarial and registry fees and recording costs (including any penalties and interest thereon) imposed by any taxing authority or other Governmental Authority in connection with the transfer of the Purchased Assets or the Business to Purchaser or its Affiliates by this Agreement ("Conveyance Taxes") shall be borne 50% by Purchaser and 50% by Seller. The party responsible for filing any Tax Return relating to any Conveyance Tax shall prepare and file such Tax Return at its expense, provided that such party shall deliver a copy of such Tax Return to the other party at least five Business Days prior to the due date for such Tax Return and such other party shall deliver to the party that prepared such Tax Return such other party's 50% share of the Conveyance Tax due in connection with filing such Tax Return at least two Business Days prior to such due date. Each of Seller and Purchaser shall take any action reasonably requested by the other party in connection with preparing and filing any Tax Return relating to any Conveyance Tax.


        9.6
    New Mexico Tax Claims.     Notwithstanding anything to the contrary herein, Seller shall be responsible for preparing and filing all Tax Returns relating to the New Mexico Technology Jobs Credit, Alternative Energy Product Tax Credit, Investment Tax Credit and High-Wage Jobs Tax Credit to the extent any such New Mexico Tax claim relates solely to a Pre-Closing Tax Period (collectively, the "Pre-Closing New Mexico Tax Claims"). Seller shall be responsible for and control all audits, examinations, hearings, appeals, or other proceedings relating to or arising in connection with such Pre-Closing New Mexico Tax Claims. Any tax credits, refunds, or other tax benefits relating to or arising in connection with the Pre-Closing New Mexico Tax Claims shall be for the sole benefit of Seller and Seller and Purchaser shall not take any position inconsistent with the foregoing on any Tax Return, any refund claim, or in any Tax proceeding unless required by a final determination by an applicable taxing authority. Purchaser shall not file an amended Tax Return relating to the Pre-Closing New Mexico Tax Claims without the prior written consent of Seller, which shall not be unreasonably withheld, conditioned or delayed. Purchaser agrees to furnish or cause to be furnished to Seller, as promptly as reasonably practical, such information, records, invoices, payroll information, and assistance as Seller may reasonably request in writing in connection with the preparation of any Tax Returns, audits or other proceedings that relate to the Pre-Closing New Mexico Tax Claims. Seller agrees to furnish or cause to be furnished to Purchaser, as promptly as reasonably practicable, such information, records, invoices, payroll information, and assistance as Purchaser may reasonably request in writing in connection with the preparation of any Tax Returns, audits or other proceedings that relate to the New Mexico Technology Jobs Tax Credit, Alternative Energy Product Tax Credit, Investment Tax Credit or High-Wage Jobs Tax Credits in respect of taxable periods after the Closing Date.

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ARTICLE 10

CONDITIONS

        10.1    Joint Conditions to Obligations.     The obligations of each Party to consummate the transactions contemplated by this Agreement shall be subject to satisfaction (or, to the extent permitted by applicable Law, waiver) at or prior to the Closing of the following condition:


        10.2
    Conditions to Obligations of Seller.     The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to satisfaction (or, to the extent permitted by applicable Law, waiver) at or prior to the Closing of the following conditions:

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        10.3
    Conditions to Obligations of Purchaser.     The obligations of Purchaser to consummate the transactions contemplated by this Agreement shall be subject to satisfaction (or, to the extent permitted by applicable Law, waiver) at or prior to the Closing of the following conditions:

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ARTICLE 11

TERMINATION

        11.1    Termination.     This Agreement may be terminated at any time prior to the Closing in the following circumstances:

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        11.2
    Effect of Termination.     In the event of termination of this Agreement as provided in Section 11.1, this Agreement shall forthwith become void (other than this Section 11.2, Section 11.3 and Article 13, in accordance with its terms, all of which shall survive termination of this Agreement) and there shall be no liability on the part of either Party except as set forth in Section 11.3.


        11.3
    Termination Fees.     

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ARTICLE 12

INDEMNIFICATION AND SURVIVAL

        12.1    Survival of Representations and Warranties.     Except for the Surviving Reps (defined below), none of the representations and warranties in this Agreement or in any certificate or other instrument delivered pursuant to this Agreement shall survive the Closing (other than for purposes of the R&W Insurance Policy). The representations and warranties contained in Sections 5.1 (Organization, Authority and Qualification), 5.14 (Tax Matters), 5.6(a) (Title to and Sufficiency of Asset) and 5.25 (Brokers) (collectively, "Seller Surviving Reps") and in Sections 6.1 (Organization and Authority of Purchaser) and 6.8 (Brokers) (collectively, "Purchaser Surviving Reps" and, together with the Seller Surviving Reps, the "Surviving Reps") shall survive the Closing indefinitely unless a statute of limitations applies to claims of third parties in any such case, and with respect to such claims, and with respect to any and all representations and warranties with respect to matters covered by Section 5.14 (Tax Matters), such representations and warranties shall expire ninety (90) days following the expiration of the applicable statute of limitations (including any extensions thereof) provided by Applicable Law (the "Survival Date"). As of the Survival Date for each of the Surviving Reps, such representations and warranties shall automatically terminate and be of no further force or effect, and except for fraud, no claims of any type whatsoever arising out of, based upon or relating any way to such representations and warranties may be brought by any party after the applicable Survival Date; provided, however, that such representations or warranties shall survive beyond such period with respect to (but only with respect to) any inaccuracy therein or breach thereof, notice of which shall have been duly given prior to the Survival Date in accordance with Sections 12.5 and 12.6. Furthermore, except for fraud and intentional misrepresentation, the Parties (i) intend that the preceding sentence relating to the expiration and automatic termination of the Surviving Reps as of the applicable Survival Date shall operate as a contractual statute of limitations relating to any and all claims of any type whatsoever arising out of, based upon or relating in any way to such representations and warranties and shall replace and supplant any statute of limitations which may otherwise apply thereto, and (ii) agree and acknowledge that such replacement and supplanting of the statute of limitations by the contractual statute of limitations in this Section 12.1 is reasonable and appropriate. All covenants or other agreements in this Agreement shall survive the Closing until fully satisfied.


