Exhibit 10.1

 

INDEMNITY AGREEMENT

 

This Indemnity Agreement (“Agreement”) is made as of November 6, 2009 by and
between STR Holdings, Inc. a Delaware corporation (the “Company”), and
[          ] (“Indemnitee”).

 

RECITALS

 

WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors, officers or in other capacities unless
they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation.

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined
that, in order to attract and retain qualified individuals, the Company will
maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities.  The Certificate of Incorporation (the “Charter”) of the Company
and the Bylaws (the “Bylaws”) of the Company provide for indemnification of the
officers and directors of the Company.  Indemnitee may also be entitled to
indemnification pursuant to the Delaware General Corporation Law (“DGCL”).  The
Charter, Bylaws and the DGCL expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of the board of
directors, officers and other persons with respect to indemnification.

 

WHEREAS, the uncertainties relating to such insurance and to indemnification
have increased the difficulty of attracting and retaining such persons.

 

WHEREAS, the Board has determined that the increased difficulty in attracting
and retaining such persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future.

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified.

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Charter and
Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

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1.             Services to the Company.  Indemnitee will serve as a director
and/or officer of the Company or Enterprise for so long as Indemnitee is duly
elected or appointed or until Indemnitee tenders his resignation or is
terminated.

 

2.             Definitions.  For purposes of this Agreement, the following terms
shall have the following meanings:

 

(a)           “Corporate Status” describes the status of a person who is or was
a director, officer, trustee, partner, managing member, fiduciary, employee or
agent of the Company or of any other Enterprise which such person is or was
serving at the request of the Company.

 

(b)           “Disinterested Director” shall mean a director of the Company who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

 

(c)           “Enterprise” shall mean the Company, any Subsidiary of the Company
and any other corporation, limited liability company, partnership, limited
partnership, limited liability partnership, joint venture, trust, employee
benefit plan or other Enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, employee, trustee, partner,
managing member, fiduciary, employee or agent.

 

(d)           “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

(e)           “Expenses” shall include attorneys’ fees and costs, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses in connection
with prosecuting, defending, preparing to prosecute or defend, investigating,
being or preparing to be a witness in, or otherwise participating in, a
Proceeding.  Expenses also shall include Expenses incurred in connection with
any appeal resulting from any Proceeding, including without limitation, the
premium, security for, and other costs relating to any cost bond, supersedeas
bond, or other appeal bond or its equivalent.

 

(f)            “Independent Counsel” shall mean a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent:  (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.

 

(g)           “Person” shall have the meaning as set forth in Sections 13(d) and
14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the
Company, (ii) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and (iii) 

 

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any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company.

 

(h)           The term “Proceeding” shall include any threatened, pending or
completed action, suit, claim, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil (including intentional or unintentional tort
claims), criminal, administrative or investigative nature, in which Indemnitee
was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any
action taken by him or of any inaction on his part while acting as director or
officer of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of any other Enterprise, in each
case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.

 

(i)            “Subsidiary” shall mean, in respect of any Person, any
corporation, association, limited liability company, partnership or other
business entity of which more than 50% of the total voting power of shares of
capital stock or other interests (including partnership or membership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person.

 

(j)            References to “fines” shall include any excise tax assessed with
respect to any employee benefit plan; references to “serving at the request of
the Company” shall include any service as a director, officer, trustee, partner,
managing member, fiduciary, employee or agent of the Company or which imposes
duties on, or involves services by, such director, officer, trustee, partner,
managing member, fiduciary, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Company” as
such terms are referred to in this Agreement and used in the DGCL.

 

3.             Indemnity in Third-Party Proceedings.  The Company shall
indemnify and hold harmless Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is made, or is threatened to be made, a party to or a
participant in (as a witness or otherwise) any Proceeding, other than a
Proceeding by or in the right of the Company to procure a judgment in its
favor.  Pursuant to this Section 3, Indemnitee shall be indemnified against all
Expenses, judgments, liabilities, fines, penalties and amounts paid in
settlement (including, without limitation, all interest, assessments and other
charges paid or payable in connection with or in respect of any of the
foregoing) (collectively, “Losses”) actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such Proceeding or any
action, discovery event, claim, issue or matter therein or related thereto, if
Indemnitee acted in good faith, for a purpose which he reasonably believed to be
in or not opposed to the best interests of the Company and, in the case of a
criminal Proceeding, in addition, had no reasonable cause to believe that his or
her conduct was unlawful.

 

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4.             Indemnity in Proceedings by or in the Right of the Company.  The
Company shall indemnify and hold harmless Indemnitee in accordance with the
provisions of this Section 4 if Indemnitee was, is, or is threatened to be made,
a party to or a participant (as a witness or otherwise) in any Proceeding by or
in the right of the Company to procure a judgment in its favor.  Pursuant to
this Section 4, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company.  No indemnification for Expenses shall be made under
this Section 4 in respect of any claim, issue or matter as to which Indemnitee
shall have been finally adjudged by a court in a non-appealable decision to be
liable to the Company, unless and only to the extent that any court in which the
Proceeding was brought or the Delaware Court (as defined below) shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnification.

 

5.             Indemnification for Expenses of a Party Who is Wholly or Partly
Successful.  Notwithstanding any other provisions of this Agreement, to the
extent that Indemnitee is a party to (or a participant in) and is successful, on
the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify and hold
harmless Indemnitee against all Expenses actually and reasonably incurred by him
in connection therewith.  If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify and hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter.  If the Indemnitee is not wholly successful in
such Proceeding, the Company also shall indemnify and hold harmless Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue, or matter on which the Indemnitee was
successful.  For purposes of this Section 5 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by withdrawal or
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.

 

6.             Indemnification For Expenses of a Witness.  Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his or her Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, he shall be indemnified and held harmless against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.

 

7.             Additional Indemnification.

 

(a)           Notwithstanding any limitation in Sections 3, 4 or 5 hereof, the
Company shall indemnify Indemnitee to the fullest extent permitted by law if
Indemnitee is made, or is threatened to be made, a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Losses actually and reasonably incurred by Indemnitee
in connection with the Proceeding.  No indemnification shall be made under this
Section 7(a) on account of Indemnitee’s conduct which constitutes a breach of
Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or
omission not in good faith or which involves intentional misconduct or a knowing
violation of the law.

 

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(b)           For purposes of Section 7(a) hereof, the meaning of the phrase “to
the fullest extent permitted by law” shall include, but not be limited to:

 

i.              to the fullest extent authorized or permitted by the provisions
of the DGCL as in effect as of the date of this Agreement that authorize or
contemplate indemnification by agreement; and

 

ii.             to the fullest extent authorized or permitted by any amendments
to or replacements of the DGCL adopted after the date of this Agreement that
increase the extent to which a corporation may indemnify its officers and
directors.

 

8.             Contribution in the Event of Joint Liability.

 

(a)           Whether or not any of the indemnification and hold harmless rights
provided in Sections 3, 4, 5 and 7 hereof are available in respect of any
Proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such Proceeding), the Company shall pay, in the first instance, the
entire amount of any judgment or settlement of such Proceeding without requiring
Indemnitee to contribute to such payment, and the Company hereby waives and
relinquishes any right of contribution it may have against Indemnitee.  The
Company shall not enter into any settlement of any Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such
Proceeding) unless such settlement provides for a full and final release of all
claims asserted against Indemnitee.