        12.2
    Indemnification by Purchaser.     Subject to the other provisions of this Article 12, from and after the Closing, Purchaser shall indemnify, hold harmless and reimburse Seller and its Affiliates, officers, directors, agents, successors and assigns (each, a "Seller Indemnified Party") from and against and in respect of any and all losses, damages, costs, expenses (including any reasonable and documented attorneys' fees), fines, penalties, disbursements and amounts paid in settlement (collectively, "Losses") which any Seller Indemnified Party may actually suffer or incur to the extent arising out of or related to:

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        12.3
    Indemnification by Seller.     Subject to the other provisions of this Article 12, from and after the Closing, Seller shall indemnify, hold harmless and reimburse Purchaser and its Affiliates, officers, directors, agents, successors and assigns (each, a "Purchaser Indemnified Party") from and against and in respect of any and all Losses which any Purchaser Indemnified Party may actually suffer or incur to the extent arising out of or related to:


        12.4
    R&W Insurance Policy.     Except as set forth in Section 12.9, from and after the Closing, the R&W Insurance Policy shall be the sole and exclusive remedy of the Purchaser Indemnified Parties for any and all Losses that are sustained or incurred by any of the Purchaser Indemnified Parties by reason of, resulting from or arising out of any breach of or inaccuracy in any of Seller's representations or warranties contained in this Agreement (other than the Seller Surviving Reps). Without limiting the generality of the foregoing, any rights of any issuer of the R&W Insurance Policy, including any rights of subrogation, do not affect, expand or increase any liability or obligation of Seller in connection with the transactions contemplated by this Agreement.


        12.5
    Limitations on Indemnification.     


        12.6
    Claims for Indemnification.     All claims for indemnification by any Indemnified Party shall be asserted and resolved as set forth in this Section 12.6:

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        12.7
    Tax Effect.     The amount of any Loss subject to indemnification under this Agreement shall be reduced by the amounts of any net tax benefits that have been actually received by the Indemnified Party in the year such Loss is incurred or in the following year and that results from such indemnifiable Loss. As used in this Section 12.7, "tax benefit" shall mean the net Tax savings attributable to any deduction, expense, loss, credit or refund to the Indemnified Party, when actually received. The amount of any tax benefit actually received shall be equal to the actual reduction in Taxes of the Indemnified Party paid in cash determined with the applicable Tax items and the indemnity payment made or to be made taken into account as compared with the Taxes that would have been payable without the applicable Tax items.

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        12.8    Insurance Offset.     If any Losses sustained by an Indemnified Party are covered by an insurance policy or an indemnification, contribution or similar obligation of another Person (other than an Affiliate of such Indemnified Party), the Indemnified Party shall use commercially reasonable efforts to collect such insurance proceeds or indemnity, contribution or similar payments. If the Indemnified Party receives such insurance proceeds or indemnity, contribution or similar payments prior to being indemnified, held harmless and reimbursed under Section 12.2 or Section 12.3, as applicable, with respect to such Losses, the payment by an Indemnifying Party under this Article 12 with respect to such Losses shall be reduced by the net amount of such insurance proceeds or indemnity, contribution or similar payments to the extent related to such Losses, less reasonable attorney's fees and other expenses incurred in connection with such recovery. If the Indemnified Party receives such insurance proceeds or indemnity, contribution or similar payments after being indemnified and held harmless by an Indemnifying Party with respect to such Losses, the Indemnified Party shall pay to the Indemnifying Party the net amount of such insurance proceeds or indemnity, contribution or similar payment to the extent related to such Losses, less reasonable attorney's fees and other expenses incurred in connection with such recovery.


        12.9
    Exclusive Remedy.     After the Closing, the indemnities set forth in this Article 12 (and, with respect to Purchaser, the R&W Insurance Policy) shall be the sole and exclusive remedy of the Parties, their successors and assigns, and their respective officers, directors, employees, agents and Affiliates with respect to this Agreement, the events giving rise to this Agreement and the transactions contemplated hereby, except for claims grounded in fraud or intentional misrepresentation. The indemnities set forth in this Article 12 apply only to matters arising out of this Agreement. Any Loss arising under or pursuant to an Ancillary Agreement shall be governed by the indemnification obligations, if any, contained in such Ancillary Agreement. The parties shall not be entitled to a rescission of this Agreement or to any further indemnification rights or claims of any nature whatsoever in respect thereof (whether by contract, common law, statute, law, regulation or otherwise, including under the Racketeer Influenced and Corrupt Organizations Act, all of which the parties hereto hereby waive).


        12.10
    Treatment of Indemnification Payments.     To the extent permitted by Law, any amounts payable pursuant to this Article 12 shall be considered adjustments to the Final Purchase Price for all income Tax purposes and the Parties and their respective Affiliates agree to take no position inconsistent with such treatment in any Tax Return or proceeding before any Governmental Authority.


ARTICLE 13

MISCELLANEOUS

        13.1    Assignment.     This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns; provided, however, that no assignment shall be made by either Party without the prior written consent of the other Party, except that Purchaser may assign any or all of its rights or benefits under this Agreement without the prior written consent of Seller (whereupon Purchaser shall provide written notice thereof to Seller), as a collateral assignment, to Purchaser's or its Affiliates' lenders or other Debt Financing Sources. Notwithstanding the foregoing, either Party may assign its rights and obligations under this Agreement without such consent to an Affiliate or in connection with a sale, merger or other transaction involving a transfer of substantially all of its assets; provided that such assigning Party shall remain liable for its obligations hereunder.


        13.2
    Public Announcements.     Neither Party shall issue or make any public announcement, press release or other public disclosure regarding this Agreement or its subject matter without the other Party's prior written consent, except for any such disclosure that is, in the opinion of the disclosing Party's counsel, required by applicable Law or the rules of a stock exchange on which the securities of the disclosing party are listed. In the event a Party is, in the opinion of its counsel, required to make a

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public disclosure by applicable Law or the rules of a stock exchange on which its securities are listed, such Party shall, to the extent practicable, submit the proposed disclosure in writing to the other Party prior to the date of disclosure and provide the other Party a reasonable opportunity to comment thereon.


        13.3
    Expenses.     Whether or not the transactions contemplated hereby are consummated, and except as otherwise specified herein, each Party shall bear its own expenses with respect to the transactions contemplated by this Agreement.


        13.4
    Severability.     Each of the provisions contained in this Agreement shall be severable, and the unenforceability of one shall not affect the enforceability of any others or of the remainder of this Agreement. In event it is determined that a provision of this Agreement is prohibited by or invalid under Law, the Parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as possible the original intents and purposes hereof. To the fullest extent permitted by Law, the Parties hereby to the same extent waive any provision of Law that renders any provision hereof prohibited or unenforceable in any respect.


        13.5
    No Third-Party Beneficiaries.     This Agreement is for the sole benefit of the Parties hereto and their permitted assigns and nothing herein, express or implied (including Article 12), shall give or be construed to give to any Person, other than the Parties hereto and their permitted assigns, any legal or equitable rights hereunder, except for Article 12, which is for the benefit of the Indemnified Parties covered thereby; provided that the provisions of Section 7.5(a), Section 7.18, Section 7.19, Section 11.2, Section 11.3(b), Section 11.3(d), Section 13.1, this Section 13.5, Section 13.6, Section 13.8, Section 13.9(b), Section 13.10, Section 13.11 and Section 13.17 shall be enforceable against all parties to this Agreement by each Debt Financing Source, each Mezzanine Financing Source and their respective successors and assigns.


        13.6
    Financing Sources.     Notwithstanding anything herein to the contrary, except for the third-party beneficiary rights of Seller under the Equity Commitment Letter and rights of Seller under the Guarantee, subject to the terms and conditions thereunder and under this Agreement, no Seller Party shall have any rights or claims against any Equity Financing Source, any Debt Financing Source or any Mezzanine Financing Source in connection with this Agreement, the Financing, the Financing Commitments or any transaction contemplated hereby or thereby, whether at law or equity, in contract, in tort or otherwise. In furtherance of the foregoing, Seller (on its behalf and on behalf of each other Seller Party) agrees not to commence (and if commenced agrees to dismiss or otherwise terminate) any action or proceeding against any Equity Financing Source (other than in connection with any action expressly permitted in accordance with the preceding sentence), any Debt Financing Source or any Mezzanine Financing Source in connection with this Agreement, the Financing, the Financing Commitments or any transaction contemplated hereby or thereby.


        13.7
    Waiver.     The failure of any Party to enforce any condition or part of this Agreement at any time shall not be construed as a waiver of that condition or part, nor shall it forfeit any rights to future enforcement thereof. Any waiver hereunder shall be effective only if delivered to the other Party hereto in writing by the Party making such waiver.


        13.8
    Governing Law.     This Agreement shall be construed and enforced in accordance with and governed by the Laws of the State of Delaware without regard to the conflicts of Laws provisions thereof except with respect to matters under the New Jersey Business Corporation Act relating to the approval of the transactions contemplated hereunder, which shall be governed by the laws of the State of New Jersey; provided, however, the provisions of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York with respect to any action, suit or proceeding arising out of or related to the Debt Financing, the Debt Financing Commitment or the performance thereof or the Mezzanine Financing, the Mezzanine Financing Commitment or the performance thereof.

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        13.9
    Jurisdiction.     


        13.10
    Waiver of Jury Trial.     EACH OF THE PARTIES HERETO WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE DEBT FINANCING, THE DEBT FINANCING COMMITMENT, THE MEZZANINE FINANCING OR THE MEZZANINE FINANCING COMMITMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.10.


        13.11
    Specific Performance.     

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        13.12
    Headings.     The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof.


        13.13
    Counterparts.     The Parties may execute this Agreement (including by electronic transmission) in one or more counterparts, and each fully executed counterpart shall be deemed an original.


        13.14
    Further Documents.     Each of Purchaser and Seller shall, and shall cause its respective Affiliates to, at the request of the other Party, execute and deliver to such other Party all such further instruments, assignments, assurances and other documents as such other Party may reasonably request in connection with the carrying out of this Agreement and the transactions contemplated hereby.


        13.15
    Notices.     All communications, notices and Consents provided for herein shall be in writing and be given in person or by means of telex, facsimile or other means of wire transmission (with request for assurance of receipt in a manner typical with respect to communications of that type), by overnight courier or by mail, and shall become effective: (a) on delivery if given in person; (b) on the date of transmission if sent by telex, facsimile or other means of wire transmission; (c) one (1) Business Day after delivery to the overnight service; or (d) four (4) Business Days after being mailed, with proper postage and documentation, for first-class registered or certified mail, prepaid.

If to Purchaser, to:    

Photon Acquisition Corporation
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, NY 10022
Attn: Ramzi M. Musallam
Facsimile Number: (212) 688-9411

 

 


with copies (which shall not constitute notice to Purchaser) to:

 

 

Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Attn: John M. Pollack
Facsimile Number: (212) 593-5955

 

 

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If to Seller, to:    

EMCORE Corporation
2015 Chestnut Street
Alhambra, California 91803
Attn: C.E.O.

 

 


with copies (which shall not constitute notice to Seller) to:

 

 

Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Suite 3400
Los Angeles, CA 90071
Attn: Brian J. McCarthy and
Andrew D. Garelick

 

 

Facsimile Number:    (213) 621-5070
                                     (213)  621-5124

   

provided, however, that if any Party shall have designated a different address by notice to the others, then to the last address so designated.


        13.16
    Performance of Obligations by Affiliates.     Any obligation of Seller under or pursuant to this Agreement may be satisfied, met or fulfilled, in whole or in part, at Seller's sole and exclusive option, either by Seller directly or by any Affiliate of Seller that Seller causes to satisfy, meet or fulfill such obligation in whole or in part. Any obligation of Purchaser under or pursuant to this Agreement may be satisfied, met or fulfilled, in whole or in part, at Purchaser's sole and exclusive option, either by Purchaser directly or by any Affiliate that Purchaser causes to satisfy, meet or fulfill such obligation, in whole or in part. With respect to any particular action, the use of the words "Seller shall" also means "Seller shall cause" the particular action to be performed, and the use of the words "Purchaser shall" also means "Purchaser shall cause" the particular action to be performed. Each of Seller and Purchaser guarantees the performance of all actions, agreements and obligations to be performed by any of their respective Affiliates under the terms and conditions of this Agreement.