 

(b)           Without diminishing or impairing the obligations of the Company
set forth in the preceding subparagraph, if, for any reason, Indemnitee shall
elect or be required to pay all or any portion of any judgment or settlement in
any Proceeding in which the Company is jointly liable with Indemnitee (or would
be if joined in such Proceeding), the Company shall contribute to the amount of
Expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually incurred and paid or payable by Indemnitee in proportion to
the relative benefits received by the Company and all officers, directors or
employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), on the one hand, and
Indemnitee, on the other hand, from the transaction from which such Proceeding
arose; provided, however, that the proportion determined on the basis of
relative benefit may, to the extent necessary to conform to law, be further
adjusted by reference to the relative fault of the Company and all officers,
directors or employees of the Company other than Indemnitee who are jointly
liable with Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the events that
resulted in such expenses, judgments, fines or amounts paid in settlement, as
well as any other equitable considerations.  The relative fault of the Company
and all officers, directors or employees of the Company other than Indemnitee
who are jointly liable with Indemnitee (or would be if joined in such
Proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary, and the degree to which
their conduct is active or passive.

 

(c)           The Company hereby agrees to fully indemnify and hold harmless
Indemnitee from any claims for contribution which may be brought by officers,
directors or employees of the Company other than Indemnitee who may be jointly
liable with Indemnitee.

 

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9.             Exclusions.  Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity
payment in connection with any claim made against Indemnitee:

 

(a)           for which payment actually has been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or

 

(b)           for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law;

 

(c)           except as otherwise provided in Sections 14(d)-(e) hereof, in
connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law; or

 

(d)           to the extent such payment would violate Section 402 of the
Sarbanes-Oxley Act of 2002.

 

10.           Advances of Expenses; Defense of Claim.

 

(a)           Notwithstanding any provision of this Agreement to the contrary,
the Company shall advance the Expenses incurred by Indemnitee to the fullest
extent permitted by law in connection with any Proceeding within ten
(10) business days after the receipt by the Company of a statement or statements
(including, at the request of the Company, reasonable detail underlying the
expenses for which payment is requested) requesting such advances from time to
time, whether prior to or after final disposition of any Proceeding.  Advances
shall be unsecured, interest free and shall be made without regard to
Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this
Agreement.  Advances shall include any and all reasonable Expenses incurred
pursuing a Proceeding to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed.  The Indemnitee shall qualify for advances solely upon the
execution and delivery to the Company of an undertaking providing that the
Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company. 
This Section 10(a) shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 9 hereof.

 

(b)           The Company will be entitled to participate in the Proceeding at
its own cost and expense.

 

(c)           In the event the Company shall be obligated under this Section 10
hereof to pay the expenses of any Proceeding against Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such Proceeding, with
counsel approved by Indemnitee, which

 

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approval shall not be unreasonably withheld, upon the delivery to Indemnitee of
written notice of its election so to do.  After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to Indemnitee under this Agreement for
any fees of counsel subsequently paid or incurred by Indemnitee with respect to
the same Proceeding, provided that (a) Indemnitee shall have the right to employ
his counsel in any such Proceeding at Indemnitee’s expense; and (b) if (1) the
employment of counsel by Indemnitee has been authorized by the Company,
(2) (i) Indemnitee shall have reasonably concluded that there may be a conflict
of interest between the Company (or any other person or persons included in a
joint defense) and Indemnitee in the conduct of any such defense or
(ii) representation by such counsel retained by the Company would be precluded
under the applicable standards of professional conduct, or (3) the Company shall
not, in fact, have employed counsel to assume the defense of such Proceeding,
then the fees and expenses of Indemnitee’s counsel shall be at the expense of
the Company.  The Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which Indemnitee
shall have reasonably made the conclusion provided for in (2) above.

 

11.           Procedure for Notification and Application for Indemnification.

 

(a)           Indemnitee agrees to notify promptly the Company in writing upon
being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be
subject to indemnification or advancement of Expenses covered hereunder.  The
failure of Indemnitee to so notify the Company shall not relieve the Company of
any obligation which it may have to the Indemnitee under this Agreement or
otherwise unless the Company is materially prejudiced by such failure.

 

(b)           Indemnitee shall thereafter deliver to the Company a written
application to indemnify and hold harmless Indemnitee in accordance with this
Agreement.  Such application(s) may be delivered from time to time and at such
time(s) as reasonably appropriate.  Following such a written application for
indemnification by Indemnitee, the Indemnitee’s entitlement to indemnification
shall be determined according to Section 12(a) hereof.