        13.17
    Entire Agreement.     This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by each of the Parties hereto; provided that Section 7.5(a), Section 7.18, Section 7.19, Section 11.2, Section 11.3(b), Section 11.3(d), Section 13.1, Section 13.5, Section 13.6, Section 13.8, Section 13.9(b), Section 13.10, Section 13.11 and this Section 13.17 (and any provision of this Agreement to the extent an amendment, supplement or modification of such provision would modify the substance of any of such Sections) may not be amended, supplemented or modified in any manner that adversely impacts or is adverse in any respect to any of the Debt Financing Sources or the Mezzanine Financing Sources, as applicable, without prior written consent of the Debt Financing Sources or the Mezzanine Financing Sources, as applicable. Except as provided in written agreements between the Parties executed and delivered concurrently herewith, this Agreement and the Confidentiality Agreement contain the entire agreement of the Parties hereto with respect to the transactions covered hereby, superseding all negotiations, prior discussions and preliminary agreements made prior to the date hereof.

* * * * *

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        IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written.

  PHOTON ACQUISITION CORPORATION

 

By:

 

/s/ RAMZI M. MUSALLAM


      Name:   Ramzi M. Musallam

      Title:   President

 

EMCORE CORPORATION

 

By:

 

/s/ HONG Q. HOU


      Name:   Hong Q. Hou

      Title:   President & CEO

[Signature Page to Asset Purchase Agreement]


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Annex B

VOTING AGREEMENT

        This VOTING AGREEMENT, dated as of September 17, 2014 (this "Agreement"), is by and among Photon Acquisition Corporation, a Delaware corporation ("Purchaser"), and each of the Persons identified on Schedule I hereto (collectively, the "Shareholders").


RECITALS

        WHEREAS, concurrently with the execution of this Agreement, Purchaser and EMCORE Corporation, a New Jersey corporation (the "Seller"), are entering into an Asset Purchase Agreement dated as of the date hereof (as amended, supplemented, restated or otherwise modified from time to time, the "Asset Purchase Agreement"), pursuant to which, among other things, Purchaser will acquire certain of the assets and assume certain of the liabilities of the Business (such acquisition, the "Transaction");

        WHEREAS, as of the date hereof, each Shareholder Beneficially Owns the number of shares of Common Stock set forth opposite such Shareholder's name on Schedule I hereto;

        WHEREAS, Purchaser and each Shareholder desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and

        WHEREAS, as a condition and inducement to the willingness of Purchaser to enter into the Asset Purchase Agreement, Purchaser has required that the Shareholders agree, and the Shareholders have agreed, to enter into this Agreement and abide by the covenants and agreements with respect to the Covered Shares set forth herein;

        NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


ARTICLE I

VOTING

        1.01    Agreement to Vote.     Without in any way limiting any Shareholder's right to vote such Shareholder's Covered Shares on any other matters that may be submitted to a shareholder vote, consent or other approval, each Shareholder hereby agrees that during the term of this Agreement, at the Seller Shareholder Meeting and at any other meeting of the shareholders of Seller, however called, including any adjournment or postponement thereof, and in connection with any written consent of the shareholders of Seller, such Shareholder shall, in each case to the fullest extent that such Shareholder's Covered Shares are entitled to vote thereon or consent thereto:

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        1.02
    Proxy.     By entering into this Agreement, each Shareholder hereby grants a proxy, coupled with an interest, appointing Purchaser, with full power of substitution and re-substitution, as such Shareholder's attorney-in-fact and proxy, for and in such Shareholder's name, to be counted as present and to vote or otherwise to act on behalf of such Shareholder with respect to such Shareholder's Covered Shares with respect to the matters set forth in, and in the manner contemplated by Section 1.01, provided, however, that the foregoing shall only be effective if such Shareholder fails to vote such Shareholder's Covered Shares in accordance with Section 1.01 at least ten business days prior to the date of the Seller Shareholder Meeting or such other shareholder meeting of Seller, as applicable, or otherwise fails to provide evidence of such Shareholder's compliance with its obligations under Section 1.01 in form and substance reasonably acceptable to Purchaser. The proxy granted by each Shareholder pursuant to this Section 1.02 is, subject to Section 5.01, irrevocable and is coupled with an interest, and is granted in order to secure such Shareholder's performance under this Agreement and also in consideration of Purchaser entering into this Agreement and the Asset Purchase Agreement. Each Shareholder shall revoke any and all prior proxies granted by each Shareholder with respect to the Covered Shares. The power of attorney granted by each Shareholder herein is a durable power of attorney and shall survive the dissolution, bankruptcy, death or incapacity of any Shareholder. Each Shareholder agrees, subject to Section 5.01, from the date hereof until the termination of this Agreement, not to attempt to revoke, frustrate the exercise of, or challenge the validity of, the irrevocable proxy granted pursuant to this Section 1.02.


        1.03
    No Inconsistent Agreements.     Each Shareholder hereby covenants and agrees that, except for this Agreement and, solely with respect to clauses (a) and (b) of this Section 1.03 with respect to the Becker Drapkin Shareholders, the Standstill Agreement, such Shareholder (a) has not entered into, and shall not enter into at any time while this Agreement remains in effect, any voting agreement or voting trust with respect to the Covered Shares, (b) has not granted, and shall not grant at any time while this Agreement remains in effect, a proxy, consent or power of attorney with respect to the Covered Shares except with respect to matters that do not breach in any material respect the voting obligations set forth in Section 1.01 and (c) has not taken and shall not take any action that would make any representation or warranty of such Shareholder contained herein untrue or incorrect in any material respect or have the effect of preventing or disabling such Shareholder from performing any of its or his material obligations under this Agreement.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

        Each of the Becker Drapkin Shareholders hereby represents and warrants on a joint and several basis as to the Becker Drapkin Shareholders, and each other Shareholder hereby represents and warrants on a several and not joint basis, in each case, to Purchaser as follows:


        2.01
    Organization; Authorization; Validity of Agreement; Necessary Action.     


        2.02
    Ownership.     Schedule I sets forth opposite such Shareholder's name the number of shares of Common Stock over which such Shareholder has Beneficial Ownership as of the date hereof. Such Shareholder's Existing Shares are, and from the date hereof through and at all times during the term of this Agreement will be, Beneficially Owned by such Shareholder or such Shareholder's Permitted Transferees. Any Covered Shares of such Shareholder acquired after the date hereof will be from and after such date through and at all times during the term of this Agreement Beneficially Owned by such Shareholder or such Shareholder's Permitted Transferees. Such Shareholder has and, solely with respect to the Becker Drapkin Shareholders, subject to the terms and provisions of the Standstill Agreement, will have at all times during this Agreement, the sole power to vote and dispose of such Shareholder's Existing Shares. Such Shareholder has valid title to such Shareholder's Existing Shares, free and clear of any Liens other than those created pursuant to the express terms of this Agreement or, in the case of the Becker Drapkin Shareholders, the Standstill Agreement. As of the date hereof, neither such Shareholder nor any affiliate of such Shareholder Beneficially Owns or holds, any right to acquire any additional shares of Common Stock or any other voting securities of Seller or its Subsidiaries, including, without limitation, pursuant to any option agreements (other than, pursuant to grants made in connection with any Shareholder's service as a director of the Issuer, and, solely with respect to the Becker Drapkin Shareholders, pursuant to the terms and provisions of the Standstill Agreement). Such Shareholder has and will have at all times during this Agreement the complete and exclusive power, individually or together with one or more other affiliated Shareholders party hereto, to, directly or indirectly, issue (or cause the issuance of) instructions with respect to the matters set forth in Article I and agree to all matters set forth in this Agreement. Except for this Agreement and, solely with respect

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to the Becker Drapkin Shareholders, the Standstill Agreement, none of the Covered Shares is (and no Covered Shares will be during the term of this Agreement) subject to any proxy, voting trust, power of attorney or other Contract with respect to the voting of such Covered Shares.


        2.03
    No Violation.     The execution, delivery and performance of this Agreement by such Shareholder, and the consummation by such Shareholder of the other transactions contemplated hereby, do not and will not (a) result in any violation of any Law applicable to such Shareholder or by which any of such Shareholder's assets or properties is bound or (b) taking into account, with respect to the Becker Drapkin Shareholders, the Standstill Waiver, result in any breach or violation of any organizational document of such Shareholder or any Contract to which such Shareholder is a party or by which such Shareholder or any of such Shareholder's assets or properties is bound, except for any of the foregoing as could not reasonably be expected, either individually or in the aggregate, to impair in any material respect the ability of such Shareholder to perform such Shareholder's obligations hereunder or to consummate the transactions contemplated hereby.


        2.04
    Governmental Consents and Approvals.     Except for any filings required by or advisable under applicable securities Laws, the execution, delivery and performance of this Agreement by such Shareholder, and the consummation by such Shareholder of the other transactions contemplated hereby, do not and will not require any consent, approval, authorization, declaration or permit of, action by, filing with or notification to any Governmental Authority.


        2.05
    Standstill Waiver.     Solely with respect to the Becker Drapkin Shareholders, each such Shareholder has obtained from Seller a waiver (the "Standstill Waiver") of any potential breach or violation of the Standstill Agreement that may be deemed to result from the execution, delivery or performance of this Agreement by the Becker Drapkin Shareholders.


        2.06
    Absence of Litigation.     There is no Action pending or, to the knowledge of such Shareholder, threatened against or affecting such Shareholder that could reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of such Shareholder to perform such Shareholder's obligations hereunder or to consummate the transactions contemplated hereby.


        2.07
    Brokers.     No broker, finder, financial advisor, investment banker or other Person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission or expense reimbursement in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Shareholder for which Seller could have any liability.


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

        Purchaser hereby represents and warrants to each Shareholder as follows:


        3.01
    Organization; Authorization; Validity of Agreement; Necessary Action.     Purchaser is an entity duly formed, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations under this Agreement and consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding agreement of Purchaser, enforceable against Purchaser in accordance with its terms, subject to the Bankruptcy and Equity Exception.


        3.02
    No Violation.     The execution, delivery and performance of this Agreement by Purchaser, and the consummation by Purchaser of the other transactions contemplated hereby, do not and will not (a) result in any violation of any Law applicable to Purchaser or by which any of its assets or properties is bound or (b) result in any breach or violation of any organizational document of Purchaser or any Contract to which Purchaser is a party or by which Purchaser or any of its assets or properties is bound, except for any of the foregoing as could not reasonably be expected, either individually or in the aggregate, to impair in any material respect the ability of Purchaser to perform its obligations hereunder or to consummate the transactions contemplated hereby.

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ARTICLE IV

OTHER COVENANTS

        4.01    Prohibition on Transfers, Other Actions.     Other than a Permitted Transfer, during the term of this Agreement, each Shareholder hereby agrees not to (i) Transfer any of its Covered Shares, Beneficial Ownership thereof or any other interest therein; (ii) grant any proxies or enter into any voting trust, power of attorney or other Contract with respect to the voting of any Covered Shares (except as otherwise provided herein); (iii) enter into any agreement, arrangement or understanding with any Person, or take any other action, that violates or conflicts with in any material respect or would reasonably be expected to violate or conflict with in any material respect, or result in or give rise to a violation of or conflict with in any material respect, such Shareholder's representations, warranties, covenants and obligations under this Agreement; or (iv) take any other action that could materially restrict or otherwise materially affect such Shareholder's legal power, authority and right to comply with and perform in all material respects its or his covenants and obligations under this Agreement. Any Transfer in violation of this provision shall be void. Except as specifically permitted by Section 4.03, each Shareholder also agrees not to engage in any transaction with respect to any of the Covered Shares with the purpose or intention of depriving Purchaser of the intended benefits of this Agreement. Each Shareholder hereby authorizes Purchaser to direct Seller to impose stop orders to prevent the Transfer of any Covered Shares on the books of Seller in violation of this Agreement.


        4.02
    Stock Dividends, etc.     In the event of a stock split, stock dividend or distribution, or any change in the Common Stock by reason of any split-up, reverse stock split, recapitalization, combination, reclassification, exchange of shares or the like, the terms "Existing Shares" and "Covered Shares" shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.