 

12.           Procedure Upon Application for Indemnification.

 

(a)           Upon written request by Indemnitee for indemnification pursuant to
Section 11(b) hereof, a determination, if required by applicable law, with
respect to Indemnitee’s entitlement thereto shall be made in the specific case
by one of the following methods, which shall be at the election of Indemnitee: 
(i) by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board; (ii) by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee; or (iii) by the
stockholders of the Company.  If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) business
days after such determination.  Indemnitee shall reasonably cooperate with the
person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.  Any
costs or expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the

 

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determination as to Indemnitee’s entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(b)           In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 12(a) hereof, the
Independent Counsel shall be selected as provided in this Section 12(b).  The
Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board), and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent
Counsel so selected.  If the Independent Counsel is selected by the Board, the
Company shall give written notice to Indemnitee advising him of the identity of
the Independent Counsel so selected.  In either event, Indemnitee or the
Company, as the case may be, may, within ten (10) business days after such
written notice of selection shall have been received, deliver to the Company or
to Indemnitee, as the case may be, a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in Section 2 hereof, and the objection shall
set forth with particularity the factual basis of such assertion.  Absent a
proper and timely objection, the person so selected shall act as Independent
Counsel.  If such written objection is so made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court of competent jurisdiction has
determined that such objection is without merit.  If, within twenty (20)
business days after submission by Indemnitee of a written request for
indemnification pursuant to Section 11(b) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition the Delaware Court (as defined below) for resolution of any objection
which shall have been made by the Company or Indemnitee to the other’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Delaware Court, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 12(a) hereof.  Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 14(a) of this Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

(c)           The Company agrees to pay the reasonable fees and expenses of
Independent Counsel and to fully indemnify and hold harmless such Independent
Counsel against any and all Expenses, claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.

 

13.           Presumptions and Effect of Certain Proceedings.

 

(a)           Neither the failure of the Company (including by its directors or
Independent Counsel) to have made a determination prior to the commencement of
any action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including by its directors or
Independent Counsel) that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.

 

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(b)           If the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within thirty (30) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be made in accordance with
Section 14; provided, however, that such thirty (30) day period may be extended
for a reasonable time if the person, persons or entity making the determination
with respect to entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating of documentation and/or
information relating thereto or for compliance with applicable advance notice
provisions or delivery of meeting materials in connection with any stockholder
or board meeting.

 

(c)           The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was not
unlawful.

 

14.           Remedies of Indemnitee.

 

(a)           In the event that (i) a determination is made pursuant to
Section 12 hereof that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 10 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 12(a) of this Agreement
within thirty (30) days after receipt by the Company of the request for
indemnification (as such time period may extended in accordance with
Section 13(b)), (iv) payment of indemnification is not made pursuant to
Section 5, 6 or the last sentence of Section 12(a) hereof within ten
(10) business days after receipt by the Company of a written request therefor,
or (v) payment of indemnification pursuant to Section 3, Section 4 or Section 7
hereof is not made within ten (10) business days after a determination has been
made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication by the Delaware Court (as defined below) to such
indemnification or advancement of Expenses.  Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association.  Except as set forth herein, the provisions of Delaware law
(without regard to its conflict of laws rules) shall apply to any such
arbitration.  The Company shall not oppose Indemnitee’s right to seek any such
adjudication or award in arbitration.

 

(b)           If a determination shall have been made pursuant to
Section 12(a) hereof that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 14 shall
be conducted in all respects as a de novo trial, or arbitration, on the merits
and Indemnitee shall not be prejudiced by reason of that adverse determination. 
If Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 14, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 10 hereof until a final determination is made with
respect to Indemnitee’s entitlement to indemnification (as to which all rights
of appeal have been exhausted or lapsed).