        4.03
    No Solicitation.     Each Becker Drapkin Shareholder agrees to comply with the obligations applicable to Seller's Representatives pursuant to Section 7.4 of the Asset Purchase Agreement as if it were a party thereto. Notwithstanding the preceding sentence, solely to the extent Seller is permitted to take the actions set forth in Section 7.4 of the Asset Purchase Agreement with respect to an Alternative Transaction Proposal and subject to the Becker Drapkin Shareholders having complied in all material respects with this Section 4.03 (provided that the Becker Drapkin Shareholders shall not have intentionally breached any covenant or agreement set forth in this Section 4.03), the Becker Drapkin Shareholders and their respective Representatives may participate in any discussions or negotiations regarding such Alternative Transaction Proposal with the Person making such Alternative Transaction Proposal and otherwise take action to the extent the Company may take such action; provided that such action by the Becker Drapkin Shareholders and their respective Representatives would be permitted to be taken by the Company pursuant to Section 7.4 of the Asset Purchase Agreement.


        4.04
    Notice of Acquisitions.     During the term of this Agreement, each Shareholder hereby agrees to promptly disclose to Purchaser in writing the number of any additional shares of Common Stock or other voting securities of Seller of which such Shareholder acquires Beneficial Ownership on or after the date hereof.


        4.05
    Shareholder Capacity.     Each Shareholder has entered into this Agreement solely in such Shareholder's capacity as beneficial owner of the Covered Shares (and not in any other capacity, including, any capacity as a director or officer of Seller) and nothing herein shall limit or affect any actions taken by such Shareholder, or require such Shareholder or its representatives to take any action, in such Shareholder's or such representative's capacity as a director or officer of Seller and any actions taken (whatsoever), or failure to take any actions (whatsoever), by any such Person in such capacity shall not be deemed to constitute a breach of this Agreement.

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        4.06
    Reserved.     


        4.07
    Further Assurances.     


ARTICLE V

MISCELLANEOUS

        5.01    Termination.     This Agreement shall remain in effect until the earlier to occur of (i) the Closing; (ii) the date of termination of the Asset Purchase Agreement in accordance with its terms; (iii) any change to the terms of the Asset Purchase Agreement without the prior written consent of the Shareholders that (A) reduces the Final Purchase Price (subject to adjustments in compliance with Section 3.2 of the Asset Purchase Agreement) or (B) changes the form of consideration payable in the Asset Purchase Agreement; or (iv) the mutual written consent of the Purchaser and any Shareholder. Upon termination pursuant to this Section 5.01, this Agreement shall terminate and be of no further force or effect; provided, however, that the provisions of this Article V shall survive any termination of this Agreement. Nothing in this Section 5.01 and no termination of this Agreement shall relieve or otherwise limit any party of liability for material breach of this Agreement.


        5.02
    No Ownership Interest.     Nothing contained in this Agreement shall be deemed to vest in Purchaser any direct or indirect ownership or incidence of ownership of or with respect to any Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares shall remain vested in and belong to the Shareholders, and Purchaser shall have no authority to direct the Shareholders in the voting or disposition of any of the Covered Shares, except as otherwise provided herein.


        5.03
    Modification or Amendment.     Subject to the provisions of applicable Law, the parties hereto may modify or amend this Agreement by written agreement executed by each party hereto.


        5.04
    Waiver; Extension.     At any time prior to the termination of this Agreement the parties may (i) extend the time for the performance of any of the obligations or other acts of the other parties, (ii) waive any inaccuracies in the representations and warranties of the other parties contained in this Agreement or in any document delivered pursuant to this Agreement, or (iii) waive compliance with covenants and agreements of the other parties contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

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        5.05
    Counterparts.     This Agreement may be executed in any number of counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.


        5.06
    GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.     


        5.07
    Notices.     Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, by facsimile, delivery of which is confirmed electronically, or by overnight courier:

        If to Purchaser, to:

Photon Acquisition Corporation
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, NY 10022
Attn: Ramzi M. Musallam
Facsimile Number: (212) 688-9411

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        with copies (which shall not constitute notice) to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Attention: John M. Pollack, Esq.
fax: (212) 593-5955

        If to any Shareholder, to the address of such Shareholder set forth on Schedule I hereto, with a copy (which shall not constitute notice) to:

EMCORE Corporation
2015 Chestnut Street
Alhambra, California 91803
Attn: C.E.O.

        with copies (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Suite 3400
Los Angeles, CA 90071
Attn: Brian J. McCarthy and
Andrew D. Garelick
fax:    (213) 621-5070
          (213) 621-5124

and

Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166
Attn: Richard J. Birns
Fax:    (212) 716-0830

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above. Any notice, request, instruction or other document given as provided above shall be deemed given to the receiving party upon actual receipt, if delivered personally; three Business Days after deposit in the U.S. mail, if sent by registered or certified mail, postage prepaid; upon confirmation of successful transmission if sent by facsimile (provided that if given by facsimile such notice, request, instruction or other document shall be followed up within one Business Day by dispatch pursuant to one of the other methods described herein); or on the next Business Day after deposit with an overnight courier, if sent by an overnight courier.


        5.08
    Specific Performance.     The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement (including failing to take such actions as are required of it hereunder in order to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that the parties shall be entitled to an injunction, specific performance and other equitable relief as provided herein to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof (without the posting of any bond), this being in addition to any other remedy to which they are entitled at law or in equity.

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        5.09
    Entire Agreement.     This Agreement constitutes the entire agreement and supersedes all other prior agreements, understandings, representations and warranties both written and oral, among the parties, with respect to the subject matter hereof.


        5.10
    No Third Party Beneficiaries.     The parties hereby agree that their respective representations, warranties, covenants and agreements set forth herein are solely for the benefit of the other parties hereto, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties hereto. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance with this Agreement without notice or liability to any other Person.


        5.11
    Definitions; Construction.     

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        5.12
    Severability.     The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.


        5.13
    Assignment.     Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned (whether by operation of Law or otherwise) (a) by any Shareholder without the prior written consent of Purchaser or (b) by Purchaser without the prior written consent of each Shareholder. Subject to the foregoing, this Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.


        5.14
    Headings.     The headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.


        5.15
    Expenses.     All costs and expenses incurred in connection with this Agreement and the other transactions contemplated by this Agreement shall be paid by the party incurring such expense.


        5.16
    Shareholders' Liability.     Whether or not expressly stated, the representations and warranties, covenants, agreements, obligations and liabilities of the Shareholders pursuant to this Agreement shall be several but not joint, except for the representations and warranties, covenants, agreements, obligations and liabilities of the Becker Drapkin Shareholders, which shall be joint and several as to the Becker Drapkin Shareholders.

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        IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by each of the parties hereto as of the date first written above.

    PHOTON ACQUISITION CORPORATION

 

 

By:

 

/s/ RAMZI M. MUSALLAM

        Name:   Ramzi M. Musallam
        Title:   President

 

 

BECKER DRAPKIN MANAGEMENT, L.P.

 

 

By:

 

/s/ STEVEN R. BECKER

        Name:   Steven R. Becker
        Title:   Managing Partner

 

 

BECKER DRAPKIN PARTNERS (QP), L.P.

 

 

By:

 

/s/ STEVEN R. BECKER

        Name:   Steven R. Becker
        Title:   Managing Partner

 

 

BECKER DRAPKIN PARTNERS, L.P.

 

 

By:

 

/s/ STEVEN R. BECKER

        Name:   Steven R. Becker
        Title:   Managing Partner

 

 

BC ADVISORS, LLC

 

 

By:

 

/s/ STEVEN R. BECKER

        Name:   Steven R. Becker
        Title:   Managing Partner

 

 

By:

 

/s/ HONG Q. HOU, PH.D

Hong Q. Hou, Ph.D

Signature Page to Voting Agreement


Table of Contents


SCHEDULE I

Ownership of Common Stock

Shareholder
  Common Shares
Beneficially Owned
  Notice Address

Becker Drapkin Management, L.P. 

   
826,514
 

500 Crescent Court
Suite 230
Dallas, Texas 75201

Becker Drapkin Partners (QP), L.P. 

   
2,077,849
 

500 Crescent Court
Suite 230
Dallas, Texas 75201

Becker Drapkin Partners, L.P. 

   
292,742
 

500 Crescent Court
Suite 230
Dallas, Texas 75201

BC Advisors, LLC

   
0
 

500 Crescent Court
Suite 230
Dallas, Texas 75201

Hong Q. Hou, Ph.D

   
381,308
 

11735 Sky Valley Way NE
Albuquerque, NM 87111


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Annex C

September 16, 2014

Board of Directors
EMCORE Corporation
10420 Research Road, SE
Albuquerque, NM 87123

Members of the Board of Directors:

        We understand that Photon Acquisition Corporation (the "Purchaser"), a company owned by The Veritas Capital Fund IV, L.P. and its controlled investment affiliates (the "Sponsor"), and EMCORE Corporation (the "Company"), propose to enter into the Agreement (defined below) pursuant to which, among other things, the Company will sell substantially all of the assets of its Photovoltaics Division (the "Space Business") to the Purchaser, and the Purchaser will assume specified liabilities of the Space Business (the "Transaction") and that, in connection with the Transaction, the Purchaser will pay to the Company $150 million in cash (the "Consideration"), subject to adjustment as provided for in the Agreement (as to which adjustment we express no opinion). The Board of Directors of the Company (the "Board") has requested that Raymond James & Associates, Inc. ("Raymond James") provide an opinion (the "Opinion") to the Board as to whether, as of the date hereof, the Consideration to be received by the Company in the Transaction pursuant to the Agreement is fair from a financial point of view to the Company.

        In connection with our review of the proposed Transaction and the preparation of this Opinion, we have, among other things:

   


 
Raymond James & Associates, Inc.
Member New York Stock Exchange/SIPC

880 Carillon Parkway • St. Petersburg, FL 33716
727-567-1000 • www.RaymondJames.com


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Board of Directors
EMCORE Corporation
September 16, 2014
Page 2

        With your consent, we have assumed and relied upon the accuracy and completeness of all information supplied by or on behalf of the Company or otherwise reviewed by or discussed with us, and we have undertaken no duty or responsibility to, nor did we, independently verify any of such information. We have not made or obtained an independent appraisal of the assets or liabilities (contingent or otherwise) of the Space Business. With respect to the Projections and any other information and data provided to or otherwise reviewed by or discussed with us, we have, with your consent, assumed that the Projections and such other information and data have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of the Company, and we have relied upon the Company to advise us promptly if any information previously provided became inaccurate or was required to be updated during the period of our review. We express no opinion with respect to the Projections or the assumptions on which they are based. We have assumed that the final form of the Agreement will be substantially similar to the draft reviewed by us, and that the Transaction will be consummated in accordance with the terms of the Agreement without waiver or amendment of any conditions thereto. Furthermore, we have assumed, in all respects material to our analysis, that the representations and warranties of each party contained in the Agreement are true and correct and that each such party will perform all of the covenants and agreements required to be performed by it under the Agreement without being waived. We have relied upon and assumed, without independent verification, that (i) the Transaction will be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Transaction will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the Transaction, the Space Business or the Company that would be material to our analyses or this Opinion. We have been advised by the Company that there are no audited financial statements for the Space Business and, accordingly, we have relied upon and assumed, without independent verification, that there would be no information contained in any such financial statements not otherwise discussed with or reviewed by us that would have been material to our analyses or this Opinion.

        Our opinion is based upon market, economic, financial and other circumstances and conditions existing and disclosed to us as of September 15, 2014, and any material change in such circumstances and conditions would require a reevaluation of this Opinion, which we are under no obligation to undertake. We have relied upon and assumed, without independent verification, that there has been no

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Board of Directors
EMCORE Corporation
September 16, 2014
Page 3

change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Space Business since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to us that would be material to our analyses or this Opinion, and that there is no information or any facts that would make any of the information reviewed by us incomplete or misleading in any material respect. We have also relied upon and assumed, without independent verification, at the direction of the Company, that any adjustments to the Consideration pursuant to the Agreement will not be material to our analyses or this Opinion.

        We express no opinion as to the underlying business decision to effect the Transaction, the structure or tax consequences of the Transaction or the availability or advisability of any alternatives to the Transaction. We provided advice to the Company with respect to the proposed Transaction. We did not, however, recommend any specific amount of consideration or that any specific consideration constituted the only appropriate consideration for the Transaction. Our opinion is limited to the fairness, from a financial point of view, of the Consideration to be received by the Company.