 

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(c)           If a determination shall have been made pursuant to
Section 12(a) hereof that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law.

 

(d)           The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.

 

(e)           The Company shall indemnify and hold harmless Indemnitee to the
fullest extent permitted by law against all Expenses and, if requested by
Indemnitee, shall (within ten (10) business days after the Company’s receipt of
such written request) advance such Expenses to Indemnitee, which are incurred by
Indemnitee in connection with any judicial proceeding or arbitration brought by
Indemnitee (i) to enforce his rights under, or to recover damages for breach of,
this Agreement or any other indemnification, advancement or contribution
agreement or provision of the Company’s Charter or Bylaws now or hereafter in
effect; or (ii) for recovery or advances under any insurance policy maintained
by any person for the benefit of Indemnitee, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advance,
contribution or insurance recovery, as the case may be.

 

15.           Non-exclusivity; Survival of Rights; Subrogation.

 

(a)           The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Charter, Bylaws, any agreement, a vote of stockholders of the Company
or a resolution of the Board, or otherwise.  No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.  To the extent that a change in Delaware law, whether by statute or
judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Charter, Bylaws or this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change.  No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.  The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

 

(b)           The Company or its Subsidiaries shall be primarily liable for all
indemnification, reimbursements, advancements or similar payments (the
“Indemnity Obligations”) afforded to Indemnitee acting on behalf or at the
request of the Company or any of its Subsidiaries, whether the Indemnity
Obligations are created by law, organizational or constituent documents,
contract (including this Agreement) or otherwise. Notwithstanding the fact that
such Indemnitee’s employer, other than the Company (such persons, together with
its and their heirs, successors and assigns, the “Employer Parties”), may have
concurrent liability to Indemnitee with respect to the Indemnity Obligations,
the Company hereby agrees that in no event shall the Company or any of its
Subsidiaries have any right or claim against any of the Employer Parties for
contribution or have rights of subrogation against any Employer Parties through
Indemnitee for any payment made by the Company or any of its Subsidiaries with
respect to any Indemnity Obligation. In addition, the Company hereby agrees that
in the event that any Employer Parties pay or advance to Indemnitee any amount
with respect to an Indemnity Obligation, the Company will, or will cause its
Subsidiaries to, as applicable, promptly reimburse such Employer Parties for
such payment or advance upon request.

 

(c)           In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.

 

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(d)           The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise.

 

(e)           The Company’s obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, trustee, partner, managing member, fiduciary, employee or
agent of any other Enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification or advancement of expenses from such
Enterprise.

 

16.           Settlement.

 

(a)           Notwithstanding anything in this Agreement to the contrary, the
Company shall have no obligation to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding effected without the
Company’s prior written consent.

 

(b)           The Company shall not, without the prior written consent of
Indemnitee, consent to the entry of any judgment against Indemnitee or enter
into any settlement or compromise which (1) includes an admission of fault of
Indemnitee, any non-monetary remedy affecting or obligation of Indemnitee, or
monetary loss for which Indemnitee is not wholly indemnified hereunder or
(2) with respect to any Proceeding with respect to which Indemnitee may be or is
made a party, witness or participant or may be or is otherwise entitled to seek
indemnification hereunder, does not include, as an unconditional term thereof,
the full release of Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to
Indemnitee.  Neither the Company nor Indemnitee shall unreasonably withhold its
consent to any proposed settlement under this Section 16.

 

17.           Insurance.

 

(a)           The Company shall obtain and maintain a policy or policies of
director’s and officer’s liability insurance customary for similarly situated
companies in a sufficient amount as determined by the Board, with reputable
insurance companies providing the Indemnitee, other officers of the Company and
members of the Board with coverage for losses from wrongful acts, and to ensure
the Company’s performance of its indemnification obligations under this
Agreement.  In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee at least the same rights and benefits as are accorded to the most
favorably insured of the Company’s officers and directors.  Notwithstanding
anything to the contrary in this Agreement, the Company shall not indemnify the
Indemnitee to the extent the Indemnitee is actually reimbursed from the proceeds
of insurance, and in the event the Company makes any indemnification payments to
the Indemnitee and the Indemnitee is subsequently reimbursed from the proceeds
of insurance, the Indemnitee shall promptly refund such indemnification payments
to the Company to the extent of such insurance reimbursement.

 

18.           Duration of Agreement.  This Agreement shall continue until and
terminate upon the later of: (a) six (6) years after the date that Indemnitee
shall have ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing member,

 

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fiduciary, employee or agent of any other corporation, partnership, joint
venture, trust, employee benefit plan or other Enterprise which Indemnitee
served at the request of the Company; or (b) one (1) year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 14 hereof relating thereto (including any rights of appeal
of any Section 14 Proceeding).

 

19.           Severability.  If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any Section,
paragraph or sentence of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section, paragraph or
sentence of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.

 

20.           Enforcement and Binding Effect.

 

(a)           The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.

 

(b)           This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.

 

(c)           The indemnification and advancement of expenses provided by, or
granted pursuant to this Agreement shall be binding upon and be enforceable by
the parties hereto and their respective successors and assigns (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of the Company), shall
continue as to an Indemnitee who has ceased to be a director, officer, employee
or agent of the Company or of any other Enterprise at the Company’s request, and
shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs,
devisees, executors and administrators and other legal representatives.

 

(d)           The Company shall require and cause any successor (whether direct
or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.

 

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(e)           The Company and Indemnitee agree herein that a monetary remedy for
breach of this Agreement, at some later date, may be inadequate, impracticable
and difficult of proof, and further agree that such breach may cause Indemnitee
irreparable harm.  Accordingly, the parties hereto agree that Indemnitee may
enforce this Agreement by seeking injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and
that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining any other relief to which he may be
entitled.  The Company and Indemnitee further agree that Indemnitee shall be
entitled to such specific performance and injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions, without
the necessity of posting bonds or other undertaking in connection therewith. 
The Company acknowledges that in the absence of a waiver, a bond or undertaking
may be required of Indemnitee by any court of competent jurisdiction, and the
Company hereby waives any such requirement of such a bond or undertaking.

 

21.           Modification and Waiver.  No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by the parties
hereto.  No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement nor shall
any waiver constitute a continuing waiver.

 

22.           Notices.  All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

(a)           If to Indemnitee, at the address indicated on the signature
page of this Agreement, or such other address as Indemnitee shall provide in
writing to the Company.

 

(b)           If to the Company to:

 

STR Holdings, Inc.

10 Water Street

Enfield, CT 06082

Attention:  Board of Directors

 

or to any other address as may have been furnished to Indemnitee in writing by
the Company.

 

23.           Contribution.  To the fullest extent permissible under applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu
of indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid
or to be paid in settlement and/or for Expenses, in connection with any claim
relating to an indemnifiable event under this Agreement, in such proportion as
is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Company
and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and (ii) the relative fault of the Company (and its

 

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directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).

 

24.           Applicable Law and Consent to Jurisdiction.  This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules.  Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 14(a) hereof, the Company and Indemnitee
hereby irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in the
Chancery Court of the State of Delaware (the “Court”), and not in any other
state or federal court in the United States of America or any court in any other
country, (ii) consent to submit to the exclusive jurisdiction of the Court for
purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) waive any objection to the laying of venue of any such action
or proceeding in the Court, and (iv) waive, and agree not to plead or to make,
any claim that any such action or proceeding brought in the Court has been
brought in an improper or inconvenient forum.

 

25.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.  Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.

 

26.           Miscellaneous.  Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate.  The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.

 

[Remainder of this page intentionally left blank.]

 

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CONFIDENTIAL

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of
the day and year first above written.

 

 

STR HOLDINGS, INC.

 

INDEMNITEE

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

Name:

 

 

Name:

Title:

 

 

Address:

 

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