        We express no opinion with respect to any other reasons, legal, business, or otherwise, that may support the decision of the Board to approve or consummate the Transaction. Furthermore, no opinion, counsel or interpretation is intended by Raymond James on matters that require legal, accounting or tax advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, we have relied, with the consent of the Company, on the fact that the Company has been assisted by legal, accounting and tax advisors and we have, with the consent of the Company, relied upon and assumed the accuracy and completeness of the assessments by the Company and its advisors as to all legal, accounting and tax matters with respect to the Space Business and the Transaction.

        In formulating our opinion, we have considered only what we understand to be the consideration to be received by the Company as is described above and we did not consider and we express no opinion on the fairness of the amount or nature of any compensation to be paid or payable to any of the Company's officers, directors or employees, or class of such persons, whether relative to the consideration to be received by the Company or otherwise. We have not been requested to opine as to, and this Opinion does not express an opinion as to or otherwise address, among other things: (1) the fairness of the Transaction to the holders of any class of securities, creditors, or other constituencies of the Company, or to any other party, except and only to the extent expressly set forth in the last sentence of this Opinion or (2) the fairness of the Transaction to any one class or group of the Company's or any other party's security holders or other constituencies vis-à-vis any other class or group of the Company's or such other party's security holders or other constituents (including, without limitation, the allocation of any consideration to be received in the Transaction amongst or within such classes or groups of security holders or other constituents). We are not expressing any opinion as to the impact of the Transaction on the solvency or viability of the Company or the Purchaser or the ability of the Company or the Purchaser to pay their respective obligations when they come due.

        The delivery of this opinion was approved by an opinion committee of Raymond James.

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Board of Directors
EMCORE Corporation
September 16, 2014
Page 4

        Raymond James has been engaged to render financial advisory services to the Company in connection with the proposed Transaction and will receive a fee for such services, a substantial portion of which is contingent upon consummation of the Transaction. Raymond James will also receive a fee upon the delivery of this Opinion, which is not contingent upon the successful completion of the Transaction or on the conclusion reached herein. In addition, the Company has agreed to reimburse certain of our expenses and to indemnify us and certain related parties against certain liabilities arising out of our engagement.

        In the ordinary course of our business, Raymond James may trade in the securities of the Company and of portfolio companies of the Sponsor for our own account or for the accounts of our customers and, accordingly, may at any time hold a long or short position in such securities. Other than pursuant to this engagement, Raymond James has not provided services to the Company in the previous two years, although the Company has engaged Raymond James to assist it with its ongoing evaluation of strategic alternatives. Furthermore, Raymond James may provide investment banking, financial advisory and other financial services to the Company and/or the Purchaser, the Sponsor or portfolio companies of the Sponsor, or other participants in the Transaction in the future, for which Raymond James may receive compensation.

        It is understood that this letter is for the information of the Board (solely in each director's capacity as such) in evaluating the proposed Transaction and does not constitute a recommendation to any shareholder of the Company regarding how said shareholder should vote on the proposed Transaction, nor is this letter intended to confer rights or remedies upon the Purchaser or the shareholders of the Company or the Purchaser. Furthermore, this letter should not be construed as creating any fiduciary duty on the part of Raymond James to any such party. This Opinion may not be reproduced or used for any other purpose without our prior written consent, except that this Opinion may be disclosed in and filed with a proxy statement used in connection with the Transaction that is required to be filed with the Securities and Exchange Commission, provided that this Opinion is reproduced in full in such proxy statement.

        Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Consideration to be received by the Company in the Transaction pursuant to the Agreement is fair, from a financial point of view, to the Company.

Very truly yours,

/s/ Raymond James & Associates, Inc.

RAYMOND JAMES & ASSOCIATES, INC.

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ANNEX D

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
EMCORE Corporation:

        We have audited the accompanying consolidated balance sheets of EMCORE Corporation and subsidiaries (the Company) as of September 30, 2013 and 2012, and the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows for each of the years in the three-year period ended September 30, 2013. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EMCORE Corporation and subsidiaries as of September 30, 2013 and 2012, and the results of their operations and their cash flows for each of the years in the three-year period ended September 30, 2013, in conformity with U.S. generally accepted accounting principles.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of September 30, 2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated December 6, 2013, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/ KPMG LLP

KPMG LLP
Albuquerque, New Mexico
December 6, 2013

D-1


THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date 0 0 0 0 0 0 0000221306_1 R1.0.0.51160 EMCORE CORPORATION ATTN: GENERAL COUNSEL 10420 RESEARCH RD SE ALBUQUERQUE, NM 87123 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on Thursday, December 4, 2014. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on Thursday, December 4, 2014. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The Board of Directors recommends you vote FOR proposals 1 and 2. For Against Abstain 1 TO AUTHORIZE THE SALE (THE "ASSET SALE") BY EMCORE OF SUBSTANTIALLY ALL OF THE ASSETS, AND THE TRANSFER OF SUBSTANTIALLY ALL OF THE LIABILITIES, PRIMARILY RELATED TO OR USED IN EMCORE'S PHOTOVOLTAICS BUSINESS PURSUANT TO THE ASSET PURCHASE AGREEMENT BY AND BETWEEN EMCORE AND PHOTON ACQUISITION CORPORATION, DATED SEPTEMBER 17, 2014. 2 TO APPROVE, BY NON-BINDING, ADVISORY VOTE, CERTAIN COMPENSATION ARRANGEMENTS FOR EMCORE'S NAMED EXECUTIVE OFFICERS IN CONNECTION WITH THE ASSET SALE AS DISCLOSED IN THE PROXY STATEMENT. NOTE: In the discretion of the proxies for such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

 


0000221306_2 R1.0.0.51160 Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: The Notice & Proxy Statement is/are available at www.proxyvote.com . EMCORE CORPORATION SPECIAL MEETING OF SHAREHOLDERS THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Alfredo Gomez and Mark Weinswig, and each of them, as proxies for the undersigned, each with full power of substitution, for and in the name of the undersigned to act for the undersigned and to vote, as designated on the reverse side of this proxy card, all of the shares of stock of EMCORE that the undersigned is entitled to vote at the Special Meeting of Shareholders of EMCORE, to be held at 8:00 a.m. local time on December 5, 2014 at the Langham Hotel, 1401 South Oak Knoll Avenue, Pasadena, California 91106 or at any adjournments or postponements thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2 AND "FOR" ANY MATTERS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING. Continued and to be signed on reverse side